Wednesday, January 28, 2009

Canada Sucking Fiscal Wind Too...................

Canada Swings from Budget Surplus to Deficit Amid Crisis
By Eric Roseman
Just twelve months ago, Canada was basking amid a commodity boom accompanied by a bull market in the Canadian dollar, which actually surpassed par-value against the American dollar in late 2007.
But in the span of just six months, the Canadian economy has come unglued in a bad way. Exports are plunging, manufacturing is sliding deeper into recession and commodity prices are collapsing. The Canadian dollar, which hit a 7% premium above the U.S. dollar in late 2007 at C$0.93 cents, tanked more than 20% in 2008.
Canada, which was mired in a string of deficits starting in 1975 finally cleaned house under former finance minister and prime minister, Paul Martin. By 1995, Martin took Canada into budget surplus.
Canada, however, ranks among those countries in the G-7 with the highest ratio of total bank deposits to liabilities, according to Credit Suisse. Only Japanese banks have a higher ratio. At 70%, that figure is high and exceeds the United States and Europe, excluding the UK, by more than 20%.
Unlike the United States and other European banks, Canadian financial institutions didn't go whole-hog on mortgage derivatives or subprime loans over the last several years. In Canada, a prospective homeowner actually needs a job to support his mortgage payments and must typically put down a 25% deposit - not exactly the keen requirement in the United States before the subprime crisis surfaced in 2007.
Canadian banks, however, did suffer large losses on asset-backed commercial paper starting in late 2007 with a few hundred billion dollars written off bank balance sheets.
Still, despite harboring one of the lowest leveraged economies in the industrialized world, Canada is highly reliant on Asian demand for its raw materials and, of course, U.S. consumption, which is responsible for more than 85% of Canadian exports.
Canada is now in a recession. Economic growth has stalled, the loonie has declined by a third since its peak and exports climbed only 3% in November compared to a year ago.
After reveling in a string of impressive budget surpluses for more than a decade, the Harper Conservative government announced its 2009 budget yesterday - sinking Canada into its first deficit hole in more than ten years as a result of rapidly declining economic growth, rising unemployment and a housing boom gone bust.
Canadian finance minister, Jim Flaherty, announced a series of big spending initiatives to spur the economy. Canada will spend C$165 billion dollars (US$135 billion) on infrastructure projects across the country, tax breaks for companies and individuals while extending unemployment insurance for the more than 2.3 million workers now out of a job.
Canada is entering a recession with the best relative balance sheet among the world's largest economies. Despite Ottawa's first budget deficit in more than ten years, the banking system remains relatively strong with none of its major six banks requiring government support or bailouts - at least not yet.
If this economic downturn persists beyond 2010 and commodities don't recover, Canada will probably head back into the economic abyss circa 1970s. China is a major consumer of her raw materials along with the United States and both economies don't look set to rebound until 2010 at the earliest. That spells more trouble for Canada and, possibly, a banking crisis that has yet to hit her financial markets.

