Federal Reserve

Government Is Sued Over Seizure of Liberty Dollars

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The federal government’s attempt to stop a group of gold-standard activists from minting an alternative to the greenback is about to face its first legal test.

A dozen people around the country filed suit in U.S. District Court in Idaho this week demanding the return of all the copper, silver, gold, and platinum coins – more than seven tons of metal in all – that the FBI and Secret Service seized in November during raids of a mint in Idaho and a strip mall storefront in Indiana.

The Justice Department had decided that the coins, many of which bear the familiar symbol of Lady Liberty and the phrase “TRUST IN GOD,” were being illegally marketed as government-sanctioned currency, according to the sworn affidavit of an FBI agent.

The creator of the coins, Bernard von NotHaus, who lives in Miami, claims that the federal government is trying to shut down production of his liberty dollars, as the coins are called, because of the competition they pose to the greenback. In recent years, his precious metal coins have outperformed the dollar, whose value has plunged in relation to gold.

The raids in November were the result of a two-year undercover investigation of Mr. Von NotHaus and how he sold liberty dollars. The Justice Department has not followed up with any criminal charges against Mr. Von NotHaus or the regional distributors of his coins.

In the suit filed in Idaho, the various plaintiffs say the federal government has no right to continue holding onto their coins any longer.

While it is common for agents to warehouse property seized during criminal investigations, such as firearms or surveillance equipment, the plaintiffs say coins of precious metal should be off-limits.

The coins “do not constitute contraband or other property subject to seizure,” the legal papers state, adding that the seizures violated the Fourth Amendment rights of the plaintiffs.

Read moreGovernment Is Sued Over Seizure of Liberty Dollars

Dollar Diving

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Dollar to fall to metals in upcoming rallies, rate hikes soon wont be able to fix economic problems, real inflation understated for years, USDX contracts plummet, why arent people fleeing from the stock market… Exchange Traded Funds are a disaster, losses from global write downs, Fed still invited to intervene in spite of failures

The dollar has once again collapsed. Get ready for the next dollar debacle and the coming rally in gold and silver which have just broken out. The elitists have lost all credibility. The would-be lords of the universe have told so many pathological lies that no one “in the know” believes anything emanating from the forked tongues of Buck-Busting, Bear-Bashing, Big-Ben Bernanke and Hanky Panky Paulson. If our Fed Head and Treasury Secretary had been characters in the Walt Disney movie entitled “Pinocchio,” their noses would have quickly grown to lengths that could have been wrapped around the earth’s equator several times. God would have had to reverse the earth’s rotation to extricate them.

Wall Street tells us the odds favor two quarter percent rate hikes to the Fed funds rate by the end of the year. We ask whether that would be before or after the economy collapses? If before, the Fed’s rate hikes will destroy what is left of our economy, and the dollar will collapse, thereby erasing any benefits from the rate hikes. If after, you will see rate cuts instead of rate hikes as the Fed attempts to save the fraudsters on Wall Street who are not even remotely close to recovering from the credit-crunch despite what the elitists might tell you to the contrary. We ask who the morons are that make up these odds, and what planet they come from. They give aliens a bad name. These index predictions are just another form of jaw-boning and disinformation.

As soon as the economy starts its final descent into Davy Jones’ Locker, which is likely to occur in the very near future, the Fed and the US Treasury will unceremoniously toss the so-called “strong dollar” policy into the nearest financial dumpster in order to save the economy and the fraudsters. Accompanying the “strong dollar” policy on its way to the dumpster will be the next round of derivative toxic waste that is on its way courtesy of the upcoming surge in fallout from tanking real estate markets in a process that will see the Fed blow what remains of its general collateral in exchange for such waste. Once the Fed’s general collateral is exhausted, we will be ushered into a new hyperinflationary era characterized by direct monetization of US treasuries to fund our deficits and to absorb more toxic waste as it continues to pour down on elitist financial institutions like Niagara Falls.

