They're Taking Less Gold Out Of The Ground

Global Mine Output Is Flat or Falling.
According to Gary Dorsch of Financial Sense, “Global gold production was down 3% in 2006 and is nearly flat this year.” What’s more, Barrick Gold CEO Gregory Wilkins recently told the press, “There’s not much gold out there.” According to Financial Sense’s Tony Allison, Barrick expects “gold production will fall 10-15% below market expectations over the next three-five years.”
There are some places where gold production is rising. For example, according to the International Herald Tribune, “China will probably overtake the United States as the world's second-biggest gold producer this year… Production could rise 8%, to a record 260 tons this year, from 240 tons in 2006, said Hou Huimin, deputy head of the China Gold Association. U.S. output should be about 250 tons this year.”
But for every success story, there are more mines that are drying up. South Africa is the gold mining kingpin, but probably not for much longer. According to Bloomberg, “South African production -- 134 tons in the first six months of 2007 -- has dropped by almost a third since 2002,” as mining companies have been forced to dig deeper. In fact, South Africa’s output is down to its lowest level since 1922.
One reason why production isn’t ramping up with gold prices is there are fewer mining companies. The 20-year bear market in gold forced many marginal mines to close. And over the past 15 years, a wave of mergers has created a bunch of mega-sized gold miners. While the top five each produce between 3.5-7 million ounces out of the ground every year, they’re more likely to concentrate on working their existing mines and buying up other mines, and focus less on new exploration.
Pace of Dehedging Is Picking Up
When miners sell forward, or “hedge,” their gold production, it adds more gold to the market. When they dehedge, it removes gold from the market.
The latest data, from the second quarter of 2007, show that gold dehedging quickened its pace, with 5.4 million ounces being removed from the market. This has a net effect of a reduction of 15% of hedged positions, and is way up from the net dehedging of less than 2 million ounces in the year-earlier period. There are now 31.2 million ounces of hedged gold production, according to Virtual Metals in London.
With gold prices headed higher, gold miners know that the earlier they close out hedge positions, the cheaper they’ll be able to do it and the better for their bottom lines. Expect more dehedging going forward. What effect does this have? Less forward sales of gold reduces future supply and adds more volatility to prices.
Central Bank Sales Fill the Gap … for Now
According to the International Money Fund, “Gold holdings by central banks and other government organizations declined for the eighth straight year in 2006... Bullion holdings were 867.6 million ounces last year, down 1.2% from 2005, the lowest since 1948.”
The largest sellers of gold among the central banks are in Europe. But they’re not selling at the pace they once did. Central banks were net sellers of 11.4 million ounces of gold in 2006, lower than the 20.6 million ounces in 2005. This year, European central banks are selling on average 6.8 tons per week, on pace with last year.
Meanwhile, the Russian central bank periodically adds to its gold stockpiles, and the markets are keeping a watchful eye on China, whose percentage of gold as part of its cash reserves is way too low. Ordinary Chinese are already picking up the pace of gold buying. If the Central Bank gets into the mix, that could really light a fire under prices.
The bottom line is that as 2008 rolls in, $800 gold is likely to be the new baseline for the yellow metal, and here at Sound Of Cannons, we will look for opportunities to take advantage of it

Check Out Your Mutual Fund Holdings

What's in Your Global Equity Fund?
Most global equity funds invest in major industrialized economies around the world. They also have sprinkles of exposure to advanced emerging markets like Brazil, China and Russia.
For the most part, these funds invest according to benchmarks. About half of their assets are in the United States. The rest are spread out across Western Europe and parts of the Far East including Japan, Hong Kong and Australia.
But increasingly, more fund managers are straying from investing in advanced economies to invest in red hot emerging market stocks. The result is greater returns, but additional risks. Most global fund investors don't understand these risks. Or worse, they have no idea their global funds are invested in such risky assets in the first place.
For example, some funds coined "Global Equity Funds" have soared over 30% this year. The benchmark, the MSCI World Index, has only risen 8% in dollars. Obviously, something is wrong with this picture. To their amazement, investors might find their mutual funds stuffed with high-risk stocks like China Mobile, China Life, Baidu.com or Brazil's CVRD.
The Global Equity sector in the United States and offshore is home to the single largest category of traditional mutual fund assets. That's because with one investment, an investor can gain instant global diversification across hundreds of stocks in foreign currency-denominated markets.
Investing in these funds takes the guess work out of global investing. You don't have to time the next big foreign market or sector. Also, the lower portfolio turnover means higher net returns because you're not busy trading all the time. That's the good news.
The problem facing investors ahead of the next bear market is "how much" emerging markets exposure do they really have? People forget that emerging markets investing is a two-way street. Yes, the returns have been truly spectacular this decade. But in the past, when financial "bubbles" burst, investors lost a pile of money in a very short period of time.
If you own global equity funds, make sure you don't have more than 10% in emerging markets, preferably even less. Although the major market economies have inherited all the risk this year, the emerging markets are not immune to a recession in the West. Buyer beware.

The U.N. Gets Stupider And Stupider

United Nations to the Rescue!

Since its founding in 1945, the United Nations has gained a certain negative reputation. It's rightfully viewed as a costly, cumbersome debating society that's unable to solve conflicts and discipline its staff.
The UN's first horrendous failure was one of its original projects, the Israeli-Palestinian conflict. Since 1947, the Israeli-Palestinian conflict has raged off and on.
More recently, the UN failed to stop the genocide in Africa. They failed to take quick action in Rwanda and their delay cost tens of thousands of lives. The horrendous death and destruction in Sudan and Darfur has drawn attention from around the world. In response, all the United Nations has done is send fact-finding teams.
Then there was the failed Iraq "Food for Oil" program, under the late Sadaam Hussein. During this program, there were proven cases of millions worth of graft and bribery involving UN staff.
But undaunted, the UN marches on - addressing the "really important issues" of the day.
For example, a special UN committee just released a new report addressing "gender equality" in Lichtenstein. This new report demands that the parliament of the Principality of Liechtenstein does the politically correct thing: grant female children of the ruling house of Liechtenstein the right to inherit the throne now occupied by Prince Hans-Adam II.
Liechtenstein is the only absolute monarchy remaining in Europe, and the ruling Prince has sweepingly broad powers. In fact, the Prince's powers just grew in 2006, when a national referendum adopted Hans-Adam's revision of the constitution.
Men Only
Since 1606, Liechtenstein law has required the first-born male of the family line inherit the throne.
In 2004 Prince Hans-Adam II formally turned the power of the day-to-day government decisions over to his son Prince Alois. It was his way of transitioning power to the next generation. However, formally, Hans-Adam remains Head of State.
The country's constitution stipulates that the succession to the throne is an internal matter of the House of Liechtenstein. Prince Hans-Adam II says the ancient family law that regulates the men-only rule is older than even the actual state of Liechtenstein. He also says it's a family tradition that does not affect the citizens.
The prince also points out that other European monarchies including the United Kingdom, Monaco, Denmark and Spain all follow male-preference primogeniture. (Primogeniture is the legal right of the first born son to inherit the entire estate.)
In spite of the UN's busybody interference in Liechtenstein's internal affairs, there is no local debate over the universal rule that the firstborn inherits the throne. That makes the whole struggle for equality meaningless - except maybe to future generations.
For now, it's a moot point. For the last century, all the firstborns of the house have been male, including the current prince's son and grandson.
Major Tax Haven
Why should you care about this tiny nation sandwiched in between Switzerland and Austria?
Simply because this tiny monarchy that has graced the map of Europe since 1719, skillfully transformed into a world-class tax haven in the last half of the 20th century.
Liechtenstein was one of the first nations in the world to adopt specific offshore asset protection laws, as far back as 1926. Today, Liechtenstein offers some of the world's strongest banking secrecy and financial privacy laws, and unique asset protection entities. Plus Liechtenstein offers direct financial and investment access to its powerhouse neighbor, Switzerland. Liechtenstein also shares Switzerland's currency and customs.
Liechtenstein's unique role in international financial circles is not so much as a banking center, but as a pure tax haven.
The principality's 16 locally owned banks, 60 lawyers and 250 trust companies employ 16% of the total work force. Its licensed fiduciary companies and lawyers serve as nominees for, or manage, more than 75,000 legal entities, most owned and controlled by nonresident foreigners.
The nation acts as a base of operations for foreign holding companies, private and family foundations and a unique entity called the Anstalt (i.e., establishment). The banks and a host of specialized trust companies also provide management services for thousands of such entities.
I have no doubt that Liechtenstein will ignore this latest UN meddling.