Ruining America One Day At A Time

Six Ways To Ruin America, How We're Moving Down That Road
By Herb Denenberg, The Bulletin
Published: Tuesday, January 27, 2009
The book How to Ruin the United States of America by Ben Stein and Phil DeMuth is right on target and I’d only suggest one change. The title of the book should be How We Are Ruining the United States of America, as that is exactly what is happening. The authors make the case that six things would ruin the United States, as we know it:
1. Exile God from public life.
2. Teach Americans contempt for America.
3. Debase American culture.
4. Weaken the United States military.
5. Be a country without borders.6. Practice voodoo economics.That’s exactly what we’re doing and that’s exactly why we better reverse course immediately, as we’re deep into this process.Exile God From Public LifeThe authors show how God was central to those who first settled America after coming from Europe and how God was a central construct of their governmental philosophy up to and including the United States constitution.Consider the mission statement “Instructions for the Virginia Colonies” dated 1606: “Lastly and chiefly the way to prosper and achieve good success is to make yourselves all of one mind for the good of your country and your own, and to serve and fear God the giver of all Goodness, for every plantation which our heavenly Father hath not planted shall be rooted out.”The same threat is woven through the “Mayflower Compact” of 1620, a colony established for the “glory of God.”The authors of this book observe, “The centrality of God to their purpose in America should not be surprising, since securing the freedom to worship as they saw fit was the major motivation behind their journey.”The presence of God is clearly evident in the Declaration of Independence, where God, according to the authors, is explicitly referenced as “Lawgiver, Creator and Judge, as well as Divine Providence. The equality of Americans is derived from the equality of all people before the Lord. Freedom to choose one’s own leaders (democracy) is explicitly commended in the Hebrew Bible, and implicit in the free will that God gave to humanity.”Prayer and God were central to the deliberations leading to the Constitution and in the Constitution itself. At the Constitutional Convention, Benjamin Franklin issued a reprimand to that body for not turning to prayer for guidance.He said, “…[H]ow does it happen, Sir, that we have not hitherto once thought of humbly applying to the Father of lights to illuminate our understandings?... Do we imagine that we no longer need his assistance?”The first Continental Congress opened with two hours of prayer on Oct. 14, 1774 and the Supreme Court’s first session started with a four-hour communion service. George Washington’s Thanksgiving Proclamation of Oct. 3, 1789, captures the flavor of the times. This is the opening of that proclamation:“Whereas it is the duty of all nations to acknowledge the Providence of Almighty God — to obey his will — to be grateful for His benefits — and humbly to implore His protection and flavor …”The history of America shows the Founders intended no high wall between church and state. The phrase about that separation does not occur in the Constitution. In fact one day after Congress passed the First Amendment calling for freedom of religion, it declared a national day of prayer.The Founders, by the language of the first amendment, wanted to ban any national religion. The authors write, “Our founders were concerned with protecting the church from the state — with gaining freedom for religion, not freedom from religion, as it were.”The famous phrase, “a wall of separation between church and state,” appears in only one of Thomas Jefferson’s letters, to a group of Baptists explaining why he did not issue a Thanksgiving Proclamation, as did Washington and Adams. This one phrase, lifted from the 18,000 letters Jefferson wrote, is the basis of the claims made to drive religion from the public square. His collected works span 30 volumes. If this separation of church and state were such an important idea, it surely would have received more attention. And one phrase of one letter dashed off to answer a complaint should not overrule our entire history leading up to the Constitution and the clear language of the Constitution itself.Nonetheless, that one little phrase in one letter has been used to drive God from the public square. This has led to forbidding prayer, or even a moment of silence, in classrooms. Clergy cannot deliver invocations at schools. And more recently there is a campaign to remove “In God We Trust” from our currency and “under God” from the Pledge of Allegiance. All this is based on courts legislating from the bench instead of interpreting the Constitution and on the resulting courts’ power grab from the states.The role of religion in keeping nations and individuals in the right track is crucial, and when religion disappears or is depreciated, bad things happen. The authors put it this way:“Now the spectacular trajectory of America through history, which shoots across the firmament like a bright meteorite, goes forward with the explicit connection of God and country severed. There’s no more allegiance to God, to ethics, or to anything outside of ourselves. This is a recipe for a return to the Hobbesian jungle — for more chaos, violence and unbridled avarice. In other words, for exactly what we find today.”Teach Americans Contempt For AmericaThis column has often written about the hate-America crews found in the mainstream media and in our colleges and universities. And that’s exactly what the authors focus on. They also elaborate on the disastrous and destructive consequences of having so many Americans who hate America.A Marxist theoretician, Antonio Gramsci, understood that the Communist revolution had failed to spread across Europe. He thought for it to succeed, it would be necessary to capture the institutions of its cultural hegemony. By a stroke of good fortune, an educated class sprang up to do just that. It came from the media and the academe. The authors write:“… the ideas of atheism, exploitation, oppression, racism, sexism, homophobia, and fascism could be promoted until the culture lost its self-confidence and collapsed from within. While at first it might seem odd that people would want to destroy the same society that brought them such education, prosperity, freedom, and leisure, this is exactly what happened.”The media and the institutions of higher learning have become the promoters of anti-Americanism. It’s hard to explain this but it happened. Perhaps its because both groups are dominated by liberals, by Democrats and by leftists who are the ones who took up the hate America course. The authors go into the more fundamental causes. I prefer to attribute this anti-Americanism to the mental disease called liberalism.This development is closely related to another — the failure to teach and communicate the greatness of America in the history being taught to younger generations as they come along. America’s greatness and its Constitution were founded by brilliant men who had an understanding of the historical experience of man and what was necessary to create an institution that could assure life, liberty and the pursuit of happiness.The foundation of our government and its perpetuation depend on a continuation of this historical understanding. But we find this history is no longer taught in any sensible way. If Americans no longer understand what a gem they have in our Constitution and our way of life, they will no longer have the dedication and willingness to fight and sacrifice to preserve what they have.The authors make their point by outlining what history was taught in 1908 and what is taught now. In 1908, students had to master an incredible array of historical subjects. That is compared to what is taught at Brown University, an elite Ivy League School said to be on the cutting edge, now. It lists 18 courses in gender and sexuality studies and no fewer than 90 courses in African studies. Almost all the other courses on American history focus primarily on slavery and sexuality.The bottom line is that their courses on American history teach a highly limited, highly negative and highly distorted picture, which would omit all of the most important aspects of our history. Instead of teaching the true history of this great nation, our schools are teaching what I would describe as somewhere between nonsense, gobbledygook and the irrelevant.The authors think that colleges and universities went off the track during the Vietnam War when they were transformed from ivied tower institutions into catalysts for social change: “This meant discarding the old notion of the university as a haven for the disinterested pursuit of knowledge, and substituting a passionate political agenda of their own choosing …”What they’re teaching now doesn’t even rise to the level of intellectual garbage. Two examples can make the point, as stated by the authors:“According to Professors Barash and Webel (authors of Peace and Conflict Studies, an $87.95 textbook used in more than 250 Peace Studies programs), the American founding fathers were terrorists, while the terrorists in Iraq are patriots.”“At the University of California-Davis, a professor told the class that the number one terrorist in the Middle East was Jesus Christ.”Do you need more proof that liberalism is a mental disorder?The authors conclude this indictment of higher education in America with this sentence:“We are still the shining ‘city upon a hill’ (as early Ronald Reagan speechwriter John Winthrop penned in 1630), a great country in its great days – but for how long? Not long if too many academics have their way.”Debase American CultureThe only good news in this department is that at least most Americans are aware of what is happening. A 2007 Gallup Poll asked Americans if “the state of moral values in the country is getting better or worse?” Eight-two percent answered worse.Another Gallup question was “how would you rate the state of moral values in the country today — as excellent, good, only fair, or poor?” Only 1 percent said excellent. Sixteen percent said good. Thirty-nine percent said only fair. And forty-four percent said poor.The authors gauge the decline of popular culture in various ways. One of the most interesting ways was comparing Pulitzer Prizes for literature in two periods:Back then:
• 1940: “The Grapes of Wrath”• 1944: “Oklahoma!”• 1947: “All the King’s Men”• 1948: “A Streetcar Named Desire”• 1949: “Death of a Salesman”• 1950: “South Pacific”• 1952: “The Caine Mutiny”• 1953: “The Old Man and the Sea”• 1955: “Cat on a Hot Tin Roof”More Recently:• 1999: “The Hours”• 2000: “Interpreter of Maladies”• 2001: “The Amazing Adventures of Kavalier & Clay”• 2002: “Empire Falls”• 2003: “Middlesex”• 2004: “The Known World”• 2005: “Gilead”• 2006: “March”• 2007: “The Road”The authors do the same for Pulitzers:Back then: Hermann Hesse, Andre Gide, T.S. Elliot, William Faulkner and Bertrand Russell.And now: Imre Kertesz, J.M Coetzee, Elfriede Jelinek, Harold Pinter and Orhan Pamuk.The authors give other examples and then draw this conclusion: “What’s completely inescapable is the stunning fall in quality and what might be called a generalized hatred of America.”And this is followed by a compelling observation: Hollywood has made many movies about the evils of the Nazis and the atrocities of the Japanese during World War II. But Hollywood is yet to come out with movies about the evils and atrocities of Soviet Communism. And there are no movies about the incredible evils of the Islamofascists, even as we’re at war with them. Hollywood finds endless evil in America but had trouble in finding it in Joseph Stalin’s Soviet Union or the present day lands of Islamofascists.And then there’s television, which has been inflicting catastrophic damage on our culture, and it continues to get worse. The Parents Television Council found television is getting more violent over time and that violence is increasingly of a sexual nature. Violence is more common in children’s than in adult’s television: six incidents of violence per hour compared to 4.41 for adults.Add to that the fact that virtually every study of the subject finds that television violence correlates with an increase of aggressive behavior in children. And if you want one more statistic to gag on consider this one: Deborah A Fisher, Ph.D., of the Pacific Institute for Research and Evaluation, estimates that children are typically exposed to 1,000 television murders, rapes and assaults a year. Can we assume that these most impressionable little creatures aren’t impressed by that?There’s more and it gets worse. A study sponsored by the Culture and Media Institute found a correlation between high television viewing and lax morals. For example, the study found that people who watch four or more hours of television daily are less committed to honesty and charity and are more permissive about sex and abortion.Music provides an even more compelling example. Remember the songs of the 1940s:• “You Made Me Love You”• “When You Wish Upon a Star”• “White Christmas”• “Some Enchanted Evening”The list of great songs is almost endless.Compare that with rap music today and its endless flow of the n-word, the f-word, other profanity of all kinds, violence, misogyny and perversion.This all adds up and it’s easy to imagine that the final sum is bad news. The authors say a sampling of popular culture teaches the following:• The sociopath is a hero.• Saving and thrift are contemptible.• Family life is for squares.• The other guy is always to blame for everything.• Hard work is for suckers.• Self-discipline and mastery of any field or skill can be achieved through fantasy instead of hard work.This adds up to America the Beautiful being forgotten and that adds up to the possibility of losing America.The authors write: “With the eradication of history and its replacement with America-bashing, sloganeering, elementary truths once taken for granted throughout our society are perilously close to being forgotten. This weakens all the things that made America great and at the same time it makes us vulnerable to our enemies.”So the authors have an interesting observation about their most urgent concerns: “We aren’t worried about America’s financial capital. There’s plenty of money and plenty of trinkets. We are worried about our moral capital. It’s as if it has been loaded onto ships and is sailing out of sight. When it is gone, what will we do?”I’d add one more worry. The authors better start worrying about the money and the trinkets. Without America’s values and institutions that are our glory, we will not be able to continue to be the most productive, innovative and successful society in the history of the world.The three other ways to ruin America are brilliantly presented in three more chapters. But in my view, they require less amplification and explanation than the first three I’ve discussed. The other three ways to ruin America are to weaken the United States military, be a country without borders, and practice voodoo economics.We face external threats to our security from Islamofascism and the Axis of Evil. But a wise man pointed out that if we lose America, it will come from within, from those who inspire a culture in our own citizens that hates America, from those who create a culture devoid of values and finally from a culture that abandons the great rudder that helps keep a society moving in the right direction, religion.America seems to be going in the wrong direction, and we better start rising to the occasion and doing our duties as citizens if we want to keep living in this shining city on a hill.

The fox and the henhouse

The Flawed Liberal Mind

Liberals are liberals first
Posted: January 28, 20091:00 am Eastern© 2009
Pick the target, freeze it, personalize it and polarize it.
~ Saul Alinsky, "Rules for Radicals," No. 13
We have all heard about how crazy liberals are. Conservative intellectual and radio host Michael Savage even wrote a book about this phenomenon, his 2005 New York Times best-seller, "Liberalism is a Mental Disorder." Likewise, in 2008, Dr. Lyle H. Rossiter Jr., M.D., wrote in his best-seller, "The Liberal Mind: The Psychological Causes of Political Madness," the following:
The roots of liberalism – and its associated madness – can be clearly identified by understanding how children develop from infancy to adulthood and how distorted development produces the irrational beliefs of the liberal mind.
Liberals are liberals first. Am I being polemical? Yes, to a degree, but I am not being personal. I'm not contending that all liberals are crazy, but I will say, along with Dr. Savage and Dr. Rossiter, that a logical, legal and medical case can be made that liberalism (i.e., socialism, progressivism, egalitarianism) is not a rational political belief system.
On this point, last Friday, President Obama chided Republican leaders for being stupid enough to listen to conservative stalwart Rush Limbaugh. Obama said, "You can't just listen to Rush Limbaugh and get things done." With a hushed silence over the room, the messiah went further saying, "If we don't get this done we (the Democrats) could lose seats and I could lose re-election. But we can't let people like Rush Limbaugh stall this. That's how things don't get done in this town."
Rush was clicking on all cylinders over the weekend when he remarked about Obama's criticism of him in this manner:
Obama's plan would buy votes for the Democrat Party in the same way FDR's New Deal established majority power for 50 years of Democrat rule, and it would also simultaneously seriously damage any hope of future tax cuts. … Put simply, I believe [economic] stimulus is aimed at re-establishing "eternal" power for the Democrat Party rather than stimulating the economy, because anyone with a brain knows this is NOT how you stimulate the economy.