A few measly quarter percent cuts will do absolutely nothing to slow the acceleration of inflation, especially if the Fed keeps the M3 at current levels. Only a double-digit Fed funds rate and greatly reduced M3 could have any eventual and meaningful impact on the inflation that is built into the system for at minimum the next year and one half at levels in the area of 15% to 18%, and even then the impact will not be felt until the current baked-in inflation has run its course. Direct monetization of treasuries to replenish Fed collateral and to absorb our growing deficits will put inflation beyond the point of no return, as will the breaking of OPEC dollar pegs.

As you can see, there is no way that any of the proposed diminutive rate hikes will have a positive impact on the economy, on the dollar or on the balance sheets of the fraudsters. Therefore, there will not be any rate hikes. Any increase in the Fed funds rate would be accompanied by an economic catastrophe of epic proportions that would occur as a direct result of the raising of that rate. Any rate hike would take a year to a year and a half to have an impact on inflation. By the time the anticipated Fed rate hikes could have any kind of impact whatsoever, the economy will already be in a state of rampant hyperinflation, and would be well on its way to depression, far too late to save the dollar or the economy. Ergo, the new elitist motto will soon become: “Damn the inflation, full greed ahead!”

Read moreDollar Diving

Morgan Stanley warns of ‘catastrophic event’ as ECB fights Federal Reserve

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Jean-Claude Trichet is taking a hard line on rates

The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe’s exchange rate crisis in the 1990s, a team of bankers has warned.

“We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe,” said a report by Morgan Stanley’s European experts.Morgan Stanley doubts that Europe’s monetary union will break up under pressure, but it warns that corked pressures will have to find release one way or another.

This will most likely occur through property slumps and banking purges in the vulnerable countries of the Club Med region and the euro-satellite states of Eastern Europe.

“The tensions will not disappear into thin air. They will find fault lines on the periphery of Europe. Painful macro adjustments are likely to take place. Pegs to the euro could be questioned,” said the report, written by Eric Chaney, Carlos Caceres, and Pasquale Diana.

The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet – for Europe – if the Fed backs away from expected tightening. “This could trigger another ‘catastrophic’ event,” warned Morgan Stanley.

The markets have priced in two US rates rises later this year following a series of “hawkish” comments by Fed chief Ben Bernanke and other US officials, but this may have been a misjudgment.

An article in the Washington Post by veteran columnist Robert Novak suggested that Mr Bernanke is concerned that runaway oil costs will cause a slump in growth, viewing inflation as the lesser threat. He is irked by the ECB’s talk of further monetary tightening at such a dangerous juncture.


Ben Bernanke is reported to be irked by the ECB’s approach

Read moreMorgan Stanley warns of ‘catastrophic event’ as ECB fights Federal Reserve

RBS issues global stock and credit crash alert

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The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

(Got Gold and Silver? More under “Solution” – The Infinite Unknown)

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

  • RBS alert: Quotes from the report
  • Fund managers react to RBS alert
  • Support for the euro is in doubt

    • RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

    “I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

    “Cash is the key safe haven. (No way!!! Yet it is still good to have some cash. – The Infinite Unknown)
    This is about not losing your money, and not losing your job,” said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

    RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

    “Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” he said.

    US Federal Reserve and the European Central Bank both face a Hobson’s choice as workers start to lose their jobs in earnest and lenders cut off credit.

    The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. “The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation,” he said.

  • Morgan Stanley warns of catastrophe
  • More comment and analysis from the Telegraph

    • “The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.

    Read moreRBS issues global stock and credit crash alert

    Ron Paul: ‘I don’t plan to endorse John McCain’

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    CNN’s Wolf Blitzer talked to Ron Paul about a rally he has planned in the same city as the Republican convention. Paul told Blitzer that his rally would pose a philosophical challenge to the Republican’s convention.

