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Instead of people becoming more moral with government interference, they become less moral.
And that, I am convinced, is a Natural Law that no words on paper can ever repeal.
I have no qualms about robbing the robbers. None.
Solomon: U.S. media coverage has been too soft on the White House
[Tide has turned.]
By Norman Solomon
This summer, many journalists seem to be in hot pursuit of the Bush administration. But they have an enormous amount of ground to cover. After routinely lagging behind and detouring around key information, major American news outlets are now playing catch-up.
The default position of U.S. media coverage gave the White House the benefit of doubts. In stark contrast, the British media has been far more vigorous in exposing deceptions about Iraq. Consider the work of two publicly subsidized broadcasters: The BBC News has broken very important stories to boost public knowledge of governmental duplicities; the same can hardly be said for NPR News in the United States.
One of the main problems with American reporting has been reflexive deference toward pivotal administration players such as Donald Rumsfeld, Colin Powell and Condoleezza Rice. Chronic overreliance on official sources worsened for a long time after 9-11, with journalists failing to scrutinize contradictions, false statements and leaps of illogic.
Powell's watershed speech to the U.N. Security Council in February was so effective at home because journalists swooned rather than drawing on basic debunking information that was readily available at the time. To a great extent, reporters on this side of the Atlantic provided stenography for top U.S. officials, while editorial writers and pundits lavished praise.
The most deferential coverage has been devoted to the president himself, with news outlets treating countless potential firestorms as minor sparks or one-day brush fires. Even now, George W. Bush is benefitting from presumptions of best intentions and essential honesty -- a present-day "Teflonization" of the man in the Oval Office.
Midway through July -- even while Time's latest cover was asking "Untruth & Consequences: How Flawed Was the Case for Going to War Against Saddam?" -- the president told reporters: "We gave him a chance to allow the inspectors in, and he wouldn't let them in. And, therefore, after a reasonable request, we decided to remove him from power." Bush's assertion about Saddam and the inspectors -- that he "wouldn't let them in" -- wasn't true. Some gingerly noted that the statement was false. But the media response was mild. The president openly uttering significant falsehoods was no big deal.
Meanwhile, reporting on the deaths of U.S. troops in Iraq has been understated. Editor & Publisher online pointed out that while media accounts were saying 33 American soldiers had died between the start of May and July 17, "actually the numbers are much worse -- and rarely reported by the media." During that period, according to official military records, 85 U.S. soldiers died in Iraq. "This includes a staggering number of non-combat deaths . . .. Nearly all of these people would still be alive if they were back in the States."
In a follow-up, editor Greg Mitchell reported that his news analysis had caused "the heaviest e-mail response of any article from E&P in the nearly four years I have worked for the magazine." He added, "These weren't the usual media junkies or political activists, but an apparent cross-section of backgrounds and beliefs." Some of the letters were from relatives and friends of U.S. soldiers in Iraq. The strong reactions indicate that American deaths are apt to be politically explosive for the 2004 presidential campaign.
Contradictions have become more glaring at a time when the war's rising death toll already includes thousands of Iraqis and hundreds of Americans. Many U.S. news organizations are beginning to piece together a grim picture of deceit in Washington and lethal consequences in Iraq. The combination foreshadows a difficult media gantlet for Bush.
Another key political vulnerability that remains underreported is the economy. Its woes persist in the context of a huge gap between the wealthy and most other Americans -- a gap that is set to widen still further due to the latest round of White House tax changes and spending priorities. Ironically, this summer's resurgence of Iraq-related coverage could partly overshadow dire economic news in the coming months. It's deja vu, with a big difference.
Last summer, the Bush team successfully moved the media focus from economic problems to an uproar about launching a war on Iraq. That was a politically advantageous shift that endured through Election Day. Now, with concerns about Iraq and the economy again dominating front pages, it remains to be seen whether news outlets will accelerate the search for truth or slam on the brakes.
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Solomon, co-author of Target Iraq: What the News Media Didn't Tell You, is executive director of the Institute for Public Accuracy
http://www.sltrib.com/2003/Aug/08042003/commenta/81027.asp
'Terror Risk' Color Labels Coming For All US Fliers
By Mary Lou Pickel
The Atlanta Journal-Constitution
8-3-3
The Transportation Security Administration plans to begin testing new computerized background checks to determine which airline passengers are potential terrorists.
But in response to privacy concerns, the agency no longer plans to delve into travelers' creditworthiness or medical records, the agency said Thursday.
Testing will begin almost immediately, using personal information on travelers collected in airline reservation systems and commercially available databases, said Dennis Murphy, a Department of Homeland Security spokesman.
"We're trying to determine if this traveler is a real person as opposed to [whether they are] making it it up," Murphy said.
Information would be used to assign a risk level -- green, yellow or red -- to all travelers. Those with higher levels would get extra scrutiny at airports.
Testing of the Computer Assisted Passenger Prescreening System could last six months, if everything goes well, Murphy said.
It won't be used to make security screening decisions on real passengers, but as testing progresses, "we'll get closer and closer to live tests," Murphy said. "If someone pops up who is on the terror watch list or a no-fly list, we'd probably take action," he said.
The idea of an advanced passenger screening program began taking shape shortly after the Sept. 11, 2001, hijackings.
Earlier this year, the Transportation Security Administration and Delta Air Lines conducted a very basic test to see whether their computer systems could communicate with each other, Murphy said.
The agency in March awarded a $12.8 million contract to Lockheed Martin Corp. to link commercial databases, such as a database of addresses or phone numbers, with airline travel data and government terrorist watch lists.
Airline travel records contain information such as how travelers paid for their tickets, who else they may be traveling with and their itinerary.
The TSA's decision to leave credit and medical records out of the system doesn't satisfy all critics, some of whom view the plan as part of a larger threat to civil liberties posed by post-Sept. 11 security initiatives.
"These are potentially fundamental changes in the relationship of the individual and the government, to have the government assigning risk scores to all of us," Jay Stanley, spokesman for the American Civil Liberties Union, told The Associated Press.
Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington, remains leery.
"Unless there's legal restraint, people will find other ways to use these systems," he said. "These private-sector databases are notorious for the number of errors they contain."
The Homeland Security agency has hired a chief privacy officer to help address concerns. It also says airline passengers will be able to complain about incorrect information to an agency ombudsman.
The TSA says it will no longer keep information on high-risk passengers for 50 years, as an earlier policy document indicated. In most cases, the risk assessment and the information used to create it will be erased after the passenger's itinerary is completed, in a set number of days, Murphy said.
Airlines generally favor the use of a computer screening system because it could reduce the current reliance on physical screening at airports, which slows passenger processing.
http://www.rense.com/general39/risk.htm
Electronic Voting Machines Exposed
An independent team of computer experts has exposed how electronic voting machines are insecurely programmed and are vulnerable to hackers who can manipulate data and steal elections without leaving a trace.
Exclusive to American Free Press
By Christopher Bollyn
A team of computer security experts has examined the software that runs one of the leading touch-screen voting systems currently being used in the United States and discovered “significant security flaws.” The voting system examined fell “far below even the most minimal security standards.”
Three experts from the Information Security Institute (ISI) at Johns Hopkins University in Baltimore and a fourth from Rice University in Houston analyzed the source code—programming that makes up software which runs a computer system—found on a publicly avail able web site belonging to Ohio-based Diebold Election Systems Inc. (DESI).
Bob Urosevich heads DESI. His brother Todd is a vice president at a competing company, Omaha-based Election Systems & Software. These two companies count nearly 80 percent of the votes cast in the United States.
The Hopkins group and other experts believe the “source code” they examined is used in Diebold’s direct recording electronic (DRE) AccuVote-TS (touch screen) voting system. The AccuVote-TS system was first used on a statewide basis in Georgia on Nov. 5, 2002.
Aviel D. Rubin, an associate professor of computer science at Johns Hopkins and technical director of ISI, headed the study. The group’s 24-page report, “Analysis of an Electronic Voting System,” was released on July 23. It is available at: http://avirubin.com/vote.pdf.
“The most fundamental problem with such a voting system is that the entire election hinges on the correctness, robustness, and security of the software within the voting terminal,” the report said. “The model where individual vendors write proprietary code to run our elections appears to be unreliable, and if we do not change the process of designing our voting systems, we will have no confidence that our election results will reflect the will of the electorate.
“Electronic voting,” the report concluded, with its inherent risks, “places our very democracy at risk.
“The only known solution to this problem is to introduce a ‘voter-verifiable audit trail,’ ” the report says, in which “the tally of the paper ballots takes precedence over any electronic tallies.”
What the experts from Johns Hopkins reported verifies what AFP and The SPOTLIGHT have been saying since November 2000: Electronic voting systems are fundamentally insecure and have intrinsic flaws that can be exploited to commit massive vote fraud.
A truly verifiable voting system requires paper ballots that are openly counted by hand. When there is no observable vote count done at the local polling place, there is no “authentication” of the tally.
“We found some stunning flaws,” Rubin said.
Dan S. Wallach, assistant professor of computer science at Rice University, added: “We found a list of flaws, any one of which could ruin the integrity of the election.”
The “glaring weakness in the system is a lack of a verifiable audit trail to double-check voting results,” Rubin told Associated Press. “I think they need to have paper trails, and I don’t think these kinds of machines should be used for voting.”
Rubin told American Free Press that just as he was about to release the report on the Diebold voting system, he learned that election officials in Maryland had decided to spend $55.6 million to purchase nearly 11,000 of the Diebold machines.
The Diebold paperless touch-screen voting system was first deployed on a statewide basis in Georgia for the 2002 election. The outcome in Georgia was a “stunning” and “historical” upset in which Republican candidates won both the governor’s mansion and a seat in the U.S. Senate. The Republican challengers in Georgia had been trailing the Democratic incumbents in both races by 5 to 11 point margins the week before the race.
Although most Georgians expected incumbent Sen. Max Cleland to win, the Diebold voting system declared the dark horse Republican candidate Saxby Chambliss the winner. Chambliss won 53 percent of the vote, according to the Diebold-generated tally. A similar upset occurred in the gubernatorial race in which a Republican candidate won for the first time in 130 years. The upset in Georgia was of national significance. As Chambliss says on his web site: “With our win on Nov. 5, we returned control of the U.S. Senate to Republicans and gave President Bush the tools he needs to implement his agenda for America.”
Because the Diebold system is paperless and the “counting” of the votes is done out of sight, within a networked computer system, there is no way for any voter to know if his or her vote was counted correctly.
The experts’ “analysis of a voting machine” discovered a host of security flaws in the software and exposed how the system is virtually wide-open to vote fraud and manipulation of the results. The Diebold voting system is open to “insider” attacks at every point of contact on the network, including the voter, and from “outsider” attacks on the data as it is transmitted.
Obvious flaws in the code were left uncorrected. The report said, “There appears to have been little quality control in the process.”
Because the voting machines communicate in a network, anybody with access to the data, from the poll worker to a telephone company employee, could manipulate the data and the outcome.
The AccuVote-TS voting machine requires a voter to insert a “smartcard,” bearing a computer chip, before voting. However, the study found that Diebold’s “use of smartcards provides very little (if any) additional security and, in fact, opens the system to several attacks.”
By forging or altering a smartcard, a voter can vote multiple times, access administrative functions, and even close the polling station by shutting down the machine, according to the study.
The system could be tricked by anyone with $100 worth of computer equipment, Adam Stubblefield, one of the experts from Johns Hopkins, said.
If a voter were to cast multiple ballots, there is “no way for the tabulating system to count the true number of voters or distinguish the real votes from the counterfeit votes,” the report said.
A poll worker could access the data in the system and change the ballot so that votes cast for one candidate would be counted for another. In this way an underdog candidate would win in an upset. Voters in Georgia reported that when they touched one candidate’s name on the screen another candidate’s name appeared.
As James and Kenneth Collier wrote in 1992 in their book, VoteScam: “The concept is clear, simple, and it works. Computerized voting gives the power of selection, without fear of discovery, to whomever controls the computer.”
“The bottom line is that all of the existing electronic voting machines are fundamentally flawed,” Peter G. Neumann, principal scientist at Stanford Research Institute’s International’s Computer Science Laboratory in Palo Alto, California, said. “The real problem is that the federal election system standards stink. They allow totally insecure voting systems to be certified.”
The problems with the Diebold software represent “just the tip of the iceberg,” Neumann told American Free Press. “This is a weak link problem in a system in which there is nothing but weak links—this is an end-to-end problem.”
“We believe the software code they evaluated, while sharing similarities to the current code, is outdated and never used in an actual election,” Diebold said in a statement.
AFP asked Diebold spokesman Joe Richardson if the software code in question had been used in Diebold machines during the Georgia 2002 election. “We are still looking into that,” Richardson said.
Neumann said: “Its very likely this code was used in Georgia.”
Georgia spent $54 million to buy 19,000 voting terminals to create the first “uniform, state-wide” electronic voting system from Diebold in 2002. Michael Barnes, Georgia’s assistant director of elections, oversaw the conversion to the new machines.
Former Georgia Gov. Roy E. Barnes appointed Larry J. Singer to serve as the state’s first Chief Information Officer (CIO) and Executive Director of the Georgia Technology Authority (GTA) in July 2000. Singer served as a “policy and budget advisor to the executive and legislative branches on technology-related issues” and played a key role in bringing the Diebold machines to Georgia. After the election, Singer suddenly resigned on Nov. 25, 2002.
AFP asked Barnes if the state of Georgia had inspected the Diebold code before buying the machines.
Barnes said, “It went through two levels of testing, first at the Federal Election Commission (FEC), who went through the code line-by-line, and then at Wyle Laboratories in Huntsville, Ala.” Finally a professor at Kennesaw State University, Brit Williams, put the voting equipment through a “mock election,” Barnes said.
Williams has served in senior positions advising the FEC on voting equipment. He was unavailable for comment.
“No we did not,” said FEC spokesman Brian Hancock, when asked if the federal agency had inspected the Diebold code “line-by-line” as the Georgia official said. “He [Barnes] has a fundamental misunderstanding. We don’t test anything.”
AFP asked Dan Reeder, spokesman for Wyle Labs if they examined the computer code for voting machines. “No,” Reeder said, “we only do the hardware tests. We check the machines for shaking and vibration. We don’t check the software.”
Bev Harris, author of Black Box Voting: Ballot-Tampering in the 21st Century, asked Williams whether he had looked at the code. “We don’t look at the source code, that’s the federal certification labs that do that,” Williams said.
Harris asked Williams about the Diebold web site where the source code had been located. The site also contained “lots of files,” Harris said. One file “was called ‘rob-Georgia’ which contained files with instructions to ‘replace GEMS files with these’ and ‘replace Windows files with these and run program.’ Does this concern you?” she asked Williams.
He was not familiar with the site, he said.
Diebold voting systems use a software program called “GEMS,” Global Election Management System, which carries the name of the company Diebold acquired in 2001, Global Elections Systems.
“Since no one at the state level looks at the source code, if the federal lab doesn’t examine the source code line by line, we have a problem, wouldn’t you agree?” Harris asked.
“Yes. But wait a minute,” Williams said, “I feel you are going to write a conspiracy article.”
http://www.americanfreepress.net/08_01_03/Electronic_Voting/electronic_voting.html
Halliburton Profits
Skyrocket On Iraq Deals
By Sheila McNulty in Houston
The Financial Times
8-3-3
Halliburton, the second biggest oilfield service company in the world, on Thursday said work in Iraq had boosted revenue as it swung from a loss to record second-quarter net income of $26m , or 6 cents a share, compared with the year-earlier period.
The Houston-based company credited the quarter's 11 per cent rise in revenue, to $3.6bn largely to increased activity in its Engineering and Construction Group (ECG) projects, including government services work in the Middle East.
The second quarter of 2002, to which this past quarter's results were compared, included charges for asbestos liabilities, losses at its Barracuda-Caratinga project in Brazil and restructuring and sales charges.
Halliburton is in the process of finalising a $4bn settlement of asbestos claims. The Barracuda-Caratinga project continues to weigh on its results, with a $173m pre-tax loss on the project in the second quarter of 2003.
Nonetheless, the results this past quarter included a foreign exchange gain of $19m because of a significant strengthening of the British pound against the US dollar during the period.
"We expect earnings per share from continuing operations for the third quarter to be at least 32 cents per share, excluding any impact of the proposed asbestos settlement," David Lesar, Halliburton chairman, president and chief executive, said.
The company's ECG revenues increased 23 per cent, with government services more than doubling, mainly because of activity in Iraq.
Nonetheless, ECG recorded an operating loss of $148m, narrower than the loss of $450m in the year-earlier quarter.
That was because Halliburton had taken a $330m asbestos charge in 2002 and this year had recorded heightened activity in Iraq.
Halliburton ended the second quarter with cash and equivalents of $1.9bn, up from $1.1bn at the end of 2002.
Of course you would. Check the smirking chimp's record regarding imigration, opening the flood gates from Mexico and giving amnesty and benefits to illeagals already here...
Patriot Act Legal Attacks Pile Up
http://www.wired.com/news/business/0,1367,59863,00.html
More Calls to Vet Voting Machines
A recent report that showed touch-screen voting machines could be vulnerable to hackers spurred the National Association of Secretaries of State, a majority of whose members are in charge of their states' elections, to consider whether the standards for the machines should be beefed up to prevent tampering.
Voting machine standards weren't on the agenda at the association's annual meeting, held in late July in Portland, Maine. But after the study by Johns Hopkins University researchers was publicly released, the group discussed asking the National Institute of Standards and Technology, or NIST, the government's standards-setting organization, to prepare a white paper on security standards for the new generation of computerized voting machines.
No decision was made, said Kay Albowicz, a representative for the Washington, D.C., group. NIST, a nonregulatory agency based in Gaithersburg, Maryland, works with industry to develop and apply technology, measurements and standards.
Computer scientists have raised concerns about the security of computerized voting machines for the past few years, but they haven't been able to gather much support from election officials, who remain confident that the systems are basically secure from tampering and breakdowns. The Johns Hopkins study is the first piece of evidence that current touch-screen technology could be seriously flawed.