When President Obama promised America "FDR, part II," few of the political pundits took notice because ideologically they are elitists, liberals and socialists like Obama. The propaganda press, the professors of the academy, judges, the Democrats and most Republicans all have fallen prey to the siren song of socialism and leviathan government taking over more and more of private enterprise. Wall Street, the investment banks, Freddie Mac and Fannie Mae, the home mortgage industry, the auto industry, states like California, Arizona and Michigan on the verge of bankruptcy, even the porn industry, is just the beginning. They all want "bailouts" i.e., "welfare," i.e., unearned, undeserved, unconstitutional confiscation of money belonging to "We the People" and given to others who didn't earn it and don't deserve it to secure Democrat Party votes in perpetuity. It's legalized thievery. It is Mafia tactics on a grand scale.
What the GOP seems oblivious to knowing and what I am trying to teach my students at Savannah State University is politics through a historical lens. That means we study politics (or any other subject for that matter) through the lens and judgment of history and through the non-partisan philosophy of Veritas – truth. All else is irrelevant propaganda.
That said, history has definitively demonstrated that since President Theodore Roosevelt, liberals (or "progressives," which was what socialists and liberals were called 100 years ago) made policy proposals not with the intent of solving real social, economic, education, legal, race, class, gender problems, but to solidify their power over the people forever. Just look at some of the political philosophy, policy and legislation passed by presidential executive order or by illegal collusion with Congress over the past 100 years:

~Theodore Roosevelt (1901-09) – the first true "progressive" president, though a Republican, invented the "imperial presidency" and used the "bully pulpit" and his "Fair Deal" policies to concoct all sorts of policies and programs that had no correlation with free-market capitalism (i.e., "trust busting") or respect for private property. (Roosevelt set aside more land for national parks and nature preserves than all of his predecessors combined, 194 million acres.)
Woodrow Wilson (1913-21) – Jonah Goldberg, in his important book, "Liberal Fascism," quoted this president: "True leaders" uses the masses like "tools"; "All progressives ask or desire is permission – in an era when 'development,' 'evolution,' is the scientific word – to interpret the Constitution according to the Darwinian principle."

~Franklin Delano Roosevelt [FDR] (1933-45) – Used the stock market crash of October 1929 and the Great Depression as a pretext to enact his "New Deal" to grow the government in gargantuan proportions over the people and to use the socialist welfare state as the "power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe. …"

~Lyndon B. Johnson [LBJ] (1963-69) – "The Great Society" or "War against Poverty" programs including AFDC, Food Stamp Act, Medicare, Medicaid; greatly expanded FDR's welfare state to connect every conceivable aspect of the American citizen to the tentacles of leviathan government. (Remember LBJ was a protégé of FDR.)

~Richard Nixon (1969-74) – Although a "Republican," Nixon gave America socialist wage and price controls, the Environmental Protection Agency and affirmative action. He also gave us two unremarkable liberal justices on the Supreme Court: Chief Justice Warren Burger and Harry Blackmun. Blackmun authored the Roe v. Wade decision in 1972, arguably (after Dred Scott v. Sanford [1854] upholding slavery) the most murderous, infamous decision in the history of American constitutional law.

~George W. Bush (2001-09) – singlehandedly deconstructed the Reagan Revolution by his bungling, incoherent, incompetent domestic policies (amnesty for illegal aliens, No Child Left Behind), foreign policy (the wars in Iraq and Afghanistan) and reinstituting a Bob Michaelesque GOP irrelevance that will probably mimic the wilderness years of 1954-94.

~Barack Obama (2009- ) – His first call as president was to Mahmoud Abbas, Yasser Arafat's protégé and the leader of the "former" Palestinian terrorist group Fatah. His first public interview as president was with the Dubai-based Al-Arabiya. Obama's first executive order was to limit lobbyist influence in Washington, D.C., while at the same time granting Deputy Secretary of Defense William Lynn an exemption because Lynn was a lobbyist for the defense contractor Raytheon. Other early policies that seem critical to Obama's legacy and the Democrat majority in Congress can be summarized in three words – abortion, abortion and abortion.

Rush Limbaugh was right – "liberals are liberals first." Liberal Democrats create policies not to solve problems, but to win elections and make more and more people dependent on the government welfare programs they provide. Since FDR, liberals have used every Machiavellian tactic to create a Leninist groupthink mentality; a slavish and addictive dependence on government that Democrats hope will keep them in power in perpetuity. This is what Rush meant he said, "Obama's plan would buy votes for the Democrat Party in the same way FDR's New Deal established majority power for 50 years of Democrat rule."
When I see the GOP sitting politely with President Obama before the cameras – neutered, compliant and irrelevant – I start shouting at my TV set: "WHERE ARE THE REAL MEN IN THE GOP!?" Then Rush helped me to remember: Don't think Obama, think Saul Alinsky, Obama's community organizer mentor, who said in Rule 13 of Alinsky's "Rules for Radicals" – "Pick the target [Rush Limbaugh, the conservative base], freeze it, personalize it and polarize it." This is what President Obama masterfully executed at last Friday's press conference with the GOP.
Why don't the Republicans understand that they are playing checkers while Obama and the Democrats are playing chess? The GOP is trying to win an election in the next two years, and the Democrats are using Machiavellian tactics to win elections for the next 40 years. Perhaps that's why the GOP doesn't stand for the "Grand Old Party" anymore. The more appropriate acronym is "GIP" … the "Grand Irrelevant Party."

Figures, Republicans Embarrass A Conservative

Republicans chew on DeMint

By: Manu Raju

January 27, 2009 09:13 AM EST
Just after November’s election, Republican senators huddled in a closed-door meeting to consider a package of rules that would have tossed Ted Stevens out of their conference, imposed term limits on party leaders and otherwise changed the way the Senate Republican Conference does business. South Carolina Sen. Jim DeMint, who proposed the rules, saw quickly that they weren’t going to be popular with his colleagues. So one of his staffers urged him to withdraw the proposal setting term limits on the GOP leader, and DeMint hoped the others would remain packaged together so they could be considered in a single vote. But Conference Chairman Lamar Alexander of Tennessee took issue with the staffer and quickly called a vote on the term-limit proposal before DeMint decided to withdraw it. Then party leaders proceeded to call up each of DeMint’s other proposals separately, creating a long series of votes that DeMint lost badly. “No doubt,” DeMint said, Republican leaders were “trying to humiliate” him. But some Senate Republicans say privately that DeMint has done plenty to humiliate himself. As Republicans seek a way forward after two disastrous elections, social and fiscal conservative activists off Capitol Hill are rallying behind DeMint because of his unrelenting style to force his party to return to its small-government, free market roots. DeMint, 57, said in an interview that he’s not dwelling on his previous battles with the GOP leadership and sees areas where his party’s leaders and the Obama administration can work together to solve the country’s problems. But DeMint is less willing to compromise with Democrats than many in his party, and some Senate Republicans doubt his fiery tactics can lead their party out of the political wilderness when the public is seeking an end to legislative gridlock. DeMint’s critics, including senior Republican senators and top aides in the Senate, say his refusal to work within the norms of the body — by showing deference to party leaders and chairmen and building support behind closed doors without airing concerns first to the news media — undermines his ability to draw support for his cause.

say privately that while they believe he is fighting for a worthy cause, the drama he creates between GOP leaders and himself is designed to project his image as an unyielding reformer — even though he agrees with his leaders on most issues. Asked in early December for his thoughts on DeMint, Sen. Bob Bennett of Utah — a close adviser to Senate Minority Leader Mitch McConnell of Kentucky — said: “I have no comment. That should be a comment in and of itself.” After learning of the Utah Republican’s comments, DeMint said that Bennett is “a good guy, but I think sometimes he’s part of the problem.” DeMint, up for reelection in 2010, is genial by nature and says he tried to work within the Capitol’s seniority system during his three terms in the House and his first two years in the Senate. But he has learned, he said, that lawmakers in both parties “only respond to pain.” “They don’t respond to good policy, persuasion, being nice. I’ve tried it all,” he said. “There’s nobody nicer than I am.” In a chamber where relationship building is seen as paramount to legislative successes, DeMint said that “club friendships [have become] more important than the party and where we’re going as a country.” DeMint has also tried to build support from within the party, as chairman of the Senate’s conservative Steering Committee, which holds weekly lunches. DeMint, however, says his approach to build pressure off Capitol Hill is most effective. He claims credit for drumming up grass-roots anger through blogs and radio talk shows that led to Barack Obama’s support for a one-year ban on earmarks, the defeat of the immigration bill in 2007 and GOP leaders’ rejection of the auto bailout last month. And he plans to take the same approach to derail the proposed economic stimulus package. But GOP leaders don’t always respond well to DeMint’s sometimes uncompromising tactics. For instance, members in both parties criticized DeMint last summer for forcing a Friday vote on a Global AIDS bill and then a Saturday vote on a housing rescue bill after Senate Majority Leader Harry Reid (D-Nev.) would not allow his amendments to come forward for a vote. Adding to frustration from his party, DeMint insisted on his amendments even though they were likely to fail, and he missed the Friday vote because of a family wedding he had to attend.