Putin Is One Fucked Up Nut-Case

Putin Accuses U.S. of Trying to Discredit Russian Vote
By CLIFFORD J. LEVY
MOSCOW, Nov. 26 — President Vladimir V. Putin on Monday accused the United States of trying to taint the legitimacy of next week’s Russian parliamentary elections by pressing a group of prominent independent election observers to abandon efforts to monitor the campaign.
Mr. Putin contended that the monitors, who are deployed by the Organization for Security and Cooperation in Europe, had halted plans to appraise the parliamentary balloting at the urging of the State Department in Washington.
Mr. Putin’s statements in recent weeks have taken on an increasingly nationalistic tone as he has sought to muster support for his party in the elections on Sunday. Speaking to reporters on Monday in St. Petersburg, he once again criticized what he suggested was foreign meddling in Russia’s affairs.
“According to information we have, it was again done at the recommendation of the U.S. State Department, and we will take this into account in our interstate relations with this country,” he said. “Their goal is the delegitimization of the elections. But they will not achieve even this goal.”
If Russia maintains a robust military, Mr. Putin later added, “we will not allow anyone to poke their snotty nose into our affairs.”
American diplomats said they had no role in the cancellation of the election-monitoring mission, and the monitoring group called Mr. Putin’s assertion “nonsense.”
On the same day Mr. Putin made his comments, the White House took the unusual step of issuing a statement saying that President Bush was “deeply concerned” about the detention of several opposition leaders in Russia.
Over the weekend, the opposition coalition led by Garry Kasparov, the former chess champion, held rallies and marches that were broken up by riot police officers in Moscow, St. Petersburg and other cities, with hundreds of people taken into custody. Most were later released.
Mr. Kasparov himself was arrested in Moscow on Saturday when he tried to deliver a letter to the election authorities assailing the conduct of the election, and was sentenced to five days in jail. His movement, Other Russia, says Mr. Putin is creating a Soviet-style dictatorship in Russia.
Mr. Putin has turned the parliamentary elections into a referendum on his leadership, and he has been stepping up his campaigning for his party, United Russia. In a major speech last week, he called his opponents tools of foreign governments, likening them to jackals who hang around foreign embassies to obtain money.
At the same time, the Kremlin has used its control over the election laws, government agencies and the news media to ensure that the opposition has little if any chance of gaining a foothold in the next Parliament.
Mr. Putin, who has high approval ratings in Russia, is barred by the Constitution from seeking a third consecutive term in the presidential elections in March. But he has said he intends to continue to wield influence after he leaves office.
The election-monitoring arm, called the Office for Democratic Institutions and Human Rights, announced on Nov. 16 that it was ending the mission, saying that restrictions imposed by the Russian government had made it impossible for it to carry out its work.
Russian election officials had first delayed issuing visas to the monitors, not giving them enough time to make their customary observations of campaigning around the country and of news coverage. The officials then abruptly said they would limit the size of the mission to only 70 people, down from 400 in the parliamentary elections in 2003.
In contending that the State Department had a role in the cancellation of the mission, Mr. Putin on Monday was highlighting an accusation first made last week by Russian election officials.
The chairman of the Central Election Commission in Russia, Vladimir Y. Churov, who was appointed with Mr. Putin’s support, said the director of the election-monitoring office, Christian Strohal of Austria, visited Washington shortly before the decision to withdraw was announced.
Mr. Strohal’s aides said the timing of the visit and the decision was coincidental. He met with the American diplomats only because he happened to be in Washington for a meeting of the Organization of American States, they said.
Daniel Fried, an assistant secretary of state, said he and R. Nicholas Burns, under secretary of state for political affairs, had indeed discussed the Russian elections with Mr. Strohal. But Mr. Fried emphasized in an interview that they told Mr. Strohal that they were not trying to affect the process and that it was up to the group to come to its own conclusions about whether the mission could go forward.
“They had to make an independent judgment,” Mr. Fried said. “This is not about United States-Russia relations. It is about Russia’s democratic development.”
Urdur Gunnarsdottir, a spokeswoman for the monitoring office, also said Mr. Putin was mistaken.
“This was a decision that was simply based on the fact that we were not receiving any visas and time had run out,” she said. “The only consultation that took place was within our office with the people that plan these observation missions and carry them through. They have 150 observation missions under their belt. They know by now what needs to be in place to do this.”
The monitoring office has observed every election in Russia since the fall of the Soviet Union in 1991. Its presence was viewed as an effort by Moscow to ensure that elections complied with international standards.
But the Kremlin has in recent years chafed at the group’s reports, contending that they were biased against the government. After the 2004 presidential elections, which Mr. Putin won in a landslide, the group stated that the campaign had not been conducted fairly. In recent months, Russian officials have maintained that the monitoring group needs to be reformed.

They're Getting Bolder In Their Support For The Amero

Billionaire to Canada: Time for amero is now

Wants euro-style currency to avoid exchange problems

By Jerome R. Corsi© 2007 WorldNetDaily.com
Stephen Jarislowsky, a billionaire money manager and investor the Canadian newspaper Globe and Mail bills as the Canadian Warren Buffet, has told a parliamentary committee Canada and the United States both should abandon their national dollar currencies and move to a regional North American currency as soon as possible.
"I think we have to really seriously start thinking of the model of a continental currency just like Europe," Jarislowsky told the Canadian House of Commons' finance committee, according to the Globe and Mail in Toronto.
Jarislowsky's call for immediate action belied an article published in the Boston Globe on Sunday that said the call for the amero to become the new North American regional currency was "purely theoretical."
In an exclusive telephone interview with WND, Jarislowsky repeated his call for a European Union-style currency to be created between Canada and the United States.
"The idea would be a European Union-type set-up," Jarislowsky said, "with a North American Central Bank that would issue the new currency and sit over the Bank of Canada and the Federal Reserve Bank in the United States."