While stressing that more studies will have to be conducted to find out just how vulnerable these are, "there is a sense that in the past (critics of computerized machines) were part of the black box crowd and conspiracy theorists," Albowicz said. "No one is saying that now."
Aviel Rubin, technical director of the Johns Hopkins Information Security Institute, led a team of three computer scientists to examine source code for touch-screen voting machines made by Diebold. More than 40,000 Diebold voting machines are in use in 37 states. Most use touch-screen technology, while the rest use optical-scanning equipment, said Mike Jacobsen, a company spokesman.
The code was downloaded earlier this year from a company FTP site. The site isn't public, but it's also not secure. Diebold's field representatives used the site to fix the company's voting machines. Diebold has since pulled the source code off the Internet. The company's employees now carry discs.
Jacobsen confirmed that the source code Rubin's team examined was last used in November 2002 general elections in Georgia, Maryland and in counties in California and Kansas.
Within a half-hour of examining the code, Rubin's team found its first red flag. The password was embedded in the source code. "You learn (not to do) that in security 101," said Tadayoshi Kohno, one of the report's co-authors. "The designers didn't follow standard engineering processes."
Other "stunning flaws" Rubin said the team found in Diebold's source code included voter smart cards that could be manipulated to cast more than one vote, software that could be reconfigured by malicious company workers or election officials to alter voters' ballot choices without their knowledge and machines that could be electronically broken into through remote access.
"The people who wrote this code didn't have very good security training," Rubin said. "They didn't use encryption."
When asked if the source code contained the passwords to the system, Jacobsen said, "I can't say. The flaws that the researchers found were found in a very controlled, clinical environment and weren't subject to the stringent auditing and security processes, including the logic and accuracy testing." Jacobsen said he believed Wylie Laboratories tested Diebold's software.
David Dill, a professor of computer science at Stanford University and a member of the California Secretary of State's Ad Hoc Touch Screen Task Force, said Rubin's report confirms what he and other computer scientists have believed for years: Electronic machines are vulnerable and there needs to be a backup system to verify voters' ballots.
The ad hoc task force recommended a voter-verifiable audit trail. One solution could be a machine that generates paper receipts behind a glass barrier showing voters that their votes have been properly cast. The receipts later could be used for recounts.
"I think it's been obvious that (these machines) can be hacked and Aviel shows that they can be hacked," Dill said. "They've blown up all the arguments that the present machines are OK and the process will solve all these problems."
Mary Kiffmeyer, Minnesota's Secretary of State and the new National Association of Secretaries of State president, said there shouldn't be a "rush to judgment" to condemn the current technology used in touch-screen voting machines.
She pointed out that Georgia used new touch-screen machines in its 2002 elections without incident. But she said the association will push for the federal government to release additional funding from the Help America Vote Act, or HAVA, to study what standards should be in place.
"Standards are being revised as new equipment comes along," she said. "We need to speed up the process and focus on (the standards) as we are rapidly making decisions about our equipment."
Congress passed HAVA in 2002 in response to the November 2000 presidential election debacle, with its hanging chads, butterfly ballots and messy voter-registration records and administration.
Congress authorized $3.9 billion for HAVA to replace outdated punch-card and lever voting machines, to improve voter education, to provide better ballot booth access for the disabled and to modernize statewide voter-registration databases.
Congress also appropriated $1.5 billion for HAVA in the fiscal year ending in September. Of that, the federal government gave states $649.5 million to buy new voting machines and to improve their electoral administration. Another $830 million is waiting to be dispersed as soon as an election commission is established. Congress appropriated only $500 million for fiscal 2004.
Penelope Bonsall, director of the Federal Election Commission's Office of Election Administration, said the president has named the commission's four members, but they have not been officially nominated. Congress is now in recess and won't be able to approve the commission until it returns in September.
The 2006 deadline for states to comply with HAVA looms. Even though new standards may be needed for computerized machines, states and local governments are rushing to buy equipment.
At the end of 2002, 19.6 percent of votes nationwide were recorded on touch-screen equipment, up from 3.9 percent in 1992, according to the Federal Election Commission. Another 31.6 percent were recorded using optical-scanning equipment. Georgia had all new machines in place for its elections in 2002. Maryland just placed a $55 million order with Diebold for 11,000 machines -- the state will have all new machines. Maryland first bought Diebold machines in November 2002.
Some computer scientists say HAVA's deadline should be extended to give the government more time to establish better standards for new computerized voting machines. Rebecca Mercuri, a research fellow at Harvard University's John F. Kennedy School of Government and president of Notable Software, a consulting firm in Lawrenceville, New Jersey, says that in the absence of new standards, the Institute of Electrical and Electronics Engineers, of which she is a member, has formed a committee to create standards for the machines. One of the committee's concerns is a voter-verified audit trail.
Rep. Rush Holt (D-N.J.) introduced a bill, H.R. 2239, in May to amend HAVA to require computerized voting machines to provide voter-verified audit trails. So far, his bill has 26 sponsors and it's unlikely to get out of the Committee on House Administration.
"As the computer scientists at Johns Hopkins recently reported, these new machines are vulnerable to massive fraud," Holt said in a statement. "Unless Congress acts to pass legislation that would make sure that all computer voting machines have a paper record that voters can verify when they cast their ballots, voters and election officials will have no way of knowing whether the computers are counting votes properly."
http://www.wired.com/news/politics/0,1283,59874-2,00.html
A Nation of Hustlers
by Bob Wallace
I keep one credit card with a limit of $5000. Seven years ago I had two with a combined limit of $30,000. The banks just kept raising the limit even though I never used it. I thought it was insane, because my credit line was more than my yearly income. Finally I sent the cards back because of the yearly fee, and got just one with a lower annual fee and a lower interest rate.
At that time, stocks were making about 30% per year. The interest rate on the cards was about 16%. It occurred to me I should buy stocks with a draft from the cards, then after a year take the profit from the stocks, pay the cards off, and end up with a profit free and clear. I didn't do it, though.
Later, it occurred to me I could have bought about $25,000 in gold coins, then declared bankruptcy. My debt would have disappeared, and I would have had gold coins, which now would be worth about $40,000. I didn't do that, either.
I wasn't concerned about the "legality." Most so-called laws are just words on paper, and are worthless. Natural Law – law discovered, not created – is the only true law. Sometimes the words on paper and Natural Law coincide. Usually, these days, they don't.
I did wonder about the morality of it. On one hand, for all practical purposes, the banks are part of the government. The government uses the banks to inflate the money supply through the use of fractional-reserve banking.
Most of the paper money floating around these days is counterfeit. The fact that the money is printed by the government is irrelevant. It's still counterfeit. It can't be exchanged for gold or silver, and there is no production to ultimately back it up.
What banks are doing, then, is lending counterfeit money to people, then demanding the counterfeit money back with interest. It's the same thing as if I gave someone Monopoly money, sat back, waited for the Monopoly money and the interest, then used what I got to buy real, tangible goods.
I've known people who have declared bankruptcy because they got themselves into a jam, usually with credit cards. They didn't mean for this to happen. They just got in over in their heads and couldn't dig themselves out.
I also know people who purposely went into debt, then declared bankruptcy. And here is the important question: is what they did moral, or a violation of some Natural Law?
On one hand, they're engaging in a case of "the robber robbed." The government is robbing them blind through taxes, inflation and regulation. They return the favor – robbing the robber – by refusing to pay back counterfeit money.
I've decided the problem here is one of hustling. The only thing that advances a nation is for the people to build better things. Better toasters, better cars, better software.
Hustlers, on the other hand, are just looking for loopholes in the law to make money. Money, I'll repeat, that isn't real money, but counterfeit.
What I would have been doing if I had bought the gold coins and then declared bankruptcy, is hustling. I would have benefited myself – sort of – but I wonder about the effect on me, as a person, if I had done something like that. Even if I had been engaging in a case of the robber robbed.
And what if everyone did it? The US would end up like Nigeria, with a bunch of morons sending me 10,000 911 emails scams, and actually thinking I'm going to give them my bank account number so some guy calling himself " Dr.Tums Rolaids" can put $20,000,000 in it.
All of the above is the result of a dishonest government that inflates the money supply. The kind of inflation we've seen over the past decade can turn people into hustlers. Look at Enron and other companies like it. They were run by hustlers who had more inflated, counterfeit money than they knew what to do with.
When there is no inflation, and the money is honest – with production to back it up – there can be no argument about the dishonesty of hustling. If I had bought the gold coins and declared bankruptcy, then I would have been stealing someone's money that they had lent me via the banks.
But with massive inflation, hustling becomes an iffy proposition. It's easy for people to convince themselves it's good, because of how they're being shafted by the government.
Looked at this way, the more inflation, the higher the taxes, the more the regulations...the more dishonest and hustling people become. Not because they want to, but because they have to, in order to survive.
Instead of people becoming more moral with government interference, they become less moral.
And that, I am convinced, is a Natural Law that no words on paper can ever repeal.
August 4, 2003
http://www.lewrockwell.com/wallace/wallace138.html
Of interest:
http://www.disclosureproject.org
Voting Suit Gains Momentum
By Joanna Glasner / Also by this reporter Page 1 of 1
02:00 AM Aug. 05, 2003 PT
A lawsuit challenging the constitutionality of computerized touch-screen voting systems has moved to a higher-profile venue in federal appeals court.
According to Susan Marie Weber, a Palm Desert, California woman who is suing the state for sanctioning voting machines she alleges are open to manipulation, the 9th U.S. Circuit Court of Appeals in San Francisco indicated this week that it plans to hear oral arguments in her case.
The suit, originally filed in 2001, charges that California's former secretary of state and election officials in Riverside County, where Weber lives, deprived citizens of constitutional rights by deploying touch-screen voting systems that do not provide a paper record of each vote.
"They're not allowing us to verify our votes," said Weber, an accountant who has been representing herself in the case. She claims that the computerized terminals manufactured by Sequoia Voting Systems and used in her home precinct are more vulnerable to fraud than other accepted voting methods. Such claims have been disputed by Sequoia, which says it employs extensive security measures to ensure accurate elections.
The granting of a hearing in the appeal comes 11 months after a lower-court judge dismissed Weber's case. In his ruling, Judge Stephen V. Wilson of the U.S. District Court for the Central District of California concluded that Weber "presented no admissible evidence to support her claim that the use of the AVC Edge System (made by Sequoia) by Riverside County effects differential treatment of voters or vote dilution."
Weber said the appeals court originally had declined to schedule a hearing in the case, but may have changed its mind in light of the extensive quantity of documents submitted by litigants and their supporters. The court originally assigned the case to a panel of judges who do not usually hear oral arguments, but recently transferred it to one that does hold hearings.
"We're hoping the court looked at those documents and thought, 'This case is a little bigger than what we've been thinking,'" she said.
The court's move comes as controversy over the reliability of touch-screen voting systems intensifies in political and computer science circles. Much of the interest stems from the activism of a coalition of computer scientists who have warned that touch-screen systems currently in use are vulnerable to a wide range of security breaches.
Members of VerifiedVoting.org, led by David Dill, a computer science professor at Stanford University, advocate computerized voting systems that provide a printed record. With a printed record, they say, voters can check to make sure their vote is accurately recorded. In the event of a recount, the paper printouts also could count as the official ballot.
While California's former secretary of state, Bill Jones, is listed as lead defendant in the Weber case, the state's current secretary, Kevin Shelley, openly has considered the pros and cons of paper printouts. Earlier this year, Shelley convened a task force to study security issues tied to touch-screen voting systems.
But in a report released a month ago, the task force said there was no consensus among members as to whether machines deployed in California should be required to produce a voter-verifiable paper ballot.
Shelley's office declined to comment on the decision, deferring to the state attorney general, who is serving as its legal counsel. The attorney general's office also declined to comment. The secretary's office recently wrapped up a public commentary period on the voting task force recommendations.
According to Weber, appellate judges have not yet scheduled a date for the hearing.
For election watchers, however, time is of the essence. Faced with a federal mandate to update outmoded voting technologies, many counties in California and elsewhere are scrambling to upgrade their systems, often to touch-screen voting.
In California, a campaign to recall Gov. Gray Davis and elect a new leader puts further pressure on counties with outmoded systems.
http://www.wired.com/news/business/0,1367,59898,00.html
Gore Vidal Delivers
Chilling Predictions of Despotism
A Wry Scourge On The Attack
By Arthur Jones
National Catholic Reporter
NCRONLINE.ORG
8-2-3
In December 2000, Gore Vidal, termed America's master essayist by The Washington Post, told "irregularly elected" President-elect George W. Bush to "rein in the warlords who were seeking $30 billion a year over and above the 51 percent of the budget that now already goes for war."
Two-and-a-half years later -- after Sept. 11, Afghanistan and Osama bin Laden's disappearance, Iraq and Saddam Hussein's vanishing act -- Vidal summarized what the Bush "warlords" have achieved in occupying Iraq: "Chaos."
"Chaos," Vidal told NCR by fax, "until we either come to our senses and leave -- not likely any time soon -- or complete the neocon plan so boldly stated by their youthful 'warriors,' by annexing as much of the Mideast oil states as possible."
Vidal seems at least farseeing, if not prophetic, in his assessment of more than a month ago, as the United States finds the footing in Iraq increasingly unsteady and dangerous.
As an occupying power in Iraq, U.S. civilian administrators backed by U.S. soldiers are "downsizing" the national bureaucracy, handing outa half million pink slips to former officials and military. Iraqi soldiers are demanding their pay and pensions. It is an uneasy peace. There is gunfire.
Americans there and here are paying a price.
Up to now, said Vidal, while the Bush administration's "down payment" for Iraqi oil "has been cheap -- the Bill of Rights," the cost has not been light "for the people -- there or here." The U.S. cost has been to its civil liberties. Vidal said, "USA Patriot Acts 1 and 2, the second leaked but not yet sent to Congress, neatly folds the republic. What next?" he asked rhetorically, "Franklin predicted despotism."
Vidal is accustomed to delivering chilling predictions. He does not lack a penchant for going on the attack. Even so, it took guts, post 9/11 and throughout the Iraq war, to criticize the commander-in-chief. After 9/11 he was the rare writer who did an analytical commentary on the background to both the Oklahoma City and World Trade Center bombings -- commentary that his customary U.S. outlets refused to publish.
All this and more was made available late last year in Perpetual Peace for Perpetual War: How We Got To Be So Hated and Dreaming War: Blood for Oil and the Cheney-Bush Junta (Nation Books, 2002). They are collections of his Vanity Fair and Nation columns with added introductions and commentary.
Vidal sees the country in the grip of a corporate-oil patch-military oligarchy. Asked if the Iraq war was an oil patch-White House deal so huge Americans can't stand back far enough to see it, Vidal replied, "Kindly Dr. Goebbels used to say that the greater the lie a government tells (and repeats loudly), the more it will be believed. Yes, it is -- was -- about oil and, of course, giving the Cheney-Bush junta's friends like Halliburton vast contracts to rebuild what we have carefully knocked down."
He told NCR, "No one will ever see all the details but the [current] crookedness is unique in our history. Enron was the first storm warning but no one realized how easily accepted that cluster of capers would be by a polity marinated in corruption -- as Ben Franklin predicted, in 1789, as our eventual fate."
Vidal has become a scourge of the Bush dynasty. The books reprise writings on what he sees as the Bush family usurpation of the 2000 presidential election, Bush family business connections to the bin Laden family, the Texas oil patch's pipeline dealings with the Taliban in Afghanistan and the subsequent war there, why bin Laden was not pursued, and how the focus shifted to Saddam Hussein and Iraq.
As a scourge he is a wry one.
"American politics is essentially a family affair, as are most oligarchies," he wrote. And he should know. He grew up in the home of his grandfather, Oklahoma Sen. Thomas P. Gore, in Washington, D.C., and was close to the Kennedy clan because he was related to Jacqueline Kennedy. He is distantly related to former Vice President Al Gore, whose father was a U.S. senator, and Gore Vidal himself was an unsuccessful liberal candidate for Congress in 1960 in New York and the U.S. Senate in California in 1982.
He knows about corruption in politics and oligarchic power.
Long before George W. Bush was irregularly ushered into the White House due to the "Supreme Court's purloining" of the 2000 election, writes Gore, the nation had "previously enjoyed a number of quietly corrupt elections decently kept from public view."
He referred to 1888, when Grover Cleveland's plurality was canceled by the Electoral College's maneuverings, and 1876 when Democrat Samuel Tilden had a quarter-million more votes than the Republican Rutherford B. Hayes, but a Congressionally selected commission gave the victory to Hayes by a single vote.
Gore (Eugene Luther) Vidal, who lives in Italy but was contacted by NCR when he was recently in the United States, was born in 1925 at West Point, where his father was an instructor. He graduated from Philips Exeter Academy, served on an Army supply ship in Alaska in World War II, and published his first novel, Willawaw, to quote one account, "at 19 while still in U.S. Army uniform."
He grew up with the Army and served in the military, yet he unabashedly regards war as "the ultimate no-win, all-lose option."
He writes, "Fifty years ago [Feb. 27, 1947], Republican Sen. Arthur Vandenberg told [President Harry S.] Truman he could have his militarized economy only if he first 'scared the hell out of the American people that the Russians were coming.' Truman obliged. The perpetual war began."
Vidal continues, "We are now faced with a Japanese seventh-century-style arrangement: a powerless Mikado ruled by a shogun vice president and his Pentagon warrior counselors. Do they dream, as did the shoguns of yore, of the conquest of China?"
Sept. 11, Vidal writes, "transformed [Bush] into the cheerleader he had been in prep school. He promised us not only 'a new war' but 'a secret war' and, best of all, according to the twinkle in his eye, 'a very long war.' "
Continued Vidal, "[President James] Madison warned us at the dawn of our republic, 'Of all enemies to public liberty, war is, perhaps, the most to be dreaded because it comprises and develops germs of every other.' "
Vidal sees other comparisons with the past.
