Sunday, September 30, 2007

Canadian Dollar May Not Fly That High

The Soaring Canuck Buck Will Come Back to Earth

For the first time since 1976, the Canadian dollar is now trading at par-value versus its largest trading partner, the United States.
On Friday, the Canuck buck or loonie, closed at par-value vis-à-vis the U.S. dollar, meaning one Canadian dollar equaled one American dollar. The last time both currencies traded at par was in 1976. At the time, the secessionist Parti Quebecois was elected in Quebec and commodities prices were in the midst of a secular bull market.
And Canadians are definitely proud now that history is repeating itself.
The news media in Canada has taken the loonie's new flight by storm since last Friday. A newfound pride has erupted across a country which has been almost perpetually saddled with a weaker currency against its much larger American brother.
Since hitting a 125-year low in February 2002, the loonie has surged a cumulative 62% versus the sagging greenback. Meanwhile, the greenback is now in its sixth year of a secular bear market versus most foreign currencies and gold.
Watch the Loonie Fly
Canada Now a Petro-Currency
Since discovering bitumen or tar sands in Northern Alberta, Canada has become the world's second-largest source of untapped oil reserves after Saudi Arabia.
It's no surprise the Canadian dollar shadows the price of spot crude. On any given trading day, the loonie tracks the performance of West Texas intermediate crude oil, while the U.S. dollar is slammed by economic trends.
Indeed, Canada's energy exports have skyrocketed this decade amid declining global reserves and China's insatiable appetite for refined Canadian energy products and raw materials.
As a result, Canada's trade balance has been in a secular uptrend since 2002 while its fiscal performance has been the envy of international markets as tax receipts surge. Despite the country's enviable twin surpluses, both Liberal and Conservative governments have refused to meaningfully reduce the country's stifling tax burden, further bulging Canada's budget surpluses.
We Can Thank the Drowning Buck for the Flying Loonie
Since 2002, I've repeatedly predicted a par-value currency relationship between the world's two largest trading partners. Well, it's finally here.
The Canadian dollar has appreciated mainly because of a healthy balance sheet and booming commodities prices. But part of that currency gain can also be attributed to protracted U.S. dollar weakness. The American dollar has been in a virtual freefall over the last five years and has declined versus almost every currency in the world since 2002.
America's fiscal burden continues to drag down growth as a tirade of bearish developments encourages dollar-based selling. The ongoing mortgage-backed crisis, housing woes, the Iraq war and exorbitant budget and trade deficits are encouraging traders to dump the buck. Canada, on the other hand, has dramatically reduced its foreign debt over the last decade and continues to record trade surpluses almost every quarter.
But be careful. The soaring value of the Canadian dollar will exact a toll on Canada's economy - eventually.
Soaring Loonie Comes at a Price
A strong currency inhibits manufacturing exports as cheaper currencies in foreign markets compete to sell similar goods and services.
Canada does harbor a plethora of raw materials to feed and grow the world's emerging markets. But the country's non-commodity exports, including forestry, continue to bleed a slow death in 2007. The strong loonie is resulting in mounting manufacturing job losses, rising labor discontent and seriously damaging the country's export platforms in Ontario and Quebec.
So while Western Canada, loaded with natural resources, continues to benefit from the commodity bull market, the rest of the nation climbs deeper into a hole. The rest of the exporters are struggling with an expensive currency and the government's reluctance to cut tax rates. Business leaders have also increased the call to lower interest rates this year to suppress the loonie's value and alleviate manufacturing losses. Indeed, until the U.S. sub-prime crisis resurfaced in July, the Bank of Canada had been tightening or raising interest rates.
For now, Canada is enjoying a strong currency. It is the best-performing dollar-based unit in 2007. The Canuck buck is up 17% versus the U.S. dollar and even rising 8% versus the almighty euro.
But at some point over the next several months, I expect the loonie to finally head back to earth. I see a U.S. economic slowdown and easier Bank of Canada monetary policy clipping the loonie's wings. Never in Canada's history has it managed to defy a U.S. economic slowdown or recession.
The loonie has further to sail and will probably fetch a premium against the sagging greenback. But 12 months from now, I'll bet the Canadian dollar will buy less, not more, American dollars as the economy slows amid declining trade-flows between both markets.

Sobering Thoughts About A Failing America

America's New Religion

By James Kunstler
Okay, here's the big problem in America; we made this unfortunate set of choices to create the drive-in utopia, the happy-motoring utopia. America's oil consumption is the greatest misallocation of resources in the history of the world. We're not going to be able to continue this living arrangement and that makes it, by definition, the greatest misallocation of resources in the history of the world.
But we like things the way they are. So we will not change our behavior until conditions force us to change. We Americans have put so much of our resources, so much of our wealth, so much of our spirit into constructing and assembling this energy-intensive infrastructure for daily life, that we can't imagine letting go of it.
But get this; no combination of alternative fuels or systems for running them will allow us to run Walt Disney World, Wal-Mart, and the interstate highway system. We're not going to run those things on any combination of solar, wind, nuclear, bio-fuel, used French fried potato oil, dark matter, or all the other things that we're wishing for, or even a substantial fraction of it.
I'm not against alternative fuels or making investment in alternative systems. But what you need to know is we'll probably be disappointed in what they can actually do for us. They can do things for us, but not the things that we're wishing they can do for us. One of the main implications of "the long emergency," therefore, is that we're going to have to downscale everything we do. So the 3,000-mile Cesar salad will not be with us that much longer.
Let's talk about the thing that the American people really do believe: when you wish upon a star your dreams come true. This is what adults all over America believe. This is a nice thought for children, but it's not a good thing for adults to believe. So what we've got now in the US is a tremendous amount of delusional thinking, especially around the issues of energy, and especially around what we're going to do in the face of a probable energy crisis. And this delusional thinking is joined by a second idea – many people think that the leading religion in America is Evangelical Christianity, but it's not. The leading religion is the worship of unearned riches.
This religion has now become normative throughout America. But this is a bad religion. The reason that it's a bad idea to believe this is because it's based on the fundamental unreality that it's possible to get something for nothing. That's why it has been a very bad idea to promote legalized gambling all over America for the last 30 years. I am not an Evangelical; I'm not a Christian. I'm not a campaigner for social reform, but I believe that legalized gambling is one of the most pernicious things that we've done to ourselves in society in my lifetime. It promotes the idea that it's possible to get something for nothing. And when you join that idea with the idea that "when you wish upon a star your dreams come true," you get a really dysfunctional, delusional country, unable to conduct a coherent discussion about what's happening to us.
One of the reigning delusions is that energy and technology are the same things. If you run out of one, you just plug in the other. I had a very interesting experience about a year and a half ago. I was invited to give a talk at the Google headquarters, and I went down to the Silicon Valley, to the Google suburban office pod. The whole building was tricked-out like a kindergarten. They had the knock-hockey sets and the computer game consoles and the Lucite boxes with the gummy bears and the yogurt-covered pretzels. And you know, the impression I had was, "Wow! This is really a child-like kind of atmosphere!"
And then the Google employees came into the auditorium. These were Google millionaires: young people who had gotten in on the ground floor pretty early: engineers and executives, and had been paid in stock and stock options. And they had become millionaires by the age of 27 and they were dressed like skateboard rats. Their ass-crack was showing; they had the sideways cap on – dressed like nine-year-olds. And I gave my talk and they all got up afterwards for comments and questions. There were no questions whatsoever, just one uniform comment from 17 people, and the comment was, "Dude, we've got like technology." Subtext: you're an asshole.
That experience was very instructive for me because I began to understand a few things about where we are as a nation. What we've got at the highest level of American high-tech enterprise are people who believe that technology and energy are the same. (How much trouble does that tell you we're in?) And I think you can account for this ignorance in the following way: these are people who have become tremendously, personally, successful from moving little pixels around on a screen with a mouse. So they assume that that activity will solve all the problems of the world. But guess what? We're not going to change out the hardware on the $2.7 trillion dollar fleet of Boeings and Airbuses all around the world. We're not going to change them out to run on some other kind of energy. We're either going to run these things on liquid hydro-carbons or we're not going to run them at all.
This is the most important thing I've got to tell you today: the only conversation that's going on around America is how are we going to run the cars by other means than gasoline. That's across the whole political spectrum and from the lowest ranks of society to the highest. From the dumb people, the NASCAR morons, clear up to the Ivy League.
But we've got to have a conversation about a lot of other things besides how we're going to run the cars. We have to make other arrangements for living. We have to behave differently in the Western World, but particularly in North America. We're going to have to do farming differently; we're going to have to do commerce and trade differently; we're going to have to do schooling differently; we're going to have to learn to make some things in our own countries again.
The thing that Thomas Friedman calls globalism and regards as a permanent condition of life: guess what? It's not a permanent condition of life; it's a set of transient economic relations that exist because we have been living in a period of extraordinarily cheep and abundant energy and extraordinary relative peace between the great powers. And that's why we have globalism. When neither of these conditions obtain anymore, we will not have globalism and we will not have those trade relations any more.
One other thing; we're going to have to occupy the terrain of North America differently. Suburbia is going to fail. You can state that categorically: It's going to fail in terms of investment and it's going to fail in terms of utility.