DeMint recognizes that his style may cost him the support of leadership when it comes to some things he wants — such as a seat on the powerful Senate Finance Committee. Nowhere was the tension between DeMint and the leadership clearer, however, than at the Nov. 18 Republican Conference meeting in the Capitol’s Mansfield Room. According to people who attended the meeting, Sen. John Ensign (R-Nev.) argued that the adoption of term limits for leadership could be perceived as an attack on McConnell, even though the rules would have taken effect after McConnell’s tenure as minority leader ended. The argument caused DeMint to reconsider the motion. But when one of DeMint’s staffers stood up to remind his boss he had the right to withdraw it, Alexander took strong exception, scolding the aide because only senators are typically allowed to address such meetings. Alexander then called for a vote before DeMint withdrew the motion — and Republican senators overwhelmingly crushed his proposal. DeMint says that he wanted senators to be able to vote for eight other motions at once, so the vote could be concluded quickly. (He previously withdrew the motion to kick Stevens out of the conference until after the Alaskan’s reelection race was called, promising a vote at another meeting later that week — but that never occurred.) By holding the votes one by one, DeMint said, party leaders were sending him a message about how little support he had within the conference. “It’s part of the whole display [to say], ‘Here’s what happens, guys, if you buck the tide,’” DeMint said. “It’s the milieu, it’s the Senate, and we don’t do that.” GOP leadership aides said the votes were spread out so each motion could be considered on its own merits, including one that was actually adopted: to require that all internal secret ballot elections be conducted by the party’s secretary. “Discussion time had been requested for each proposal, so there was going to be a significant period of debate regardless of the vote process,” one GOP leadership aide said. A senior GOP aide rejected DeMint’s contention that it was the leadership who tried to embarrass him. The aide said that while the senator has “certainly contributed to leadership policy positions, the rejection of an amendment to the rules was a rejection by the caucus as a whole, not by any faction — leadership or otherwise.” Yet Florida Sen. Mel Martinez told Politico at the time of the meeting the session had been “terrible” and “caused consternation” within the conference. DeMint says he’s sympathetic to McConnell, who has to reconcile views of a diverse caucus, and he says that on most issues, the GOP leaders “actually appreciate somebody going out there ... and loosening the ground up, where they can’t necessarily go in the beginning.” Indeed, Alexander says that his relationship with DeMint is “terrific.” He’s hosted DeMint and his wife at his home in Knoxville, Tenn., and has given him a spot on the conference’s advisory board. Alexander declined to comment on the Nov. 18 conference deliberations, saying such meetings are intended to be private. Don Stewart, a McConnell spokesman, called DeMint a “valuable member of our conference and among the strongest advocates for the American taxpayer.” And DeMint’s home-state colleague, Sen. Lindsey Graham (R-S.C.) praised DeMint for fighting for what he believes — even though the two backed different Republican presidential candidates and Graham backed an immigration plan that DeMint derided as “amnesty” for lawbreakers. “People that I’ve even been at odds with — I didn’t think they’d speak to me again,” DeMint said. Singling out former GOP Sens. Pete V. Domenici of New Mexico and John Warner of Virginia, DeMint said that “a lot of them will whisper in my ear: ‘Keep fighting.’”

"Already In A Depression........" Funny, Sound Of Cannons Has Been Saying That For Over A Year..........

Merrill Lynch’s Chief Economist: We’re Already In a Depression
George Washington’s Blog Wednesday, Jan 28, 2009
Merrill Lynch’s chief economist for North America, David Rosenberg, writes in an economic commentary entitled “Some Inconvenient Truths” that we are probably already in a depression:
We are likely enduring a depression today
As for depressions, there is no official definition, except to say that they have existed in the past. There were no fewer than four in the nineteenth century, one in the twentieth century, and we are very likely enduring another one today.
As I have previously written, just like it took many months for the officials and talking heads to admit that we were in a recession - and in fact had been for a long time - it will take a while before the government admits that we are already in a depression.

No Where To Run, No Where To Hide.............

Stocks Could Drop 20%, No Safe Haven: Dr. Doom

US and global stocks are still likely to fall because the corporate and economic news will be worse than expected, Nouriel Roubini, RGE Monitor Chairman, told CNBC.

Investors will be hit by the realization that many banks are bankrupt, that companies will have to rein in debt and sell assets and that emerging markets may get into trouble, Roubini said.
"I think that there's a 20 percent downside risk to US and global equities," Roubini told "Squawk Box Europe."

The transmission mechanism oiling the wheels of the banking system is broken, he said, adding that "banks are getting the money and they are hoarding it, they're not lending it," because they expect higher losses.
There is no safe haven from the crisis as all countries are affected, and the collapse in aggregate demand may bring about prolonged deflation, Roubini added.
"We have to worry today about not ending up like Japan. That's the risk for the global economy," he said.
The rise in the price of gold is a signal of fear that countries and corporations may default on debt rather than of worries about future inflation, and the precious metal is used as a "safety valve."
Falling stock prices and very low bond yields are signaling depression, while credit spreads are still very wide, indicating fear of defaults, according to Roubini. And even the fast-growing Asian economies aren't spared.
"If you look at the data in emerging markets and around Asia, East Asia, there is a hard landing," he said. "All the numbers out of China suggest… the manufacturing sector is already in a recession."
Protectionism is the next danger, as history shows that it prolonged the 1930s depression, he said, regarding remarks by U.S. Treasury Secretary Timothy Geithner that China was "manipulating" its currency to help its exports.
"Certainly starting a war with China on the issue of the currency is very, very dangerous," he said. "The US is relying on the kindness of strangers -- Russia, China, the Gulf States … to finance a huge, and growing, twin current account and fiscal deficit," Roubini said.
"If China were to pull the plug on financing the US dollar, then we'd have a freefall of the dollar," he added.

Itemization Of The Stimulus Rip-Off

Here is where the 825 Billion is going!
The Coming Depression Wednesday, Jan 28, 2009
• The non-job creating spending in this bill includes:
a) $50 million for the National Endowment for the Arts. ( will this create 1 job?)

b) $400 million to study climate change. ( What’s there to study? Its a climate change!)

c) $200 million to revitalize the National Mall, including planting new sod.( BULLDOZE IT DOWN around $10,000 +removal!)

d) $1.1 billion to allow the Secretary of Health and Human Services to establish a permanent board to ration health care services, a precursor to universal health care. (A Billion dollar BOARD OF HEALTH? Enough for FREE HEALTH CARE for a YEAR!)

e) Hundreds of millions of dollars for contraceptives and family planning services through Medicaid.

f) $650 million dollars for additional digital TV converter box coupons. ( turn the TV off and get to basics, IDIOTS!)

g) $166 billion in direct aid to help states pay their bills. ( Due to illegal immigrants)

h) $13 billion for reading programs.

i) $15.6 billion to increase the maximum annual Pell grant (for college students) by $500 from $4,360 to $4,860.

j) $3 billion to public health departments for additional immunizations. ( immunize yourself from a DUMB Gov’t)

k) $1 billion in additional funding to pay heating bills of low-income Americans. ( Give them a JOB, clean the streets ANYTHING)

l) $1 billion for the 2010 census. ( To count illegal IMMIGRANTS?)

m) $100 million for National Science Foundation scholarships.

n) $200 million for nutrition programs. ( Buy Macdonalds , Burger King and the rest of them foul places AND SHUT THEM DOWN!)

o) $200 million to provide incentives to teachers to raise test scores. ( Teach students how to write a check, pay a bill, apply for a scholarship, grocery shop, how to apply for a rental apt, EVERYDAY STUFF YA KNOW? BUT TEST SCORES? Bunch of Simpletons)

p) $2 billion in additional funds for low-income child care.q) $900 million in additional funds to prepare for the pandemic flu. ( WHAT? Probably find a cure for every disease in the world with that money!)

Ron Paul CNN American Morning 01-27-2009

Ron Paul says it all. Funny that America had the choice to elect a political and financial genius like Ron Paul; but instead chose an empty shirt windbag like Obama. Ron had a plan to cut the income tax, but Americans decided to saddle the next 8 generations with ridiculous debt. Amazing.

Ron Paul's Answer to The Spending Spree (uh....stimulus package?)