"An alternative would be to create a peg on the U.S. dollar which would allow the Bank of Canada to adjust the Canadian dollar in a 5 percent plus or minus range, based on the fluctuation in value of the U.S. dollar," he explained.
Still, Jarislowsky was less confident the U.S. dollar peg would work.
"The Bank of Canada only pinpoints inflation," he told WND. "My idea would be to have the Bank of Canada manage the Canadian dollar with a view both to inflation and the U.S. dollar. The Bank of Canada has never been very receptive to this idea."
Jarislowsky insisted Canada was going to be forced to do something because the increased value of the Canadian dollar vis-à-vis the U.S. dollar was likely to depress business activity in Canada and cause a recession.
"Two-thirds of the Canadian economy is tied to the U.S. economy," Jarislowsky pointed out. "Some 85 percent of our exports are headed for the U.S. market. Our economy is tied to the U.S. dollar, whether we like it or not."
In an interview published with the Globe and Mail, Jarislowsky emphasized the likely adverse impact on the Canadian economy triggered by the rise in the value of the Canadian dollar.
"We don't have a single mill in Canada which isn't losing cash at the current exchange rate despite the fact we invested hundreds of millions in dollars into new equipment when we had the money," Jarislowsky said.
"I believe that if we stay at the present levels, the entire forest products industry practically is going to be in liquidation-bankruptcy and there's going to be an enormous loss of employment," he continued.
Jarislowsky told the House of Commons finance committee that a regional North American currency would reduce the adverse currency exchange risk being experienced in Canada since the Canadian dollar has risen more than 20 percent against the U.S. dollar this year.
Jarislowsky brushed aside stated opposition from the Canadian Finance Department, including a negative recommendation to Finance Minister Jim Flaherty because of concerns a common North American currency would mean an erosion of sovereignty for Canada.
"I know Finance Minister Flaherty quite well," Jarislowsky told WND. "Sure, first he will have to deny he is taking seriously the idea of a new currency, then later he will come out and say he was forced to create one anyway."
Jarislowsky insisted he made very seriously the suggestion to create a euro-style currency for North America.
"Pretty soon, the Finance Ministry will have no choice but to create a new currency," Jarislowsky argued, "unless the Canadian dollar all of a sudden changes course and reverses against the U.S. dollar all on its own."
"In the provinces we are already seeing economic activity slowdown because of the rise in value of the Canadian dollar," he insisted. "If our automobile and lumber industries begin to decline, we will have a serious recession as a result."
"The Finance Ministry knows how closely our economy in Canada is tied to the U.S. market," he continued. "A common currency would avoid the problems we are now facing with currency exchange risk added to the normal risks of doing business."
Jarislowsky currently heads the Canadian investment firm Jarislowsky Fraser Limited, headquartered in Montreal.
According to Canadian Business, Jarislowsky has amassed a personal fortune of $1.2 billion, ranking him as the 25th richest person in Canada.
Canadian Business also claims the average private client at Jarislowsky Fraser typically has more than $10 million in liquid assets to invest.
Forbes put Jarislowsky's net worth at $1.5 billion, ranking him No. 512 in the list of the world's richest people in 2006.
Forbes estimates that Jarislowsky Fraser currently manages $50 billion for a select list of institutional clients and high-net-worth individuals.
Jarislowsky's 2005 book, "The Investment Zoo: Taming the Bulls and the Bears," was a business best-seller in Canada.
The Canadian dollar reached parity with the U.S. dollar at the end of September. Since then, the Canadian dollar has been trading above the U.S. dollar, at values not seen since the 1960s.
The Canadian dollar closed yesterday at $1.01 to the U.S. dollar on major currency exchanges.
Canada's Finance Department did not respond to WND requests for a comment.

Military PsyOps Control

Information Warfare Using Aggressive Psychological Operations: Information Operation Roadmap Part 4
Brent JessopKnowledge Driven Revolution.com Tuesday November 27, 2007
The Pentagon's plans for psychological operations or PSYOP in the global information environment of the 21st century are wide ranging and aggressive. These desires are outlined in the 2003 Pentagon document signed by Donald Rumsfeld in his capacity as the Secretary of Defense called the Information Operation Roadmap. More detail about the origins and purpose of this document can be read in the first part of this series here. Also, a description of the Pentagon's desire to dominate the entire electro-magnetic spectrum and their need to "fight the net" as outline in the Information Operation Roadmap were previously described. What is a PSYOP? A PSYOP is not specifically defined in this document but it does provide some insight into the wide ranging activities that are considered PSYOP.
"The customary position was that "public affairs informs, while public diplomacy and PSYOP influence." PSYOP also has been perceived as the most aggressive of the three information activities, using diverse means, including psychological manipulation and personal threats." [emphasis mine] - 26 "One result of public affairs and civil military operations is greater support for military endeavors and thus, conversely these activities can help discourage and dissuade enemies, which PSYOP does more directly with its own tactics, techniques and procedures." [emphasis mine] - 10 "PSYOP messages disseminated to any audience except individual decision-makers (and perhaps even then) will often be replayed by the news media for much larger audiences, including the American public." [emphasis mine] - 26
(Article continues below)
"A PSYOP force ready to conduct sophisticated target-audience analysis and modify behaviour with multi-media PSYOP campaigns featuring commercial-quality products that can be rapidly disseminated throughout the Combatant Commanders area of operations." [emphasis mine] - 63 "PSYOP products must be based on in-depth knowledge of the audience's decision-making processes and the factors influencing his decisions, produced rapidly at the highest quality standards, and powerfully disseminated directly to targeted audiences throughout the area of operations." [emphasis mine] - 6 "Better depiction of the attitudes, perceptions and decision-making processes of an adversary. Understanding how and why adversaries make decisions will require improvements in Human Intelligence (HUMINT) and open source exploitation, as well as improved analytic tools and methods." [emphasis mine] - 39 "SOCOM [Special Operations Command] should create a Joint PSYOP Support Element to coordinate Combatant Command programs and products with the Joint Staff and OSD [Office of the Secretary of Defense] to provide rapidly produced, commercial-quality PSYOP product prototypes consistent with overall U.S. Government themes and messages." [emphasis mine] - 15 "SOCOM's ongoing PSYOP Advanced Concept Technology Demonstration and modernization efforts should permit the timely, long-range dissemination of products with various PSYOP delivery systems. This includes satellite, radio and television, cellular phones and other wireless devices, the Internet and upgrades to traditional delivery systems such as leaflets and loudspeakers that are highly responsive to maneuver commanders." [emphasis mine] - 15 "PSYOP equipment capabilities require 21st Century technology. This modernization would permit the long-range dissemination of PSYOP messages via new information venues such as satellites, the Internet, personal digital assistants and cell phones: - (U) PSYOP ACTD. Commencing in FY04, SOCOM [Special Operations Command] initiates an Advanced Concept Technology Demonstration (ACTD) to address dissemination of PSYOP products into denied areas. The ACTD should examine a range of technologies including a network of unmanned aerial vehicles and miniaturized, scatterable public address systems for satellite rebroadcast in denied areas. It should also consider various message delivery systems, to include satellite radio and television, cellular phones and other wireless devices and the Internet." [emphasis mine] - 65 "Rapid, fully integrated nodal and network analysis providing Combatant Commanders with holistic kinetic and non-kinetic solutions for a full range of electromagnetic, physical and human IO [information operations] targets." [emphasis mine] - 39 "Capabilities such as physical security, information assurance, counter intelligence and physical attack make important contributions to effective IO." [emphasis mine] - 23
Third Party PSYOP The Pentagon is also willing to use third parties for their PSYOP.
"Identify and disseminate the views of third party advocates that support U.S. positions. These sources may not articulate the U.S. position the way that the USG [US Government] would, but that may nonetheless have a positive influence." [emphasis mine] - 27
Under recommendation number 48 - "Create a Joint PSYOP Support Element" - is the following:
"Contract for commercial sources for enhanced product development." [emphasis mine] - 64
The use of third party advocates or front groups for the dissemination of US government propaganda is well documented. A couple of recent examples include the illegal payment of $1.6 billion for domestic fake news and similar activities in Iraq using the Lincoln Group among others. Virtual PSYOP Not only is the Pentagon exploiting new and old technology for aggressive behavior modification, they can also practice and refine their techniques in a virtual simulation of the entire world. From an article by Mark Baard:
"U.S defense, intel and homeland security officials are constructing a parallel world, on a computer, which the agencies will use to test propaganda messages and military strategies." "Called the Sentient World Simulation, the program uses AI routines based upon the psychological theories of Marty Seligman, among others. (Seligman introduced the theory of "learned helplessness" in the 1960s, after shocking beagles until they cowered, urinating, on the bottom of their cages.)" "Yank a country's water supply. Stage a military coup. SWS will tell you what happens next." "The sim will feature an AR avatar for each person in the real world, based upon data collected about us from government records and the internet."
How useful do you think your new MySpace or Facebook account is in helping the Pentagon develop a detailed psychological profile of you? Do you think they would be shy in exploiting such a valuable source of personal data? AIDS Awareness
PSYOP in the past, however, often was used to support U.S. Government public diplomacy and information objectives with non-adversarial audiences. These actions include counter-drug, demining and AIDS awareness programs in friendly countries." [emphasis mine] - 25
It is a minor point in the context of this document, but it is worth reflecting on why US military PSYOP were used for AIDS awareness. Are There Any Limits to Information Warfare? An obvious question arises from the description of PSYOP described by the Information Operation Roadmap, are there any limits? Can PSYOP be conducted on the American public or just foreign audiences? On adversaries or non-adversaries? Can they be performed during peacetime? My next article will attempt to show just how few limits there actually are.