Ted Butler On The Silver Markets

By Theodore Butler
Mid-September 2007
I am concerned that by explaining the silver manipulation in such detail, the real message to silver investors may not be getting through. Manipulation has created what I believe is the investment opportunity of a lifetime. If it were not for the fact that the price of silver has been manipulated, given the powerful supply/demand fundamentals, there is no way that it could, or would, be priced as cheaply as it is today, Simply put, the manipulation has caused the price of silver to be so low that it has created a rare gift.
Sure, the manipulation is an abomination to any free-market advocate, and we must continue to attempt to expose and terminate it. Like every manipulation in history, this silver manipulation must and will end. Artificial prices cannot be maintained indefinitely. But it would be a shame not to take full advantage of this by positioning oneself for the inevitable end of the silver manipulation.
The current investment opportunity in silver is rare precisely because the manipulation itself is a rarity. While there have been countless market manipulations throughout history, to my knowledge, they were all upside manipulations, where the price of something was artificially inflated. The current manipulation in silver is a rare downside manipulation.
Upside manipulations are more common because they are relatively simple to accomplish. All you have to do to create an upside manipulation is have the concentrated entity buy, and keep buying, enough of the item in question to drive the price sharply higher. Then they unload to new buyers who come in late. A short side manipulation is more complicated. It takes sophisticated short selling and uneconomic dumping of physical supplies.
In an upside manipulation, an ordinary investor can hope to participate by buying in the later stages of the price advance and then selling before the inevitable collapse in price. Or, if the outside investor is sophisticated and has deep pockets, he could go short and hope to profit from the price collapse. But both approaches to profiting from an upside manipulation are entirely dependent on luck and timing. Guess wrong on timing and you will lose big. This is rank speculation not tailored to securing your financial security.
But, the very rare downside price manipulation currently in force in silver offers outside investors the opportunity of a lifetime for a number of reasons. A downside manipulation creates a much lower price than would exist without the manipulation. Buying low means you can buy more at lower risk. Also, when a downside manipulation ends, it explodes upward. When manipulations end they end with a bang and a price movement opposite the direction of the manipulation.
But, there is a third aspect of the downside silver manipulation that creates a lifetime investment opportunity. Quite simply, it can be done easily by every type of investor. There is a simple and understandable way to participate, namely, buy real silver. There are no sophisticated strategies, critical timing decisions, high risk leverage or luck. It’s just common sense. Buy silver before the manipulation ends. Buy it now.
Sometimes, we make things more complicated than necessary. Admittedly, the downside silver manipulation is a complicated issue, although I have tried my best to explain it as simply as possible. Silver is much lower than it should be. Fortunately, how you can profit from this particular manipulation is as simple as can be. Don’t get fancy. Buy silver, put it away and go about life.
By Theodore Butler
In a surprisingly bullish development, the August 28 Commitment of Traders Report (COT) recorded a shocking further improvement in COMEX silver futures. I can’t over emphasize the bullish COT set up in silver. The fundamentals have never been better in silver, and the dramatic improvement in the COT creates a particularly attractive opportunity for buying silver.
The last time the COT was this good, four years ago, silver was priced around $4.50 an ounce. We have less available silver in the world than four years ago. We know that the remaining silver is held in stronger hands. We know the shorts are more concentrated than they were four years ago and are coming under increasing scrutiny. That makes them more vulnerable and sets the stage for an upside surprise. No one would turn down the chance to buy silver at $4.50 an ounce. In a very real sense silver is the equivalent to its $4.50 price tag of four years ago.
Theodore Butler
The key to ending the silver manipulation is to pressure either the Big 4 or the single big short to end their manipulative ways. This was the intent behind my private, turned public, campaign involving ScotiaMocatta. I believe that campaign is bearing fruit, both in action and words.
Scotiabank has responded to questions about there being a significant short in COMEX silver. To their credit, Scotiabank answered in a timely manner, unlike the CFTC or the NYMEX/COMEX. In addition, Scotiabank wrote that they unequivocally did not condone market or price manipulation. In the history of the world, no one ever has.
While Scotiabank did answer in a timely manner, they only answered two of the three questions posed to them. They answered that they thought it was proper for them to be speculating in silver and that they were reporting their risk profile, their Value at Risk (VaR), properly. While time may prove their assessment wrong, at least they answered directly. What they didn’t answer, of course, was the most important and specific question, namely, did they hold a significant short position in COMEX silver?
Instead, Scotiabank danced around this direct question, by saying that as a leading dealer in the world silver market, they were long and short at times, but were always mostly hedged. This response was no surprise to me, as this is exactly what I warned them about in my private letters to the CEO, Richard Waugh. I wrote him that offsets via derivative hedges away from the COMEX would not excuse manipulation via a concentrated short position on the COMEX.
This is an important concept to grasp. It is not legal to artificially depress the price of silver by shorting thousands of contracts on the world’s leading silver exchange, the COMEX, for the purpose of then buying silver and silver derivatives elsewhere. Because the COMEX silver price is the benchmark for how most silver is priced in the world, it is illegal to influence the price on the COMEX to get bargains elsewhere. This is not legitimate arbitrage, this is manipulation 101.
Of course, I can’t say this is what ScotiaMocatta has done, but the response from Scotiabank indicates it may be the case. They did not deny that they were the big short on the COMEX. They said, in essence, that if they were short on the COMEX, they were hedged. Scotiabank answered the only way that they could if they were short big on the COMEX. They wouldn’t lie and say they weren’t short if they were. It would be potentially catastrophic for a respected financial institution if it was later discovered they were untruthful.
Unlike the CFTC and the NYMEX/COMEX, who are the frontline regulators and must answer legitimate questions about issues as important as manipulation, I never expected any great revelations from Scotiabank’s response. So if I knew what they were going to say, then why the heck did I ask them directly about their short position and impose on you to ask them as well?
The answer is that it wasn’t about words, it was about actions. Our actions and their actions. It was about putting Scotiabank (and other silver commercials) on notice, in such a manner that it could not be denied. Thanks to you, that has been accomplished. Scotiabank can never say they weren’t warned.
As I had written previously, I strongly believe that the CEOs of the large financial firms whose metal departments may be involved in the silver manipulation were largely unaware of illegal activities in silver. Scotiabank was formerly in the unaware category, in my opinion, but not any longer. Now it becomes a case of what they do about it.
I think you have to put yourself in Mr. Waugh’s shoes. He is responsible for a highly respected and successful financial giant that employs over 58,000 people around the world, has over 12 million customers and earns over $1 billion each quarter. Metals trading is not a core component of the organization, yet has the potential of erupting into scandal and tarnishing a stellar 175 year-old reputation. Suddenly, serious questions are asked about a large short position in COMEX silver futures. What would you do if you were he?
As outsiders, all we can do is think about what is likely to occur and monitor possible changes in previous behavior. I think we may have been given a strong signal that change may be underway in the last two COT Reports. I find it hard to believe that the recent sharp sell-off and dramatic short covering in the big 4 category is unrelated to ScotiaMocatta and our recent contacts to its parent, Scotiabank. It just can’t be a coincidence that the largest two-week buyback of short position by the big 4 had nothing to do with the attention placed on Mocatta.
If I am correct, and the recent sell-off and concentrated short covering was related to the spotlight being shined on Mocatta, that could portend a sea change in the silver manipulation. We won’t know for sure until the next rally has commenced and we can observe if the concentrated short position increases or not. But I think there is a reasonably good chance that the big shorts have had enough of the attention being heaped upon them and will end their manipulative ways. This would have a profound impact on the price of silver.
(Editors Note: For the first time in years gold has outperformed silver over the short term. Why has the pattern changed now? Could it have anything to do with Ted Butler focusing the spotlight on Mocatta Metals? Since his private letters to the CEO of the Bank of Nova Scotia, who owns Mocatta, some strange things have happened. Silver was pounded down to $11.00 in a single day of trading. The Commitment of Traders Report (COT) looks more bullish than it has in decades, according to Ted Butler. Yet silver hasn’t reflected that fact. Gold ran while silver walked.)
(The previous essays were written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)
We have slightly condensed the following e-mail sent by a reader.
