RBS tells clients to ‘think the unthinkable’ and prepare for ‘monster’ money-printing by the Fed

As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

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Entitled “Deflation: Making Sure It Doesn’t Happen Here”, it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

The speech is best known for its irreverent one-liner: “The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost.”

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Investors basking in Wall Street’s V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

The ECRI leading indicator produced by the Economic Cycle Research Institute plummeted yet again last week to -6.9, pointing to contraction in the US by the end of the year. It is dropping faster that at any time in the post-War era.

The latest data from the CPB Netherlands Bureau shows that world trade slid 1.7pc in May, with the biggest fall in Asia. The Baltic Dry Index measuring freight rates on bulk goods has dropped 40pc in a month. This is a volatile index that can be distorted by the supply of new ships, but those who watch it as an early warning signal for China and commodities are nervous.

Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on “monster” quantitative easing (QE)”.

“We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable,” he said in a note to investors.

Read moreRBS tells clients to ‘think the unthinkable’ and prepare for ‘monster’ money-printing by the Fed

Bizarre G20 Standoff: Police Corralled 200 People In Heavy Rain For 4 Hours

Related article:

More than 600 arrested as Toronto summit ends (Vancouver Sun)


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Police arrest protesting cyclists along the streets of downtown Toronto during the G20 Summit on Sunday, June 27, 2010. (Ryan Remiorz / THE CANADIAN PRESS)

A tense and bizarre standoff between police and a crowd lingering in central Toronto following a weekend of G20 protests has ended after nearly four hours.

At a busy intersection in the city’s core, a large contingent of police boxed in a group of about 200 people in heavy rain. They were not allowed to leave the area.

Dozens were arrested during the police action, which occurred only steps from where police cruisers were torched 24 hours earlier.

Just before 9:45 p.m. local time, police let the remaining crowd go free.

Talking to reporters late Sunday night, Toronto Police Staff Superintendent Jeff McGuire was pressed to explain why police had barricaded people for so long in the rain, before simply letting them go.

McGuire said, “We’re not perfect in everything we do, but our interest was in the safety of the citizens of Toronto.”

Read moreBizarre G20 Standoff: Police Corralled 200 People In Heavy Rain For 4 Hours

Venezuela’s President Chavez: ‘Genocidal’ Israel will be put in its place

Related video: UK Jewish MP: Israel acting like Nazis in Gaza


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Venezuela’s President Hugo Chavez speaks during a meeting with his Syrian counterpart Bashar al-Assad at Miraflores Palace in Caracas June 26, 2010. (REUTERS)

CARACAS (Reuters) – Venezuela’s President Hugo Chavez described Israel on Saturday as a genocidal state that acted as an assassin for the United States, predicting the Middle East nation would one day be “put in its place.”

The socialist Chavez is a harsh critic of both Israel and the United States and cut relations with Israel after accusing it of “holocaust” for its 2009 offensive in the Gaza Strip.

“It has become the assassin arm of the United States, no one can doubt it. It is a threat to all of us,” Chavez said, during a visit by Syrian President Bashar al-Assad.

Chavez said he supported a peaceful struggle for the return to Syria of the Golan Heights, captured by Israel in 1967.

“The territory will one day return to the Syrian hands,” Chavez said. “Of course we want it to be peaceful because we don’t want more war.”

“But one day the genocidal state of Israel will be put into its place, and let’s hope that a really democratic state emerges there, with which we can share a path and ideas.”

Read moreVenezuela’s President Chavez: ‘Genocidal’ Israel will be put in its place

US: 46 States Face Greek-Style Debt Crises

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Warren Buffett, Arnold Schwarzenegger and Jacob Rothschild

The Greatest Depression is here.


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Arnold Schwarzenegger, governor of California, speaks to the state assembly about his proposed budget in Sacramento, California.

Californians don’t see much evidence that the worst economic contraction since the Great Depression is coming to an end.

Unemployment was 12.4 percent in May, 2.7 percentage points higher than the national rate. Lawmakers gridlocked over how to close a $19 billion budget gap are weighing the termination of the main welfare program for 1.3 million poor families or borrowing more than $9 billion in the bond market. California, tied with Illinois for the lowest credit rating of any state, is diverting a rising portion of tax revenue to service debt, Bloomberg Markets magazine reports in its August issue.