Ron Paul: Stimulus Packages Will Turn Recession Into A Depression
Congressman warns that destruction of Dollar will compound depression beyond scale of 1930s crash
Tuesday, Jan 27th, 2009
Texas Congressman Ron Paul has warned that passing the latest proposed economic stimulus package would be akin to pouring kerosene on an already raging fire.
Paul, who is also a member of the House Financial Services Committee, warned that such measures will cause a recession to turn into a full scale depression possibly worse than that of the 1930s.
During a Television interview with CNN, Paul explained why he believes stimulus funding is such a destructive policy.
“It’s because the government is spending it. If the people were spending it it would be fine, but the government never does anything productive. They have to take money from productive individuals and spend it in non productive ways, so it’s just digging a bigger hole, getting us into bigger debt, and that is the problem.” Paul said.
“This stimulus package is going to cost each and every American $6700 of more debt, so how can that be beneficial? If debt was the answer we would of never had a problem.”
“We are doing exactly what we did in the 1930s, we are taking a recession and working very hard to try and turn it into a depression.” The Congressman added.
“What we’re worried about right now, well certainly I am, is that it’s worse than the 30’s because we’re on the verge of destroying the dollar. So if you think the financial crisis is bad, and the financial system isn’t working, wait ’til you find out when the Dollar doesn’t work.”
The Congressman told viewers that only by liquidating debt, allowing the market to operate freely and allowing prices to come down will the problem be corrected.
Paul also spoke to those who have blamed the free market for the downturn and have suggested that deregulation is a primary cause of the financial crisis.
“We never had a hands off approach, that’s the fallacy, and as long as we believe that we will never correct our problem. If you blame Capitalism and free markets and sound money for this then we can’t win the intellectual fight.” Paul urged.
“If you want to regulate, regulate Government agencies, regulate the Treasury, regulate the Federal Reserve. The Federal Reserve has no oversight, they’re not even permitted to be audited by law, so that’s the kind of oversight we need. The Federal Reserve has committed trillions of dollars to individuals, corporations and banks, they don’t even have to tell us where it’s gone to.” he added.

Tuesday, January 27, 2009

Offshore Tips

Locking Down YOUR Offshore Accounts...

"The Swiss government so far has refused to allow UBS to turn over these records," , "citing the country's bank secrecy laws. However, negotiations are underway that may permit banking records to be released on a case-by-case basis. If you're a U.S. person with an unreported offshore account at UBS - or anywhere else - contact a tax lawyer immediately for assistance. The IRS has you in their cross hairs."
"U.S. clients have the option of transferring their assets to U.S.-based wealth-management units, or to another offshore bank. They can also repatriate the assets to the United States. All these options create a paper trail that many clients - especially those who didn't report the income or gain from their accounts to the IRS - would prefer to avoid."
"U.S. persons - U.S. residents especially, but increasingly, even U.S. citizens living abroad, are persona non gratae at offshore banks. Moreover, as the Obama administration beefs up the Securities & Exchange Commission, you can expect renewed efforts by this agency to penalize offshore banks that permit U.S. investors to purchase foreign securities that aren't SEC-registered. I know of at least one offshore bank that already prohibits U.S. residents from purchasing non-SEC registered securities. I think this number will increase in the months and years ahead."
"Here are a few ideas that you may help you bypass these restrictions:
~Have the bank or a private portfolio manager trade your portfolio. That way, you're not providing investment instructions from the United States.
~Place your assets in a tax-compliant offshore structure, such as an offshore trust, an offshore corporation, an offshore LLC, an offshore insurance policy, or an offshore annuity. Again, you may lose the ability to make investment decisions.
~If you want to manage your own account, some offshore banks will accept investment instructions from U.S. persons if they originate outside the United States.

"Whatever you do, don't give up! As the global economy collapses, it's more important than ever to get a portion of your wealth out of the United States - away from litigious lawyers, nosy competitors, and most of all, out of the U.S. dollar."

Youtube censored the original--Trailer - The 0bama Decəption - A Film by Alex Jones

Alex Jones has his hand on the pulse of the Elites. Ignore his findings at your own peril.

Monday, January 26, 2009

Thain The Fucktard

The Yuppy-fication of Wall Street By Jack Crooks
One of the problems I've lamented about over the last several years is what I refer to as the Yuppy-fication of Wall Street. Instead of the guys who made it to the top because of their guts, instincts and brains, we are now faced with a world of Ivy-league MBA's with spreadsheets running these institutions.
We have guys who never had to worry about how to feed their kids, or make their mortgage payments or scrape together just enough of their own funds to launch a venture that later failed miserably. Instead we have an incestuous pool of people with powerful contacts populating the upper echelon.
The old-school guys who understood risk viscerally and did all they could to keep overhead at a minimum, knowing there is such a thing as a business cycle, seem to have been either pushed out or retired or runaway from the newly Yuppy-fied world in which we live.
Don't get me wrong. Our Ivy League turns out some very smart people indeed. But they are smart in terms of facts and figures and business case studies. They know strategic planning, have perfected the proper schmoozing with just the right person, and know how to make a spreadsheet sing. They are maestros.
But they never delivered mail in the mail room and grinded their way through every level of the organization, having to prove themselves every step of the way (later being sent to a top school by the company having proved real leadership skills) and learned about the firm's core culture and competencies that drive sustained long-term success in all business environments.
I think this is why we end up with egotistical clowns such as John Thain.
In a just world Mr. Thain would be taken out and beaten within an inch of his life for his arrogance ,incompetence and destruction of other peoples' wealth. Instead he walks away with millions, will likely spend a few years in the wilderness being "rehabilitated" (read friends in high places and journalist rebuilding his reputation with well placed lies at just the right time to polish the image) and re-emerge to "lead" another institution.
Sadly gone are the days when the head guy sat at a trading desk with the troops and lead by example — think John Gutfreund at Solomon.
"Salomon [Brothers] was an institution. The chairman, John Gutfreund, had a desk on the trading floor that he sat at every day. In my nine years at Salomon, I never sat more than twenty feet away from him.
...Here's a guy who is chairman of Salomon Brothers, which in those years was probably the most powerful firm on the Street, while I am a nobody trainee. It has been a year since that first encounter and he has the presence of mind and the interest to set me up like that," as told by Bill Lipschutz to Jack Schwager in The Market Wizards.
I guess a lot of this had to do with the fact that firms on the street were partnerships. The partners had real money on the line so they couldn't afford "social promotions." The key players had to know risk viscerally. Partners needed and hired really smart people with guts and integrity to safeguard their own wealth and grow the firm over the long-run.
Now, clowns like Thain play with other peoples' money. And sadly we see how Yuppy-fication has destroyed our once great trading institutions.

Sunday, January 25, 2009

The U.S Economic Collapse! A MUST WATCH!

The top of this video has a quote by Ron Paul. Truer words never spoken in a video piece every American should see! A Sound Of Cannons Essential!!!!

Thursday, January 22, 2009

Nicely Said.....................

"[War] is not a polite recreation, but the vilest thing in life, and we ought to understand that and not play at war." -Leo Tolstoy

But Where Is Your Money safe???

"Those of you who read Atlas Shrugged by Ayn Rand probably recall that John Galt (the central character) persuaded the leading industrialists and other productive capitalists in the U.S. to go on strike and move to a hidden valley called Galt's Gulch where they would be free of a socialist government. Of course, there isn't any place in the USA where a lot of people could be free of government intrusions or the increasingly confiscatory income tax."
"Charles Adams, author of For Good or Evil: The Impact of Taxes on the Course of Civilization stated that, "The list of notables who have fled their homeland to avoid heavy taxation would read like an international Who's Who. Flight is the number one device used by wealthy people to avoid heavy taxation.""
"If Galt's Gulch isn't in the USA, where might it be? The Heritage Foundation'sEconomic Freedom Index provides a ranking of economic freedom in 179 countries."
"The top two were in Hong King and Singapore, both of which are subject to the whims of the Chinese government, which is ranked at # 132. Australia was # 4 and New Zealand was # 5, with Ireland in between at # 3. The USA was # 6. Switzerland was # 9. Most of the Caribbean island nations were not listed, probably because they are part of the British Empire. In Central America, Panama is # 55, Belize is # 66 and Costa Rica is # 46."

This Ain't Good....................And It's Getting Worse

There were separate stories out of England and the USA about how both country's central banks were about to turn on the printing presses and monetize their respective debts. It's their only way out now...unless they want to revalue the gold price ..and it doesn't look like that's in the cards at the moment. John Exeter's inverse liquidity pyramid is posted above. We've gone from "Small Business" to "Paper Money" in an unbelievably short 18 months...and now the Fed is trying its best to prevent the final resolution to gold. They're fighting a losing battle. Now it's only a matter of when...and how high. Buy physical gold and silver and take possession, as I get the distinct feeling that we're nearly out of time. And it might be worth considering taking a few months’ worth of living expenses out of the bank while you're at it.

Paulson The Idiot

Hank Paulson did not leave his post without a final shot at China. In this Bloomberg story, "a Chinese central bank official attacked reported comments by U.S. Treasury Secretary Henry Paulson that China’s high savings rate helped trigger the global credit crisis." Paulson's logic is similar to that of a teenager pleading to a judge for clemency because he is an orphan after he killed both of his parents.