"Dear Mr. Waugh CEO of Scotia Mocatta:
Thank you for replying to Mr. Butler's letter. A reply is more than we generally get. I would like to point out to you an observation; you should not take comfort in the fact that the regulatory authorities have not seen fit to investigate you with regard to your silver market manipulation. Gov’t actions dealing with manipulation many times come after the blow up. It's called the blame game and the Gov’t never takes the blame. The authorities have a history of not implementing their regulatory responsibilities before the fact. They more often react after there is a melt down so when it is all over they look like they are on top of things. So where does this place you. In my estimation, it is very simple. You are the CEO of Scotia and to the extent manipulation blows up on your watch you have a big problem as a CEO. The simple solution for you is to do something about it now. You have been warned of the problem.
As a suggestion, get your legal staff to study the way the regulatory agencies implement the rules and regulations they are empowered to enforce. I think you will find that many times they do not implement to regulate but implement to punish. They often react after a problem becomes an event (subprime: what a joke when it comes to regulatory oversight). You become an easy target, and in the end you are the one that gets blamed. The Gov’t makes sure it’s the one that is the hero to the voters.
In conclusion, if you do not fear the eventual wrath of Gov’t regulators, then you are totally unaware of how the game is played.
Also, while you try to cover your shorts, may I suggest you do not participate in another nuke of the silver market like 08 16 07, as that was a criminal act of manipulation.
Thank you."
By James R. Cook
I have some wealthy friends. They use brokerage firms and hedge funds to manage their money. They make no investment decisions themselves. It’s worked for them in the past and they’re not about to change. The other night one such fellow bragged to me that a hedge fund managing some of his money was up 20% last year.
Later, I thought about how I could ever convince these wealthy individuals to buy silver. Maybe it’s not possible. They pretty much buy the establishment story. The Federal government, the Federal Reserve and Wall Street all agree that inflation has been running about 2% a year. You would have to doubt that fact to buy silver. You would have to be convinced that covering the government deficits with new money and keeping interest rates artificially low would eventually debase the dollar. You would also have to suspect that stocks could someday be impacted negatively by monetary mismanagement.
Lou Rockwell of the Mises Institute puts in aptly. "The American economy may look good on the surface, but underneath the foundation is cracking. The debt is unsustainable. Savings are nearly nonexistent. Money supply creation is getting scary. The paper money economy can’t last and last. One senses that the slightest change could bring about massive wreckage."
Here’s why wealthy people should put 10% of their net worth into silver. Over two billion new people are in the hunt for products that use silver. For the first time, they have money and they are going to improve their living standards, come hell or high water. This roaring Niagara of demand will devour natural resources like a herd of hungry elephants in a shrub garden. Silver price rise could outdo any money manager’s stock picking ability.
Stocks can get clobbered. What’s worked for money managers can turn against them. Hedge fund investors are reported to be leaving these funds. The current mortgage and derivatives problem looks like a $30 trillion iceberg. According to newsletter author, Chris Laird, (using BIS estimates) "the actual leveraged amount is $600 trillion." As the Norwegians say in Minnesota, "Uff-da."
Laird goes on to say, "Right now, central banks are vigorously trying to stem a meltdown in the money markets, as corporate paper (short term money for banks and companies) has pretty much stopped rolling over. The lenders in that market are afraid if they roll the paper over, they will be stuck with loans to companies banks and institutions who are hiding huge derivates losses….A central bank can monetize some things, but it surely cannot monetize trillions and trillions of them over and over. If they do that, then the value of their own bonds collapse, and the currency devalues.….Given the fact that I don’t think Central banks can escape having to monetize more and more trillions worth of derivatives, the question arises ‘what will be the fate of major currencies?’…."
As monetary guru Jim Sinclair says about derivatives. "The problems cannot be fixed by any interest rate action. The problem will not even be fixed by a monetary inflation of unprecedented amounts."
These are circumstances that Austrian economists companies have always warned against. Paper money is inherently unstable. It has become worthless a thousand times over in a hundred different countries. More than ever paper money and paper assets are at risk. There isn’t one Wall Street money manager in a hundred that truly understands the risks. That’s why wealthy individuals solely invested with the establishment should change directions for 10% of their net worth. They should own silver because it’s one of the few things that can’t go bankrupt.
By James Cook
I’ve been in the gold and silver business for thirty-five years. I started out calling company presidents, trying to get an appointment to sell them silver. When I’d get a rare sale I’d deliver it myself, sometimes lugging bags of silver up two flights of stairs. Once I got a flat tire on the freeway with six bags of silver in my trunk. I changed that tire in a hurry. In 1973 I made a measly $3,000 selling silver and gold. I lived off my savings.
I read every economic treatise on sound money. I learned everything I could about gold and silver. Twenty-eight years later I met Ted Butler. At the time, I thought I knew everything there was to know about silver. In reality, I knew next to nothing about silver. I knew what the Silver Institute and the Silver Users said. I knew what the so-called silver analysts at the big Wall Street firms had to say. (They’re still saying the same dumb things today.)
Ted instructed me on how important the COMEX was in determining the price. Everything else was background noise. The London market, the Asian market and the after-hours market were essentially meaningless. When gold hit $700 the other day on the COMEX, I read where various newsletter writers and others were saying that people were pouring into gold because of economic concerns. Sorry. Trying to sell gold these days is like pulling teeth. I read that the Chinese and India were going to buy big quantities of gold. As if the Asians would put out a press release that they were going to be buying gold. Inscrutable indeed. It’s never what you hear it is that influences price. It’s big hedge funds, mining speculators and dealers on the COMEX.
In 1980, when silver soared to $50 an ounce, I made a lot of money melting down silverware. The Hunt brothers were primarily responsible for that dramatic price rise. When silver hit $50 an ounce, the big shorts of that period were in huge trouble. Rumors of major bankruptcies circulated. Somehow these dealers got the exchange to intervene on their behalf. The exchange ruled that you could no longer buy silver, you could only sell it. The shorts were back in the driver’s seat. Since you couldn’t buy, the price could only go down. Silver collapsed.
The authorities went after the Hunt brothers. I could never figure out why. Apparently their aggressive buying was deemed a manipulation. They had a few associates also buying. The amount of silver they were long is less than the amount held short today for the four or less big traders. Ted Butler has claimed this is a selective application of the law. You get treated differently if you are a commodities exchange member than an outsider. It appears the big silver shorts can impact the price at will. Supposedly they’re not suppose to be a market maker in what is an open outcry market. But, when prices head down, the entities with huge controlling positions only need refuse to buy, or lower their bids, and the price drops accordingly. That’s why concentration is illegal.
Let’s say you bought a futures contract for 5,000 ounces at $12.00. You put up $10,000 for one contract and the balance is financed. You buy another 5,000-ounce contract at $14.00. Silver rises to $15.00. You have a $20,000 profit. The price starts to slide on an overall drop in commodities. Soon silver is back to $12.00. You get a margin call and put up another $10,000. Now silver crashes to $11.00 where you have a stop loss order. You’re sold out. The buyer of your contracts is one of the big shorts. Now they have a $20,000 profit. They also have reduced their short position by buying your contracts back. This is how they profit and how they extricate themselves from an overly large short position. Precipitous drops like the recent plunge to $11.00 smell to high heaven. What kind of trading advantage do you have if you can influence the price?
Ted Butler has argued that the short position is concentrated, manipulative and illegal. He suggests it’s become too big to offset without a massive price spike. He has focused attention on so many different aspects of the silver market as to be a silver genius. Meanwhile, the establishment trots out the same old dreary silver expert to cover their butts and say what they want to hear. To think we used to listen to guys like this.
I’ve learned virtually everything I know about silver from Ted Butler. So has everybody else writing or talking about silver. There’s one difference. I give him all the credit in the world. Others will write a lengthy epistle about silver full of revelations that were first mentioned by Ted. Yet, that article will never acknowledge him. It’s amazing.
How’s the big paper caper in silver going to end? If the shorts cover, silver will skyrocket. Ted Butler is putting pressure on individual shorts once again. He did in once before with AIG. If a big short covers, it could be explosive. However, the ultimate answer is a physical shortage. Ted Butler says we’re close to that. Physical silver will eventually trump the paper market. When it does, I’m betting Mr. Butler is right when he says the silver price will overheat.