    Paul told Blitzer that he had no intention of supporting John McCain. Paul said, “I don’t plan to endorse John McCain unless he changed his views on the war and was interested in the Federal Reserve and all these other things, which is not likely to happen.”

    This video is from CNN’s Situation Room, broadcast June 16, 2008.

    Source: The Raw Story

    Emerging markets face inflation meltdown

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    Downward spiral: Chinese stocks have slumped by almost 50pc since October while Mumbai’s BSE index has lost 27pc of its value

    Central banks across much of Asia, Latin America, and Eastern Europe will soon have to jam on the breaks or risk a serious crisis as inflation spirals into the danger zone. As the stark reality becomes ever clearer, this year’s correction in emerging market bourses and bond markets has now accelerted into a full-fledged rout.

    Shanghai’s composite index touched a fourteen-month low of 2,900 yesterday. It follows moves this week by the central bank raised reserve requirement yet again, draining a further $60bn from the banking system. Chinese stocks have now slumped by almost 50pc since peaking in October.

    In India, Mumbai’s BSE index has lost 27pc of its value as the exodus of foreign funds accelerates. The central bank has raised rates to 8pc to curb inflation and halt a run on the rupee, but critics still say the country waited too long to tackle overheating. The current account deficit has shot up to near 3.5pc of GDP. A plethora of subsidies has pushed the budget deficit to 9pc of GDP.

    Russia, Brazil, India, Vietnam, South Africa, Indonesia, Nigeria, and Chile – among others – have all had to raise interest rates or tighten monetary policy in recent days. Most are still behind the curve.

    “The inflation genie is out of the bottle: easy money is the culprit,” said Joachim Fels, chief economist at Morgan Stanley.

    “Weighted global interest rates are 4.3pc, while global inflation is above 5pc. The real policy rate in the world is negative,” he said
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    The currencies of Korea, Thailand, the Philippines, and Malaysia have come under pressure this week as investors scramble for dollars in moves that echo the East Asia crisis in 1997-1998. Several countries have had to intervene to slow the currency slide.

    The sudden shift in sentiment appears to follow comments by Ben Bernanke and Tim Geithner, the heads of the US Federal Reserve and the New York Fed, leaving no doubt that Washington has lost patience with the crumbling dollar.

    It is almost unprecedented for Fed officials to take a public stand on the Greenback. The orchestrated move is clearly aimed at halting the vicious circle in the oil markets, where crude prices are feeding off dollar weakness – with multiples of leverage.

    The “strong dollar” campaign has switched into high gear. US Treasury Secretary Hank Paulson has conducted an aggressive lobbying drive behind the scenes in the Middle East and Asia. America’s friends and foes have been left in no doubt that the enormous strategic might of the United States is now firmly behind the currency. From now on, they cross Washington at their peril.

    The markets are now pricing in two rate rises by the Fed this year. Investors no longer doubt that the US – and Europe – will do what is needed to restore credibility. This display of resolve has suddenly switched the focus to the very different universe of emerging markets, where a host of countries have repeated the errors of the 1970s.

    Richard Cookson, a strategist at HSBC, advises clients to slash their holdings in these regions.

    “Inflation looks like a very real problem in Asia, and the risk is that investors will lose faith in the region’s currencies. Although markets have fallen savagely from their peaks, they’re still looking pricey. We’ re lopping exposure even further, to zero,” he said.

    “Where to put the money? We think corporate debt is stunningly cheap compared with equities. Seven-year to ten-year ‘BBB’ [rated] corporate bonds in the US haven’t been this cheap since the Autumn of 2002,” he said.

    “Until and unless policy makers in the emerging world – especially those in China – tighten policy dramatically, the inflation rates are unlikely to fall much. Our guess is that most don’t have much will to tighten pre-emptively,” he said.