SOC Science: Parallel Universes

Evidence for a parallel universe?
DNA Genetics, Paternity, CSI & General Science Tuesday November 27, 2007
Today’s article is not about DNA, although its far-reaching implications prompted us to share this story with our readers.
Last August, astronomers working on the analysis of data being acquired by NASA’s WMAP (Wilkinson Microwave Anisotropy Probe) satellite announced that they found a huge void in the universe. A void is a region of space that has much less material (stars, nebulae, dust and other material) than the average. Since our universe is relatively heterogeneous, empty spaces are not rare, but in this case the enormous magnitude of the hole is way outside the expected range. The hole found in the constellation of Eridanus is about a billion light years across, which is roughly 10,000 times as large as our galaxy or 400 times the distance to Andromeda, the closest “large” galaxy.
The dimension of the hole is so big that at first glance, it results impossible to explain under the current cosmological theories, although scientists put forward some explanations based on certain theoretical models that might predict the existence of “giant knots” in space known as topological defects.
However, University of North Carolina at Chapel Hill physics Professor Laura Mersini-Houghton made a staggering claim. She says, “Standard cosmology cannot explain such a giant cosmic hole” and goes further with the ground-breaking hypothesis that the huge void is “… the unmistakable imprint of another universe beyond the edge of our own“.
(Article continues below)
The idea of alternative, or parallel universes has been around for quite a while and has provided considerable inspiration for Sci-Fi literature and sparked endless philosophical debate, but although begin seriously considered within the scientific realm it never crossed the limits of speculative of purely theoretical grounds. Perhaps until now. If Mersini-Houghton is right, Eridanus’ giant hole would be the first experimental evidence for the existence of another universe. The implications of this possibility are obviously of huge importance for everybody, but it also has further relevance for the astrophysics community as it would bring support for the hotly debated string theory and other central debates.
But Mersini-Houghton and colleagues’ theory of entangled universes make testable predictions, providing the opportunity to confirm or refute the claim as more data arrive to the astronomers’ computers. Her model predicts the existence of two voids rather than one, one in each hemisphere of our universe. The one that has been found by WMAP’s data lies in the Northern hemisphere. They expect new data will show a second similar void in the Southern side. This and other cutting-edge experimental projects testing Mersini-Houghton’s ideas will tell us whether a new era in cosmological thinking has indeed arrived.

Yup, As A Country, We Are Done For

America's day of reckoning is at hand
Paul Craig RobertsOnline Journal Tuesday November 27, 2007
Pat Buchanan is too patriotic to come right out and say it, but the message of his new book, Day of Reckoning, is that America as we have known her is finished. Moreover, Naomi Wolf agrees with him. These two writers of different political persuasions arrive at America's demise from different directions.
Buchanan explains how hubris, ideology, and greed have torn America apart. A neoconservative cabal with an alien agenda captured the Bush administration and committed American blood, energy, and money to aggression against Muslim countries in the Middle East, while permitting America's domestic borders to be overrun by immigrants and exporting the jobs that had made the US an opportunity society. War and offshoring have taken a savage economic toll while open borders and diversity have created social and political division.
In her new book, End of America: Letter of Warning to a Young Patriot, Wolf explains America's demise in terms of the erosion of freedoms. She writes that the 10 classic steps that are used to close open societies are currently being taken in the US. Martial law is only a declaration away.
The Bush administration responded to September 11 by initiating military aggression in the Middle East and by using fear and the "war on terror" to implement police state measures at home with legislation, presidential directives, and executive orders
(Article continues below)
Overnight the US became a tyranny in which people could be arrested and incarcerated on the basis of unsubstantiated accusation. Both US citizens and non-citizens were denied habeas corpus, due process, and access to attorneys and courts. Congress gave Bush legislation establishing military tribunals, the procedures of which permit people to be condemned to death on the basis of secret evidence, hearsay, and confessions extracted by torture. Nothing of the like has ever been seen before in the US.
The cancer might have metastasized if the Guantanamo detainees had actually been the dangerous terrorists and enemy combatants that the Bush regime declared them to be. Had the administration actually possessed evidence against the detainees, the Bush regime might have succeeded in dispensing with the Constitution. Conviction of the detainees could have led to what Wolf calls a "fascist expansion." Following the exercise of its new powers, the regime could have broadened the definition of terrorist to include the regime's critics, thus pulling citizens in general into tribunals devoid of civil liberty protections.
It could still turn out this way in the event of another 9/11 attack, whether real or orchestrated. But momentarily the drive toward tyranny has been blunted, because the vast majority of detainees turned out to be hapless individuals sold into American captivity by warlords responding to the bounty the US paid for "terrorists." Any unprotected individual was vulnerable to being captured by Afghan and Pakistani warlords and sold as a "terrorist." The Americans needed to show results, and the Bush regime needed "terrorists" in order to feed the fear its propaganda had generated.
In Stalinist Russia or Nazi Germany, the absence of evidence would not have mattered as the judicial system produced the results demanded by the tyrants. However, the US military had not been sufficiently corrupted for the Bush regime's Guantanamo agenda to succeed. Honorable officers, such as Lt. Col. Stephen Abraham, were able to discern that the US government had no information on the detainees and used interrogations in order to rubber stamp the a priori determination that a detainee was a terrorist or enemy combatant. Military officers made these revelations known to real courts before the tribunal process could establish itself.
CounterPunch writer Andy Worthington's recently published book, The Guantanamo Files: The Stories of the 759 Detainees in America's Illegal Prison, proves that the regime's claim that it had hundreds of dangerous terrorists at Guantanamo was just another Bush administration lie.
Currently, support for Bush, Cheney, and the neoconservative agenda is low. However, Congress, the press, and elections have proven to be feeble opponents of the Bush regime's drive toward war and tyranny. It remains to be seen whether the regime has sufficient credibility or audacity to initiate war with Iran or a false flag attack that would revive the fascist expansion of which Naomi Wolf warns.
The Bush administration has been a catastrophe. Its failures are unprecedented. Energy prices are at all time highs. The US is deeply in debt and dependent on foreign creditors. The dollar has lost 60 per cent of its value against other tradable currencies, and its reserve currency status, the basis of American power, is in doubt. The US has lost millions of middle class jobs which have been replaced with low paid domestic service jobs. Except for the very rich, Americans have experienced no gains in real income in the 21st century. As the ladders of upward mobility are dismantled and the middle class struggles and fails, America is left with a few rich and many poor. America's reputation and credibility are damaged perhaps beyond repair. Congress and the press have enabled the executive branch's disregard of the Constitution and civil liberty. The US is mired in two lost wars which are pushing Lebanon and nuclear-armed Pakistan into deepening political crises.
As Buchanan concludes, "Our day of reckoning is at hand."