Jim Rogers Tells It Like It Is

“The clowns in Washington,” our friend Jim Rogers agrees, “have signaled to the world they don’t care about the U.S. dollar.” In an interview with Bloomberg, Rogers predicted another 15-year run in commodity prices. Rogers’ Quantum fund returned 4,200% between 1971-1980, and Rogers “retired” after working for about 10 years. He expects the environment we’re in today to return similar gains in commodities as back then.

GW Has Been More Spendthrift Than Friggin Clinton

“The Senate has given final approval to an $850 billion increase in the public debt,” reports DR blog -master Dave Gonigam. This hike marks the fifth since President Bush took office and will allow for a national debt of $9.8 trillion.
“Please allow a moment for that to sink in,” urges Dave. “The fifth such adjustment under President Bush… The man has been in office less than seven years. And in that time, the national debt has exploded by 65%. By what earthly standard is this man considered a ‘conservative?’”

Best Countries To Run A Business

Singapore is the “easiest” place in the world to conduct business, says a Doing Business 2008 report released this week. The report considered items such as employing workers, getting credit, licensing and taxes when compiling the list.
“Countries that have improved their performance in the rankings in past years have seen a parallel increase in equities performance,” says our international man of investing Christopher Hancock. “Egypt improved more than any other country -- rising to 126 from 165 last year. China overtook Russia among the fastest middle-income countries, rising 10 places, to 83.”
Our buddy Hugo Chavez is getting high marks this year, too. Venezuela fell from 164 to 172, the survey’s worst performing country. The World Bank reports that Venezuela is on track to pass the Democratic Republic of the Congo as the worst place in the world to conduct business next year. Bravo, mi hermano.

SOC Has Maintained This Was A Deliberate Act By The Central Banks


By Joan Veon

September 24, 2007
The ruse that has been played out in the stock, bond, and credit markets for the last two months is one of the biggest scams of the century, after the crash of the NASDAQ. At stake is the cementing together of a global economic structure that will not be able to be dismantled.
At the core of the trumped up credit crunch were a handful of international bankers that helped create a big enough deception which will ultimately lead to Congress exchanging our national regulatory laws for standardized international regulatory laws. Sadly, I have seen the pattern of creating a problem so you can solve it according to your hidden agenda, over and over again in the 27 years I have spent in the investment business. For those who think it is about a new low in the value of the dollar, they are wrong—the dollar has been dropping ever since the twin 1973 currency crises which sent then Assistant Treasury Secretary for International Monetary Affairs Paul Volcker around the world to hammer out a new regime for floating currencies (what a great way to transfer wealth and control countries: currencies). Every time the dollar drops, it is new and historic. For those who think the past two months was about the Rothschild’s cornering the global gold market, no way. They and the same core of international bankers that own the Bank of England, the Federal Reserve, and other major central banks control the value of gold. When central banks sell gold as they did in the late 90s, it is only title that changes, not the owners.
In the fall of 1983, my husband and I purchased our first home. Several months later he got a job in another city but we were straddled for 2 ½ years with a house we could not sell because interest rates climbed to 22% with mortgages as high as 14-16%. Years later, I found out that our Congress changed “old and outdated” banking laws to render to national and international bankers, one of the most major coups of the century! The law which Congress passed is called the Depositary Institutions Deregulation and Monetary Control Act (1980 Deregulation Act), which basically lifted all restrictions on U.S. banks as to the amount of interest they could pay or charge investors/creditors. At the time this was heralded as being “good” for America since banks would have to pay market rates on savings, which conveniently rose to 22% for a short period of time. That was not a bad short-term price to pay for banks being able to pay very low rates for savings and charge usurious rates for credit cards from 9 ½% to 35% with home equity lines of credit being tied to prime. The high interest rates were appreciated by the serfs who have ceased to remember their joy.
This globally trumped up liquidity and credit crunch was orchestrated by the key players: the international bankers: Goldman Sachs, Barclays, BNP Paribas, Bear Stearns, Citigroup, JP Morgan Chase, and Bank of America. They would not buy commercial paper from one another or lend to one another. Come on. This was reported as being shocking when in fact, it was the standard insiders game designed to facilitate major changes to U.S. regulations by scaring Congress and the rest of the country first. Once the Security and Exchange regulator has been folded into one agency—like Britain’s Financial Services Authority, instead of having separate regulators for commodities and derivatives, the world will go back to calm—for a little while. The next thing you are likely to hear is that the world needs a global financial regulator. But before that can happen, the national regulatory laws have to be harmonized to prepare the way.
The supporting players were the hedge funds and complex investment instruments. It is not Joe Average who can afford to invest in these animals. Hedged funds known as “Quants” attempt to profit from price inefficiencies identified through mathematical models. These send buy/sell signals on small variations in price between different securities (Financial Times-FT, 8/13/07). Most of the international bankers have quant funds. In fact while they were crying the blues over a 30% drop in August and external investors lost 20% of their investment, it was reported that Goldman Sachs made $300M last month from the rescue of one of their troubled hedge funds. They injected $2B of their own money while billionaire friends injected another $1B to save it (FT, 9/16/7, 6). The fund was up 15% before the Fed bailout! What great math!
The investment instruments are no doubt terribly complex. They are called derivatives ($400T in a world where the entire GDP is $40T), off-balance sheet structures known as conduits ($1,400B), and SIV’ or structured investment vehicles.
The pawns were those who took a sub-prime mortgage and bit the apple in the same way Eve did. According to Fed Chairman Ben Bernanke, “About 7.5 million first-lien subprime mortgages are now outstanding, accounting for 14% of all first-lien mortgages. So-called near-prime loans—loans to borrowers who typically have higher credit scores than subprime borrowers but have other higher-risk aspects—account for an additional 8 to 10 percent of mortgages” (speech 5/17/07). Six months ago, there were $1,300B of subprime loans or about 13% of all outstanding mortgages while the total residential mortgage market is more than $20,000B. In other words, the subprime market is a very small percentage of our total economy. In fact the losses from the Savings and Loan Crisis in the 1990s were much higher.
Regarding the mortgage market, it should be noted that the practice of banks selling mortgages they use to hold until maturity is over. In the 1980s when there was a mortgage default, it was the bank that took the hit. Now mortgages and loans of every type (auto, credit card, etc.) have been securitized (packaged into group of mortgages), then repackaged in a collateralized debt obligation bond (CDO) and sold to a hedge fund that bought it on leverage (David Hale, FT, 8/14/7, 11). The sophistication and complexity of how you sell mortgages has evolved since the 1980s. Bottom line is that the banks no longer carry mortgages or the risk—they basically act as conduits. It is the market—now the global market that carries the risk. The banks really are not concerned about the risk in the loans they make because all of them are now sold in the bond markets to pension funds, mutual funds, and others.
While there is much more that could be said about this whole trumped up charade of loss of liquidity, the bottom line is that the Federal Reserve could have solved this problem two months ago by lowering interest rates. They are the ones who create the business cycle and market highs and lows by the amount of money they inject into the banking system. Just like in the 1980s, interest rates could have come down at any time, but there was another agenda. Can the Fed solve the problem of the sub-prime mortgages, no. Congress will have to deal with the inequities.
At the international level, all of the international organizations: the Bank for International Settlements, the International Organization of Security Commissions, the Group of Seven finance ministers, and the Financial Stability Forum are talking about the need to have capital markets that are globally integrated since no one Central Bank could determine how to proceed. The U.S. is the only major country not to have all of their regulators under one roof (just like the British system which is used in many countries around the world). All countries need to adopt global accounting standards (the US is in the process of moving in that direction, there has been agreement between GAAP and the IASB) and countries must implement the BASEL II Capital Accords (which are new rules for international banks on how much they need to have in reserve for protection), the U.S. is in the process of implementing them. Then once these things are put in place, the world is ready for a global financial regulator!

Just days after the Fed reduced interest rates by ½ of 1%, it was announced that the Dubai Stock exchange will acquire just under 20% of the Nasdaq stock exchange and 28% of the London Stock Exchange while the Nasdaq purchases the Nordic stock exchange, OMX. Do we see the handwriting on the wall?

If the IMF is suppose to become a Global Central Bank, then perhaps the Financial Stability Forum is a forerunner of what might be suggested next month when the G7 reports on the problems of supposed credit crunch! All this drama just to integrate world markets and stock exchanges! The ruse is now global! People need to see beyond the lies, deceit, deception, and distortion so that they stop operating in fear and begin living in truth. Lastly, all of the volatility created allowed those in the know to make lots of extra money at the expense of those who sold low and those who lost their homes. Be prepared for more of these trumped up vignettes, they have been occurring from the beginning of time. This one is in our generation.