Ted Butler Says There's Less Silver Out There Than People Think

Real Silver Availability

Much has been written about the actual amount of physical silver that exists in world above ground inventories. Due to decades of industrial consumption depleting world inventories, there is remarkably little silver remaining. I have estimated perhaps one billion ounces of silver bullion equivalent exists at anywhere near current prices, and my estimates are much higher than most published estimates. Considering that the cumulative world mine production through the ages has been roughly 40 billion ounces, that means only 2.5% of that total production remains in bullion equivalent form. That’s shocking. This is one of the key reasons for buying silver, namely, there isn’t much left.
I’ve written countless articles over the years, trying to put this shockingly small amount of silver remaining into different perspectives. I’ve compared it to the total amount of money and credit in the world, namely, $11 billion of silver remaining compared to the many tens of trillions of dollars of money and credit sloshing around. Each ten trillion is a thousand times more than all the silver in the world is currently worth.
I’ve compared the amount of silver, in ounces and dollar terms, in per capita terms, namely, how much there is if evenly divided among the earth’s 6.5 billion inhabitants. For each man, woman and child, there exists 0.15 of an ounce. At current prices that’s around $1.65 a person. Not much of a surplus or overhang.
I’ve compared the amount of silver remaining above-ground to other commodities, and particularly to gold, it’s constant compatriot through millennia. I have explained that because gold was always highly valued as an investment and for jewelry, its high price prevented it from being industrially consumed, in stark contrast with what occurred in silver. Due to this plainly-observed historical reality, the world cumulative gold mine production of 5 billion ounces still exists in a relatively easy to recover form. So even though 8 times more silver than gold was produced throughout history, 5 times more gold than silver exists above ground today, due to silver’s industrial consumption profile over the past 100 years.
Further, when you assign a dollar value to gold and silver above ground inventories, given the current price disparity between the two, the comparisons are even more startling. Because gold is currently running at almost 80 times the price of silver, that means there is 400 times more gold than silver in the world in dollar terms. On a per capita basis, that comes to $660 per inhabitant, compared to $1.65 for silver. In the past, I’ve estimated that maybe one in a million knew these facts. My conclusion was the growing awareness of this situation alone would impact the price of silver for many years to come.
Today, I would like to look at the amount of above ground silver in a different perspective. This perspective is not unique to silver and applies to all investment assets. What I will say may not seem dramatic at first, but I ask you to think it through. I don’t recall seeing these thoughts in print before. My observations are just that - personal observations that I have contemplated for many years. If my observations and conclusions are correct, it could be considered another very bullish factor for silver. It has to do with what exists and what is available.
In today’s financial world, there is often very heavy daily trading of most investment assets, excluding real estate. Stocks, bonds, currencies, commodities, and especially derivatives are traded actively. Due to advances in computers and communications, it’s easier than ever to transact massive amounts of traded assets quickly. I have come to observe that the vast majority of all this daily trading, well over 90%, is just that - day trading. In other words, very little of this daily trading involves the accumulation or disposal of long term positions. Most of the trading involves quick in and out scalping-type transactions. My first observation is that long term holders are basically not involved in this daily trading.
Let me use COMEX silver futures as an example of what I am talking about, although I could use, quite literally, any other traded market. Certainly, I have never publicly suggested anyone buy a futures contract instead of real metal. Yet, even using a futures contract as an example, I think I can illustrate my point. That point is that in futures contracts, most trading is day trading.
On a typical day, maybe 20,000 COMEX silver futures contracts are traded, or close to 100,000 contracts in a week. The amount of silver that these contracts represent is enormous. So enormous that it would be absurd to think that real long-term silver holdings were actually being sold by old owners and bought by new owners. 100,000 silver futures contracts is equal to 500 million ounces of silver, not much less than a full year’s annual mine production.
Currently, there are around 80 to 85,000 silver contracts in existence (open interest). We know from published data, including daily open interest statistics as well as weekly COT data, that very few of the total existing open interest changes hands daily or weekly. Long term holders don’t trade that frequently and couldn‘t possibly trade in the amounts represented by daily and weekly volume statistics. Therefore, most trading must be daily in and out trading, with very little being carried overnight.
Away from futures trading, it is even more obvious that long term holders don’t trade frequently. They sit and hold. Think of how many times you buy or sell real estate, or real silver or gold, or bonds and stocks and other long term assets in a typical year. I would estimate, that over the course of a year, that no more than 5% to 10% of long term investment assets get turned over, including real estate. That’s over the course of a full year. Divide that 5% to 10% by the number of days in a year and you will come up with a very small percentage for how many long-term holdings are actually transferred daily.
This brings me to what I am driving at. When I write about there only being one billion ounces of above ground silver bullion in the world, I am vastly overstating the amount actually available for purchase at any point in time. As just discussed, very little, maybe 5% to 10% may be available for sale over the course of a full year, incredibly less on a daily basis. The distinction I am trying to make is between what may exist of an item and what is available for purchase or sale. There may be one billion ounces of silver in existence, currently worth $11 billion, but there may be only 50 to 100 million ounces, or $500 million to $1 billion available for sale in any given year. Not $11 billion.
As stated previously, this phenomenon is not unique to silver, it applies to all investment assets. But because silver’s inventory status is so limited to begin with, it takes on special investment significance. For example, when this phenomenon is applied to gold, it suggests that of the 5 billion ounces of gold in existence, only 250 million to 500 million ounces would be available for sale in any given year. But that still suggests a dollar amount of $200 to $400 billion being available for sale in any year, at current prices. (It’s that same 400 times more gold than silver ratio in dollar terms). My point here is simple - an item with only half a billion to a billion dollars potentially available for sale would experience much less selling pressure than an item with a potential $200 to $400 billion available for sale.
An additional observation is that the actual percentage of the amount of an asset that may be available for sale is influenced by price. At a low price, less is available than what would be available at a high price. The amount of what is in existence and what is available is a discussion that pertains to the supply-side of the supply/demand equation. Low prices constrict supply (availability), while high prices encourage supply to come to market. The current low price of silver will necessarily restrict supply and availability to lower levels than the normal 5% to 10% turnover of long-term assets.
What I am trying to introduce here is the difference between what exists and what may be available for sale. While we can all measure accurately the amount of visible silver in existence (in ETF’s and COMEX inventories) to the ounce, none of us can be sure of how much of that silver is actually available for sale near current prices. Just because we see it documented and visible doesn’t mean it is available for sale. Even the actual owners of silver stored in COMEX warehouses, for instance, are often surprised when they discover that their silver is counted as inventory. The first thing I hear from them when they discover this, is "my silver is not for sale." That’s my very point.
That this difference between what exists and what is available for sale is so underappreciated, is a powerfully bullish force for silver, simply because it won’t be underappreciated indefinitely. As it is, the small amount of silver in existence is bullish by itself. That amount being reduced drastically by the reality of availability is hard to comprehend. And if your head is spinning with trying to reconcile just how little real silver is available for purchase and the current ultra-low price, look no further than the great silver manipulation. It is the only plausible explanation. Help me fight that manipulation, but don’t fear it. Put it to your advantage by buying what little real silver is available.
Tighter Physical Supply?
There are a number of developments that may point to tighter physical supplies of wholesale silver. The amount of silver flowing into the big silver exchange traded fund (SLV) has been impressive since the first of the year. It looks like index funds have rebalanced their portfolios and this has resulted in the holdings of SLV reaching a new record of close to 230 million ounces, up 11 million ounces since the first of the new year.

What They've Done With The Bailout Money

The red line shows that, since August, banks have built their cash position in the form of Treasuries, agencies and deposits at the Fed by $865 billion, while their loans and leases have increased by only $325 billion. In other words, rather than lending the billions of dollars received from the Treasury’s Troubled Asset Relief Program (TARP), as was originally intended, the recipient banks have squirreled away the bailout funds in order to shore up their balance sheets. Concurrently, the Federal Reserve is exchanging its excess reserves for toxic waste from the financial institutions. The combined affect is a “circular bailout” with the Treasury borrowing… in order to lend money to banks… that then lend it back by purchasing more Treasuries. Of course, the expense of this entire bailout scheme ultimately falls onto the back of the tax-paying public.