"The [founding] fathers had such a fear and loathing of democracy that they invented the Electoral College so the popular voice of the people could be throttled, much as the Supreme Court throttled Floridians on Dec. 12 [2000] where Bush was entrusting his endangered Florida vote to the state's governor, his brother, Jeb."
Historian Vidal was asked if there was a point in U.S. history when the democracy functioned. He replied, "Before Polk's 1846 war with Mexico in order to acquire California. General -- then Lieutenant -- Grant said that the Civil War was the vengeance of God upon us for what we had done to Mexico."
These two books signal more than Vidal at the top of his form as a thunderer, however. In listing his collected writings, Vidal refers to the slim volumes as "pamphlets." It is a distinction with a subtle warning.
The pamphleteer is the point on the shaft of political dissent; the sharp art of a political tradition the established order never takes kindly to.
Pamphlets were the spark that helped ignite the American Revolution. Tom Paine, with his famous pamphlet, Common Sense, could "electrify the whole of colonial life," wrote John M. Robertson in his 1915 introduction to Paine's The Age of Reason.
Vidal, who sees both rights and democracy fast ebbing, seeks to electrify, too. But the populace, comfortably uninformed and occupied with its daily self, is inert.
Arthur Jones is NCR editor-at-large. His e-mail address is arthurjones@comcast.net
From the Introduction to Perpetual War:
"In the last six years two dates are to be remembered for longer than usual in the United States of Amnesia: April 19, 1995, when a much-decorated infantry soldier called Timothy McVeigh blew up a federal building in Oklahoma City, killing 168 innocent men, women and children. Why? McVeigh [who may have committed mass murder to avenge the government slaughter of the religious cult at Waco] told us at eloquent length, but our rulers and their media preferred to depict him as a sadistic, crazed monster. On Sept. 11, 2001, Osama bin Laden and his Islamic terrorist organization struck at Manhattan and the Pentagon.
"The Pentagon Junta in charge of our affairs programmed their president to tell us that bin Laden was an 'evildoer' who envied us our goodness and wealth and freedom.
"None of these explanations made much sense, but our rulers for more than half a century have made sure that we are never to be told the truth about anything that our government has done to other people, not to mention, in McVeigh's case, our own.
"All we are left with are blurred covers of Time and Newsweek where monstrous figures from Hieronymous Bosch stare out of us, hellfire in their eyes, while The New York Times and its chorus of imitators spin complicated stories about mad Osama and cowardly McVeigh, thus convincing most Americans that only a couple of freaks would ever dare strike at a nation as close to perfection as any human society can come."
That U.S. government policies and actions "might have seriously provoked McVeigh and bin Laden was never dealt with. Things just happen out there in the American media and we consumers don't need to be told the why of anything."
National Catholic Reporter, August 1, 2003
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Uh, cattle mutilations are up...
--From the movie "Sneakers"
http://www.rense.com/Datapages/argentinedata.html
Vitamin C Helps Prevent Peptic Ulcers, Stomach Cancer
8-3-3
(ANI) -- People who consume a vitamin C-rich diet on a regular basis are less likely to develop peptic ulcers or stomach cancer, says a new study.
Published in the August 1 issue of the Journal of the American College of Nutrition, researchers said: "This is the largest study to look at the relationship between vitamin C levels and infection by Helicobacter pylori."
H. pylori is an ulcer-causing bacteria.
Joel A. Simon, staff physician at San Francisco VA Medical Centre and associate professor of medicine, epidemiology and biostatistics at University of California at San Francisco and his collaborators tested stored blood samples for H. pylori infection from a random sample of nearly 7,000 participants aged between two months and 90 years.
Samples of nearly a third (32 percent) of the participants tested positive for antibodies to H. pylori, indicating that their immune systems had previously mounted an attack against the bacteria.
More than half of those who tested positive showed evidence of infection by the particularly toxic strain of the bacteria.
In addition to testing for H. pylori infection, the researchers also analyzed Vitamin C, or ascorbic acid, levels in the blood of the participants and found that those with the highest blood levels of vitamin C had a 25 percent lower prevalence of infection.
"Some studies using animal models suggest that adequate Vitamin C intake may reduce infection with these bacteria. The bottom line is that higher levels of vitamin C may have the potential to prevent peptic ulcers and stomach cancer," said Simon.
Looks ready to move here soon...been watching it dips below the bolinger bands and heads up hits it's head on the top one comes back down put it on the radar should be able to make a buck or two if you watch for a while...
It's a trader not a buy and holder and not for hard money or the weak at heart...
Selling more important than buying, right?
I think that all good, right thinking people in this country are sick and tired of being told that all good, right thinking people in this country are fed up with being told that all good, right thinking people in this country are fed up with being sick and tired. I'm certainly not, and I'm sick and tired of being told that I am. -- Monty Python
Example isn't another way to teach, it is the only way to teach. --Albert Einstein
Teaching should be such that what is offered is perceived as a valuable gift and not as a hard duty. --Albert Einstein
The important thing is to not stop questioning authority. --Albert Einstein
SFA getting close to time to bail...
http://finance.yahoo.com/q?s=SFA&d=t
Refer to old JFSAG board for original recomendation around 13 bucks...way back in March or so...
PPT on in full force today...
Gettin' nervous again...
Move to cash if you haven't already...or be quick to pull te trigger if you want to squeeze out the last few points on this leg up...next drop's a doozey..
The Police Contact: Silence Is Golden
By Carl F. Worden
I have debated writing this article for months. I am a strong supporter of law enforcement, and I have an extensive background in law enforcement. Even now, I have a number of conflicts which cause me great concern with how the information I am about to impart to you will be used. I do not want to enable the criminals in our society to thwart justice, but I am committed to protecting the innocent from what appears to be an explosion of police abuse. In a case like this, I choose to protect the citizens.
I will start with law enforcement contacts with regard to traffic stops for suspicion of driving under the influence of alcohol or drugs.
The Fifth Amendment of the Bill of Rights states that we are not to be forced to incriminate ourselves. The actual wording is that you cannot be "compelled" to be a witness against yourself. If you are stopped for suspicion of DUI, these are your rights, regardless of the laws of your state.
First, you are to deny having consumed any alcoholic beverages whatsoever. You are never to admit to having one or two drinks. If you admit to consuming even one drop of alcohol, you open the door to probable cause, allowing the police officer to search your vehicle for open containers. Next, you are never to submit to a field sobriety test. You are to refuse to do so. They cannot make you walk the line, balance or anything else. If arrested, you are to refuse to allow a blood or breath test, regardless of what state law requires, such as revocation of driving privileges for a period of time. That is an attempt to compel you to be a witness against yourself. Supreme Court decisions in this area are quite specific with regard to your rights as follows: Lefkowitz v. Turley, 94 S. Ct. 316, 414 U.S. 70 (19 73). "The Fifth Amendment provides that no person shall be compelled in any criminal case to be a witness against himself. The Amendment not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding civil or criminal formal or informal, where the answers might incriminate him in future criminal proceedings."
McCarthy v. Arndstein 266 U.S. 34, 40, 45 S. Ct. 16, 17, 69 L.Ed 158 (1924) , squarely held that "the privilege is not ordinarily dependent upon the nature of the proceeding in which the testimony is sought or is to be used. It applies alike to civil and criminal proceedings, wherever the answer might tend to subject to criminal responsibility him who gives it. The privilege protects a mere witness as fully as it does one who is a party defendant." Maness v. Myers, 95 S Ct. 584, 419 US 449 (1975). "...where the Fifth Amendment privilege against self-incrimination is Involved ... This Court has always construed its protection to ensure that an individual is not compelled to produce evidence which later may be used against him as an accused in a criminal action... The protection does not merely encompass evidence which may lead to criminal conviction, but includes information which would furnish a link in the chain of evidence that could lead to prosecution, as well as evidence which an individual reasonably believes could be used against him in a criminal prosecution. Hoffman v. United States, 341 US. 479, 486, 71 S. Ct. 814, 818, 95 L. Ed. 1] 18 (1951) . "
"In Kastigar v. United States, 406 U S 441, 92 S Ct. 1653, 32 LEd. 212 (1972) , we recently reaffirmed the principle that the privilege against self incrimination can be asserted in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory. Id., at 444, 92 S.Ct., at 1656; Lefkowitz v. Turley, 414 US. 70, 77, 94 S. Ct. 316, 322, 38 L.Ed. 2d 274 (1973)...
Miranda v. Arizona, 86 S.Ct. 1602, 384 US 436 (1966) . "We have recently noted that the privilege against self-incrimination --- the essential mainstay of our adversary system-is founded on a complex of values ... To maintain a fair state individual balance, to require the government to shoulder the entire load ... to respect the inviolability of the human personality, our accusatory system of criminal justice demands that the government seeking to punish an individual produce the evidence against him by its own independent labors, rather than by the cruel, simple expedient of compelling it from his own mouth... ln sum, the privilege is fulfilled only when the person is guaranteed the right to remain silent unless he chooses to speak in the unfettered exercise of his own will."
"...there can be no doubt that the Fifth Amendment privilege is available outside. of criminal court proceedings and serves to protect persons in all settings in which their freedom of action is curtailed in any significant way from being compelled to incriminate themselves."
Please also note: The above, as stated by the Supreme Court, are rights and privileges as guaranteed by the Constitution, and anyone (including judges) who knowingly violates those rights may be civilly and criminally liable under several federal statutes. Please see: United States Code, Title 18 Section 241 (Conspiracy against rights), and Section 242 (Deprivation of rights under color of law); Title 42 Section 1983 - Section 1986 (Civil Rights). Most attempts to pursue action under these laws fail, but very skilled litigators with good factual circumstances can sometimes get some satisfaction. However, if more individuals were to understand the above rights and exercise them at the appropriate times, more successful litigation could be the outcome.
Okay, you got that? You cannot be forced to provide evidence against yourself, therefore you must not allow any tests whatsoever, be it field sobriety "walking the line", or a blood or breath test. Period. If you will follow these instructions, they have no case against you and they are also barred from taking away your driving privileges under the same Supreme Court rulings.
Now to more serious matters: If you are contacted as a possible suspect, or even a witness, in any other law enforcement investigation, you are to say nothing. You are to say nothing even when your attorney is present. You are to say nothing, regardless of evidence of your guilt as presented by the law enforcement officers. You are not to try to explain away the circumstances of the evidence they present to you. You are to say absolutely nothing. No matter how tempted you are to try to talk your way out of the situation, you are to give them absolutely NOTHING to verify. If they ask you if the sky is blue on a clear day, you are to say nothing. You are to give them nothing whatsoever. Whatever evidence or witness information they have, you are to say nothing. Even denying any of their allegations can be used against you in a prosecution if it is determined later that you obviously lied. You are to stay MUTE.
The reason for this is quite simple: The evidence the law enforcement officers have is all they must be required to work with. Don't give them anything more. The only time you should consider the option of telling your side of the story is to your attorney in privacy, or in a court of law if prosecuted.
Because you have stayed mute, giving law enforcement nothing in addition to the extrinsic evidence and witness information at hand, the burden of proof available to the district attorney is severely limited and will most often result in a dismissal of charges unless their evidence and witness input is overwhelming and compelling enough for a grand jury to return a bill of indictment. And even if bound over for trial, the jury will be limited to consider only that evidence and witness input.
When you are given your Miranda Rights wherein you are informed that anything you say can and will be used against you, take it to heart: If you say absolutely nothing, NOTHING can and will be used against you in a court of law.
There are literally thousands of people behind bars today who tried to talk their way out of a law enforcement contact. Don't fall for the ploy. Law enforcement officers are trained to bluff you into making denials or statements. They will appear friendly and reasonable. They will appear willing to help resolve the matter. They will tempt you to talk about it and appear sympathetic. Don't fall for it. Say nothing. Give them nothing. Deny nothing. Give them NOTHING. Stick your tongue between your teeth and bite down - HARD. You are to be a marble statue. You do not exist. You have no past, you have no address, you have no name, you have no social security number. You are to give them nothing whatsoever to work with.
http://www.sierratimes.com/03/08/04/carlworden.htm
Ass-Backward Economics - I
Jim Willie CB
[Painfully long...worth it all the way down to the end.]
Never in my entire life have I seen so much misguided folly so widely embraced as competent, expert, and grounded in historical precedent. The political body has had 30 to 40 years of deep influence on the social science economics field, left vulnerable to the expedient conformity to the growing wave sweeping our nation since the VietNam era to install a socialist system in every way shape and form, except in name. In an earlier article (see [1]) indicting economists, I stated my position in a mere 20 pages of the progressive decay of the economist trade. Simply put, it has been turned on its head, where up is down, debts are assets, paper is gold, IOU coupons and token slugs are money, credit is purchasing power, and a printing press is a source of wealth production. History is revised to suit political demands, while few call patently false revisions into question. Careful analysis of policy is sorely lacking. Challenge of important Federal Reserve policy is almost nonexistent. The public, the Congress, business leaders, and banking leaders are working with no proven economic compass whatsoever. Little wonder that the world economy might be on the precipice of a recession, requiring a lifeline of Federal Reserve credit and low rates to keep from stalling. The US Economy has become a bloated pig, burdened by debt, heavily dependent upon a constant large supply of credit. A barbeque awaits.
The truth cannot be suppressed. If a nation seeks real wealth, then it must build products, mine minerals, grow food supplies, or service these activities in support. If a nation intends to destroy real wealth, then it will print money and deem it as good & proper, allowing it to purchase real assets intermingled within an economy. Is that not a counterfeit process? In short, if no work is performed, then no value is created. Such truths are not self-evident in our world!!! Everything nowadays is backwards.
I detect a deep embarrassment among economist professionals, inept in their defense of a system that is failing, and policies that have been soundly discredited. They urge a hastened pace down the path squarely into the Japanese Liquidity Trap. Simultaneously, Japan, now the USA as well as Western Europe, have entered the tight clutch of a trap. The plain symptoms are interest rates heading to zero, excess production capacity, weak final demand, widespread liquidation of businesses (inventory and work force), absent demand for credit (outside mortgages), and reduced pricing power. Duration inside the trap can last for years, as we have seen in Japan. Political forces as well as social forces can be strong for drawing an economy into the trap.
Are we to be fortunate enough to avert a parallel liquidity trap like in Japan because our skin is white, because our eyes are set behind more prominent cheekbones? Are we any less socialist than Europe because we have one common language, because we permit more rapid unemployment and smaller severance packages? As Stephen Roach expertly details, the three major world economies are in a liquidity trap for the first time since 1930, having entered from distinctly different avenues. The United States is currently repeating the desperate policy implemented by Japan over 10 years ago. We seem to feel no alternative is available. Roach provides timely, perceptive, up-to-date essays as a true gift to the financial community (see his essay archive [2]). His two most recent essays detail the great recessionary risk to the world economy, and how the Federal Reserve has lost control. Only Asia, exclusive of Japan, chugs along. He makes an excellent point that the first nations to be hit by price deflation and asset bubble busts are the first to enjoy re-emergence from the devastating condition, which means Asian nations. They underwent the proper adjustments first, and will emerge first. The US Economy only recently has been hit, so will be late to the revival after the requisite massive adjustments. Two common characteristics shared among Japan, the USA, and Europe are overextended credit and burst asset bubbles. How can any sane thinking man or woman stand and refute such claims? I contend that most economic thought is directed toward many such denials, and as a result sorely lacks sanity. Everything nowadays is backwards.
The economist community is ripe for criticism and even attack, yet hardly a harsh word is heard. I describe their members as having formed a political priesthood, with uncontrollable federal budgets justified by govt frontmen, with falsified deceptive national economic data reports offered up by internal govt swindlers, and with absurdly optimistic forecasts spewed by brokerage harlots. My greatest condemnation goes to the academic quacks, whose arrogant tribes never discuss the giant hidden pitfalls of the debt-based economic foundation, which perpetuates and urges on discredited economic theories, which provides a breeding ground for new deficient disciples. Academia has failed us in their endorsement of an economic system incapable of proper function since that critical 1971 year. In the movie series "Terminator" they cite a date when the machines first developed self-awareness. In 1971, the world monetary system first developed lack of awareness of its inherent self-destruction. Yet few talk about the enormity of removing gold from the monetary foundation, replacing it instead with US govt debt. Without gold to carry the weight and represent the prima facie of the world monetary standard in the USDollar, by default our nation's sovereign debt fills the void. Our precarious USDollar is nothing but a debt-denominated instrument passed off as legal tender in international commerce. Some day foreigners will not accept it so willingly for payment of gargantuan bills. The world's economic house is built on sand, yet economists find nothing wrong. Everything nowadays is backwards.
Would a person build a family home structure atop shifting sand? Hell no!! Yet we cavalierly build the world economy atop the debt-denominated USDollar, whose supply is recklessly accelerating and whose collateral is being reduced dangerously. A foundation of a savings-based population, erected upon a capstone of a gold-backed dollar worked all too well during the Eisenhower Administration. Such prudence failed to accommodate either domestic socialist spending or adventures in war abroad, and were therefore abandoned. Since that time, we have embarked on a lunatic mission to duplicate the Communist Politburo central planning committee. Our Federal Reserve has had a truly disastrous track record. It has behaved more like a drug dealer supplying the credit upon which we have become utterly dependent, than a banking supervisory board. Its latest agenda has been to expand credit, to monetize the long bonds (thus debasing the dollar), and to intervene ten times more often than ever before in the financial markets. Its wayward chairman now advises tapping home equity to sustain the consumption bubble, an utterly irresponsible and unprecedented statement by any central banker. It has attempted to achieve outcomes according to a planned agenda, blocking the natural course of corrections. It has morphed into an agency to spread its financial cancer, even as its victims look pleadingly to it for solutions. Our Federal Reserve will instead continue to cause even greater problems, hardship, and panics. Everything nowadays is backwards.