Bad Thoughts Are Now Illegal

Hate Bill Passes!
By Rev. Ted Pike
By a vote of 60 to 39 this morning, Sens. Kennedy and Smith’s hate crimes amendment was attached to the defense authorization act. After three days of virtual silence, several Republican senators spoke against the bill within the two hours of debate. Sen. Lindsey Graham briefly argued that, if passed, the President will veto the hate bill and arms bill together, jeopardizing timely support of our troops. Sen. Jeff Sessions contended that states are adequately dealing with hate crimes and that Kennedy’s amendment burdens the defense authorization bill. Senate majority leader Mitch McConnell, arriving after the debate, was allowed to very briefly state that a hate bill was irrelevant to an arms bill.
The real hero of the day was Sen. Orrin Hatch. Yesterday he stood alone among Republicans to publicly oppose the hate bill. But today he spoke three times with powerful, logical, legal, and constitutional reasons why the hate bill is redundant to state law enforcement, which adequately deals with all kinds of violent crime. He said that gender identity, as put forth in this legislation, is unclear. Its definition depends on the subjective perceptions of both the hate criminal and the victim. He offered his own amendment (which was later passed unanimously) calling for the federal government to authorize studies to determine if states are adequately enforcing hate crimes laws.
Remarkably, Sen. Byrd of West Virginia , habitual supporter of the hate bill, voted against it. If only one more pro-hate bill Senator, Democrat or Republican, had been persuaded, either by massive calling during the last week or by impassioned attack of the hate bill on the floor of the Senate, the hate bill would have been destroyed in this Congress. It would have to be resubmitted in the next Congress under the stigma of having been rejected six times. Yes, the President has promised to veto today’s hate bill victory. But at the same time, the hate bill, through passage now by both House and Senate, is energized and dignified as never before to be easily ratified in the next Congress, little more than a year from now.
Credit for hate bill victory must largely go to the repeated impassioned speeches by Sens. Kennedy and Smith, but leaders of the religious right and Republican senators are, by default, just as responsible. Since the defense appropriations act was introduced 16 days ago, opening the possibility of hate bill attachment, there has been an astonishing lack of consistent warning from leaders of the religious right. This has grown even more acute since Monday, with a virtual blackout of warning from all new right websites (See, Do New Right Leaders Want Hate Bill Passed? and Hate Bill Ready for a Vote). As a result, the millions of calls which might have been generated amounted to a relative trickle. Only at the last minute, yesterday, when it became virtually impossible to influence today’s Senate vote, did new right leaders send out calls to action.
Such dereliction of duty was reflected on the floor of the Senate this week by the silence of Senators well known to oppose hate laws. Day after day they ignored invitations to speak to the Senate against the hate bill.
Both new right leaders and Republican senators represent themselves as watchmen on the wall, guardians of our freedom. Yet God told the prophet Ezekiel that if, as such a watchman, he knew the enemy was coming and yet did not sound the alarm, he would lose his eternal soul (Ez. 33)
For the past several weeks, both Christian and Republican leaders have seen the enemy coming. Yet they did not sound the alarm in a timely and effective way. For this they will have to answer to their Creator. Meanwhile, all Americans now are very, very much closer to having to answer to the federal “thought police” for every idle word that is not politically correct.

Some Airplane REITS To Spice Up Your Portfolio

We start with some of the bits of pending regulations focused on the airline industry. I live on airplanes, probably logging more miles than most US pilots. I understand all too well the troubles facing the airline industry.
I’ve sat on the tarmac at JFK, and I know what it’s like to try to get off the ground from O’Hare. I often pray, “Please, just let number 17 go this time.”
And I never know when or if my American Airlines shuttle between Reagan National and LaGuardia will ever leave.
I'm not alone. Passengers around the country are fed up and are asking for help. And politicos are starting to pay attention.
New regulations are in the works, meaning we may soon see some fixes--but not ones that will help the industry and the market. Pending revisions include the reduction of landing and takeoff slots at airports--among them O’Hare and JFK--with airlines negotiating to cut back flights.
This sounds like a win-win for all--on the surface. But it's not. It's merely a band-aid that makes for nice headlines, but similar moves have been made before, with no real impact.
We've had voluntary flight cutbacks before. What happens is that the big carriers agree to cut flights, only to have the local airport reassign those slots to some discount carrier. American Airlines and its peers get the shaft, passengers still suffer delays, and the whole mess continues.
We need a market approach to the airline business. Airlines should bid for landing and takeoff slots by number and time. The carriers will then be able to accomplish a few major, free-market fixes.

First, the carriers will price flights appropriately. Smaller carriers giving away seats won't be able to compete with business-focused carriers for key times that serve regular travelers. Fares will reflect this. Leisure travelers with flexible schedules will choose flights in the lower-stressed mid-morning and mid-afternoon time frames; early morning and late-afternoon peak periods will be reserved for full-price flights of major carriers.
Second, regional jets--the bane of frequent fliers--will become uneconomic for major airports. They'll still be fine for serving smaller airports. Competition and bidding for landing slots at secondary airports will be cheaper. Carriers will use larger planes, making each flight count, especially during peak periods.
Each airport will have an approved number of slots determined under modest weather conditions. And we'll have planes focused on key markets, with larger planes fitting into major markets.
Smaller airports that feed larger ones in the hub-and-spoke system will find that they can compete for leisure travelers and for those traveling to connect. They'll either choose off-peak landing times at the big airports or pay up to travel during peak periods.
Airlines will then have the economic power to work with prices under true supply and demand conditions. And to those of you muttering that air travel is part of the public service, it isn't. It's private. Only the airspace and airports are in the public purview.
Think of it as a gasoline tax for controlling road traffic. Raise gasoline taxes enough and we'll be able to fully fund a better road system. Drivers and shippers would then make free-market decisions, which should ease congestion because price will become a more significant factor. Let’s kill the sprawl and focus on less driving and more efficient use of land and transportation resources.
But neither of these policies will play out, not amid the already heady 2008 election season. We have the airline market we're stuck with, so we might as well make some cash from it.
I’ve been on the hunt for the best means to profit from air traffic, not just in the US but around the world. And the way to wealth isn’t through airlines, as the Iceland-based private equity group FL GROEP is learning.
Own the planes themselves.
We know airlines need more planes, and new aircraft need to be more fuel efficient. If rational approaches to limiting landing and takeoff slots emerge, bigger planes will be even more in vogue.
But if you walked into a showroom in Seattle or Amsterdam and asked about delivery times for new passenger or cargo fleets, the answer would be termed in years.
If you own planes, you own the market.
There are three leaders in this market, and each is structured as a publicly traded partnership (PTP). They’re all headquartered or registered (for tax reasons) in Ireland. Think of them as REITs for airplanes.
They own planes that get leased out on long-term contracts. All they have to do is service their debt, pay management and the rest is profit--with the bulk going to us in the form of nice, fat dividend checks.
Two have been in the market for almost a year now, AIRCASTLE (NYSE: AYG) and GENESIS LEASE (NYSE: GLS). As of this week, BABCOCK & BROWN AIR (NYSE: FLY) has joined them.
Babcock & Brown Air is the offspring of Australia-based BABCOCK & BROWN (OTC: BBNLF, Australia: BNB), the same bank in Sydney that, like it's crosstown peer MACQUARIE BANK (Australia: MBL, OTC: MQBKY), is getting on board great businesses and packaging them up to trade on their own. And all the spinoffs pay piles of cash to investors.
For some strange reason, market observers don’t take the time to look at these airplane REITs. The result: They're trading as cheap as the tarmac they land on. But we've already been collecting huge cash flows from the first two, and Babcock & Brown Air shouldn't be any different. The dividend yield should fall somewhere in the mid- to upper 8 percent range. (Yahoo Finance won't show a dividend yield because the company just went public.)
Read the filings, then come fly with me. The cash will flow faster than the $2 bottles of water rolling down the aisle in coach.
Perhaps more of us will soon be able to afford to fly first class.

Those GATA Boys Are Tenacious

Citigroup acknowledges central bank scheme to suppress gold
Submitted by cpowell on Fri, 2007-09-28 04:23. Section:
11:20p ET Thursday, September 27, 2007
Dear Friend of GATA and Gold:
A major New York investment house, Citigroup, this week acknowledged that central banks have been colluding to suppress the price of gold.
The acknowledgement came in a long report on the prospects for the metals and mining industry, "Gold: Riding the Reflationary Rescue." It was written by Citigroup analysts John H. Hill and Graham Wark, who, in a section titled "Central Banks: Capitulating on Gold?," write:
"Official sales ran hot in 2007, offset by rapid de-hedging. Gold undoubtedly faced headwinds this year from resurgent central bank selling, which was clearly timed to cap the gold price. Our sense is that central banks have been forced to choose between global recession or sacrificing control of gold, and have chosen the perceived lesser of two evils. This reflationary dynamic also seems to be playing out in oil markets."
GATA welcomes Citigroup to the camp of the conspiracy nuts, where the central bank scheme against gold has been documented for nine years.
You can read Citigroup's acknowledgement of the central bank scheme to suppress gold on Page 7 here:
CHRIS POWELL, Secretary/TreasurerGold Anti-Trust Action Committee Inc.