Golden Sanity Amid Fits of Fiscal Madness
"And as the bust continues, gold always becomes MORE valuable as everything else turns to crap and the government starts destroying everything with fits of fiscal madness in its insatiable quest for more money, more money, more money!"
by The Mogambo Guru
Completely surprising me, people continue to ask me questions, like I have any answers about anything - like, for instance, where I was last Tuesday night when somebody caused a disturbance at a local Chinese-food restaurant when the little proprietor had to be instructed that around here, an "order of egg rolls" means two egg rolls, not one! Two! And no, I did not eat one already, no matter what the waiter says, what the other customers say, what kind of tasty crumbs were on my lips or what my breath smells like!
Anyway, as I told the police, I don't know anything about that incident since I was obviously somewhere else; I forget where, but whoever the noble, brave customer was, he was absolutely right; an order of egg rolls means two egg rolls, not one. Two, dammit! Two!
But not even this scandal has stopped anyone from asking me questions, and one of the more popular questions is, "What in the hell is wrong with you that you are always yelling at us to buy gold? You make us completely miss fabulous, fabulous investment opportunities in all kinds of other things, like that terrific business opportunity they advertise on TV all the time where my computer makes money for me without me doing anything, and I just sit around scratching my big, fat butt and counting all the money that comes rolling in!"
As to "what in the hell" is wrong with me, alas, nobody knows, although there are several theories and a lot of powerful medications to try and keep it under control; I still hear the voices, but I can't understand what they are saying! Hahaha!
As to why I continually disrespectfully bellow, "Buy gold right now, unless you are an idiot!" until my throat is raw and sore from all the screaming, and my kids and neighbors are likewise hoarse from their yelling back, "Shut up! Please shut up, shut up, shut up!" - it is because I assume that you are, like me, a greedy paranoid little squirt and you want to make a lot of money when this whole fiat-money idiocy collapses.
And I even know WHY you want to make a lot of money! You want riches so that people will have to come to you and grovel for a loan, and then you can make them humiliate themselves for mirthful hour after hilarious hour ("Pick your nose and eat the booger! No, a bigger one!"), while laughing at them ("Hahahaha!), and then, finally, telling them, "No! No money! Now get the hell out of my sumptuous palace overlooking the ocean or someplace else equally as nice! Hahahaha!"
But regardless of your motives, gold is always popular at the beginnings of the busts that follow the booms that you get when somebody is stupid enough to use a fiat currency (like the U.S.A. and now all the other stupid countries of the world) that gets multiplied to excess so that inflations in the money supply causes inflation in other assets like stocks, bonds, houses and size of government and, unfortunately, food and energy.
And as the bust continues, gold always becomes MORE valuable as everything else turns to crap and the government starts destroying everything with fits of fiscal madness in its insatiable quest for more money, more money, more money!
And the reason that Congress wants to spend, spend, spend is perfectly summed up by Massachusetts Rep. Jim McGovern, who is quoted by the Wall Street Journal as having said, "Congress has to accomplish things." Hahaha! Says who? Hahahaha!
The weird news is that this quote comes in a piece by John Fund in the Wall Street Journal as he describes how the odious and thoroughly repugnant Nancy Pelosi and her fellow-travelers in the House of Representatives have changed the rules, and now, "The new rules mean that the only way to push for a tax cut will be to propose a tax increase somewhere else", which "Democratic leaders" said "were needed to make the legislative train run faster"!!
I deliberately inserted those two exclamation points at the end as part of my Mogambo Editing Duties (MED), mostly because there is nobody here big enough to stop me or even tell me that I can't, and now I can, unrestrained, use these punctuation marks to send secret signals to Junior Mogambo Rangers (JMRs) around the world that this is some Weird, Weird Crap (WWC), which (if you bother to look WWC up in your Mogambo Desk Reference (MDR)), means that "We are freaking doomed to die from consumer price inflation as a lagged result of excess monetary inflation, and you should be buying gold, gold, gold, beautiful, beautiful gold in self-defense, and if you are not, then that means you are some kind of mental defective!"
But we were not talking about how the socialist-communist/fascist morons running the place have doomed America, but "Why gold?" The reason is that there will be a lot of rich people selling the aforesaid stocks, bonds and houses, as that is how market tops are formed and why prices fall, and then the sellers will have a lot of money sitting there, meaning that now they have to find someplace to put it, and then they notice that everything else is turning to crap, and that is "Why gold"!
Nobody is ever satisfied with that explanation, and in the past I always had to convince people by out-shouting them (which is time-consuming) or wrestling them to the ground and getting them in a chokehold of some kind (which is tiring).
I say "in the past" because now I can use the headline, "Merrill Lynch Says Rich Turning To Gold Bars For Safety".
Without even the courtesy of mentioning me by name, or how I have been screeching about this stuff for years, "Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or 'paper' proxies".
It shows that the rich ARE different in that they are not particularly stupid, which probably explains how they got to be rich in the first place.
And part of that intelligence is to understand the possibility of corruption inherent in derivative, paper assets, and to know that with the "possibility" eventually comes dead-bang "certainty", and thus they shun paper assets and demand real, physical gold.
And it is that "possibility that leads to dead-bang certainty" that makes the possibility of the Federal Reserve creating too much money and the possibility of the Congress allowing so much money to be created so that they can possibly spend which makes the decision to buy gold, silver and oil so simple that you shout, "Whee! This investing stuff is easy!"

Nicely Said..................

"What was originally supposed to be a war against terrorist groups with global reach - ostensibly al-Qaida - has now become a global war ... even against groups that do not threaten or attack the United States." -Charles Pena

Oils Away!!!!

I came across a great line in Barron’s the other day. You know all about bull markets and bear markets... what we have now is a “Jim Morrison market.”
Why a Jim Morrison market? Because the future’s uncertain and the end is always near.
(I thought that was too good not to share. For those of you who aren’t fans of The Doors, we’ll move right along...)
Something’s Happening Here...
Something very strange is going on with the price of oil. Not just in terms of straight-up price, but in regard to the huge discrepancy between the near-month and far-month futures contracts.
As I write, the going price for near-month West Texas Intermediate crude is $36.51 per barrel. The December 2009 contract, on the other hand, is trading at $55.13.
That is a monster spread. We’re talking a difference of more than $18 a barrel between spot crude – the stuff you can buy in the cash market – and crude slated for delivery at the end of this year.
The technical name for this situation is contango. That’s what they call it when a forward-month commodity contract is trading at a higher price than the near month. (You don’t really need to know this right now, but the opposite of contango, when near-term prices are higher than the back months, is backwardation.)

The reason this is strange is because of the massive profit opportunity embedded in the crude market.
Assuming you had the means, you could go out right now and sell millions of dollars worth of December crude contracts at $55 dollars a barrel... buy the equivalent amount in the cash market for $37 a barrel or less... and then just wait until it’s time to deliver the oil (and lock in your $18 profit).
The only hitch in the deal is finding a place to store the stuff. If you were to buy crude on the cheap now, you would have to take delivery and store it until late November (or whatever month your delivery date rolls in, when you close the trade and take your locked-in profit).
A number of big, savvy players are making exactly the trade I just described. They are selling millions of barrels worth of expensive far-month futures contracts, buying the equivalent amount of cheap oil in the cash market, and storing that oil in huge supertankers moored off the coast of Scotland and the Gulf of Mexico.
Storage and financing are counted as part of the trade, of course, and those big tankers don’t come cheap. Costs can run as high as $68,000 per day to keep one sitting idle.
But when you can lock in $18 a barrel, who cares? When the outlays are spread over millions of barrels – and a single ship can hold 2 million barrels of crude – there is still an obscene amount of profit left in the trade.
Frontline Limited (FRO:NYSE), the world’s biggest owner of supertankers according to Bloomberg, estimated last week that 80 million barrels worth of oil are being “stored” this way – the most they’ve seen in 20 years.
Not only are some big Wall Street players making this trade (Citigroup, Morgan Stanley, etc), big oil exporters are doing it too. Iran is filling up tankers with crude, no doubt waiting for the opportunity to sell at higher prices.
What It Is Ain’t Exactly Clear...
The puzzling question is why the anomaly persists. Why has the spread not come in?
Remember that once the far-month contracts are sold, price risk is removed from the equation. If you’ve entered into a deal to sell 2MM barrels of crude at $55 after buying at $37, you don’t have to worry about where prices go between now and your delivery date. You can just sit and wait.
When a no-brainer opportunity like this comes along, Wall Street normally jumps all over it. Traders exploit the anomaly in size until it disappears.
If markets weren’t so out of whack, you would gradually see the spread between near-month and far-month crude contracts get smaller and smaller as more and more players piled in. The profit in the spread would be reduced to the point where putting on the trade no longer made sense.
Two constraints that keep this from happening now are financing and storage.
First the finance angle: This is a trade that requires a serious cash outlay (or a major line of credit) to pull off. To fill up a supertanker with crude and sit on it for a year, you’re talking $50 million to $100 million as table stakes. The big Wall Street houses have been so bruised and battered, it’s hard for them to come up with that kind of dough – even for slam-dunk opportunities.
The other major constraint to the trade is storage. Such huge volumes of cash market crude are being held off the market now, traders are literally running out of places to put it. (It’s not like you can just pop into the local EZ-storage or stash a million barrels of oil in the shed.)
Curiouser and Curiouser
The storage issue is also creating headaches for the New York Mercantile Exchange (NYMEX) as traders question the pricing of West Texas Intermediate (WTI crude). The Financial Times reports:
The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America’s pipeline system, has depressed its value not only against other global benchmarks, such as Brent, but also against other domestic US crudes.
Julius Walker, an oil market analyst at the International Energy Agency in Paris, said there was “anecdotal evidence” of traders moving away from WTI and “doing deals based on other US oil benchmarks.”
In other words, we’ve got oil coming out of our ears in the short-term... but the price of oil is still head-scratchingly higher – much, much higher – in the longer term.
So what does all this mean for us small-fry traders, i.e., those of us who can’t dial 1-800-TANKERS-R-US like the big boys?