Pat B. On Our Loss Of Freedom

How We’ve Traded Freedom for ‘Equality’
Patrick J. BuchananMonday November 26, 2007
“Our Enemy, the State” was the title of libertarian Albert Jay Nock’s classic that was once widely read by conservatives.
Nock was not an anarchist but a Jeffersonian. Government was necessary, but in its centralization lay the roots of tyranny.
And in 21st century America, Leviathan is indeed rising – and, oddly, being welcomed by people who talk incessantly of freedom.
Consider the front-page story in the New York Times of Nov. 8, “House backs broad protection for gay workers.”
It began thus: “The House on Wednesday approved a bill granting broad protections against discrimination in the workplace for gay men, lesbians and bisexuals, a measure that supporters praised as the most important civil rights legislation since the Americans With Disabilities Act of 1990. …
(Article continues below)
“The bill, the Employment Non-Discrimination Act, is the latest version of legislation that Democrats have pursued since 1974. Reps. Ed Koch and Bella Abzug of New York then sought to protect gay men and lesbians with a measure they introduced on the fifth anniversary of the Stonewall Rebellion, the brawl between gay men and police at a bar in Greenwich Village that is widely viewed as the start of the American gay rights movement.”
Our Revolution had Concord Bridge. The French Revolution had the fall of the Bastille. The civil rights movement had Selma Bridge. The gay rights movement has – a bar fight in Greenwich Village.
What would the new law do? Make it a federal crime for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to the compensation terms, conditions or privileges of employment of the individual, because of such individual’s actual or perceived sexual orientation.”
Majority Leader Steny Hoyer called the measure “historic” and “momentous.”
“It’s wonderful,” burbled Koch. Florida Rep. Kathy Castro exulted, “On this proud day, the Congress will act to ensure that all Americans are granted equal rights in the workplace.”
Said Joe Solomese, president of the Human Rights Campaign, the largest gay rights group in the country, “Today’s vote in the House sends a powerful message about equality to the country, and it is a significant step forward for our community.”
The bill will also do something else – further restrict individual freedom and further criminalize personal conduct. It would tell an employer: You may not want to hire homosexuals, but you are no longer free not to. For if you fail or refuse to hire or promote a homosexual, we will punish you, fine you, shut you down, break you.
Through Congress, the gay rights activists are seeking to use law to impose their values on society.
A fair headline you will not see in the Times might read, “House tells employers: Hire homosexuals – or else!”
In this bill, we see the triumph of the counterculture of the 1960s in making its moral values the basis of law, even as Christians once shaped society when America was a Christian country. In pre-secular America, homosexual sodomy was a crime, not a “lifestyle.” The “lifestyle” view is now being enshrined in federal law.
In this homosexual rights law, and the way it is being hailed as progress, as Republicans grumble, we see clearly that the revolution of the ’60s has overthrown the old moral and social order and begun to dictate how we must all behave in their new order. Those who think the right won the Culture War should think again.
Men are no longer free to hire or sell their homes to whomever they wish, or to associate with whomever they wish.
In the 1950s, there were men’s clubs and women’s clubs, WASP country clubs and law firms and Jewish country clubs and law firms. Black folks had their own restaurants, barber shops, movie theaters and churches.
We were a free country then. Did people use their freedom to discriminate? Undeniably. Did race discrimination need correcting? Undeniably. But in enlisting state power to end discrimination, we harnessed Leviathan. The left is now using the monster to reshape America. Thus is freedom, the cause of the American Revolution, supplanted by equality, the cause of the French Revolution.
The U.S. Constitution guaranteed freedom by restricting the power of government, the source of tyranny: “Congress shall make no law …” Civil rights laws restrict freedom. Men are told they will face disgrace, fines, ruin if they act on their beliefs in deciding whom they will hire, whom they will serve in a bar or restaurant, or to whom they wish to sell or rent their homes.
If a man is free to hold beliefs we detest, and speak and write in ways we detest, why is he not free to live according to his beliefs – if we believe in freedom? Hopefully, we are becoming a better society, for we are surely becoming a less free society.

Law Of The Sea Treaty: Lets Get Rid Of This

Law of the Sea treaty should be voted down
Bill McNallyNashua TelegraphMonday November 26, 2007
The big news in 1978 was when Ronald Reagan declared: "No national interest of the United States can justify handing sovereign control of two-thirds of the Earth's surface over to the Third World."
Now we have President Bush and U.S. Sen. Judd Gregg trying to push the United States overboard into LOST – the Law of the Sea Treaty – controlled by the United Nations.
The Senate Foreign Relations Committee is sending this treasonous treaty to the full Senate with a 17-4 approval vote.
You should know that Rep. Ron Paul, R-Texas, a presidential candidate, has a bill (H.R.-1146) that would get the United States out of the United Nations and hopefully the UN out of the United States (www.GetUSout.org).

Call U.S. Reps. Paul Hodes and Carol Shea-Porter and ask them to co-sponsor H.R.-1146.
It's doubtful that Sen. John E. Sununu would dare to vote for LOST because of his re-election bid in 2008.
What has the Republican administration promised Gregg to vote to ratify LOST? You should call Gregg today and tell him "Don't let the USA get LOST."

Fingerprints As Credit Cards...........Oh Brother

Your fingerprints may soon replace credit cards
Thaindian NewsTuesday November 27, 2007
Are you afraid that using a credit card for shopping may make you a victim of an ID fraud? Well, now a new technology based on personalised fingerprints is here to address your worries.
With the revolutionary new system, which is being introduced in Europe, it will be possible to buy a product by paying through fingerprints.
The so called digiPROOF fingerprint payment system is already very popular in Germany.
To pay for the product purchased, a customer will have to press his/her finger or thumb on to a scanner at the till, which acts as a register of customers prints and their bank details. The total will then be deducted from the customers account.
(Article continues below)
Toby Wolff who shops at the Edeka supermarket in Rulzheim, South West Germany, twice or thrice a week describes the system as quick as a flash.
“I always use digiPROOF. It’s good because it’s so fast, and you don’t have to bring your wallet with you,” the Mirror quoted the 22-year-old graphic designer as saying.
In Germany, the technology is popular even amongst old people.
“Older people like it better than young people. Sometimes when they get older, they get shortsighted and it can be embarrassing to fumble around for their coins at the till or peer at their credit cards,” said Werner Schneider, store manager at the luxurious department store, Wagener Gallery.
“We introduced the system two years ago and we now have 6,000 customers using it out of a total of 15,000 regulars. It’s good for the customer as it’s faster and it’s good for us because people who sign up tend to be more loyal shoppers,” Schneider added.
The system is also being used in school canteens, where parents pay into an account and can limit their child’s daily lunch allowance.
The person behind digiPROOF is Ulrich Kipper, chief executive of technology company It-Werke.
According to Kipper, the new system may provide a solution to the current panic about ID fraud.
“Stealing from people’s credit cards would be yesterday’s news with this technology. It would mean the end to credit card fraud. Every time you use a card, you are putting your details out there. But with digiPROOF, you register details once into a secure database,” said Ulrich.
Austria, Sweden, the Netherlands, and several companies in Saudi Arabia have shown interest in using the digiPROOF fingerprint system.
It just takes a few minutes for a customer to sing up to digiPROOF. All one has to do is to fill a form, and swipe an identification proof like a passport and a bank card, and scan once dabs. The registration process completed about five minutes thereafter.
Sion Roberts, director of consumer industries and retail at global technology company EDS, said: “Customers are most concerned with queues, so anything that can be done to speed up a transaction is appealing.
He added: “The other idea is that, if it’s in school canteens, the technology can be used to send parents a report detailing what their child has been eating that week, which may help in fighting childhood obesity.”
Roberts, however, admitted that the digiPROOF fingerprint system might have two major drawbacks.
“Some people might be concerned about putting their driving licence number or passport number on to the database, so there might be a bit of work to do with privacy. Retailers have also just spent a lot on rolling out chip and PIN, and might not be so keen to pay for another new system,” he said.
“Having said that, research shows one-fifth of people would be keen to use biometric payments and many would even be happy to have a chip inserted into their arms. We will probably see more trials of this kind rolling out in the UK over the next 12 to 18 months,” he added.

The EU Becomes Big Brother

Fears over pan-EU electronic identity network

By Philip Johnston, Home Affairs Editor
Last Updated: 2:54am GMT 27/11/2007
New concerns have been raised over the Government's multi-billion-pound ID project as it emerged that Britain's identity database could be shared with 26 other European Union countries.
The Home Office is taking part in a scheme, codenamed Stork, which aims to make all EU electronic identity networks ''inter-operable'' within three years.
David Davis, the shadow home secretary, said this development was particularly worrying following the loss of the nation's child benefit records by HM Revenue and Customs.
advertisement
He added: ''How are they going to prevent a repetition of the disaster of the last few weeks when sensitive personal data is held by 27 countries?"
Speaking in the Commons, Mr Davis said: "If the Government gives away your bank account details, that's a disaster but at least you can change your bank account. What, precisely, do you do if the Government gives away your biometric details?"
Michael Wills, the data protection minister, yesterday conceded that the ''deplorable'' loss of 25 million records had implications for the ID card scheme.
"We are going to obviously have to look at the national identity register in the light of all this,'' he told Parliament's joint human rights committee.
''We are going to have to learn the lessons. Everything will have to be scrutinised and then we will assess it again.''
However, Mr Wills said this did not mean the ID scheme - due to start next year for foreign nationals - would be scrapped.
The Stork project, spearheaded by the Identity and Passport Service, will ensure electronic identity systems recognise each other and can be used across the EU.
Eventually, the Stork project is intended to allow easy access to social security, medical prescriptions and pension payments.
However, Britain's national ID database will be the most comprehensive in the EU by far. No other country has plans for such a sophisticated database containing so much information.