Ron Paul vs. the Neocon Cowards

Let’s say it straight out: Virtually every architect and supporter of today’s neo-con-game of endless war is a coward.
Why? Because anyone who advocates a policy of military invasion, yet studiously avoids joining the soldiers on the battlefield, is, by definition, a coward.
What kind of a person believes that a cause is worth (someone else) dying for, yet not only refuses to face the "enemy," but remains, at all times, in the cool shadow of security? I’ll tell you what kind – a coward.
What kind of a person can’t wait to send America’s youth to die in Iraq for a series of absurd, constantly evolving fabrications, yet finds it more prudent to receive lobbyists than to fire a rifle? I’ll tell you what kind – a raw coward.
We’ve all heard the deranged platitudes: "Sorry I can’t join ya over there...but I’ll be stayin’ here, representin’ ya, makin’ sure the homeland is secure, and that the economy stays on track. Believe me, I’m gonna be doin’ everything I can to keep you and your buddies well-supplied – with everything you need for victory. So...God’s speed. We’ll all be thinkin’ about ya. And prayin’ for ya. You’re all just fabulous!"
(Article continues below)
Another classic: "I’ve already served my country in the military. I’ve done my duty. Now, someone else can do his. I’m entitled to voice my support for this war. But, right now, I’m just too old to return to battle! And too busy with my job!"
And my all-time favorite? "Well...I haven’t really had any military training. I think it’s best to leave the actual fighting to professionals."
How much training does it take to blow a hole in an eight-year-old girl? mom, construction worker, US Senator, software engineer, grade school teacher, Vice-President of the United States, young, old...whatever you are. You think defeating worldwide "terrorism" is a life-or-death issue for America? Then put your courage where your mouth is.
Join-up, or shut-up.
Just look around. And listen. Listen to all of America’s neo-conned, warriors-in-theory. Their numbers are legion. They’re in Congress. They’re in the White House. They’re wearing the black robes of justice. They’re walking the streets of America, safely preaching genocide. What do they all have in common?
There’s never a doubt, and never a scratch. Cowards, each and every one.
I hereby issue a challenge: I challenge any supporter of our current Middle East blood fest to tell me exactly why he is still here – and not over there.
Do you hear a sudden eerie silence? Of course you do. It’s the silence of cowards.
Have you noticed how the rationale for war these days is becoming less and less important? At this very moment, we are committing mass-extermination in Iraq – for no discernable reason whatsoever.
Except for one – profit.
When our nation’s very existence rests in the balance (as the "War on Terror" drum-beaters repeatedly claim), precisely why is any kind of profit-taking permitted? Why isn’t the military-industrial complex offering its materials and services at cost?
This is a question the cowards would rather not answer, because answering it would reveal the truth: If you take the profit out of war...there is no war. Today’s cowardly patriotism resides only within the perimeter of profit – and safety.
And there’s also a corollary, just for cowards: If you require those calling loudest for war to fire the first shot, the guns remain silent.
Our "War on Terror" has absolutely nothing to do with "terrorists." It has absolutely nothing to do with preventing another 9/11. (The proof? The neo-cowards’ refusal to secure our wide-open borders, due to their love affair with slave labor.) It has nothing to do with a "Clash of Civilizations."
It has everything to do with making money. Lots and lots of money. (And let’s never forget: There’s oil in them-thar hills!)
And it has to do with a new type of "failure." Just as cowardice is now the new bravery, today, failure has also been rebranded. It’s now called "success."
The more American soldiers who die, the longer that innocent blood is spilled, the longer the cycle of destruction and rebuilding, in other words, the longer the horror – the bigger the profit. A normal person believes that he is witnessing chaos in Iraq. Not at all. Success is everywhere in sight.
Of course, it’s a coward’s success. And a coward’s profit.
With every gut-shot Iraqi child, limp in a grieving parent’s arms, we see a bullet that is sold. And a profit that is made. With every suffering, limbless soldier, the military-industrial complex sees a reason to persist. And finds more profits to be made. With every tank that’s ripped-apart, with every screaming, dying civilian, the White House imagines a "surge" that is working. And sees a profit for a friend.
A government that endorses mass murder for profit, and calls it war, deserves no latitude. It deserves a cage.
And so do we, if we stand by in passive assent. Every American deserves what he tolerates. The time for tolerance is over.
There’s only one candidate for President of the United States in 2008 who has the depth of understanding, and the character, necessary to place meaningful restraints upon our profit-centered system of cowardly warmongering – Ron Paul.
Positions of Dr. Paul’s that would help achieve this objective include:
Getting rid of the Federal Reserve, which functions as the financial enabler of war, as well as its head-coach.
Forcing politicians in favor of war to make a formal declaration of war, as specified in the Constitution.
To which I would add:
Patriotism requires that the profit-motive be put-aside in time of war. Therefore, financially profiting from a soldier’s courage, and, possibly, from the sacrifice of a soldier’s life, should be forbidden by law.
By law, every elected representative espousing war must either personally ship-off to battle, or, send a close family member in his stead.
The Ron Paul Revolution is, among other things, a revolution to reclaim our original American spirit, a spirit mangled, at least since the time of Lincoln, by the passive acceptance, and tacit encouragement, of state-sponsored mass-murder for profit.
With God’s help, it is a revolution that will come to pass.

Ron Paul Knows What's Good For This Country

America According to Ron Paul
Dana GabrielStop Lying.caSaturday September 29, 2007
It is exciting to chronicle the Ron Paul revolution of hope, liberty, and freedom. You can never accurately gage how far any grassroots movement will go, but his campaign shows no signs of slowing down anytime soon. Although he has taken on the mantle of leader, it is our actions that have brought success. He continues to perform well in debates and in interviews, and this quarters campaign contribution numbers are expected to be good, which will even further distance him from the bottom pack candidates and give him a better chance at becoming president. We have all witnessed the chuckles, snickers, the taunting, the ridicule, the misrepresentation, and the outright disrespect that some have directed his way. He is focused, refuses to engage in sandbox politics, and continues to put his heart, soul, and body on the line because he sincerely wants to make this country better. He isn't an establishment type, and unlike other politicians, he doesn't wish to further control our lives. America according to Ron Paul would be a safer, freer, more independent, and more liked nation around the world.
Ron Paul understands the importance of the constitution and national sovereignty. He believes that they are obstacles to the global elite, and that both are threatened by continued U.S. membership in the United Nations. He views the UN as an undemocratic body that serves as a forum for anti-Americanism, and doesn't wish to see our armed forces under its control. He said, “We should stop worrying about the UN and simply walk away from it by withdrawing our membership and our money. We should demand a return to real national sovereignty, and respect other nations by rejecting our failed interventionist foreign policy.” The United Nations is the necessary mechanism in place for a world government that wishes to control all aspects of our lives. Ron Paul stated, “The choice is very clear: we either follow the constitution or submit to UN global governance.”
It is isn't only the UN that we are ceding more and more sovereignty to. Other unelected and unaccountable organizations like the WTO are also a real threat. Ron Paul said, “the WTO is the third leg of the globalists' plan for a one-world, centrally-managed economic system.” First of all, we don't need a treaty to have trade, and both NAFTA and CAFTA are not about free or fair trade but represent government-managed agreements. Ron Paul is a co-sponsor of resolutions stating that Congress should not engage in the construction of a NAFTA Superhighway or any other agreement that promotes or advances the concept of a NAU. He said, “Any movement toward a North American Union diminishes the ability of average Americans to influence the laws under which they must live.”
Ron Paul advocates a humble foreign policy and believes that we should not entangle ourselves in the affairs of other nations. He said, “We can continue to fund and fight no-win police actions around the globe, or we can refocus on securing America and bring the troops home.” That means bringing the troops back from Iraq, which he has always viewed as an unconstitutional war in the first place. He wishes to secure our own borders and coastlines and enforce visa rules and is against any sort of amnesty. Ron Paul understands that there is a fine line in becoming a protectionist and isolationist and stated, “Let us have a strong America, conducting open trade, travel, communication, and diplomacy with other nations.”
Many people hear that Ron Paul wants to the end income tax and eliminate the IRS, they like the idea but can't understand how this could possibly be done. He believes that income tax isn't necessary to pay for government services, and by cutting spending overtime it could be eliminated. He said, “Few people know that every penny of the income tax is used to service federal debt.” He went on to say, “If we stop incurring debt, we can quickly end the IRS.” A limited constitutional government with low taxes, one that doesn't interfere in the business of other nations, sounds good to me. Ron Paul has always been on the front lines fighting for our privacy, freedoms, and liberties. Whether it be his opposition to the Patriot Act or the National ID Act, he understands the importance of a free society and recognizes that the biggest threat to it is the government itself. One of the great things about Ron Paul is that it doesn't matter if you find a quote or statement he made yesterday, two months, or five years ago-his principles and philosophy have remained consistent and true to the constitution.
Many in the patriot movement have known for quite sometime that Ron Paul represents what is right with America. It has taken others a little longer to catchup with his message, and I pray that more will wake-up. It is impossible to ever agree with everything someone says or does, but I am convinced that the changes that he would bring about can and will save this country. America and the world would be a much safer and freer place with him as president. If another attack on a country like Iran or Syria doesn't take place before the 2008 elections, his presidency might be one of the only things that could prevent such a strike and further escalation in the Middle East. We all know that just because one man becomes president, things will not automatically change for the better overnight. Improvements will have to be done gradually, but they will not require us making sacrifices at the expense of our freedoms or the constitution. He is the right man to lead us back on the road to recovery and respectability, not only in our own eyes, but in the eyes of all those around the world. Ron Paul's campaign continues to win over the hearts and minds of the people with his simple message of freedom for America.