In order to sustain the sale of Treasury Bonds, which finance the climbing federal deficits, our burokratic creative accountants commit fraud on a massive scale to promote the story of economic recovery, rising income, strong productivity, subdued price inflation, manageable job losses, and ample savings. Not a single macro econ statistic is valid, not a one. Richard Benson carefully exposes the mass of deceptions (see [3]). We are witnessing a "hedonic economic recovery" which owes its basis to phony and objectionable distortions reported within government statistics. The official misrepresentation is astonishing, shameless, and criminal. Could the USGovt sell their federal debt if the truth were told? In his service to the public, Michael Hodges gives detailed descriptions (see [4]) of the unbridled fraud.
Gross Domestic Product is over-stated by approximately 10%, or $1500 billion per year, if you ignore absurd adjustments and defer to the cash economy. Income is augmented by similar fictitious ploys such as $800B in self-paid rent for homeowners and $300B in credits for bank checking accounts (nowadays paid by fees), among others.
Productivity is double-counted and triple-counted by means of adjustments for faster computer processors and faster disk storage access. A recent conjob was perpetrated to reclassify software expenditures as capital equipment investments, thereby allowing a multiplier to be unleashed as in the accounting of equipment sales.
Business investment over the 12 months ending 2003Q1 for computer systems grew by an hedonically elevated $56 billion, whereas in current unadjusted terms, it rose only $4.4B. Recently announced forward guidance by both Sun Microsystems and Siebel Systems serves to confirm the notion that information technology recovery is a myth.
Even the jobless report is conducted with fraudulent intent, as nutty estimates are introduced for small business job creation, thus wiping out over 300,000 layoffs in Q1 of this year in revision.
Savings are not a small and rising percentage of income, but rather are actually about minus $400 billion annually after one pushes off the ledger several fraudulent adjustments cited above.
The economy caught up to me personally in the last few weeks in my own lost job, as my consulting firm has experienced lost bids for contracts, non-renewal of current contracts, while account receivables have zoomed upward. Our clients are under severe stress. I was given notice of layoff effective on August 1st, despite having ample statistical skills generally, and diverse experience in the marketing research field. Most of my direct clients are other analysts; much of my work is internal activity. I am a luxury for my firm, assisting analysts in difficult methods, training via seminars in newer applications. Later this summer, I am out of work, an ironic victim of my own forecasts. My warnings to certain VP's in my firm were heard, and a year later are a reality. Their agent of warning is being shown the door. Anger is centered upon being situated within my firm's organization as an overhead staff consultant with lesser external billing, against my longstanding objection. I am involved in a wide array of projects, but not much as a direct intermediary with the client. My firm has decided to cut overhead costs, at the risk of reducing critical skills which would enhance our position to compete for new contracts. A vacated analyst position suitable for me will likely not be replaced, due to insufficient work loads. Further frustration breeds from insight possessed without recognized economic academic credentials, thus limiting work opportunity in that wasteland sector, ripe for new blood. So I march in the same professional direction as my recent past, which aint so bad.
In the meantime, I remain irrepressible in speaking the truth about the vast net in which our nation is now perilously ensnared. I will lay out how the economic principles closely held as true, proclaimed as consensus wisdom by the self-adulating priesthood, errant principles which chip away at our chances to emerge from the current nationwide malaise. Jobs are being destroyed while the credit bubble is raising the bar of risk to unprecedented levels. Talk has begun to creep into the press & media in reference to Greenspasm's moral hazard, wherein he has steered interest rates below the prevailing realistic price inflation rate. Talk has also begun concerning his questionable interpretation of household balance sheets and urged reliance upon home equity in the management of routine spending. He seems unaware of the risk of his own inflationary policies. The monetary base is expanding at an annual rate greater than 20%. Before this storm ends, he will be demonized and blamed for a long nightmare. He remains a knighted hero, appealed to as the savior of final resort, trusted beyond all reason, even as the entire economic body is suffering from fallacious policy and counsel. The Fed is looked toward as a beacon of hope, when in reality its policies are the primary cause for crazed levels of debt, the collapsed stock market, and the stagnant economy. Everything nowadays is backwards.
The economy under Greenspasm's recent guidance thru the credit bubble is running on nothing but stimulus and liquidity fumes. The dislocations are becoming ever wider. No resemblance whatsoever is evident to previous exits from recessions, such as the one in 1993. The over-rated chairman has finally admitted to unreasonable post-Iraqi war expectations. Debt now is supporting critical household essentials, not frivolous consumption. Extension of credit bordering on extremely insane has born little fruit of economic activity. Growth in Federal Reserve monetary expansion has only succeeded in widening the trade gap and balance of trade account, and pumped up new financial sector bubbles. An argument can be made that the Fed counterfeiting operation revs up the printing press, and China's trade surplus escalates beyond control. The bond market's July reaction to the Fed's latest rate cut represents a deafening vote of "NO CONFIDENCE." Since the rate cut, the 10-yr Trez yields has risen almost a full 1%, mortgage rates have risen half of 1%, gold & silver have risen noticeably, and the USDollar has met downchannel resistance, certain to resume its longterm bearish trend. The markets have detected a Fed which has lost control. Our fate lies in Asia's hands, from their willingness to continue to purchase our extraordinary debts. The latest trade gap news makes it abundantly clear that our hyperbolic creation of money & extension of credit within our struggling economy has succeeded in swelling foreign-held debt, unmatched by any substantive benefits to our many industries that actually produce goods (excludes financial sector). A case in point reveals that the housing boom has not enabled any benefit to domestic furniture makers. Instead, it has spawned an explosion in foreign furniture imports, from China and other Asian locations.
The leading living spokesman for the Austrian School of Economics, Kurt Richebacher cuts through the maze. He makes available a portion (see [5]) of his broad diverse editorials, sharing less than a promising outlook. For a more global review and analysis of the world economy, I urge interested readers to review any writings by this brilliant and clear economist. He makes a certain point regularly. At the present stage of our economic situation, an acceleration in money creation is mandatory in order to tread water. It takes $5 of newly created credit to generate $1 in new GDP activity. Last srummer, $4.50 was required.
Gresham's Law :
This time-tested adage is in need of a dusting, supplemented by two corollaries. The law addresses the basic medium of exchange in day-to-day commerce.
Gresham's Law: "bad money displaces good money"
So phony money, otherwise known as counterfeit currency, masquerades within the commercial circulation of money, and pushes out real money. In nature, in much the same manner a cuckoo bird steals and then occupies an existing nest, pushes out a few of the old mother's eggs, and deposits her own. Not possessing rocks in their heads, people hoard their old real money, and rely solely the phony money, since fools willingly accept the phony money as payment for groceries, gasoline, doctor bills, car repairs, restaurant bills, and shoes. The horded old money is kept in a secure place, where years later it will emerge worth many times more. The public inevitably awakens to the exposure of the sham. Here I take the liberty to extend this basic irrefutable law into two directions.
Money is not dormant, but rather moves, affecting sectors of the economy. There are far-reaching consequences for corrupted money within the development (or decay) of our economy.
Gresham's Sector Corollary: "industry sectors nourished by bad money and debt will displace the productive sectors anchored by real money"
So the destination of tainted money will be sectors that enjoy a new dominant role, temporarily. Supplied by bad money, the unproductive sectors such as mortgage finance and residential real estate will enjoy the fleeting beneficial rise in price out of proportion to a rise in true worth, all from unearned and manufactured new printed money. While the productive sectors struggle in these harder times, cash flow suffers, debt is difficult to maintain, and workers are shed. Ailing sectors can later be acquired by the nouveau riche beneficiaries of the freely flowing counterfeit sources. They are smart perceptive riders of the monetary inflation wave, owning and managing housing properties over the long term, or speculating with complex financial surfboards in the short term. They produce nothing, yet enjoy the benefits of real wealth. Displacing the old school enterprises, these new financial sectors are where the new jobs appear in the interim. We see them in mortgage finance, property appraisal, and brokerage sales. Again, they produce nothing, yet serve up the illusion of wealth production, and even earn the praise of financial leaders who operate levers on the money printing machines. The real sectors of the economy are pushed aside as obsolete, even as debts rise to signal a warning of the aberrant condition.
The wretched story continues further, as individual assets are detrimentally affected.
Gresham's Debt Corollary: "assets closely associated with heavily indebted businesses are vulnerable to liquidation or impairment in value"
General Motors and Xerox own many fine assets. But their enterprises are overloaded with debts to the point of totally crippling ongoing business functions. Compounding the burden are pension and related financial obligations. A great many large corporations are in a similar bind. GM has approximately three retirees per active worker, with health costs rising for the retired base faster than revenues. Their profits from carmaking operations are disappearing faster than a Ferrari on a Grand Prix roadway. Xerox's debt load is many times its market capitalization; GM's is even worse. As their indebted businesses are liquidated in slow motion, the owned and amortized assets gradually suffer writedowns in value. Asset proximity to heavy debt leads to forced liquidation and distressed sales, in order to keep the cash flow steady. Debt must be serviced, even at the expense of asset writedowns and distressed sales. Discounted car sales and product transactions qualify as writedowns, commonplace events nowadays. As long as severance costs exceed production costs per built car, the theme will continue to be "moving inventory." This summer should see some stormy labor clashes with the UAW. They may have already begun, with announced worker furloughs. Much of the debt expansion comes from the bottomless well of tarnished money.
Fine. Economists have few answers. Money is tainted. Productive sectors are in liquidation, adversely affected by a great "sucking sound" emanating from within the burgeoning bogus bowels of the financial sector. Assets are suffering impairment. A new credit bubble at least five times larger than the busted stock bubble has inflated and is desperately being kept inflated by easy money and interest rates well below the running rate of price inflation. What is the difference between a bull market in stocks or bonds or real estate, and a busted bubble? Easy. While inflating, the perpetrators, the beneficiaries, and the clueless all label it a "bull market." After the process turns into reverse, causes horrific damage, destroys some lives, ruins many pensions, the phenomenon is more easily detected and labeled correctly for what it was all along, a "bubble." With assets, we pound chests and use the label "bull market". With products, we alert the town criers and use the label "inflation." It is all inflation, all from the same source.
In many respects, the entire US Economy is a speculative bubble, with liberal monetary policy pumping up one bubble after another, supported by mindboggling credit supply. The latest speculation underwritten by our Fed is the real estate sector, whose rise it prays will miraculously rescue the economy, will soak up the excesses in productive capacity and debt burdens, and will bushwhack a path toward even a semblance of an economic recovery. Easier said than done. A bad plan with poor chances of success. History says "no way." Even the venerable John Templeton believes the housing sector is next up to the gallows of valuation reduction (see [6]). He expects a sizeable decline. Instead of falling its typical 20% after the stock bear market struck, the housing sector rose by over 20%. He advises buyers to wait for a truly significant decline from the top!!! Such are the wages of the Greenspan's Fed policies.
ASS-BACKWARD ECONOMIC BELIEFS & POLICIES :
Just what are the prominent accepted economic beliefs and policies which are ass-backwards? They seem to be insidiously all-encompassing, hence require a diagnostic list. Diagnosis is one thing, but the cure is far more elusive and politically impossible without the public mandate behind a national crisis. That upcoming crisis is written in stone. I will attempt to document the most flagrant and destructive among the constructs held as true. Each falsehood would take several pages to adequately discuss and disprove, so pardon the brevity and outline form. I must devote some time aside from my shrinking office workdays to locate and secure a new job. Part I of this article will address three premises, which are each patently false. Part II will address six other incorrect premises, to be shot down within a week.
a) The US Economy is in danger of falling into deflation, so the Fed must accelerate the monetary pumping operations. Wrong diagnosis, wrong cure, feeble attempt to cover its tracks. A quote is in order, considered humorous by many, but tragic to be sure, coming from my most recent article (see [7]) on credit markets and their own vicious circles.
"Our economic advisors and observers are befuddled by inflation, embarrassed by their inability to distinguish among inflation, deflation, disinflation, reflation, stagflation, declining asset values, liquidity, credit, monetization, and money supply."
The entire concept of inflation is horribly misunderstood by almost every corner of this nation.
After 30-40 years of mismanaged banking and political leadership, unchecked monetary inflation and credit abuse have resulted in massive overproduction, colossal debts, and extreme international imbalances, which naturally lead to falling asset and product prices during liquidation in a grand corrective phase.
The structure of the US Economy is now deeply dislocated, out of balance, and flawed. The current price deflation is a structural phenomenon. Greenspasm has diagnosed it as a monetary problem, unleashing vast money supplies in its treatment. Japan made the same mistake, earning them more problems, from which we have learned nothing.
Monetary inflation causes price deflation after overproduction, default on debt after its unbridled buildup, and the inevitable collapse of asset speculation (called bubbles). One can aptly conclude that our monetary inflation (i.e. credit expansion) paid our bills abroad, financing our trade gap imbalance. More monetary inflation (i.e. Trez Bond issuance) paid for our federal deficits.
The end result will be arterial aneurisms from the excessive blood supply that the economic body cannot properly handle. In our economy, we are seeing aneurisms in the form of new bubbles in real estate, mortgage bonds, and treasury bonds. Prescribing evermore monetary inflation for the treatment of the deflationary aftermath is like prescribing Jack Daniels on the morning after, to a chronic alcoholic suffering from delirious tremens (DT's). It calms the "shakes," temporarily silencing the visible symptoms. The disease continues to be nurtured.
We will continue to see both price deflation in the production side of the economy, and price inflation in the resource and commodity side of the economy. Modern economists still force perceptions in aggregate form as one or the other, with considerable shortsightedness and ineptitude. Liquidation of inventory and workers continues, while Chinese low-priced competition remains fierce. As corporate revenues decline, earnings are generated via liquidation and cost cutting, thus the reduced prices. Meanwhile, speculation induced by the Federal Reserve has led to price inflation emerging from all financial sectors. They are curiously labeled "bull markets," which demonstrated true dysfunction in recognition. The energy sector and some other commodity areas are seeing price rises from shortages. The main risk to accelerated money creation by the Fed is to cause the opposite ends of the economy to move to greater extremes. We are soon to see even lower product prices and even higher commodity prices, just when the housing sector falters. Extreme outcomes are the order of the day when money is created irresponsibly.
b) Lower interest rates are stimulating the economy and will eventually kickstart growth. Nonsense, the exact opposite is true in an environment burdened by overcapacity, although completely unnoticed. Low shorterm rates enable the survival of precisely the weak companies deserving of liquidation, which otherwise could not succeed in carrying on their debt loads. The overburdened by debt, the inefficiently run, those with uncompetitive product sets, they all are given an assist in survival (see Ford and General Motors). Low rates create a collectivist climate whereby the weak, the inept, the clumsy are given reprieve, all in the name of preserving jobs. As a result, low rates forestall an economic recovery. The liquidation has simply been coerced into a lower gear.
We have a class struggle in progress. On one side we have the younger credit-hungry, active politically, more critical to the demand equation. On the other side we have the older, more prudent savers, less extended or over-extended into debt, often retired, and politically more passive, more critical to the supply equation. Why would the unelected banking officials sacrifice savers so readily, currying favor to the debtors? Because debtors rule this nation and control political power, because our entire system is debt-based, because extension of debt ensures sustained economic activity. Those living off credit sources surely benefit, but at the expense of more numerous savers such as retirees. In a low demand environment for money to expand the capital base, the income and service side consequently dominates the story. Smells like a Liquidity Trap to me, as money velocity is slowing. Zero Bound is in close reach, with numerous forces pulling powerfully toward the permanent trap.
Pent-up demand is sorely absent, a requisite ingredient in order to reap the advantage of attractive rates. Across the entire economy, demand is approaching a limit in the three critically important areas: capital equipment, cars, housing. The demand side of low rates does not add up to a kickstart.
Manufacturing is at a historical overcapacity now, with only 75% capacity utilization. Low rates do little to encourage corporate executives to approve large outlays when supply is in excess, final consumer demand is weak, and cash flow is reduced.
Zero rates with nothing down have done little to sustain car sales, which recently showed a sizeable 30% decline year over year. Car demand has been almost totally exhausted.
Residential housing demand has yet to register sufficient pause for any beneficial pent-up demand to develop either. Now job losses are inhibiting the sector. Interest rates are the lowest in 40 years. Delinquencies and defaults are also at 40-year highs. Go figure!
Data supports the argument that low rates are slowing down the economy, the exact opposite of what fumbling economists claim, and what self-serving brokerage analysts exhort the public to believe. We have a net reduction in economic cashflow from the interest rate equation with each successive rate cut. The supply side of low rates does not add up to a kickstart either.
In the year 2001, roughly $1100 billion was earned in interest income from govt treasuries, corporate bonds, certificates of deposit, and passbook savings.
Only half that figure, roughly $600 billion was paid out as costs to service mortgages, equity lines of credit, installment loans, and revolving credit lines.
Most of the entire financial sector is under duress from low interest rates. The lending business faces a dire situation wherein commercial cash flows are inhibited from the economic stagnation, thus increasing risk to the borrower to repay. In contrast, rates held low provide wider profit margins for lenders, but at the cost of higher defaults. The insurance business is held to honor fixed obligations on annuity payments, defined accident costs, variable damage awards. Yet their income sources tend often to originate from the credit markets, where rates are low, from utility stocks bearing yields but losing principal. They also own stock portfolios, damaged from the stock bust, and commercial properties stressed by low occupancy rates.
c) Real Estate is in the midst of a great bull market, has held up economic growth, and is providing valuable equity for continued household consumption. Bull cookies, a new bigger bubble will cause bigger future problems when it runs its course. This bubble has been blessed by the press & media, by the Secy of Inflation Chairman Greenspasm, as a rescuing chariot on our commercial roadway in the post-bust era in the new millennium. A growing gap can be identified between what the market will fetch for a typical metropolitan home and what it is actually worth. Official interest rates have been forcibly brought down under the reckless aegis of the Federal Reserve. In fact, by late 2001, after several rate cuts and a stubborn long bond refusal to march lower in lockstep with the controlled short end rate, the Fed upped the ante on the moral hazard. They changed their modus operandi. They ceased all new 30-yr TBond issuances, and they began to intervene and purchase the 10-yr TNote within the counterfeit operations at the Dept of Treasury. The tactic succeeded in bringing down the long rate to nearly 3.0%, which is probably below any true measure of price inflation. Worse still, the Fed has been bantering endlessly about the threat of deflation, while the economy suffers debilitation from years of full-bore monetary inflation. Smells like a Liquidity Trap to me, as money velocity is slowing. Zero Bound is in close reach, with diverse forces pulling powerfully toward the permanent trap.