Far from rebounding, the Golden State, with a $1.8 trillion economy that’s larger than Russia’s, is sinking deeper into its financial funk. And it’s not alone.

Even as the U.S. appears to be on the mend — gross domestic product has climbed three straight quarters — finances in Arizona, Illinois, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution. State spending is 12 percent of U.S. GDP.

“States are going to have to cut back spending and raise taxes the same way Greece and Spain are,” says Dean Baker, co- director of the Center for Economic and Policy Research in Washington. “That runs counter to stimulating the economy and will put a big damper on the recovery in the latter half of this year.”

Stimulus Dries Up

Read moreUS: 46 States Face Greek-Style Debt Crises

Police State: Cops Taser 86-Year-Old Bed-Ridden Grandmother

American police accused of using a Taser on an 86-year-old, bed-ridden grandmother

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Police in El Reno, Oklahoma, have been accused of tasering an 86-year-old grandmother

American police have been accused of tasering an 86-year-old bed-ridden grandmother.

Lonnie Tinsley called the emergency services to his home in El Reno, Oklahoma, when he became concerned that his grandma Lona Vernon had failed to take her medication.

But instead of a medical technician, he claims at least a dozen armed police officers answered his call.
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Police in El Reno, Oklahoma, have been accused of tasering an 86-year-old grandmother

When Mrs Vernon ordered the police from her house, officer Thomas Duran allegedly decided she was being ‘aggressive’ and gave the order: ‘Taser her.’

Her alarmed garndson, is then said to have replied: ‘Don’t taze my granny!’

According to a lawsuit filed in U.S. District Court, Tinsley’s ‘obstructive’ behaviour prompted the police to threaten him with their tasers.

He was then was assaulted, removed from the room, thrown to the floor, handcuffed, and detained in a police car.

At this point, the heroes in blue turned their attention to Lona.

According to officer Duran’s official report, Mrs Vernon had taken an ‘aggressive posture’ in her hospital bed.

In order to ensure ‘officer safety’, one of his men ‘stepped on her oxygen hose until she began to suffer oxygen deprivation’.

Another of the officers then shot her with a taser, but the connection wasn’t solid.

A second fired his taser, ‘striking her to the left of the midline of her upper chest, and applied high voltage, causing burns to her chest, extreme pain’, and unconsciousness.

Lona was then handcuffed with sufficient ruthlessness to tear the soft flesh of her forearms, causing her to bleed.

After her wounds were treated at a local hospital, Lona was confined for six days in the psychiatric ward at the insistence of the El Reno Police Department.

Read morePolice State: Cops Taser 86-Year-Old Bed-Ridden Grandmother

Obama Internet ‘Kill Switch’ Approved By Senate Committee

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WASHINGTON (CBS4) ― The White House is one step closer to having the authority to flip the Internet “kill switch” in case of emergency.

The Senate Committee on Homeland Security and Governmental Affairs approved a cybersecurity bill called PCNAA, or Protecting Cyberspace as a National Asset Act on Friday. The bill would give the president the power to call it lights out for the Internet if there is “a cyber attack capable of causing massive damage or loss of life.”

The legislation would force companies such as broadband providers, search engines, or software firms that the government selects to “immediately comply with any emergency measure or action developed” by the Department of Homeland Security. Anyone failing to comply would be fined.

Read moreObama Internet ‘Kill Switch’ Approved By Senate Committee

Obama administration to challenge Arizona immigration law

See also:

Arizona Governor Jan Brewer Slams President Obama: Warning Signs Are Not Enough


The White House is expected to file a lawsuit next week. Arizona has raised more than $120,000 in private donations to defend the legislation.

White-House

Reporting from Washington — A White House showdown with the state of Arizona over its tough new immigration law is likely to unfold next week, when the Obama administration is expected to file a lawsuit aimed at blocking the state’s bid to curb illegal immigration on its own, according to people familiar with the administration’s plans.

Arizona officials are girding for the legal challenge. The state has raised $123,000 in private donations to defend the law, according to Gov. Jan Brewer’s office. Money has come in from all 50 states, in donations as little as $1.