Why Do Cities Need Drone Planes?

CNN: What is Houston planning to do with drone planes?
Katie BakerRaw StoryMonday November 26, 2007
When neighbors noticed black trucks, satellite dishes, swirling radars, and "a portable launch pad, with something covered up" on a Waller County Ranch, they had no idea what to think. CNN's Houston affiliate KPRC has partially solved the mystery: Houston police plan to start using unmanned drone aircraft. But, a question still remains: what, exactly, will the drones be used for?
The mood surrounding Waller County Ranch was highly secretive. At the entrance to the test site stood a Houston police road block, making sure only those invited were let through. HPD lieutenants refused to answer any questions from KPRC reporters, but KPRC still managed to gain footage of the "test [we] were not supposed to see."
"[The] drone was able to use a high-powered camera to track us," says Stephen Dean, who tracked the drone for KPRC. "Those cameras can actually look into people's homes or even follow them in moving cars."
(Article continues below)
Drone Planes are not new to the United States. The military has been using drones for secret war zone surveillance for years; drones were also used to put out the California wildfires last month. The drones used for the test in Houston weigh only 40 pounds, but can carry 15 pounds more in gear. They are able to stay airborn 15 to 24 hours without landing.
According to Dean, the fact that Houston police will be able to employ such high tech security devices raises "all sorts of new questions." One question: how will law enforcers will utilize the drones? A policeman conducting a search needs probable cause or a warrant -- will drone planes adhere to the same laws?
When the HPD realized their "secret test" was being filmed, they "hustled together" a news conference.
"I wasn't ready to publicize this," said Martha Montalvo, the executive assistant police chief.
She said that potential public safety applications include "mobility, evacuations, homeland security, search and rescue, as well as tactical."
Montalvo said that it was "too early to tell" what else HPD will do with the aircraft.
Police helicopter pilots said the entire air space surrounding the test site was restricted and, according to Dean, "threatened ... two investigative pilots with action from the FAA if [they] didn't leave."
But, when KPRC checked with the FAA, they learned there never was a flight restriction.
For Dean, that leaves some wonder "whether the police are now ready to use terrorism fears since 911 to push the envelope further into our private lives."
"We've seen that some of these technologies that are being used in the aftermath of 9/11 that we thought were necessary to protect our security in that time are now being used to diminish privacy in other contexts," said an unidentified male filmed by KPRC. "And that is extremely worrisome."

The Anti-2nd Amendment Gang Is At It Again

Gun-Grabbers Crank Up Anti-Second Amendment Propaganda
Kurt NimmoTruthNewsTuesday November 27, 2007


Now that the Supremes have agreed to rule on the Second Amendment, the corporate media has launched a full-court press to convince America it does not have a right to bear firearms.
“Activists on both sides of the steaming debate over guns ought to be able to agree, at the very least, on two things. The first is that the language of the Second Amendment is, grammatically speaking, incomprehensible. The second is that the time has come for clarity from the Supreme Court about whether the “right to bear arms” is an individual or collective one,” writes Andrew Cohen for CBS News.
In fact, the Second Amendment is quite explicit: “A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
Cohen and other gun-grabbers concentrate on “the three, jarring, comma-spliced clauses of the amendment,” that is to say they attack the grammar of the amendment and would have us believe our forefathers were indecisive and “were no more willing or capable of making tough decisions about contentious issues (like gun rights) than are their modern-day counterparts,” that is to say a gaggle of appointed statists determined to dismantle the Constitution.

Cohen is a postmodern apologist for state power over the individual. The Supremes, he declares, “should chart a course that does to the Second Amendment what we long ago did to the First Amendment; identify a strong individual right but allow for that right to be trumped from time to time by certain kinds of regulations.” In other words, the state should agree in principle that the individual has a right to bear firearms but that principle should be “trumped,” that is to say denied, by the exigencies of state power. Put another way, you may have a right to bear arms, at least on paper, but in practice the state will “regulate” (deny) that right.
“So we would then get a Second Amendment that both recognizes our right to own and possess guns and recognizes the government’s ability to restrain that right in certain, yet-to-be-determined ways.”
Nonsense. The founders realized that the individual had a natural, indivisible right to possess firearms precisely because of the nature of state power. It has nothing to do with “certain, yet-to-be-determined” exigencies of the state.
In regard to grammar and the trickery Andrew Cohen has in mind, founder George Mason, who co-authored the Second Amendment, wrote during Virginia’s Convention to Ratify the Constitution in 1788: “I ask, Sir, what is the militia? It is the whole people. To disarm the people is the best and most effectual way to enslave them.”
That should resolve Cohen’s grammatical problem, but it will not, of course.
In Letters from the Federal Farmer to the Republic, Richard Henry Lee wrote: “A militia, when properly formed, are in fact the people themselves.”
Zachariah Johnson, arguing in The Debates in the Several State Conventions on the Adoption of the Federal Constitution, wrote: “The people are not to be disarmed of their weapons. They are left in full possession of them.”
“And that the said Constitution be never construed to authorize Congress to infringe the just liberty of the Press, or the rights of Conscience; or to prevent the people of the United States, who are peaceable citizens, from keeping their own arms,” declared Samuel Adams in the Philadelphia Independent Gazetteer, August 20, 1789.
George Washington understood well what Cohen and the gun-grabbers do not: “Firearms stand next in importance to the constitution itself. They are the American people’s liberty teeth and keystone under independence … from the hour the Pilgrims landed to the present day, events, occurences and tendencies prove that to ensure peace security and happiness, the rifle and pistol are equally indispensable … the very atmosphere of firearms anywhere restrains evil interference — they deserve a place of honor with all that’s good.”
Thomas Paine knew that “horrid mischief” would ensue if the people were denied their right to arms. “The supposed quietude of a good man allures the ruffian; while on the other hand arms, like laws, discourage and keep the invader and plunderer in awe, and preserve order in the world as property. The same balance would be preserved were all the world destitute of arms, for all would be alike; but since some will not, others dare not lay them aside.”
Thomas Jefferson: “Those who hammer their guns into plowshares will plow for those who do not.”
In fact, Jefferson considered it not only a right for the individual to be armed, but a duty. Predictably, Cohen and the gun-grabbers do not make mention of this philosophic attitude, preferring instead to tell us the founders were conflicted and, absurdly, wanted to postpone the debate “for another day.”
Cohen and crew believe Congress, after a Supreme Court “decision,” has the right to regulate our firearms out of existence. Patrick Henry had something to say about this: “Are we at last brought to such humiliating and debasing degradation, that we cannot be trusted with arms for our defense? Where is the difference between having our arms in possession and under our direction and having them under the management of Congress? If our defense be the real object of having those arms, in whose hands can they be trusted with more propriety, or equal safety to us, as in our own hands?”
Finally, Thomas Jefferson explained precisely why there is a Second Amendment: “What country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance. Let them take arms.”
Indeed, let them… before it is too late.