Sadly, residential real estate is the next bubble under construction, designed off a 5-times larger blueprint than the stock bubble, under full warranty to inevitably break. It will not collapse so suddenly as the tech-telecom-media-internet frenzied mania did.
We can all watch the sad pathogenesis to the automobile sector, which cannot seem to maintain growth or stability even with 0% loans and cash giveaways at signed closings. The first failure of zero-deals is with cars, a depreciating asset.
Next is the stall and gradual decline of residential housing, underpinned by declining rates and ready refinance cashouts. As housing valuations flatten, problems will develop. As jobs continue to be shed in unrelenting numbers, problems will amplify.
Why is it that rates are at 40-year lows, but both mortgage delinquencies and defaults are also at 40-year highs?
I believe the initial cracks in the residential real estate sector have already shown themselves, along its foundation of mortgage finance. Not one, but three top executives at Freddy Mac were urged to resign, a euphemism for release and firing. They admitted to managing future profits in the government sponsored enterprise (GSE). They apparently sidelined excessive profits in recent quarters, which could only mean they booked hefty speculative profits. Let me guess. They were tipped off by the Federal Reserve, placed bonded cash into futures contracts (i.e. gambled), and gained far more than could be easily hidden. They got caught before carrying out their intention to unleash these ill-gotten gains when default and delinquent losses would require an offset. The FRE chart has suffered damage. David Chapman recognizes a looming mortgage crisis, on the scale of the 1989-90 Savings & Loan washout, or the 1998 Long Term Capital Management wipeout. He points out that sales are topping out even as consumer confidence is on the wane (see [8]). But no fear, the USGovt and Asian central banks will ensure no collapse, at least until late or defaulted payments make for a mountain of losses. The risk of residential housing has become concentrated to the extreme into Fanny Mae and Freddy Mac, as leveraged focal points. The very collectivism we decried in the Soviet Union is alive and growing like a cancer in the mortgage finance industry, as mortgage portfolios are routinely packaged (despite any test of quality) for purchase by the US Govt agencies. The public has been bestowed a glimpse into GSE opaque derivative books. For now their gambles have paid off, but when conditions reverse with higher rates or worsening labor markets, those gambles will bite hard.
A credible, cogent, and powerful argument has been made by the Rodney Cook, aka The Big Fisherman. He interprets Greenspasm's premeditated housing inflation project as instituting a "Housing Cover Clause" which girds the US Economy, and thus the USDollar (see [9]). A remarkable perception, since the stagnant economy, ballooning federal deficits, shocking debt burdens, and hemorrhaging trade imbalance collectively put the USDollar in great danger. The only visible pulse within the US Economy can be found in the residential real estate sector and its lifeline of mortgage finance. This sector can boast of no substantive production to justify its resurgent evidence of wealth. For the time being though, its ostensible evidence of wealth supports consumption. The development would be more laughable if it were not so tragic.
The "jobless recovery" continues, showing multiple distress signals. Investors continue to be fooled. The US Economy proceeds with its ultra-slow-motion liquidation of debt, labor force, and inventory. Daimler/Chrysler just announced a 90% decline in earnings of their most recent quarter, year on year, but exceeded analyst estimates. Sony just announced a 98% decline in earnings, as consumers pull back the reins of spending. Outside the financial sector, countless other examples of profit depression can be cited. The world economy is in deep trouble. The umbilical cord to the Federal Reserve credit line must remain for years, evident in an intravenous lifeline to the non-productive financial sectors. There is no guarantee that the liquidity lifeline will succeed in preventing a deep recession. Not at all. This nation does not admit its errors, does not correct its errors, and refuses to allow the natural corrections to occur, because the pain would be far too great, even to the point of causing social upheaval. Instead, it compounds errors with greater errors.
Part II of this article will address six additional incorrect premises. Look for the sequel to this article soon:
The USDollar decline has adequately addressed world trade imbalances
Consumption must be encouraged in order to keep the economy healthy and strong
Fed monetization produces new USTBond security assets to strengthen banks
Rising commodity & import prices are evidence that the Fed has succeeded in reflation
The US Economy will gain strength to offset rising interest rates along a normal cycle
The US Economy is growing again, led by profits, productivity, improved balance sheets
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PERSONAL ASIDE: It is my sincere curiosity how many readers are willing to make the commitment to pay a nominal $8 per month charge for regularly timed clarification on economic matters, to debunk conventional claims, and to provide guidance through the minefields in today's confusing financial world. In my mind, the value would far exceed daytime efforts within even the most productive marketing research. By night I work to uncover the financial chicanery and travesty in progress, a larger endeavor to be sure, with far greater implications to the world. Something very ugly this way comes, on the tail end of the dissipating bond market bubble and real estate decline that has begun. The long treacherous ride ahead requires a guide. Hmmm.
Professional crossroads lie ahead in my life. For months now, my efforts along the economy, gold, and currency front have been given away. I am excited by the prospect of performing a labor of love, as well as receiving compensation. New opportunities must be explored as life's challenges dictate change and open new doorways. An informal survey would be helpful in gauging interest in an investment letter. If interested in a monthly paid subscription to a newsletter with primary focus on the economy, with direct implications on currencies, gold, and international finance, let me know. If you wish, please shoot a quick email to me at: JW@goldenjackass.com
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REFERENCES (including those from part II) :
[1] "A Statistician's Indictment of Economists" by Jim Willie CB (Dec 2002)
[2] essay archives by Stephen Roach (July 2003)
[3] "Govt Statistics: Lessons in Cooking and Spinning" by Richard Benson (June 2003)
[4] "Statistical Revisionism and Wizardry" by Michael Hodges (June 2002)
[5] partial editorial list by Kurt Richebacher (2000 to 2003)
[6] "Wall Street Great Says the Market is Broken" by Bill Fleckenstein (July 2003)
[7] "Vicious Circles and US Credit" by Jim Willie CB (May 2003)
[8] "Looming Mortgage Crisis" by David Chapman (June 2003)
[9] "Housing Cover Clause" by Rodney Cook (June 2003)
[10] "The Crumbling Strong Dollar Policy" by Ashraf Laidi (May 2003)
[11] weekly Japanese yen chart by Stockcharts.com
[12] "Japan, Argentina, Weimar, or Muddle?" by Jim Willie CB (April 2003)
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Jim Willie CB
July 30, 2003
http://www.gold-eagle.com/editorials_03/willie073003.html
Silver hogs the limelight
Our Commodities Bureau
Published : August 4, 2003
Silver hogged the limelight in the domestic precious metals market following a sharp rise in prices globally. It soared to a 10 week high of Rs 8145 per kilogram, up Rs 85 from Rs 8060 on previous Friday.
Gold lost sheen on weak overseas advice and lacklustre buying. Gold (99.9 purity) fell from Rs 5515 per 10 gram to close at Rs 5430 on Friday while standard gold lost from Rs 5485 to Rs 5400.
Silver had a brief spurt to touch a 3-1/4-year high at $5.21 an ounce on Thursday, but retreated thereafter on Comex on Friday. However it was expected to remain volatile.
Internationally, spot silver was quoted at the day’s high of $5.16/5.18 an ounce by 1005 GMT, up from New York’s $5.13/5.15.
Friday’s London fix was at $5.12, its highest since April 2000. COMEX stocks fell 4,691,604 ounces to 106,502,677 ounces.
Gold continued to retreat on Friday in Europe following a fairly stable overnight session in Asia after the dollar, buoyed by positive news on the US economy, notched up further gains against the euro, agencies reported quoting traders.
Friday’s early London fix was at $353.05. COMEX gold stocks were down 103 ounces at 2,741,550 ounces. Market steadies after an overnight dip as the US dollar takes a breather from its gains against the euro.
Gold was knocked to its lowest in just over a week at just under $352 an ounce and might come under more pressure from the dollar if the next set of data from the United States showed further signs of improvement.
Traders pinpointed $350 as a key level for gold. If it managed to hold above that, it might have a chance of climbing back to recent highs. However, they said a breach of $350 might push prices right back down to $342.
Spot gold was indicated at $352.75/353.50 a troy ounce by 1006 GMT, weaker than New York’s late quote on Thursday at $354.00/354.80. With bullion still tracking dollar/euro movements virtually tick for tick, traders were looking for further direction from US July payroll data and manufacturing data from the Institute for Supply Management due out late on Friday before resuming trade on Monday.
A speculative long position overhanging the New York Comex gold futures market would also make gold vulnerable to further liquidation by funds should the dollar continue to firm.
However, analysts were also mindful of a recent trend that had seen metals — both precious and base — attract buying from investors looking to place their cash in alternative assets.
Platinum slid to its lowest in just over two weeks, attracting speculative selling when it failed to hold above $685 an ounce.
Spot prices dropped to $675.00/680.00, the lowest since July 16 and down from New York’s late quote at $684.00/689.00. Palladium firmed to a 3-1/2 week high of $181.00/186.00 from $175.50/181/50.
http://www.business-standard.com/today/story.asp?Menu=22&story=19910
[Hedge funds:] SHOW US THE MONEY
By CHRISTOPHER BYRON
Michael Lauer
Lancer chief
- Bloomberg News
August 4, 2003 -- LAST week brought some familiar news from the anything- goes world of hedge funds: Yet another hedge fund suddenly found itself in hot water.
This time the fund in question - a $700 million Norwalk, Conn., outfit named Durus Capital Management - 'fessed up to a series of "inadvertent" stock trades that look plainly to have been designed to corner the market in two obscure biotech companies in the Durus portfolio and force their stock prices into orbit.
The news regarding the trading activities of the hitherto unknown Durus fund simply echoes some similar portfolio-pumping antics by the larger, and older, Lancer Group of hedge funds - about which we've written plenty already.
Lancer operated out of offices on Park Avenue and in Stamford, Conn., until the Securities and Exchange Commission shut them down last month - and for activity that looks a lot like what Durus Capital seems to have engaged in.
So far as the investing public knew, the two funds could not have been less alike.
Lancer had been in existence for nearly a decade, and had been widely praised in the press for its superior performance year after year in the bull market of the 1990s. By contrast, Durus had been in existence for less than two years and was almost unheard of, even within Connecticut's gossipy hedge fund community.
At its zenith last winter, Lancer boasted having more than $1 billion of assets under management, while Durus was thought to be managing barely a third that much money. Lancer was believed to be heavily invested in defense and aerospace stocks. Durus was thought to be a biotech investor.
Yet for all those differences, the two funds did in fact have one thing in common, and in the end that is all that now really matters: Almost nothing the public thought it knew about either one has turned out to be true.
So the point seems pretty obvious: How many more instances of this sort of thing are going to be needed before Washington wakes up and brings the out-of-control and almost totally unregulated hedge fund industry to heel?
As we've been warning in this space for quite a while now, hedge funds are a ticking time bomb in the heart of capitalism. You don't know where their money comes from, or what's in their portfolios, or almost anything else an informed investor needs to know before handing over money.
Yet the very lack of regulatory oversight has allowed this industry to grow in the dark, like mushrooms on a mountain of rotting bull-market manure, until it now accounts for an estimated 20 percent of all the equity trading on Wall Street. This is simply intolerable and has to end.
REMEMBER the 1998 collapse of Long- Term Capital Management? That was the first of the big egg-on-our-face hedge fund surprises. In the dark, and while no one was paying the slightest attention to what it was doing, this fund leveraged its $5 billion of investors' cash into $125 billion of borrowed money, then poured the whole wad of it into securities ranging from Danish mortgage obligations to U.S. junk bonds.
Then the fund collapsed, threatening a global financial panic that the Federal Reserve averted by printing so much money, and so fast, that the stock market swelled within a matter of months into the biggest bubble Wall Street has ever known.
The Long-Term Capital debacle was followed almost immediately by the meltdown of a second multibillion-dollar fund, Ellington Partners, which also caught the entire world by surprise. And after that have come yet more - a seemingly endless stream of funds no one had previously ever heard of, erupting suddenly in hundreds of millions of dollars in losses, then shutting down to the predictable harrumphing of the SEC and the rolling drumbeat of investor lawsuits.
The names of the funds - Beacon Hill Asset Management, Cambridge Partners, Gotham Partners, Manhattan Investment, Lancer and now perhaps Durus - were barely known even on Wall Street until they got into trouble. And each time a new name has surfaced, it's been accompanied by the chorus of "one bad apple" from the rest of the industry.
But the reality is exactly the opposite: Most of this industry is rotten, and it is only the exceptional fund that can show its investors straight-up accounting and a portfolio of legitimate investments.
The situation that's been uncovered at the Lancer Group is appalling. The fund has turned out to consist almost entirely of worthless, penny-stock trash, much of it controlled by mob-connected felons and career-long Wall Street scofflaws.
Yet even though evidence of this was in the SEC's own files for years, neither the regulators nor federal law enforcement did a single thing until the story caught fire this spring in the press. Now investigators are running all over the country trying to catch up with a situation that never should have been permitted to develop in the first place.
Meanwhile, a kind of hedge fund lite version of Lancer has already developed in the Durus case. In it, the fund's founder and managing partner, a college dropout named Scott Sacane, filed papers with the SEC last week acknowledging that Durus had improperly but "inadvertently" bought up 76.7 percent of the outstanding common stock in an obscure, money-losing biotech stock called Aksys Ltd.
The filing said the purchases, which had taken place day after day for four entire months beginning in April, had somehow all been a big mistake - implying that Sacane had apparently fallen asleep on the "buy" button on his computer as the tightening market caused by his purchases lifted Aksys' price from $3.50 to nearly $16, pulling up Durus' own performance numbers along with it.
A big mistake? Well, scarcely had Sacane 'fessed up last week to the Aksys mistake than Durus filed papers with the SEC acknowledging a second set of Big Mistake purchases, involving yet another obscure, money-losing biotech stock in its portfolio: Esperion Therapeutics Inc.
Thanks to Durus' big mistakes, by the start of last week the combined market value of these two stocks topped $1 billion, with half of it sitting in the Durus portfolio. In other words, for a brief shining moment, the Durus fund appeared to have reached nearly $700 million of value, with an estimated 73 percent of it accounted for the purchases of two obscure stocks the fund didn't know it was buying.
Frankly, this is preposterous. Sacane looks to be either one of the stupidest investors in the history of Wall Street, or an out-and-out liar. Either way, it's no consolation to the everyday folks who had never even heard of Durus before waking up late last week to discover that their investments in Esperion and Aksys had collapsed by nearly 25 percent overnight on the news that a hedge fund had apparently manipulated their share prices into orbit illegally.
Hedge funds have been justified from Day 1 by the argument that because they are only open to rich investors, who are presumably able to tell good investments from suckers' bets, they don't need to be regulated and controlled.
But that's absurd. The absolute best that can be said about this industry, as the evidence now copiously shows, is that far too many hedge funds seem to be managed by some of the worst, most reckless, most irresponsible money managers Wall Street has ever known - and backed by some of the stupidest rich people on earth.
THERE is no justification whatsoever for this industry to be regulated any differently from the mutual fund industry, because that's all hedge funds actually are - unregulated mutual funds for the rich. Hedge funds need to be required to produce audited, public statements of their financials, and to file fully detailed and timely reports on their portfolio investments.
It should be illegal to invest in funds that do not do this. And that, I hope, is what the SEC will conclude when it releases its much-anticipated recommendations - probably soon after Labor Day - for defusing the hedge-fund time bomb.
* Please send e-mail to: cbyron@nypost.com
http://www.nypost.com/business/2272.htm
FRIGHTENING REVELATIONS
SENSATIONAL MEMOS LIFT THE LID ON NEWS CONTROL
By: Henry Makow
"It seems that guerrilla warfare is a real thing. Too much looting, assaulting Iraqi women, too much Muslim-bashing. No discipline in the US forces and the commanders have a hard time in controlling their men. Protestors are to be shown to be "die-hard Baathist supporters of the evil Saddam" and show pictures of a "commando" camp with pictures of Saddam and anti-US slogans." (June 12)
Since April, The Barnes Review News web site (www.tbrnews.org) has posted memos like this from an executive at a major TV network to selected News Division staff.
If they are authentic, these memos represent the most important revelation of government deception since the Pentagon Papers, and suggest the "news" is little more than mass psychological control. There are shocking references to cover-ups of government domestic terrorism, SARS, Mad Cow, and events in Iraq, Afghanistan, Korea, Iran and much more.
In mid-March TBR Webmaster Walter Storch received an email from a man who claimed to be a mid-level executive at a major U.S. TV network. He said he had "serious doubts" about the strict control of the media by the government.
He sent Storch a disc containing 1500 pages of memos dating back to 2001. All were on corporate stationary signed by the sender and recipients in the News Division.
Storch asked for current directives and was able to ascertain that they were followed both in print and on TV. He posted the memos in excerpt or in full and watched "as ordained news was created before our eyes."
"We are now printing the more outrageous and serious aspects of the incoming papers with the hopes that this will cause serious public relations problems [for] those directly involved," Storch wrote recently.
Named for "revisionist" historian Harry Elmer Barnes, TBR sees accepted history as propaganda by the winners. Presumably the TV executive thought this web site would have the courage to expose contemporary propaganda as well.
The memos so far have created a minor sensation. TBR news gets 3,000-10,000 viewers of this item per day, about half foreign. About 95% of the email response is positive while 5% are from government and press people who are "outraged by the implications. "
The memo writer is probably an executive at a media conglomerate in New York charged with coordinating with government. His directives seem to be followed by other networks and newspapers, although he refers to "unreliable" newspapers (June 2).