Obama administration officials declined to reveal the basis for the suit. But legal experts say the challenge is likely to include the argument that in passing the law, Arizona violated the Constitution by intruding on the federal government’s authority to regulate immigration.

To date, the state has been hit with five lawsuits. The law, SB 1070, was signed in April and is scheduled to go into effect July 29.

By confronting Arizona, the Obama administration would be making a political statement as much as a legal one. Obama has already criticized the Arizona law as “misdirected.” Criminal action against illegal immigrants is not, by itself, a satisfactory solution to the nation’s dysfunctional immigration system, the White House says.

Read moreObama administration to challenge Arizona immigration law

Sacked General Stanley McChrystal created special forces military command centre ‘Death Star’ with ‘Kill TV’, led secret war raids

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General McChrystal was sacked as Nato commander following the Rolling Stone article

They called it the “Death Star” because according to one source who worked inside it, “you could just reach out with a finger and eliminate” somebody.

On the walls were television screens, known by the special forces boys as “Kill TV”, where footage from image-intensifier cameras of the enemy being blown up by air strikes, or being gunned down by undercover hit teams was shown.

This place was “the Machine”, a state-of-the-art military command centre hidden away in an airbase in Balad, a desolate stretch of land north of Baghdad.

It was created by Major General Stanley McChrystal, the chief of United States Special Forces, the most secretive force in the American military.

Here, in the permanently darkened communications cockpit, dozens of US and British (SAS) personnel would gather around as nightly raids took place against al Qaeda and their insurgent allies.

Sometimes McChrystal would lead the raids himself, his squad of elite undercover combat troops, known as Delta Force, being told at the last minute that the commander was coming along for the ride.

Read moreSacked General Stanley McChrystal created special forces military command centre ‘Death Star’ with ‘Kill TV’, led secret war raids

World’s biggest gold coin sold at auction for £2.68m

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A Spanish precious metals trading company bought the world’s largest gold coin for £2.68 million, its exact material worth, from the estate of an insolvent investment firm at a rare auction in Vienna on Friday.

The 220.5 lb piece, one of only five Canadian $1,000,000 Maple Leaf coins the Royal Canadian Mint has ever produced, was snapped up immediately in a written bid from ORO direct, a gold trading company based in Madrid.

There were no counter offers in an auction room packed with more journalists than potential buyers. It sold for the catalogue sum, the coin’s pure gold value based on Friday’s market price. This was four times its face value.

The auction was ordered by the administrator of Austrian investment group AvW Invest, which filed for insolvency in May after its owner and chief executive was arrested on suspicion of fraud, breach of trust and other charges.

AvW had acquired the coin in 2007, joining an exclusive club of owners including Queen Elizabeth, who is also displayed on one side of the coin, two unidentified investors in Dubai and one who is so reclusive even his or her residence is unknown.

Read moreWorld’s biggest gold coin sold at auction for £2.68m

Niger: People eat leaves and lizards to survive, millions of people are facing starvation

Aid organisations are warning that millions of people are facing starvation from drought and crop failure in the West African country of Niger, and some people are turning to desperate measures to survive.

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Famine hit Niger in 1984 and 2005

If you look up “bo” on the internet, nothing that makes sense comes up. But we were looking at a bo, or rather looking for it.

We were walking along the bank of the Niger river, searching for the tracks of a hippopotamus that was ravaging the corn on Karim’s farm.

All of a sudden, a lizard about the size of a small crocodile hurtled out of the undergrowth and raced up a nearby baobab tree.

“It’s a bo,” everybody cried, racing to the foot of the enormous tree.

Now I had never seen a bo before, so I was interested out of pure curiosity.

The handful of villagers with us had other ideas, though. “The bo is delicious,” explained Karim. “It has the taste and texture of fish, and the inside of it is all white.

“You don’t see them very often. There are not that many about.”

Moustafa, Karim’s head man, was talking excitedly into his mobile phone. “He’s calling the kids from the village,” explained our host.

“He wants them to climb the tree and get the poor creature down.”

It was hardly surprising, I thought, that the bo was scarce. It is rotten luck to be a delicious animal in a land where people are hungry.

Read moreNiger: People eat leaves and lizards to survive, millions of people are facing starvation