CNN Finally Catches Up To SOC: The Recession Is Here

Don't look now: Here comes the recession
Even with a boost from holiday spending, the U.S. economy looks shaky, thanks to slumping housing prices, Wall Street woes and debt-laden consumers. How bad could it get?
By Colin Barr, senior writer
NEW YORK (Fortune) -- The cash registers were ringing on Black Friday, but make no mistake: American consumers are jittery, and seem all but certain to push the U.S. economy into recession.
After years of living happily beyond their means, Americans are finally facing financial reality. A persistent rise in energy prices will mean bigger heating bills this winter and heftier tabs at the gas pump. Job growth is slowing and wage gains have been anemic. House prices are sliding, diminishing the value of the asset that's the biggest factor in Americans' personal wealth. Even the stock market, which has been resilient for so long in the face of eroding consumer sentiment, has begun pulling back amid signs of deep distress in the financial sector.
The latest evidence of the long-awaited consumer retrenchment: Chic discounter Target (Charts, Fortune 500) last week reported a weaker-than-expected third quarter, as sales of higher-margin apparel and home goods slowed. Starbucks (Charts, Fortune 500) reported for the first time that customer traffic in its stores declined in its latest quarter compared to a year earlier. Wal-Mart (Charts, Fortune 500) shares hit a six-year low in September after the retail giant posted another wan sales increase.
With consumer spending accounting for about three-quarters of U.S. economic activity, some economists say it is inevitable that the economy will stop growing at some point in the coming year, for the first time since the mild recession of 2001. "Right now, the question is how bad it's going to get," said David Rosenberg, chief North American economist at Merrill Lynch. "The question is one of magnitude."
Not everyone agrees. Many economists believe the Federal Reserve will steer the economy into a period of slow growth but avoid a recession, which is typically defined as two or more consecutive quarters of economic contraction. Indeed, the Fed already has twice cut its overnight interest-rate target, and options markets show investors expect the Fed to cut by another quarter-point at its Dec. 11 meeting, taking the Fed funds bank-lending rate down to 4.25%.
Government officials have steered well clear of recession talk, with recent Fed documents citing instead the risk of "an unexpectedly severe weakening in economic activity." But Rosenberg and others are skeptical of the Fed's influence on an economy staggering under a mountain of personal, corporate and government debt. The economic recovery underway in 2002 was driven by low interest rates and abundant credit availability -- helped along by then-Fed chief Alan Greenspan's decision to cut interest rates as low as 1% in 2003.
Rosenberg said the low rates and easy underwriting meant loans were available to just about anyone with a pulse, so recent economic gains were more credit-induced "by a factor of four" than any other U.S. expansion on record. Now many of those loans are going bad, which is why investors are fleeing any debt riskier than U.S. Treasury securities.
Making matters worse, the banking system is coming under severe strain. Wall Street has recognized more than $40 billion in losses this year on souring subprime mortgages and a related problem, the toxic debt known as collateralized debt obligations. The losses could constrain the economy by forcing banks and brokerages to sock money away rather than lending it out to businesses and individuals.
Freddie Mac (Charts, Fortune 500), the big government-sponsored mortgage investor, provided some insight into that dynamic last week, when it said a $2 billion third-quarter loss had wiped away two-thirds of its regulatory capital surplus -- raising the prospect that the company will have to become a seller of mortgages at a time when the limping housing market desperately needs Freddie to be a buyer.
"The infection that started in housing is spreading," said Northern Trust chief economist Paul Kasriel. He says banks are extremely vulnerable to the defaults and foreclosures now sweeping American neighborhoods, with mortgage exposure amounting to 63% of U.S. banks' earning assets.
As a result of that exposure - and the hefty losses that financial institutions are going to have to take as more loans go bad -- Kasriel believes Fed chief Ben Bernanke is in a very different position than Greenspan was seven years ago, when the economy last showed signs of heading into recession.
"I'm wondering if Bernanke will have the same latitude" to cut rates, Kasriel said, referring both to the uncertain health of the banking system and the persistent weakness of the U.S. dollar, which is trading at lows unseen since the end of the gold standard in 1971. When Greenspan slashed U.S. interest rates in the early part of the decade, "the financial system was intact," Kasriel said. "Banks were able to extend cheap credit."
But with banks choking on bad loans, Kasriel doesn't expect to see the return of the easy lending standards that fueled the housing boom. Instead, he expects to see "greater risk aversion" that will slow credit growth and reduce the value of assets like property. He says the median U.S. house price would need to fall 17% to return to its 2001 level, which he notes was hardly at the bottom of the house-price cycle. A decline of that magnitude will further erode home-equity borrowing by Americans and, presumably, deliver one more blow to consumers' wallets.
The American consumer seems to grasp the risks. A growing number of Americans expect the economy to tip into recession in the next year -- 40% last week, up from 31% in October, going by a Reuters/Zogby poll released last week. Rosenberg said government statistics show that 500,000 self-employed workers have lost their jobs since July -- a greater loss than was seen in all of 2001. Reported unemployment figures remain low, but Kasriel says those numbers "smell worse than a week-old fish."
The combination of an emerging consumer recession and a heavily stressed financial system has some experts suggesting that a financial meltdown looms.
"In short, the financial markets are at a critical point," fund manager John Hussman of the Hussman Funds wrote last week in a Web site post devoted to discussing a possible financial crisis. "It's possible that investors will somehow adopt a fresh willingness to speculate, but my impression is that in the weeks ahead, investors will be forced to recognize that the recession risk has tipped."
Others are more direct. Nouriel Roubini, an economics professor at New York University who has been predicting the collapse of the housing bubble for years, wrote recently that not only is a recession inevitable, he also sees "the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before."
Such a meltdown, he writes, would include bank runs such as the one seen earlier this year at Britain's Northern Rock and the bankruptcy of some broker-dealer firms.
That view isn't widely shared, of course. Few expect Americans to find themselves out on the street corner soon selling apples. Jim Griffin, an economist who writes for ING Investment Weekly in Hartford, Conn., shuns recession forecasts as unreliable and believes worries about the nation and the financial system are mostly overstated.
Griffin sees this fall's turmoil as "part of the next historical phase" in the global economy, as the U.S. shifts from driving world growth to riding behind developing nations. He expects U.S. export growth to help cushion the blows dealt by the housing bust and related bad debt.
Merrill Lynch's Rosenberg is less sanguine than Griffin, but he too discounts the voices of doom. "We've had consumer recessions before," Rosenberg said. "The world doesn't end." Let's hope not.