He decides what to suppress ("blackout"), what to promote ("puff pieces"), what angle to take on anything controversial. About SARS, which did spread to the US but was called pneumonia, he says," Get the usual medical people and give them the usual script." (May 25)
He has a cynical, conspiratorial, chatty style and makes the newsmen feel they are "in the know." They do not include the public in this charmed circle.
RECENTLY A CHANGE OF TONE
In July, the memo writer starts to distance himself from Bush policy in Iraq, which is becoming a quagmire like Vietnam. He implies that "our circle" predicted this from the start. This suggests that his master may be the Rockefeller-CIA-CFR elite network.
For the first time, the writer urges a "completely neutral position" in case Bush goes the way of Richard Nixon. On July 12, he tells the executives to follow the example of "bellweather" New York Times. On August 1, the New York Times described Bush's performance at a recent news conference as "vague and sometimes nearly incoherent.... [he gave] rambling non answers."
On July 17, the writer says, "The White House is moving into a bunker mentality, very much like Nixon during the end of the Watergate business." The elite media may be getting ready to dump George W. Bush. Why would they report every U.S. casualty in Iraq when they have blacked out Afghanistan?
Iraq may be Bush's Watergate. He may have been tricked into invading Iraq, just as Nixon was tricked into sanctioning Watergate. The whole affair from Sept 11 to the Iraq war may be designed (like Vietnam) to bleed the U.S. taxpayer, destroy American morale and undermine the US's stature in the world.
SHOCKING REVELATIONS FROM WWW.TBRNEWS.ORG:
Ultimately you will make your own mind up about the authenticity of this material.
For me it reads like the script of a play I have been seeing. Play down North Korea. Black out Rachel Corrie. It's all followed. I have always been disturbed by the uncanny uniformity of the three TV network newscasts.
Go to www.tbrnews.org and click on "Controlling the News". The latest reports are at the bottom of Storch's introduction. There is a link to about 10 pages of excerpts since February. You can subscribe to a full service for $5 a month.
Here is a sample:
"Speculations of the actual nature of SARS are not under any circumstances to be permitted. Keep in mind the currently in- place rules following the outbreak of "Legionnaires Disease." (March 30)
"If this gets any credence, it could wreak havoc with the US cattle industry, not to mention the fast food and restaurant business. Mad-cow has been in the US before and kept very quiet. Let's see if we can't repeat this now." (May 24)
"Regarding North Korea, it is urgently requested by the White House that any reference to the President?s determination to remove the existing leadership of that country be downplayed. It should be mentioned as an "option" rather than the intention of the President." (April 19)
"Re. Enormous amounts of US currency found in Iraq. Under no circumstances, it has to be stressed, should any mention of amounts in excess of the publicly stated $600 million be made. And absolutely no mention of the possibility of these $100 bills being counterfeit." (May 3)
"The decision to proceed against Iran has been taken." (May 25)
MARTHA STEWART: "BETTER THE SMALL FRY GET COOKED"
Re. Martha Stewart: "Better the small fry get cooked than the really important ones. Campaign funding? Hah, hah!" (June 7)
"There is a black-out on guerrilla attacks in Afghanistan. The fear is that these are part of a coordinated attack in the Arab world." (June 12)
"The Administration has gotten burned by attacking [Ariel] Sharon. It won't happen again." (June 13)
"North Korea is a back issue for now. We are pulling troops away from the DMZ in case we have to nuke Pyongyang..." (June 13)
"SARS is officially dead. Monkeypox is replacing it. We have beaten SARS to death so it is best to keep the file footage for when it comes back with a bang this winter. With no vaccine in sight, buy masks, kids! If SARS combines with something else, watch out on this one..." (June 14)
"Unemployment is soaring but let's keep this minor key unless some trouble breaks out over it. Justice has evidence of serious labor unrest, especially among ghetto minorities." (June 15)
"Serious problems with the growing resistance movement in Iraq... Iraqi oil is being interdicted before it can be shipped out of the country. Casualties cannot be concealed but can be minimalized....[No pictures of] Iraqis that appear to have been beaten." (June 15)
DIRE MEASURES PLANNED IN IRAQ
"The most severe methods of interdiction are currently being indicated including setting up detention camps, curfews, the issuance of ID cards, the closing of mosques, the detention of religious leaders...An order is being prepared to exclude all foreign media..." (June 16)
"For a decade, the establishment has taken a very dim view of the Internet. It is seen as a method by dissident elements to propagandize the public and publish material that might cause great disruption in the public mind..." [Counter measures are discussed.] (June 16)
" Nailing the people at the tabloid press in Florida was a shot across our bows?the media had best shut its mouth or look what can happen to you. There is no substantive control over the military and official Washington is terrified that they could pull another Northwoods game again..." (June 22)
" Bush was warned repeatedly by Pentagon experts that there was the strong probability of dangerous insurgent activity [but] he and his close advisors such as Rumsfeld and Wolfowitz discounted it. ... Pacification could take years, not weeks or months, and with elections coming up next year, inside White House sources have said the President and Rove are in a panic." (June 28)
"The best way to cover this [fraudulent claims of uranium sales to Iraq ] is to be strictly neutral in comment and we must now maintain a completely neutral position in all of this. If Bush has the same problems Nixon did over Watergate, our viewers cannot see us as being blindly partisan. We have to have plausible deniability in this. The NYT is now beginning to crack the wall of silence surrounding the Presidency and as they are the bellweather, best to watch them closely. " (July 12)
"THE IRAQIS WOULD GET NONE OF THEIR OIL SALES"
"The major disaster for the White House is that they cannot get oil out of Iraq. The plan always was to root out Saddam, occupy the country after securing the oil fields first and then put a CIA trained and controlled local governments into place. This puppet government (let's face it gentlemen, that is what it would be but we can call it Iraqi autonomy) would graciously grant to the US the right to protect their oil resources and assist them in recovering their pre-Desert Storm production levels. In fact, the Iraqis would get none of the proceeds of the oil sales...(July 13)
"The Administration is over a barrel on this [prior warnings of Iraqi guerrilla resistance] because if they try to make too many scapegoats, someone will let the cat out of the bag over who really knew what and what kind of specific warnings the White House had actually received?the same scenario as the 9-11 warnings..." (July 13)
"There is a growing fear in counter intelligence circles that if the resistance movement in Iraq is not stopped, the resulting very bad PR might cause an "incident" somewhere in the US just before election time to whip the voters up to vote for Bush as a "wartime leader" who can put a number of draconian laws and edicts in place to "protect the American people." Someone in the FBI said to one of our people, entirely off the record, that quote it will probably be the Statue of Liberty endquote.
There must be no speculation on this subject under any circumstances. If some rigged incident does happen and we comment on it in advance, new regulations could cause us serious problems... If this happens, it will be Rumsfeld who plans and executes it. This will give the President the usual deniability. It is more than likely that we will get some advance notice of such an action and then decisions can be made relative to going to the public. On one hand, it would be a magnificent media coup guaranteeing ratings off the chart and on the other, a death sentence..." (July 14)
"OPEN MUTINY"
"The White House is now moving into a bunker mentality, very much like Nixon during the end of the Watergate business. With mounting Iraqi opposition and facing a very capable guerrilla movement, supplied by Syria and Russia, the US has run into the stonewall we all predicted. His personality will not permit the President to withdraw in good order; the neocons and the oil people will simply not let him. Bush is stuck between the rock and the proverbial hard place... Serious growing unrest in the troops coupled with very low morale, growing death tolls, lack of rotation, real fear of being fatally attacked are all leading to a situation that our Pentagon source informs us could actually erupt into open mutiny.
Couple all of this with the terrible economy, the insistence of the Bush people on insane tax cuts (to help out corporate America), the obvious right wing political and religious fanatics supporting the President and we have the makings of serious, probably fatal, domestic problems. The fear is that a frantic Administration could connive at some kind of domestic terrorism if and when they perceive the President slumping badly in the polls. He already is and it looks like it might go like the economy. Today, a 65% favorite; tomorrow matching [Grey] Davis' 20%. " (July 17)
"We have to sit on stories of serious physical abuse of Iraqi citizens. Most sensitive (and we put the blackout on this subject) are the numerous rapes and sexual assaults against Iraqis. Interesting are the unreported but fully known homosexual rap... the real problem here is that US GI minorities are mostly responsible for these and Bush needs these votes in November so on with the lid... we don't think they can keep this shut up for too long... the Okinawa syndrome all over again." (July 20)
http://www.etherzone.com/2003/mako080403.shtml
The Evil Freedom Culture
Save the Children
by Russell Madden
I'm glad some decent folks in Utah have our backs covered. The citizens there stand as a brilliant example for other well-meaning and concerned, patriotic Americans to emulate. Once all states realize what is at stake in this tragic issue and act to correct the errors of the misguided and the evil, we can all rest easier.
At the airport in Salt Lake City, for example, those wonderful government servants who have our best interests at heart have posted "a sign on the door" that provides fair warning that no one can "bring freedom into the building."[1] Sensible? But, of course. All the television interviews with the "common man" assure us that we need to be safe and secure in our travels. Giving up a bit of freedom to accomplish that most basic of human needs is not even close to being a matter of real concern. After all, if you've done nothing wrong, you have nothing to fear.
Sadly, though, this wise emphasis on security over freedom is shockingly absent when dealing with that most precious societal resource, that fountain from which all future taxable income shall flow, those miniature chips-off-the-ol'-block, our children. Do you understand? Our children! They are risking our children.
Why, "it's easy — and perfectly legal — to" carry freedom "and walk into a public school." Surely, such a dangerous practice is ill-advised. What are those who support "a new law that loosens restrictions on the carrying of freedom in Utah" thinking? But, of course, perhaps that is precisely what they are not doing: thinking.
These freedom-nuts want "teachers, janitors, and other school staff" legally to be able to carry freedom among the innocents. Such irresponsible advocates nonsensically believe that freedom "will deter or prevent . . . tragedies." Even more outrageous, they accept this ludicrous conclusion even though . . .
. . . they "don't have to tell anybody they're doing so and even though they aren't required to have any special training" in freedom! (Emphasis added.)
Insanity! Madness! Lunacy!
Levelheaded Utahns, of course, recognize folly when they see it. They can read the tea leaves and know that "letting untrained persons carry freedom in schools will lead to accidents" and decrease security. The latter "should be left to professionals," not amateurs.
Those professionals are "worried," too . . . and rightly so. Granite School District Police Department officer, Lt. Todd Rasmussen, wants his neighbors to know that, "'I don't think this is any place for freedom to be.'" Dealing with crime "is a big job. Adding more freedom into the mix . . . " is a bad idea. As a parent himself, Rasmussen does not "' . . . want freedom in the school with . . . '" his children, regardless of who has it with him.
This "debate over legal freedom has raged for years."
Some biased and unprincipled researchers, such as John Lott, of the far right-wing American Enterprise Institute, falsely claim that criminals fare worse when accosting potential victims who have ready access to freedom. Professor John Donohue of Stanford, however, is spreading the truth that citizens who insist on freedom when faced with attackers are actually increasing the danger to themselves. Beyond that devastating proof of the inadequacy of freedom, the Roman Catholic and Episcopal churches in Utah "have publicly stated their opposition to freedom in schools." Even the Mormon Church has "run a series of editorials against freedom in schools." If such opinions are not sufficient to convince the doubters, the incontrovertible fact — the card that trumps all else — is that "most" Utahns "want to ban freedom in schools despite — or perhaps because of — the freedom culture" in Utah.
That paragon of sensibility — the Brady Center to Prevent Freedom — has made it clear that this Western hellhole of barbarism ranks near the bottom "'at protecting its children from freedom.'" The state government "'does not hold adults responsible for . . . freedom around children . . . does not have any freedom-safety standards . . . and forces police to let people carry freedom in public, even into schools, and does not require background checks'" at freedom shows. (Emphasis added.)
While "a short safety course" is (thankfully!) required for a freedom permit, "the applicant does not need to demonstrate any proficiency with freedom." (Emphasis added.) Can you imagine the anarchy and chaos that is only waiting for an obscene opportunity to erupt? The entire Utahn culture is being devastated by this totally irresponsible policy. Indeed, since the current legislation permitting concealed freedom was instituted in 1996, freedom-permit holders have skyrocketed in numbers from fifteen-thousand to almost fifty-seven-thousand. Despite the fact that "many" of these dangerous freedom-nuts have had their licenses revoked for serious crimes, about a thousand more of these untrained freedom-toting souls receive their permits every month.
The reporter exposing this raw wound on the Utahn social body asks, "What is it about the politics and culture of Utah that allows freedom in schools?"
An excellent question. In the past century-and-a-half, people both famous and small have been murdered in Utah. Thus, it is only natural to conclude that the warped view that Utahns have of their right to keep freedom "with as little government interference as possible" flows from the stark reality of those heinous crimes from a bygone century. Antiquated though this perspective on freedom is, many people in the region "have thought of freedom as a natural part of life and society."
Marla Kennedy of the Freedom Prevention Center of Utah is sympathetic — at least in principle — to this outmoded tradition. After all, she admits that she — as does over half of Utahns — that she has freedom in her home. But she, at least, realizes — and sensibly so — that times have changed. "'There's just places where freedom ought not to be.'"
Chris McGrath of Freedom-Free America, "an organization dedicated to banning freedom nationwide" knows only too well that the "freedom lobby" uses politicians "as puppets to fulfill their legislative priorities."
How much longer must we Americans sit idly by while the socially corrupt freedom culture pushes to expand the areas where the freedom-nuts will be allowed to practice the unholy rites of their evil religion?
Our children are our future. We must do all we can to protect them from the dangers inherent in uncontrolled and uninhibited freedom. The time is now. Tomorrow may be too late.
Reference
[1] Brad Knickerbocker. "Utah law tests limits of gun culture in West." The Christian Science Monitor. 7-29-03. http://www.csmonitor.com/2003/0729/p01s02-uspo.html
(Oh. I almost forgot. I think I may have substituted "freedom" for "guns" and related phrases in the quotes I used from this article. Sorry about that. I hope my dear readers will still be able to glean my meaning . . . )
http://freedom.orlingrabbe.com/lfetimes/evil_freedom.htm
Stars and Stripes Fly over Caspian Sea
[File under: CLUE.]
Over the last few years the United States has openly admitted that the Caspian Sea region is of strategic interest to it. This has been set out clearly in the US' energy doctrine. In contrast to Iraq, US companies have managed to take control of 16% of the Caspian's oil reserves and 11.4% of its gas reserves without firing a shot. If you add joint US-British companies to this list, then Washington and London control 27% of the Caspian's oil reserves ad 40% of its gas reserves.
Of course, the allies needed 10 years to achieve this in the Caspian, compared to a couple of months in Iraq, but the result is much the same. The US already feels itself to be in charge in the region. A recent Chinese attempt to negotiate greater participation in Kazakh oil and gas projects met fierce US opposition. Kazakhstan itself has little chance of having its own energy policy: 73% of the country's proven oil reserves are controlled by Western oil companies.
The interest from George Bush's administration in Caspian oil can be explained by the fact that neither Kazakhstan, Azerbaijan nor Turkmenistan are members of OPEC. This means that energy supplies from these countries will be less dependent on the cartel's pricing policy.
It is clear that the US has gained the upper hand over the world's energy masters. Many politicians now in Bush's administration were involved in strengthening the position of US business in the Caspian region. Condoleezza Rice, the president's national security advisor, was a director at Chevron. Incidentally, Rice now has a Chevron tanker named after her. Vice-President Dick Cheney was a founder, and remains a major shareholder, of Halliburton, which is a leading supplier of services to oil workers in the Caspian.
The future of the oil industry in the Caspian region looks very bright indeed. Proven hydrocarbon reserves in the region amount to 7.8 billion barrels. By 2010 the region will be producing 3.8 million barrels of oil a day, which is roughly 60% of the North Sea's current, but declining output. By the same year the Caspian will be producing more oil than Norway or Brazil and experts believe that its proven oil reserves will be 1.5-2 times higher than those of the Gulf of Mexico. Unsurprisingly, at a spring session of the Parliamentary Assembly of the Council of Europe, the Caspian Sea region was named a key centre of European energy security.
US and British companies have concentrated their main resources in Kazakhstan and Azerbaijan, which have about half of the region's hydrocarbon reserves. Iran, which owns the Caspian's southern shores, is the most awkward country in the region for the US: American oil companies have yet to find a way there. The Iranian parliament even removed aspects of the government's programme for 2003 that concerned attracting foreign investment into projects in the Caspian basin.
Iran is the main obstacle to US plans to develop international oil and gas projects in the Caspian. Turkmenistan is in many ways similar to Iran, but with one main difference: it is much less able to stand up to US pressure.
The balance of power in the Caspian with regard to the status and division of oil and gas reserves has not changed much recently. On the one hand, Iran and Turkmenistan are in favour of dividing the Caspian Sea equally between the five countries that share its coastline. On the other hand, Russia, Kazakhstan and Azerbaijan want to split the sea according to the length of coastline each country owns.
On May 15, Russia, Kazakhstan and Azerbaijan signed a trilateral contract on dividing the sea floor to allow natural resources to be exploited. They also appear to be drawing closer on other issues. However, Iran and Turkmenistan refuse to recognise this agreement. The seemingly endless arguments will no doubt arise again when the working group for drawing up a convention on the Caspian's legal status meets for its tenth session in Moscow in early July.
The positions of the different countries are clear. Russia, Kazakhstan and Azerbaijan have lined up together, which makes the business of gaining access to Caspian energy reserves much easier for international oil corporations. If this position remains unchanged, a significant part of the Caspian's riches will find themselves controlled by Russia's strategic partner:
Time will tell how wise this policy is. Meanwhile, the process of dividing the Caspian's energy resources is drawing to a close.
Alexei Frolov, Rosbalt News Agency. St. Petersburg
Translated by Robin Jones
http://www.rosbaltnews.com/2003/08/01/63269.html
It's unstoppable: High tech jobs ditching US
The need to stay competitive will benefit countries such as India, China and even Singapore, where labour costs are lower
EVEN though the United States' ailing technology sector looks poised to recover, the bad news for job-seekers in the world's largest economy is that they won't benefit.