I can think of at least a few takeaways worthy of food for thought:
~Why aren’t the big oil exporters all over this trade? Iran has locked up a few tankers, and it’s likely Russia and Venezuela etc. have too. But these guys are supposed to have lots of oil in the ground... and OPEC just made a big fuss of capacity cuts... so why aren’t they selling the hell out of the far-month crude contracts, locking in $18 a barrel, and bringing the spread back in with their size? Could it be capacity constraint? Could it be these guys don’t actually have all the spare capacity they’re letting on?
~Why are the drillers and oil service names so depressed? Stock markets are supposed to discount the future, not the past. Equity valuations are supposed to be forward looking. And yet, at current multiples, most of the high-quality drillers and oil service names are trading as if oil were headed to $20, not back to $60. Yet the December crude contract says otherwise... and the huge spread between near-month and far-month contracts persists. What gives?
~Could Wall Street still be “broken” in the aftermath of 2008? After the year we just went through, anyone who still believes in perfectly efficient markets should have their head examined. Markets operate in a range from “mostly efficient” to “wildly, insanely INefficient.” When credit mechanisms and normal channels break down, things just stop making sense. Could the huge disconnect between forward-month oil contracts and insanely cheap oil service names be yet another example of Wall Street not making sense?
~Could December crude contracts be expressing an opinion on the inflationary effects of U.S. debt monetization... or rebound possibilities for emerging markets... or both? It’s widely recognized that the U.S. Fed and Treasury are embarking on a “great experiment” now that has never before been tried – one that could be summed up as, “Print like crazy and see what happens.” Some observers, like Joachim Fels of Morgan Stanley’s Global Economics Team, further believe that emerging markets could outperform in 2009 due to better internals than they get credit for. Could the persistent crude spread be reflecting both views?
Yep, no question... something’s happening here.

$64 Billion Gone In 3 Months...................

And so goes the Troubled Asset Relief Program (TARP)… the government’s bank bailout plan has already lost 26% of taxpayer funds. Bean counters at the Congressional Budget Office (CBO) announced yesterday the current market value of the $247 billion in loans and purchases made by the Treasury through Dec. 31, 2008 has declined by $64 billion.
Wow. $64 billion… gone… in less than three months.
Meet Jerry Yang, last year’s World Series of Poker champion, and his $8.25 million prize. Jerry’s pile of winnings weighs more than he does… about 181 pounds.
How much does $64 billion weigh? Somewhere around 1.4 million pounds… if entirely denominated in $100 bills. Without a backhoe and tanker load of lighter fluid, we don’t think we could burn $64 billion as fast as the Treasury has lost it.
Thanks, guys.

Is The Goal Complete nationalization (We Think So)

Jaws to the floor ladies and gentlemen, every bank in the free world is hemorrhaging market capitalization all over the place as they head for the door marked "nationalization."
What happened here? Was there another banking crisis that happened while we were all watching the Inauguration yesterday?
Not quite. This is more of a confluence of different factors. Kind of like we've got the "Dream Team" of bank-killers scattered to the four corners of the globe and they're all working in unison somehow.
In Ireland, it was a combination of shady executive dealings and the whisper of bank nationalization. That's all it took to encourage investors to cut-and-run, cutting the market capitalization of the remaining Irish banks by about half and escalating the need and the urgency of nationalization on the Emerald Isle.
For the UK, it was Gordon Brown's announcement of further nationalization plans and his adamant request that banks' balance sheets be more transparent. Shares of Barclay's, Lloyd's and HSBC promptly went cliff diving, hit the pavement, and started digging.
One can't help but wonder whether nationalization becomes a self-fulfilling prophecy when it involves wiping out the shareholders. It was a little more static with Fannie and Freddie last year; with stock prices only hitting rock bottom when nationalization was clearly inevitable. But lately, these banks seem eager to free-fall anytime a government representative even utters the word ‘nationalization.'
Meanwhile, On Our Side of the Pond...
No, it's not much better over here. But at least over here, the rapidly falling share prices are the banks' fault and not necessarily that of the government.
As we mentioned yesterday, Bank of America has received an extra US$20 Billion to "digest" (great word choice there) Merrill Lynch..., which they willingly bought with the last round of free taxpayer money. If you see a pattern there, then you're not alone.
And there's more news coming out of Citigroup than Washington D.C. After unsuccessfully seeking out new investors and rich Arab princes, apparently they'll be splitting their retail operations off from their riskier enterprises. The shareholders aren't buying it, we're not buying it, and even Bloomberg isn't buying it. One of their recent headlines explains how, "Citigroup's Pandit tries to Save the Little that's Left to Lose." A classic, that headline.
You see that "little" that Citigroup's got left to "lose"? That's your tax dollars hard at work. At this point that's really all they've got left, and probably not even too much of that.
No, no. Let's make no mistake. The time for action - the time to prevent failure - has come and gone. A long, long time ago. As a blogger from the London-based magazine The Economist put it, "These banks grew so large that their failure threatened the global financial system, and then proceeded to fail. To simply hand over the money necessary to return them to solvency would abuse the taxpayer's trust, reward bad behaviour, and send a terrible signal to other bad financial actors out there. Time to quit mucking around and make with the nationalisations."
I know, I know. There's a sting of socialism in that comment. Even - as Legal Counsel Bob Bauman has pointed out before - a tinge of the economic component of fascism in that kind of thinking. But we must do that which is necessary to avert disaster, yes?
"The banks here are bust, with total writedowns probably more than the entire market cap of the financial sector at this point," Investment Director Eric Roseman told me candidly yesterday, "So, yes, the government will follow UK's course and backstop all bad assets and eventually nationalize the entire group. This is inevitable. The losses won't stop until we segregate bad assets off bank balance sheets combined with near or total nationalization. The markets won't relent unless some bold action is taken now."
But of course, there's always an alternative (however untenable it may be)... "The alternative is to let bad banks fail," Eric said, "Then we have a full scale Depression and the financial system will regress back to the Dark Ages."
That sounds pretty untenable.
So the Endgame here is nationalization then?
Wrong, Wrong, Wrong.
The Endgame here is that this isn't actually the endgame. Nobody least not yet. Because the crisis has only just begun, and the failure of the global banking system is just the first chapter in a much larger story.
In a very French, Jean-Paul Sartre sort of way, the world is throwing us a big curveball, and we're not sure if anyone's really seeing it yet. And even if they're seeing it, it still probably hasn't sunk in.
As of September 2008, some 173 million iPods had been sold across the world. In 2000, there were roughly 168 million personal computers in the US, and the number is probably more like 200-250 million today. There are 9 million mobile homes in the US, approximately 102-130 million single-family homes, and countless million apartments.
Do you see what we're getting at here? There aren't many necessary - or even unnecessary - goods left for American consumers to consume! We are already saturated.
We're digging in a little deeper with our saturation survey lately, but one could safely assert that there's already a home, an mp3 player and a personal computer for every man, woman and child in the United States. And this isn't just backed-up inventory; consumers already own or have purchased the lion's share of these goodies/housing. So when Obama, Gordon Brown or anyone talks about freeing up the flow of credit, you just have to ask yourself "why?"
So that we can buy more iPods? More double cheeseburgers and speculative property? We've already got more "stuff" than we know what to do with, and the best possible plan that the twin-worlds of government and finance can come up with is to get, "back to normal?"
Well folks, the market has the same plan. And unlike bankers and the government, the market realizes that the last decade of hyper-charged consumption was anything but "normal."
So the endgame is that - regardless of what happens to the banks - we're coming up on a multi-year run of what amounts to terrible business for them. The collapse of the Baltic Dry Shipping Index is a bell-weather for evaporating demand of foreign goods, and the 4th quarter's collapse in retail sales signals the death of domestic consumption. The bottom line - and there's no two ways about it - is that America is embarking on a new trend toward greater savings, less spending and a lower demand for credit. Thanks in part to the ravenous consumption of years past.
And instead of a banking system where the forces of open-market competition have narrowed the field down to a handful of the most honest, efficient players out there (banks like Wells Fargo or BB&T), we'll be dragging along a government-sponsored "competition-free zone," composed of banks who were successful in the race to get "too big to fail."
Now we'd like to leave you with a question; if these banks built themselves toward inevitable failure during the boom - when the sun shined and anyone could make money - then how do you think they'll do during the bust?
What a world.