The NAU Doesn't Want Uncle Sam Around

Something The US Should Consider

Japan Set to Privatize Postal System
Saturday, September 29, 2007

TOKYO — Tiny Shirogane post office in a quiet Tokyo neighborhood, with just three clerks and one ATM, might seem far removed from the world of global finance.
But when Japan Post is privatized on Monday, the Shirogane office will become part of the world's biggest commercial bank _ with assets of $3.03 trillion _ in a move intended to inject competition into Japan's banking sector.
"Our customers will soon experience the merits of privatization," Yoshifumi Nishikawa, president of Japan Post, said Friday. "They will see a better quality of services, or new products _ in short, more convenience."
The massive changeover is the result of 2005 reforms instituted by then-Prime Minister Junichiro Koizumi, a former post and telecommunications minister who championed the issue in his landslide victory in parliamentary elections that year.
Much more is at stake than just stamps and letter deliveries: Japan Post operates a bank with over 400 million accounts. Its 24,500 offices nationwide act as sales agents for insurance and investment products.
For millions of rural Japanese, the post office is their only bank, and the system's ubiquitousness has made it a symbol of a benevolent government ready to cater to every citizen's needs.
"The post office is such a basic necessity," said Kazuko Nishina, 36, an accounting clerk, who was withdrawing cash from her savings account at the Shirogane post office.
"I'm still not sure what's going to happen with privatization, but I hope there aren't any surprises for ordinary customers," she said.
Changing such an entrenched system has been tough. When Koizumi pushed through the reforms, critics warned privatization would reduce services, especially to the countryside.
Even lawmakers within his own ruling party vilified the reforms as another attack by modern times on an orderly, secure society.
But Koizumi argued that the government guarantee on postal savings had encouraged generations of Japanese to park their money in the low-interest accounts, creating a stagnant pool of savings and diverting funds away from more productive investments like stocks and mutual funds.
Experts have also said that postal funds have been used to finance pointless government-backed public works _ bridges to nowhere, redundant roads _ and to purchase government bonds, contributing to a public debt now over 160 percent of Japan's gross domestic product.
"These reforms were necessary in terms of making more efficient use of funds," formerly being diverted to useless public works projects, said Kentaro Kogi, banking analyst at Macquarie Securities.
Privatization could also help foreign banks and investment companies scoop up new clients, with the huge savings pool up for grabs at a time when more Japanese turning to stocks and mutual funds.
That means big money for both domestic and foreign banks, as well as insurance companies.
"We can expect the changes to be a plus for stock markets, against the general backdrop of a trend toward more diverse investments," Kogi said.
The entity privatized on Monday will eclipse Citigroup, with assets of $2.22 trillion, as the world's largest commercial bank. Third will be Japan's Mitsubishi UFJ Financial Group, with $1.67 trillion.
Under the 10-year privatization plan, Japan Post will on Monday be broken into four separate businesses, initially held under a government-controlled holding company: An insurance company, savings bank, mail courier and post office management company.
The companies are set to be made independent by 2017, and aim to list on stock markets. The new bank has said it hopes to improve returns on its savings by starting mortgage and credit card businesses, and lending to small companies.
Still, uncertainties remain.
Some say that far from encouraging open competition, Japan Post will be allowed to encroach on rivals by introducing new investment services and new insurance products before a more level playing field is created.
Another issue is whether foreign firms will have equal footing to sell investment products through the newly privatized bank. So far, they have been granted only a minor role, with Goldman Sachs Asset Management the only foreign firm chosen from a dozen that applied to sell their funds.
Meanwhile, some analysts say the mammoth organization _ largely lacking expertise in more sophisticated investments _ could struggle to stay profitable. That raises the risk the bank could start selling off its huge government bond holdings, causing a hike in yield and ultimately adding to the government's debt payments.
"The concept of postal privatization is good. It will inject competition into the banking sector and raise the overall quality of financial institutions, and would encourage more risk-taking behavior and revitalize the economy," said Junsuke Senoguchi, a banking analyst at Lehman Brothers Japan.
"But, depending on how privatization plays out, the move could ultimately damage public finances," Senoguchi said. "That's probably not what the government intended."

Giv'in It All To The U.N.

Law of Sea Treaty on Senate fast-track

Bush administration pushing for ratification in next 3 weeks

WASHINGTON – For the second time in three years, the Bush administration is putting on a major effort for Senate ratification of the United Nations' Law of the Sea Treaty, a wide-ranging measure critics say will grant the U.N. control of 70 percent of the planet under its oceans.
With Democrats in nearly unanimous agreement with the treaty and the Bush administration behind it, it will be up to a handful of determined Republican senators to derail it from getting a two-thirds vote in the upper house.
The treaty is currently under review by the Senate Foreign Relations Committee and could be approved by the entire Senate in the next three weeks, before popular opposition has a chance to grow.
This is not the first time LOST has come up, of course. International negotiators drafted it in 1982 in an attempt to establish a comprehensive legal regime for international management of the seas and their resources. President Ronald Reagan, however, refused to sign LOST because he realized that the treaty doesn't serve U.S. interests.
In 1994, however, President Clinton signed a revised version of the treaty and forwarded it to the Senate. The record shows the Senate was not convinced the 1994 changes corrected the problems, and it has deferred action on the treaty ever since.
The Heritage Foundation warns the treaty would have unintended consequences for U.S. interests – including a threat to sovereignty.
The conservative think tank says "bureaucracies established by multilateral treaties often lack the transparency and accountability necessary to ensure that they are untainted by corruption, mismanagement or inappropriate claims of authority. The LOST bureaucracy is called the International Seabed Authority Secretariat, which has a strong incentive to enhance its own authority at the expense of state sovereignty."
"For example, this treaty would impose taxes on U.S. companies engaged in extracting resources from the ocean floor," write Heritage fellows Baker Spring and Brett D. Schaefer. "This would give the treaty's secretariat an independent revenue stream that would remove a key check on its authority. After all, once a bureaucracy has its own source of funding, it needs answer only to itself."
"The United States should be wary of joining sweeping multilateral treaties negotiated under the auspices of the United Nations," say Spring and Schaefer of Heritage. "Specifically, the benefit to U.S. national interests should be indisputable and clearly outweigh the predictable negative consequences of ratification."
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Other critics fear the treaty will be used as a back-door to implement policies against global warming without any accountability to the American people. Parts of the treaty, they say, mandate international regulation of U.S. economic and industrial activities on land. With that in mind, critics of the treaty believe so-called greenhouse gases could be viewed as ocean pollutants.
In the Senate Foreign Relations Committee hearing last week, Bush administration officials were repeatedly embarrassed by tough questioning from Sen. David Vitter, R-La., who is leading the opposition to ratification.
For instance, Deputy Secretary of State John Negroponte testified the U.N. body established by the treaty has "no jurisdiction over marine pollution disputes involving land-based sources."
"Why is there a section entitled pollution from land-based sources?" questioned Vitter.
Vitter also questioned who decides what is considered military activity under the treaty.
"We will decide that. We consider that within our sovereign prerogative," said Negroponte.
"Where does the treaty say that we decide that and an arbitral body does not decide that?" questioned Vitter.
Deputy Secretary of Defense Gordon England answered: "My understanding – and I'll ask my lawyer behind me – that that's in the treaty that we make that determination and that's not subject to review by anyone else."
"It's not in the treaty because I point to Article 298 1b where it simply says disputes concerning military activities are not subject to dispute resolution," explained Vitter. "But it doesn't say who decides what is and what is not a military activity."
England conceded the point.
"We say it is up to us, but nobody else in the world says it is up to us," Said Vitter said.
Sen. Jim DeMint, R-S.C., said the United States had special military and commercial interests as the globe's only superpower, interests that the treaty did not take into account. He said many of the concerns over loss of national sovereignty that surfaced in the recent debate over immigration reform were surfacing once again in the Law of the Sea debate.
"This is not a good time to be bringing something like this before the American people," he said.
The battle over the Law of the Sea Treaty first began 25 years ago, eventually being torpedoed by President Reagan. It resurfaced in 2004 under the sponsorship of Sen. Richard Lugar, R-Ind., and was successfully defeated by then Senate Majority Leader Bill Frist, R-Tenn.
President Bush announced his intention to seek reintroduction of LOST for ratification to a small group of trusted Republican grass-roots organizers last week – an announcement that was met with horror and scorn.
Eagle Forum leader Phyllis Schlafly, Center for Security Policy President Frank Gaffney, Leadership Institute President Morton Blackwell, Free Congress Foundation founder Paul Weyrich and leaders of the Heritage Foundation were quick to denounce the idea in forceful terms, calling on their members to begin lobbying the White House immediately.
LOST has long had the support of environmental groups such as the Natural Resources Defense Council.
It would establish rules governing the uses of the of the world's oceans – treating waters more than 200 nautical miles off coasts as the purview of a new international U.N. bureaucracy, the International Seabed Authority
The ISA would have the authority to set production controls for ocean mining, drilling and fishing, regulate ocean exploration, issue permits and settle disputes in its own new "court."
Companies seeking to mine or fish would be required to apply for a permit, paying a royalty fee
Critics also point out the new U.N. agency would have the right to compete directly with private companies in those profit-making activities.
The U.S. would have only one vote of 140 – and no veto power as it has on the U.N. Security Council.
The Bush administration claims the initiative for reintroduction of the treaty comes from the military, which likes the 12-mile territorial limits it places on national claims to waters. Yet, critics point out international law already protects non-aggressive passage, including non-wartime activities of military ships.
One of the main authors of LOST not only admired Karl Marx but was an ardent advocate of the Marxist-oriented New International Economic Order. Elisabeth Mann Borgese, a socialist who ran the World Federalists of Canada, played a critical role in crafting and promoting LOST, as WND reported in 2005.
Borgese was hailed by her U.N. supporters as the "Mother of the Oceans" or "First Lady of the Oceans." She died in 2002.
The youngest daughter of the German novelist Thomas Mann, Borgese openly favored world government, wrote for the left-wing The Nation magazine and was a member of a "Committee to Frame a World Constitution." She served as director of the International Center for Ocean Development and chairman of the International Oceans Institute at Dalhousie University in Canada.
The U.N. Environment Program, UNEP, has said Borgese recognized the oceans as "a possible test-bed for ideas she had developed concerning a common global constitution."
Borgese received UNEP's "Environment Prize" in 1987 and was credited with organizing the conferences that "served to lay the foundation" for the United Nations Convention of the Law of the Sea, according to Dalhousie University, which houses her archives.
In a 1995 speech, pro-U.N. Democratic Sen. Claiborne Pell said Borgese's ideas were "embodied in the negotiated texts of the Law of the Sea Convention."
Her ideas included recognizing the oceans as the "common heritage of mankind" and creating an International Seabed Authority to charge U.S. and foreign companies for the right to mine the ocean floor.
In a January 1999 speech, Borgese declared, "The world ocean has been, and is, so to speak, our great laboratory for the making of a new world order."
In an article titled, "The New International Economic Order and the Law of the Sea," she argued that the pact could "reinforce" the goals of the NIEO by giving Third World countries a role in managing access to the oceans.
In a 1997 interview, Canadian Broadcasting Corporation broadcaster Philip Coulter asked Borgese about the collapse of Soviet-style communism and the triumph of the "elites."
Borgese replied "there is a strong counter-trend. It's not called socialism, but it's called sustainable development, which calls ... for the eradication of poverty. There is that trend and that is the trend that I am working on."
The concept of "sustainable development," considered a euphemism for socialism or communism, has been embraced in various pronouncements by the U.N. and even the U.S. government.
In her book, "The Oceanic Circle: Governing the Seas as a Global Resource," she approvingly cites Karl Marx, the father of communism, as someone with "amazing foresight" about the problems faced by urban and rural societies. The book is available from the liberal Brookings Institution in Washington, D.C.
In an article co-authored with an international lawyer, Borgese noted how LOST stipulates that the oceans "shall be reserved for peaceful purposes" and that "any threat or use of force, inconsistent with the United Nations Charter, is prohibited."
She argued LOST prohibits the ability of nuclear submarines from the U.S. and other nations to rove freely through the world's oceans.