While Others Call Out Loudly For It, The Prognosticators Of The NAU Deny It

Denying the North American Union
Kurt Nimmo

TruthNews November 26, 2007
Now that Alex Jones, Jerome Corsi, and others have exposed the plot to establish a “North American community,” that is to say eradicate the national sovereignty of the United States, Canada, and Mexico in favor of a “United Nations of America” based on the European Union, the corporate media and globalist apologists have kicked into over-drive with a propaganda effort to deny reality.
“Nobody is proposing a North American Union,” declared Robert Pastor, correctly identified as the father of the NAU and author of “Towards a North American Community: Lessons from the Old World for the New,” a book published by the Council on Foreign Relations Press in association with the Canadian Council of Chief Executives and the Consejo Mexicano de Asuntos Internacionales. Pastor may insist the elite of the three countries, at the behest of transnational corporations, are not interested in a merged superstate, but his argument betrays the fact the former national security advisor dreams of an American version of the European Union.
Pastor is an advocate of NAFTA on steroids, or “NAFTA Plus.” According to Miguel Pickard, in “the early 1990s, when NAFTA negotiators were still wrangling over arcane language, Pastor was proposing ways to ‘improve’ the treaty. According to Pastor, NAFTA was off to a bad start, since negotiators were mostly seeking to dismantle trade tariffs. For Pastor it was crucial to find ways of integrating the three countries, similarly (but with important differences) to what the Europeans had done since the 50s. Years later, Pastor would bemoan that NAFTA’s promise had gone unfulfilled, since it lacked a ‘grand vision’ for the three countries, i.e., a much richer perspective than the emphasis put on trade.” In other words, NAFTA was simply a trade treaty minus the “grand vision” of global integration.
But there is a problem with Pastor’s “grand vision,” namely the people of the United States, Canada, and Mexico are reluctant to give up their national sovereignty.
Pastor, in a conversation with Jerome R. Corsi, “was careful to distinguish that his proposals were designed to create a North American Community and that he never has proposed to create a North American Union as an EU-style regional government,” thus Pastor’s insistence “nobody is “proposing a North American Union.”
But this is, to say the least, deceptive. “The idea seems to be to put new structures in place that change the look of the landscape,” writes Corsi. “[WorldNetDaily] pointed out to Pastor that this step-by-step approach is the same approach taken to create the European Union. The memoirs of Jean Monnet, regarded as the architect of European unity, finally disclosed he had used a strategy of deceit, knowing his plan to form a European Union would never succeed if it were openly disclosed.”
“Pastor in an article entitled ‘NAFTA is Not Enough,’ argued for an incremental process that could head toward the creation of the NAU, all the while providing cover for participating politicians and governments to deny that creating the NAU was their goal,” Corsi argues in a News with Views editorial. In the article, Pastor provides key details on how this stealth process works:
While the three governments of North America are unlikely to step into the debate on long-term goals at the current time, nongovernmental organizations, research institutes, and universities should fill the void with new ideas and old-fashioned cross-border dialogue.
Short of this sort of shadowy incrementalism, the NAU project may be dropped on the fast track by other means, according to Corsi. “Dr. Pastor seems to prescribe that a fear formula is all that is needed for the American people need to begin begging SPP to produce the NAU right now. Pastor openly writes as if the next 9/11 terrorist attack or a future outbreak of some health epidemic such as the avian flu could be just what the NAU doctor ordered as the prescription for the American people to abandon sovereignty in favor of super-regional government control, all in the interest of ’security’ leading to ‘prosperity.’ Or, is it ‘prosperity’ which necessitates more ’security’ via surrender to Big Brother government?”
In predictable fashion, the corporate media is tasked with characterizing those who document the emerging NAU as tinfoil hatters, nut cases, mental patients, conspiracy theorists, etc.
For instance, neocon Charles Krauthammer told Fox News: “I love this stuff because if you ever doubt your own sanity, all you have to do is read this stuff and realize that you’re okay” (see video), while “conservative” Michael Medved lamented what he calls the “paranoid and groundless frenzy… fomented and promoted by a shameless collection of lunatics and losers; crooks, cranks, demagogues and opportunists, who claim the existence of a top secret master plan to join the U.S., Canada and Mexico in one big super-state,” never mind the above, well-documented. “I’m sorry to sound cynical and intolerant about this stupidity, but I’m furious, actually – ashamed to be part of a proud medium (conservative talk radio) that increasingly encourages this paralyzing, puerile paranoia,” apparently a reference to Alex Jones and others who continue to flesh out the “incremental” conspiracy Medved refuses to acknowledge.
Drake Bennett writes for the Boston Globe:
Government officials say a continental union is out of the question, and economists and political analysts overwhelmingly agree that there will not be a North American Union in our lifetimes. But belief in the NAU — that the plans are very real, and that the nation is poised to lose its independence — has been spreading from its origins in the conservative fringe, coloring political press conferences and candidate question-and-answer sessions, and reaching a kind of critical mass on the campaign trail. Republican presidential candidate and Texas congressman Ron Paul has made the North American Union one of his central issues.
Government officials of the sort, no doubt, that told us Saddam Hussein was about use weapons of mass destruction against the United States or that the air at Ground Zero in New York was safe to breathe.
Finally, it is no mistake the Boston Globe has rolled Ron Paul into its diatribe of transparent denial, as Paul must be roundly discredited and characterized as a kook, primarily because a Paul presidency would most certainly put an end to Robert Pastor’s dream of an American version of the European Union once and for all.

A Nuclear Sub For Brazil????

Brazilian defense officials announced plans to build their first nuclear submarine last week. Is Brazil preparing for war? Worried about foreign nations patrolling their waters? No… just looking after their oil… "When you have a large natural source of wealth discovered in the Atlantic, it's obvious you need the means to protect it," said defense minister Nelson Jobim last week. Brazil, which has been discussing nuclear submarine production for decades, is finally moving forward, thanks to the gigantic Tupi oil discovery it reported earlier this month. The Tupi field is believed to contain up to 8 billion barrels of oil. Brazil has no official enemies in South America, nor has it been the target of any significant terrorist threat. However, the Tupi field could boost Brazilian reserves by as much as 62%… Brazil doesn’t seem interested in taking any chances.

Leaving The USA...........A Small Trend Getting Bigger?

Here’s an interesting trend: 1.5 million U.S. households are preparing to move out of the U.S. A poll by Zogby Intl. of 115,000 Americans estimated that:
1.6 million U.S. households have already made the decision to leave 1.8 million are seriously considering and likely to leave 7.7 million are somewhat serious about leaving and may do so 3.0 million are seriously considering purchase of non-U.S. property 10.0 million are somewhat serious about purchase of non-U.S. property.
“We are not talking about the next major deployment of National Guard units to the Middle East,” comments Mike Muehleck in Strategic Investment. “In fact, none of the emigrants are government workers or corporate employees leaving for temporary overseas assignments. This is a group of malcontents and adventurers. They consist entirely of private citizens and their families packing up and leaving the USA at their own initiative.
“Why do people leave home for strange foreign lands? While a handful might claim to leave for political or religious reasons, most seek greater economic opportunity. All of my grandparents emigrated from Germany or Lithuania in the early 1900s. My wife's Chinese grandparents emigrated from China to Siam in the same generation. None came because of a burning desire to be ‘free.’ They all came because they wanted to make more money and thus enjoy a better life.”
Which, evidently, is getting harder to do in the U.S. Mike himself emigrated to Thailand years ago.

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

"Whoever prefers life to death, happiness to suffering, well-being to misery must defend without compromise private ownership in the means of production." -Ludwig von Mises

Dollar Demise: The Chart Says It All

2nd Amendment Rights, More Important Than Ever

Supremes Opportunity to Restore the Constitution
Wednesday, November 21, 2007 - FreeMarketNews.com
"The decision by the Supreme Court to rule on the DC gun ban gives them an historic opportunity to return to the original meaning of the Second Amendment," said Gun Owners of America's executive director, Larry Pratt."The case, Heller v. D.C., resulted in nullification of the gun ban in the District of Columbia. Judge Laurence Silberman wrote the majority opinion for the DC Court of Appeals which decided that the DC law violated the individual right to keep and bear arms protected by the Second Amendment. "Silberman's opinion was based on an extensive review of the historical record which makes it clear that the militia is a mandatory body comprised of all military-aged males who must own their own military weapons. He found that the 'state' referred to in the Second Amendment is a reference to society, not a political entity," Pratt said."The response of the District of Columbia reflects not only an ignorance of the Constitution, but the bloody record of the gun ban in the District. DC Mayor Adrian Fenty has lamented the excess of handguns in the District, and the citizens who are dying because of them."This is hardly a reason to ignore the Constitution, much less because the Mayor's position is totally false," Pratt continued. "There are not enough guns in the District. Other than the police, only criminals have them. That is why they are so brazen. Assailants are much more restrained in neighboring Virginia where the murder rate -- in Fairfax County -- was 0.3 per 100,000 people in 2005. In the same year in DC, the murder rate was 100 times greater at 35 per 100,000."Gun Owners of America encourages the Supreme Court to tell the DC solons: 'You already have the most effective crime fighting tool at your disposal which you should use -- the Second Amendment,'" Pratt concluded.Larry Pratt is the Executive Director for Gun Owners of America, a national gun lobby with over 300,000 members. GOA is located at 8001 Forbes Place, Springfield, VA 22151 and at

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

"No man has a natural right to commit aggression on the equal rights of another, and this is all from which the laws ought to restrain him." -Thomas Jefferson

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

"Editors and reporters don't like to diverge too sharply from what everyone else is writing. When a president is popular and a consensus prevails, journalists shrink from challenging him." -Michael Massing