Faced with intense competition and the need to cut costs, one in 10 technology jobs is likely to move overseas within the next 18 months, says research firm Gartner.
The beneficiaries will be countries such as India, China, Vietnam and Singapore, which are seen as being able to deliver cheaper and faster software development, manufacturing and tech support.
The trend appears to be an unstoppable force, and that not just infuriates jobless workers but also worries some economists who say it may ultimately hinder the US economic recovery.
'This is part of why the economy is still sluggish,' said director Mac Clouse of the Reiman School of Finance at the University of Denver. 'It's not the traditional economic model any more,' he said.
'Businesses may be spending, but they're not spending their dollars here - it's not going to result in new jobs and increased economic activity.'
However, US business executives say they can't compete, let alone keep their companies alive, if they hire US IT workers for US$40,000 (S$70,000) to US$80,000 a year while their competitors hire the same talent in India for US$8,500 to US$9,800.
So, when Denver-based software company Quark was deciding where to build a new facility that will employ 1,000 software and technology workers, it chose Chandigarh, India.
Late last month, news leaked that IBM would move 1,000 jobs overseas.
A couple of weeks earlier, Microsoft said it would hire 5,000 more people, up to 2,000 of them outside the US. At about the same time, Oracle said it will almost double workers in its Indian unit to 6,000.
'There's a lot of interest,' said the company's president Robert Welch. 'American software teams are awesome for innovation, but in terms of being able to crank things out in a productive manner, they're not the best on the planet.'
Three years ago, Louisville-based Storage Technology moved its manufacturing operations to Puerto Rico. Agilent Technologies also shipped hundreds of its Colorado Springs jobs to India and China. Also in the Springs, broadband device maker Actiontec sent several hundred jobs to India, and computer storage firm Quantum sent 865 jobs to Malaysia.
Denver tech consulting firm Ciber revealed a few weeks ago it will create new software and IT-related jobs in India.
Chief executive Mac Slingerlend of Ciber argues that by using Indian workers, his firm ultimately saves US jobs.
For instance, Ciber lost work from a major client, American Express, when the financial firm sent half of its software development work to India.
Because Ciber didn't do work in India at the time, the company lost the business and was forced to cut 100 jobs in its Phoenix office, Mr Slingerlend said. 'I've cost American jobs by not doing work on India.'
That doesn't provide much consolation to the thousands looking for work, some of whom say they were replaced by foreign workers.
Yet jobs have been leaving the US for years in a number of other industries. The automotive industry began hiring offshore in the 1960s as clothing, shoe and widget manufacturers did a decade later. In 1970, manufacturing jobs made up 15 per cent of the Colorado workforce. By 2000, they made up just 9.3 per cent.
And more recently, customer call centres started moving overseas.
However, critics say that while manufacturing jobs in the 1970s were replaced with new and higher-paying jobs in technology, the future for today's jobless tech workers is not clear.
Still, Colorado's secretary of technology John Hansen said the solution is not regulation. That, he said, will strangle businesses' global competitiveness.
Instead, US companies and citizens must innovate and come up with technologies that create new companies and ultimately new jobs. -- AP
http://straitstimes.asia1.com.sg/storyprintfriendly/0,1887,203065,00.html?
Treasuries Try to Put Life Back Together
Monday August 4, 1:12 pm ET
NEW YORK (Reuters) - U.S. Treasuries were trying to piece together a modest rally on Monday, taking advantage of a setback for stocks, but sentiment was skittish at best after weeks of punishing losses.
The latest U.S. economic data were upbeat but so old that for once investors did not run for the exits.
Durable goods orders rose 1.7 percent in June and topped forecasts of a 1.5 percent gain, though that was balanced by a downward revision to May's rise.
Some of the strength was due to defense, with orders for military equipment up over 33 percent on the year. Computers also showed good growth, suggesting some life in investment, and inventories were historically lean, encouraging analysts to look for a boost from inventory rebuilding this quarter.
Yet equities could make nothing of the data, perhaps because the market has long been pricing in a recovery.
That allowed the benchmark 10-year note (US10YT=RR) to edge 5/32 firmer in price, yielding 4.36 percent from 4.39 percent late on Friday.
Two-year notes (US2YT=RR) rose 1/32, taking yields to 1.75 percent from 1.78 percent, while five-year notes (US5YT=RR) firmed 8/32 for a yield of 3.18 percent from 3.24 percent.
The 30-year (US30YT=RR) was being erratic as usual, dithering either side of 5.32 percent.
TENDER MERCIES
Still, Treasuries remain at the mercy of mortgage debt.
As Joseph Shatz, government strategist at Merrill Lynch, notes the overall mortgage market at around $5.0 trillion now dwarfs the marketable Treasury market of $3.4 trillion.
Thus when owners of mortgage debt use Treasuries to hedge against prepayment risk, it can cause huge swings in prices well beyond what would be justified by fundamentals.
In recent weeks the trend has turned savagely as rising yields greatly lessened prepayment risk and left mortgage managers owning more Treasuries than benchmarks recommended.
Many scrambled to dump the extra bonds and reduce the average duration of their portfolios -- a phenomenon known as convexity selling.
"Mortgage convexity selling begets more mortgage convexity selling," notes Merrill's Shatz. "This has contributed greatly to the rapid rise in five-year and 10-year yields."
He also suspected that the speed of the recent rise in yields could mean many managers never got the chance to offload as much Treasuries as they wanted and they would be desperate for a rally to sell into.
Adding to the pressure has been a gaping government deficit and the explosion of debt issuance needed to plug it.
This week Treasury will sell $60 billion in debt -- $24 billion in three-year notes, $18 billion of five-year and $18 billion in 10-year notes -- making it the largest quarterly refunding ever.
Prices may have cheapened enough in recent weeks to attract investor demand but equally they could be scared away by the sheer scale of volatility in the market, leaving dealers holding much of the new paper.
Andrew Harding, director of taxable fixed income at Cleveland, Ohio-based Armada Funds, said a 4.50 percent 10-year yield, compared with a yield just above 3.0 percent in mid-June, could look like good value.
"It's cheap compared to a month ago, but is it cheap for the longer term?" he said. "There's some real argument about what's going to happen."
Jason Franklin, a trader at Zions First National Capital Markets, said the real test for the market is if it can "get its legs" after the refunding. "That's when we'll know."
http://biz.yahoo.com/rb/030804/markets_bonds_7.html
Draw your own conclusions:
But buy gold on dips accumulate silver.
Me was you; click the links read the whole entire articles...all are excerpts...
The ratio has moved mostly sideways, generally ignoring the correction from late May and early June’s highs. Today the ratio stands near its highest levels of the year. Without a significant mark down in the ratio, it would appear that there is confidence in a higher gold price.
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256D750072B34E?OpenDocument
No one in Europe is buying Freddie Mac and Fannie Mae stock, and are dumping it like mad, because of the lack of honesty in their bookkeeping, plus they have little in assets, and tons of liabilities. Interest rates are going up, which means the re-fi business is over for the mortgage companies, and this will possibly slow the housing bubble. It is the housing bubble that is keeping the whole thing going. The stock market is going up, just like it did when it burst a couple of years ago. Why? Because the sheeple know nothing, and think they'll remove their fading dollars from the dishonest banks, and put them in the overblown stock market. The Iraq debacle is costing, they say, a billion a week, and at least a life a day. Is this true, or babble? Whom does one trust? Whose statistics? Whose press releases? Ain't life grand? Protect yourself.
http://www.gold-eagle.com/gold_digest_03/stott080103.html
The absolute worst spin that Wall Street continues to spew forth is the notion that interest rates are going up because of improving economic conditions. They have to spin it that way, otherwise how can higher rates be justified. The fact of the matter is that the Fed blew a bunch of smoke while they were screaming worries of deflation. The smokescreen of deflation gave the Feds the green light to inflate, inflate, and inflate some more. The bond market took the head fake initially from the Fed back in May and early June, and bought Treasuries only to get the big let down when Alan Greenspan addressed Congress to say that they probably wouldn’t need to support the bond market. The selling hasn’t stopped since then. Bonds are selling-off due to inflation fears, not because of an improving economy. Would someone please tell me what is better about the economy?
http://www.financialsense.com/Market/wrapup.htm
Templeton's take: The stock market is broken
Last week, a friend was kind enough to e-mail a copy of an interview that Sir John Templeton gave recently to Robert J. Flaherty of Equities magazine. I, in turn, would like to share its wisdom with readers of the Contrarian Chronicles.
During the previous interviews with the publication in 1999 and 2000, Sir John said investors should expect a 1929-style crash in stocks. Flaherty notes that the interviews prompted two very different responses. Some folks expressed gratitude for the money they saved by reading Sir John's comments while others opined that Sir John was "old and out of touch," and what did he know about today's market, anyway?
In his current interview, Sir John, who is now 90, devotes most of his thoughts to the housing market. What he tells Flaherty comes as a surprise to the downside, since the writer had been expecting to hear more encouraging words: "Because I was hoping for good news," Flaherty writes, "I was personally taken aback and depressed by Sir John's short-term pessimism."
In that vein, Sir John offers this observation about Wall Street at large: "The stock market is broken, and it will take time, maybe years, to repair it. Mass media, especially TV (read: Bubblevision) today is so short-term that few in its audience grasp the lasting damage and corrective impact which will continue to linger from the greatest financial crash in world history."
He continues: "It would be unlikely that the bear market is over when the American stock market is only down about 30% when in the biggest boom year ever, it had been up ten times over where it had been years earlier… Following such a large increase, a 30% decrease is small." (I am assuming here, he was obviously not talking about the Nasdaq ($COMPX).)
I guess I like this passage because it's a refrain that I've often pounded away at in my daily column.
Bear markets and housing markets
Moving on to housing prices, Sir John comments: "Every previous major bear market has been accompanied by a bear market in home prices… This time, home prices have gone up 20%, and this represents a very dangerous situation. When home prices start to go down, they will fall remarkably far. In Japan, home prices are down to less than half of what they were at the stock market peak." Sir John adds, "A home price decline of as little as 20% would put a lot of people in bankruptcy."
Sir John also had a few words about debt - a four letter word that folks seem not to care about: "Emphasize in your magazine how big the debt is… Total debt of America is now $31 trillion. That is three times the GNP of the U.S. That is unprecedented in a major nation. No nation has ever had such big debt as America has, and it's bigger than it was at the peak of the stock market boom. Think of the dangers involved. Almost everyone has a home mortgage, and some are 89% of the value of the home (and yes, some are more). If home prices start down, there will be bankruptcies, and in bankruptcy, houses are sold at lower prices, pushing home prices down further. On that note, he has a word of advice: "After home prices go down to one-tenth of the highest price homeowners paid, then buy."
Well, that's a pretty extreme view, even for me. But I guess it shows you how bearish Sir John is. I'm sure his latest comments will elicit the same kind of response as when he shared his bearish views during the bubble - that he just doesn't get it. (It's certainly the earful that I and others heard on the back of our bearish sentiments.) Folks who make that argument, protesting that this time is different, are generally in the unfortunate position of having confused a bull market/rising prices with brains.
Three of the best investment minds I know (Richard Russell, Warren Buffett, and John Templeton) all agree that the U.S. economy has serious defects and no real solutions are being offered. We have public servants whose only interests are limited to reelection, campaign contributions, and opinion polls. They can't offer a solution because that would require an acceptance of responsibility along with an implicit admission of guilt. The end result will bring sadness and pain.
http://www.gold-eagle.com/editorials_03/orlandini080203.html
Silver could test $5.50 an ounce, but will probably slip back to the $4.5, to $5 trading band later in the year, he says.
http://www.gold-eagle.com/editorials_03/behrmann080303.html
sideeki, I can't even tell you how pissed I am
that you didn't get in touch with me when you got to Maui...
One drink too much to ask?
What a hoser.
Seems to me citizens should make a little noise when they spot police acting like terrorists and charging 17 year olds for no crime.
Where are the letters to the court house...?
Anybody going to picket infront of the courthouse during the "trial"?
No, JUST SHEEP.
This republic is lost.
Long worth the read:
http://www.financeasia.com/articles/E867AEB6-642E-11D7-81FA0090277E174B.cfm
Excerpts:
However, it is now becoming increasingly apparent that The Dollar Standard has also resulted in a number of undesirable and potentially disastrous consequences.
First, it is clear that countries which built up large stockpiles of international reserves through current account or financial account surpluses have experienced severe economic overheating and hyper-inflation in asset prices that ultimately resulted in economic collapse. Japan and the Asia crisis countries are the most obvious examples of countries that suffered from that process. Those countries were able to avoid complete economic depression only because their governments went deeply into debt to bailout the depositors of their bankrupt banks.
Second, flaws in the current international monetary system have also resulted in economic overheating and hyper-inflation in asset prices in the United States as that country's trading partners have reinvested their dollar surpluses (i.e. their reserve assets) in dollar-denominated assets. Their acquisitions of stocks, corporate bonds, and US agency debt have helped fuel the stock market bubble, facilitated the extraordinary misallocation of corporate capital, and helped drive US property prices to unsustainable levels.
Third, the credit creation The Dollar Standard made possible has resulted in overinvestment on a grand scale across almost every industry worldwide. Overinvestment has produced excess capacity and deflationary pressures that are undermining corporate profitability around the world.
edit
An incredible building boom began. A thousand high rise buildings were added to the skyline. All the building material industries quadrupled their capacity. Corporate profits surged and the stock market shot higher. Every industry had access to cheap credit; and every industry dramatically expanded capacity. The economy rocketed into double digit annual growth.
And, so it was in all the countries that rapidly built up large foreign exchange reserves: credit expansion surged, investment and economic growth accelerated at an extraordinary pace, and asset price bubbles began to form. That was the case in Japan in the 1980s and in Thailand and the other Asia cisis cuntries in the 1990s. It is also true of China today. Wherever reserve assets ballooned in a short space of time, economic bubbles formed.
Unfortunately, economic bubbles always pop. And when they pop, they leave behind two serious problems.
edit
They must decide between holding those dollars in dollar-denominated investments that will generate a return, converting the dollars into some other currency, or else buying some other store of value such as gold.
Their options are fewer than they at first appear however. That is because the amounts involved are so large.
For example, China and Japan each enjoyed a trade surplus of more than $100 billion with the United States last year. That is in addition to the hundreds of billions of dollar-denominated reserves assets they had accumulated in prior years.
Any attempt to convert even a small portion of that into gold would drive the price of gold wildly higher. Similarly, any strategy that attempted to convert a significant portion of those dollar holdings into Euros would cause a very sharp spike in that currency that the European Central Bank and other European policy makers would view as most unwelcome because of the negative impact it would have on Europe's exports.
It is quite probable that politicians and central bankers in Europe would call their counterparts in Asia and politely ask them to stop driving up the Euro. Or, imagine the response in Tokyo if China began converting its dollar hoard into Yen. Diplomatically, it would be unacceptable and, for that reason, it is not an option.
The fact of the matter is that Asia's dollar reserve holdings, both stock and flow, are so large that they only place they can be accommodated is in US Dollar-denominated assets such as Treasury Bonds; agency debt, such as Fannie Mae and Freddie Mac; corporate debt; equities; or bank deposits.
That is why it has been so easy for the United States to finance its enormous current account deficit. There is really nowhere else for that much money to go.
edit
Neither the consumer sector nor the business sector can afford to take on any more debt. That leaves only the government sector.
Strangely, it is rather fortuitous - at least from the point of view of Asian central banks - that the United States government has once again begun to run such large budget deficits. At this stage in the business cycle, only the US government has the debt servicing capacity to issue and service the amounts of debt required to provide a safe home for the half a trillion dollars and more that the US current account deficit is adding to the world's stock of reserve assets each year.
This year, the US government deficit is well on its way toward $400 billion. Foreign central banks will be more than happy to snap all that up and then some.
It is no coincidence that the worst of the bubble excesses took place in the United Stated between 1998 and 2000 when the government briefly achieved a budget surplus. During those years when the government stopped issuing new treasury bonds, the many countries experiencing a current account surplus with the US had little choice but to buy other, more risky dollar-denominated assets such as Fannie Maes, corporate bonds or NASDAQ stocks.
edit
It is difficult to know which will happen first. However, it is certain that one of the two will eventually occur. Either outcome would put an end to the era of export-led growth that Asia has enjoyed for so long.
In the meantime, and here is the story that is of much greater significance than how much Asian central banks will lose as the dollar depreciates, so long as the US current account deficit continues to flood the world with US Dollar liquidity - in effect blowing up the global money supply - new asset price bubbles are likely to inflate and implode; more systemic banking crises can be expected to occur; and intensifying deflationary pressure can be anticipated as falling interest rates and easy credit result in excess industrial capacity and falling prices.
In other words, so long as the US current account deficit persists, the global economic disequilibrium that it generates will continue to cause economic upheavals around the world. The costs of those upheavals will far exceed the foreign exchange losses Asian central banks will suffer as the dollar continues to weaken in the months and years ahead.
There Is A Silver Lining
"...Warren Buffet sought "wealth insurance" for his vast stock holdings; instead of a "golden anchor," he bought one of silver. Soros, who historically has been willing to take greater risks than Buffet in his portfolio, saw silver as one of several undervalued commodities. Most investors don't realize how truly important silver is to industry and how strong the demand is. At today's prices, there is not enough silver to go around..."
Michael Checkan
What do two of the best investors during the past generation have in common? The answer is pure silver (.999 fine).
In 1997, Warren Buffet bought 130,000,000 ounces of silver. He put 1% of Berkshire Hathaway assets into "the poor man's gold." Likewise, George Soros, the man who made US$1 billion in one day and brought the Bank of England to its knees, has invested heavily in silver over the past five years.
What do these two giants of investing see in silver? In my opinion, Warren Buffet sought "wealth insurance" for his vast stock holdings; instead of a "golden anchor," he bought one of silver. Soros, who historically has been willing to take greater risks than Buffet in his portfolio, saw silver as one of several undervalued commodities.