Thursday, September 27, 2007

Google Knows Your Underwear Size

Next Firefox will tell Google all about you
Nick FarrellThe InquirerWednesday September 26, 2007
THE FORTHCOMING version of the Firefox browser, Gran Paradiso, will ship with a function that will tell Google all about your browsing habits.
The feature is supposed to be designed to allow the browser to check the URL against a list of phishing sites which is stored at Google.
The downside is that while the punter gets some form of malware protection, Google is getting shedloads of information on the sorts of sites you are visiting.
It can sell this information or offer advertising companies lucrative product information packages.
As it has been pointed out on Slashdot, the "feature" is disabled by default so any user who is daft enough to actually think it is pretty nifty is going to have to press a few buttons to make it happen.

Our Boy Gary Hart Writing Letters To Foreign Countries

CFR's Hart Suggests False Flag Event For Iran War

Tacit warning to Iranian government suggests staged event may be used to ensure "bombs fall on your head"
Steve WatsonInfowars.netThursday, Sept 27, 2007
Council on Foreign Relations member Gary Hart, famed for stating that Americans will die en- mass on home soil this century, and for declaring 48 hours after 9/11 that it should be used "to carry out a new world order", has written a scathing letter to the leaders of Iran clearly warning that the U.S. government has a history of staging provocations in order to initiate conflict with other nations and that Iran could be next.
Hart references the sinking of the USS Maine in Havana harbor in 1898, which led to the Spanish American war, as well as the Gulf of Tonkin incident, which was ultimately the catalyst for airstrikes on Vietnam.
Why does Hart reference these two cases? Because they are both examples of staged managed events that were used to coerce the American public into supporting war.
The sinking of the Maine was immediately blamed on the Spanish, with the innovator of yellow journalism William Randolph-Hearst enflaming anti-Spanish sentiment in his papers by definitively claiming that it was a Spanish plot. No reliable evidence was ever produced linking Spain to the event and it is now widely believed that the event was at best a mechanical failure or at worst a false flag operation.
Similarly the Gulf of Tonkin incident saw President Johnson accuse North Vietnamese PT boats of attacking strike carries in the gulf, the USS Maddox and the USS Turner Joy. Documents and tapes released via the Freedom of Information Act have since shown that Johnson knew that there were no PT boats and no attacks, but still went ahead with lying to the American public on national TV to garner support for escalating the war in Vietnam. Johnson also had the NSA fake intelligence data to make it appear as if the two US ships had been lost.
Hart, one of the instigators of the Homeland Security apparatus that has evolved since 9/11, then goes on to state that American people are reluctant to go to war unless provoked and coldly remarks "For historians of American wars the question is whether we provoke provocations."
He then mentions the Iraq war and refers to how the public were duped into accepting the invasion via the spectre of 9/11. Hart writes "even in this instance, we were led to believe that the mass murderer of American civilians, Osama bin Laden, was lurking, literally or figuratively, in the vicinity of Baghdad."
To those who do not read history Gary Hart's letter makes for a confusing read, but to those who know anything about staged provocations, the intent is clear. Hart is declaring that the elite controlled US government has attacked countries based on false pretenses in the past and will gladly do so again.
Hart's declarations carry the same sentiment as those of fellow globalist Zbigniew Brzezinski earlier this year. The Former National Security Advisor and founding member of the elite policy making group the Trilateral Commission implicitly warned a Senate Foreign Relations Committee that an attack on Iran could be launched following a staged provocation in Iraq or a false flag terror attack within the U.S.
Brzezinski alluded to the potential for the Bush administration to manufacture a false flag Gulf of Tonkin type incident in describing a "plausible scenario for a military collision with Iran," which would revolve around "some provocation in Iraq or a terrorist act in the US blamed on Iran, culminating in a ‘defensive’ US military action against Iran that plunges a lonely America into a spreading and deepening quagmire eventually ranging across Iraq, Iran, Afghanistan and Pakistan.”
Texas Congressman and Presidential candidate Ron Paul has also recently warned that a "Gulf of Tonkin like event" may be used to provoke air strikes on Iran as numerous factors collide to heighten expectations that America may soon be embroiled in its third war in six years.

Here is Gary Hart's letter in full:
Unsolicited Advice to the Government of Iran
Presuming that you are not actually ignorant enough to desire war with the United States, you might be well advised to read the history of the sinking of the U.S.S. Maine in Havana harbor in 1898 and the history of the Gulf of Tonkin in 1964.
Having done so, you will surely recognize that Americans are reluctant to go to war unless attacked. Until Pearl Harbor, we were even reluctant to get involved in World War II. For historians of American wars the question is whether we provoke provocations.
Given the unilateral U.S. invasion of Iraq in 2003, you are obviously thinking the rules have changed. Provocation is no longer required to take America to war. But even in this instance, we were led to believe that the mass murderer of American civilians, Osama bin Laden, was lurking, literally or figuratively, in the vicinity of Baghdad.
Given all this, you would probably be well advised to keep your forces, including clandestine forces, as far away from the Iraqi border as you can. You might even consider bringing in some neighbors to verify that you are not shipping arms next door. Tone down the rhetoric on Zionism. You've established your credentials with those in your world who thrive on that.
If it makes you feel powerful to hurl accusations at the American eagle, have at it. Sticks and stones, etc. But, for the next sixteen months or so, you should not only not take provocative actions, you should not seem to be doing so.
For the vast majority of Americans who seek no wider war, in the Middle East or elsewhere, don't tempt fate. Don't give a certain vice president we know the justification he is seeking to attack your country. That is unless you happen to like having bombs fall on your head.