The 1990s may have been the time of the "new paradigm" with money being made with paper investments. But, so far in the 21st century, the best investments have been tangible ones like real estate, platinum, oil, gold, natural gas etc.
Through most of the 1960s, silver was "fixed" at US$ 1.29 per ounce. In the 1970s, both silver and currency rates were freed, and the values of these commodities were determined by supply and demand.
Silver's image became tarnished in the late 1970s, after the failed attempt by the Hunt family to corner the silver market. Falling from a record high of US$50 per ounce in January 1980, silver bottomed out in the early 1990s at US$3.50 where it languished in a trading range of US$3.50-US$6.00.
But all of this changed in late 1997 when silver shot up to US$6.38 per ounce in reaction to dramatic reductions of warehouse stockpiles. It was finally confirmed in February 1998 that Warren Buffet had purchased more than 130 million ounces of silver.
Silver Is Irreplaceable
Silver is primarily an industrial metal, not a monetary one. It has properties that make it unique and irreplaceable for industry. Nothing else combines strength, elasticity, electrical conductivity, malleability, fatigue and corrosion resistance.
Industrial and health uses make up almost half of the demand for silver. Another 30% goes into silver jewelry. Most industrial silver is used in photography, and this use isn't likely to be replaced by digital cameras anytime soon. According to the 2003 Silver Survey, digital cameras have resulted in a mere eight million ounce decrease of silver for photography in 2002.
And new industrial uses for silver are constantly being discovered. This is evidenced by the four million ounces of increased silver consumption by industry in 2002, according to the same survey. Keep in mind that this increase in consumption occurred as U.S. industry contracted!
Most investors don't realize how truly important silver is to industry and how strong the demand is. Nor do they know that the U.S. government, which had over 3 billion ounces of silver in 1942, ran out of silver in 2002. At today's prices, there is not enough silver to go around.
Silver's price is close to a 5,000-year inflation-adjusted low. Over 90% of all the silver that's been mined in the past 5,000 years has been used up by industry. Today, the world's silver inventories are at the lowest point in 200 years. At the same time, demand for silver is greater than ever. Therefore, it should come as no surprise that 2002 marked the 14th straight year in which silver was produced at a significant deficit to demand!
The Best Ways to Buy Silver
The case for buying silver is airtight. Methods of acquiring it include:
Silver bullion bars of approved refiners. This was the technique chosen by Mr. Buffett, with storage overseas for geographic diversification. Advantages: small markup; easily converted into cash; internationally negotiable. Disadvantages: Must be stored securely with storage fees amounting to 0.5% annually or more; possible need for assay at time of sale.
Silver bullion coins. Advantages: Relatively inexpensive, some less than US$10/coin; easily converted into cash; internationally negotiable. Disadvantages: Must be stored securely; premium over bar prices.
Silver mining stocks or mutual funds. Advantages: Offers leveraged profits in a silver bull market; no storage fees; may yield a dividend. Disadvantages: Profits are dependent upon a given companies management; losses are greater during price dips; may not be as easily liquidated as bullion.
Silver warehouse certificates. Advantages: small markup; easily converted into cash; internationally negotiable; storage fees reduced or eliminated. Disadvantages: Reduced liquidity for some issuers; possible risk to holdings in the event of issuer bankruptcy.
Michael Checkan is President of Asset Strategies International, Inc. (ASI) in Rockville, Maryland and is a member of The Sovereign Society's Council of Experts. For more information about silver investments, you can contact him toll free at (800) 831-0007, or from outside North America direct at (301) 881-8600. Or you can e-mail him at rcheckan@assetstrategies.com or visit www.assetstrategies.com.
http://www.dailyreckoning.com/home.cfm?loc=/body_headline.cfm&qs=id=3336
.0008 still a long way back to a penny...
http://finance.yahoo.com/q?s=MDCE.PK&d=t
Put TALL on your radar:
http://finance.yahoo.com/q?s=TALL.OB&d=t
Did Condi Give the Game Away?
Her Yellowcakegate alibi doesn't add up.
By Timothy Noah
Posted Thursday, July 31, 2003, at 4:12 PM PT
Astronomers are often able to infer the existence of planets too far away to be seen through a telescope. They do this by observing a slight wobble in a visible star. The wobble is presumed to be the gravitational pull of an unseen planet. The Wobble Method is a useful tool for considering whether a key player is missing from the administration's narrative of Yellowcakegate. Let us now apply it to National Security Adviser Condoleezza Rice's July 30 interview with Gwen Ifill on PBS's NewsHour, in which Rice became the fourth Bush administration official to accept full responsibility for the inclusion of erroneous information in the State of the Union address. (Five if you include President Bush, who surely neither knew nor cared whether it was true that "Saddam Hussein recently sought significant quantities of uranium from Africa.") In a lengthy and skillful interrogation, Rice wobbled.
Rice's challenge was to explain why she let Bush cite the yellowcake example in January when CIA Director George Tenet had sent a memo to her (and others) in October elaborating why the yellowcake example was no good. In accordance with Tenet's wishes, a reference to Saddam's yellowcake safari was removed from an Oct. 7 speech President Bush gave in Cincinnati. Yet the reference resurfaced in the State of the Union three months later.
In answering, Rice had five options:
"I didn't read the memo."
"I don't remember reading the memo."
"I read the memo and then forgot about the yellowcake part."
"There was no reason for me to read the memo."
"I read the memo but ignored it because someone more powerful than Tenet insisted on including it anyway."
What drives Yellowcakegate is the suspicion that No. 5 is the correct answer. Answers 1, 2, 3, and 4 are embarrassing but forgivable, whereas 5 is much harder to forgive. Given a choice of four forgivable answers, Rice, inexplicably, chose all four:
I can tell you, I either didn't see the memo, I don't remember seeing the memo, the fact is it was a set of clearance comments, it was three and a half months before the State of the Union.
Rice's inability to settle on a single forgivable excuse suggests to Chatterbox that none of them felt quite right to her. Among the four, though, Rice seemed to feel most comfortable with No. 4, as the next stretch of the interview demonstrates:
Q: Should you have seen the memo?
A: Well, the memo came over. It was a clearance memo. It had a set of comments about the [Oct. 7 Cincinnati] speech. [The yellowcake reference] had already been taken out of the speech, from my point of view and from the point of view of Steve Hadley. Steve Hadley runs the clearance process. And when Director Tenet says something—takes something out of a speech, we take it out. We don't really even ask for an explanation. If the DCI, the director of Central Intelligence, is not going to stand by something, if he doesn't think that he has confidence in it, we're not going to put that into a presidential speech. We have no desire to have the president use information that is anything but the information in which we have the best confidence, the greatest confidence.
And so when Director Tenet said take it out of the speech, I think people simply took it out of the speech and didn't think any more about why we had taken it out of the speech.
Readers of Chatterbox's earlier Yellowcakegate column, "Cheney Wraps His Glutes in the Flag," will immediately spot an inconsistency in Rice's account. The same inconsistency surfaced in the otherwise-believable mea culpa offered by Rice's assistant, Steve Hadley. Both Rice and Hadley state that they had already removed the offending line from the Cincinnati speech when Tenet sent them a memo urging them to remove it. Tenet had already told Hadley by phone to take it out, and Hadley had complied. If, as Rice says, it's axiomatic that when the CIA director wants something out of a presidential speech, it comes out, Tenet would have known there was no danger that his complaint—the way Rice makes it sound, it was more like a command—would go unheeded. So why did Tenet—a man who is so busy fighting the war on terrorism that three months later he didn't have time to read an advance draft of the State of the Union, an oversight that made him Yellowcakegate's Fall Guy No. 1—write a superfluous memo?
Because, Chatterbox believes, it wasn't superfluous. Tenet knew that his complaint was not a command and that somebody at the White House still needed convincing. But who would have the standing to tell the CIA director to go jump in the lake? Surely not Fall Guy No. 2, the National Security Council's nonproliferation expert, Robert Joseph. Surely not Fall Guy No. 3, the NSC's deputy, Steve Hadley. And surely not even Fall Person No. 4, Condi Rice, who'd have to be insane to lie, on national television, about dissing Tenet. (Tenet, she surely knows, is superb at exacting revenge.)
Chatterbox therefore posits the existence of a Fall Guy No. 5, Vice President Dick Cheney. The one person in the White House who has no patience for addressing the Yellowcakegate mystery at all and who questions the patriotism of anybody who does. Who pushed the Saddam-is-about-to-get-nukes line harder than anyone else in the Bush White House. Who has an eerie gift for making the most outrageous actions sound reasonable. (In The New Yorker, Nicholas Lemann likened him to an IV delivering serotonin re-uptake inhibitors.) Who, Chatterbox believes, would have been angered to learn that the yellowcake reference came out of the Cincinnati speech, and who thereafter would have made damn sure it didn't get censored again.
This is, Chatterbox emphasizes, just a guess. The Wobble Method is not infallible. (It was, after all, the same method employed by the Bush administration to demonstrate that Saddam Hussein's possession of chemical and biological weapons was certain, a proposition that has yet to be proved.) But it's the only way Chatterbox knows to make sense out of Yellowcakegate.
One thing Chatterbox will say for certain: President Bush is not about to fire Rice. Asked about this yesterday, Bush said: "Dr. Condoleezza Rice is an honest, fabulous person. And America is lucky to have her service. Period." If he'd been getting ready to can her, he'd have said, "Dr. Rice has my full support and confidence." That's Washington-ese for "She's toast."
Yellowcakegate Archive:
July 25, 2003: "Whopper of the Week: Condoleeza Rice"
July 24, 2003: "Cheney Wraps His Glutes in the Flag"
July 17, 2003: "Is Libby the Phantom Bigfoot?"
July 16, 2003: "Why This Bush Lie? Part 2"
July 15, 2003: "Why This Bush Lie? Part 1"
http://slate.msn.com/id/2086461/
Eatery to close after 105 years
By Michael Fitzgerald and Bruce Spence
Record Staff Writers
Published Wednesday, July 30, 2003
On Lock Sam Restaurant, a 105-year-old Chinese restaurant in downtown Stockton, will close in three weeks after being hit by a federal-court civil lawsuit charging lack of wheelchair accessibility, one of the owners said Tuesday.
Robert Wong, one of six Wong family members who own the restaurant at 333 S. Sutter St., said that because of the threat of huge legal costs in a losing court fight, the family has no choice but to shut the doors Aug. 17, putting 25 employees out of work.
"To correct the problem, I'd say that's fair," said Wong, 62, adding that the family would have been amenable to making needed changes to the restaurant.
But the potential for legal-cost liabilities in a court fight was too much, he said, adding that the family may seek a new owner.
"It seems like quite an injustice to our employees and to the public," said Bob Hong, president of On Lock Sam Inc.
The complaint was filed June 12 in U.S. District Court in Sacramento on behalf of Charles Hager, whose legs were amputated and who moves around in a motorized wheelchair.
Wong said he didn't know of the complaint until the lawsuit was served.
Hager is represented in the lawsuit by Paul Rein, an Oakland attorney who represented an Alameda woman who sued film star Clint Eastwood over
handicapped-accessibility allegations concerning Eastwood's Carmel Mission Ranch Inn.
The On Lock Sam suit cited problems that Hager allegedly had in October when parking at the restaurant, entering the restaurant, trying to use the restroom and then use a public pay phone in a bar area down several steps from the main restaurant floor.
The complaint said Hager soiled himself while trying to use the restaurant restroom.
Rein, whose firm specializes in accessibility cases, said he was open to a compromise in the On Lock Sam lawsuit, but after the lawsuit was served, he was never contacted by the Wongs to work out issues.
He said he had no ballpark figure for damages he would seek, because the primary purpose is to obtain access for the disabled.
He said he was sorry that the restaurant will be closing but added he doubts it was about the expense of a lawsuit.
There is an alternative to the restroom-accessibility issue, he said, such as building an accessible unisex restroom elsewhere on the premises if fixing the existing restroom were too expensive.
And putting in a parking place for disabled motorists is the cost of the paint, he said.
The bar-accessibility issue could have been compromised on, Rein said. What can't be compromised on is a large restaurant without restrooms that disabled people can use, he said.
A business that operates without complying with the law takes advantage of other businesses that do comply, he said. ::: Advertisement :::
Hager had a very serious incident there, Rein said, about the most humiliating thing that can happen to a person in a public restaurant.
Stockton lawyer Scott Malm, representing the Wong family, deferred comment to the owners.
According to the complaint:
On Oct. 5, Hager, his sister and her fiance went to the restaurant in his disabled-accessible van to meet a friend for lunch.
There were no properly configured van-accessible parking places, but Hager was able to find a place to park and get out of his van in his wheelchair.
At the restaurant entrance, vestibule configuration made getting through entry-way double doors difficult to manage in a wheelchair, and the doors were too heavy for him to open on his own.
When Hager went to the restroom, he needed the help of his sister's fiance to get through the door because the doorway was too narrow for Hager to get through on his own.
Also, the restroom was too small for Hager to maneuver his wheelchair or to enter the stall.
As a result of the cramped quarters and inability to enter the restroom stall, Hager soiled his clothes and wheelchair.
He was embarrassed and emotionally distraught and wanted to phone the friend who was to meet them to cancel the lunch date. But he was unable to use the pay phone in the restaurant's bar area, which could be entered only down at least three stairs and wasn't accessible by wheelchair.
Hager got someone else to make the phone call canceling the lunch date and "returned to his van in humiliation and frustration."
The suit also charges that the restaurant lacks clear paths of travel through the restaurant and lacks accessible seating areas for someone in a wheelchair.
Hager's suit seeks damages and triple-penalty damages and full payment of all his attorney fees, litigation expenses and court costs.
In an ad running in today's edition of The Record, Wong announces an Aug. 17 closing, pointing out that On Lock Sam has been in business in Stockton since 1898.
The ad outlines the dispute with Hager and says the Wong family recognizes "the difficulties faced by the disabled in our community and fully supports the rights of the disabled to equal access."
The cost of any court-ordered renovation work, plus lost income while construction work was being done, would be "certain financial disaster," the ad said.
Stockton Mayor Gary Podesto said he was surprised to hear about the closing but was aware that the restaurant was no longer the intense, family-run operation of earlier years when Jimmie and Ruth Wong steered On Lock Sam.
A couple of years ago, he said, he had tried to convince Robert Wong to consider relocating the restaurant to the waterfront, where the city is focusing so much of its current redevelopment efforts.
"That would be gangbusters," Podesto said.
But the restaurant business is a tough one, he said, and he didn't sense a family drive to continue with the restaurant in such a manner, considering that younger Wong family members aren't involved with the restaurant.
Podesto said said the closing of On Lock Sam won't hurt the city's downtown redevelopment.
"The things we are doing will create more restaurants," he said.
It's more spiritual, like the 49ers leaving, he said.
"But On Lock is a tremendous name and almost a foundation of Stockton," Podesto said. "I would think somebody would want to take that name and run with it."
Two lunch diners Tuesday were sorry to hear the news.
San Jose residents Jerry and Ruth White are retired but stop to eat at On Lock Sam's at least three or four times a year -- every time they pass through the area.
They've been fans for 10 years, since a San Jose friend -- a restaurant connoisseur of sorts -- pointed them to On Lock Sam with high recommendations.
"We love the food," Ruth White said.
They said they also hated to hear about the lawsuit and the impending closure, even while generally agreeing that accessibility for the handicapped is a good thing.
"I'm opposed to this lawsuit-happy business -- just about of any ilk," Jerry White said. "And I don't think they should have to pay a penalty just because somebody came in here and found it difficult."
http://www.recordnet.com/articlelink/073003/news/articles/073003-gn-4.php
Oprah to buy Kula land
By HARRY EAGAR
Staff Writer
KULA — Oprah Winfrey, who already owns 100 shore-front acres in Hana, is buying more beautiful Maui real estate in Kula.
Her agent on Maui had no comment, but Winfrey and her friend and personal trainer Bob Greene have made offers on several properties past the Kula Hospital on Thompson Road, the narrow rural roadway that runs to the ranch.
Winfrey is the longtime syndicated television talk show host, who is maven of a multimillion-dollar media conglomerate that includes a magazine and a book club. Greene is a physiologist who co-authored with Winfrey a fitness book, “Make the Connection.”
Their offers for Upcountry land reportedly have been turned down by some, but accepted by others.
One sale under way is of 31-acre Thompson Ranch.
Jerry Thompson, whose father started the ranch in 1901, said Tuesday he “had mixed feelings” but would never have sold if he had not been able to make a land exchange to buy a larger, ranchable property nearby.
He and his wife, Toni, will move their Thompson Ranch Riding Stables business to the new area, but not until after the summer rush.
Until then, they will continue offering trail rides over about a thousand acres of Haleakala Ranch land, where they have an entry agreement.
Just down the road, Carmen Goble of Goble’s Flower Farm says she told Winfrey’s agents, “No way!” when they inquired about buying the property she farms with her husband Woody.
“We are not selling,” she said Tuesday, because “we have four children and there would be no place for them” if they did.
Other neighbors reportedly are either selling or in serious negotiations, although April Mims of RE/Max Maui realty, the agent, said she was unable to say more.
The home place of Thompson Ranch was what is now Silver Cloud Ranch, operated as a guest house.
Thompson Ranch at one time covered about 500 acres, according to Jerry Thompson, but his father sold or gave away much of it during World War II.
When his mother died, Jerry Thompson had to sell what is now Silver Cloud to pay inheritance taxes.
The 31 acres he kept is too small to keep a real herd of cattle, and so he decided, with regrets, to sell the place he grew up on in order to be able to continue ranching and operating his trail rides.
When Winfrey bought acreage near Hamoa Beach in Hana, she made promises not to develop the land, beyond building about three houses for herself, Greene and a guest cottage.
Thompson says he believes Winfrey also has no interest in developing his land, beyond building a couple of houses for Greene and herself.
However, he has never met her.