    Russia’s inflation is 15.1pc, yet interest rates are 10.75pc. Vietnam’s inflation is 25pc; rates are 12pc. Fitch Ratings has put the country on negative watch and warns of brewing trouble in the Ukraine, Kazakhstan, the Balkans, and the Baltic states. The long-held assumption that emerging markets are strong enough to shrug off US troubles is now facing a serious test. The World Bank has slashed its global growth forecast to 2.7pc this year. The IMF and the World Bank define growth below 3pc a “global recession”.

    There is a dawning realization that China is facing a major storm as inflation (7.7pc), the rising yuan (up 5pc this year), soaring oil prices, and an economic downturn in the key export markets of North America and Europe all combine to crush profit margins. China uses five times as much energy as the US to produce a unit of GDP. It is acutely vulnerable to the energy crisis.

    A quarter of the 800 shoe factories in the Guangdong region have shut down in recent months, and several thousand textile workshops are battling to stay afloat. Hong Kong’s industry federation has warned that 10,000 firms operating in the South of China may soon go out of business.

    By Ambrose Evans-Pritchard
    Last Updated: 13/06/2008

    Source: Telegraph

    In Debate Over Permanent Bases In Iraq, U.S. Seeks Authorization For War In Iran

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    The ongoing negotiations between Iraqi leaders and the Bush administration over the future role of the military occupation “have turned into an increasingly acrimonious public debate.”

    The Bush administration’s demand for 58 permanent bases in Iraq – a near doubling of the current 30 bases – are causing Iraqis to warn that the status of forces agreement would be “more abominable than the occupation.” The administration is reportedly holding hostage “some $50bn of Iraq’s money in the Federal Reserve Bank of New York to pressure the Iraqi government into signing an agreement.”

    The reason the White House is so hell-bent on signing a long-term agreement may have less to do with Iraq and more to do with Iran. According to press reports of the ongoing negotiations, the Bush administration is seeking the “power to determine if a hostile act from another country is aggression against Iraq.” Ali al Adeeb, a leading member of Prime Minister Nouri al-Maliki’s Dawa party, confirmed:

    The Americans insist so far that is they who define what is an aggression on Iraq and what is democracy inside Iraq…if we come under aggression we should define it and ask for help.

    The administration’s request would seemingly allow the U.S. to brand Iran as an enemy of Iraq and attack Iran in the name of defending Iraq pursuant to a legal obligation under the status of forces agreement.

    Other details from press accounts confirm that the Bush administration has one eye on Iran in the course of its negotiations with Iraqis. The Washington Post explains that the administration is seeking “the prerogative for U.S. forces to conduct operations without approval from the Iraqi government.” Moreover, the U.S. wants control over Iraq’s airpsace:

    The American negotiators also called for continued control over Iraqi airspace and the right to refuel planes in the air, according to [Sami al-Askari, a leading Shiite politician], positions he said added to concerns that the United States was preparing to use Iraq as a base to attack Iran.

    Since the administration is unlikely to get an Iran war authorized through Congress, it’s instead trying to sneak it through the Iraqi parliament.

    By Faiz on Jun 11th, 2008

    Source: Think Progress

    Fed Claims They Will Get Tough Against Inflation

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    Maybe even tougher than lowering the interest rates, creating money out of thin air, destroying the Dollar and stop publishing the monthly report on M3 because of skyrocketing Inflation! – The Infinite Unknown
    ____________________________________________________________________________________________

    Top Federal Reserve officials on Tuesday hammered home the U.S. central bank’s determination not to allow inflation to get out of control, cementing views that interest rates will rise later this year.

    The remarks by two regional Fed presidents followed hard-line comments on Monday from Fed Chairman Ben Bernanke that the U.S. central bank would “strongly resist” any deterioration in inflation expectations. Analysts and markets viewed the comments as a sign the Fed — like other central banks — was turning its sights on inflation.
    (It’s sometimes very enlightening to have a closer look at ones own creations. – The Infinite Unknown)

    Dallas Federal Reserve Bank President Richard Fisher, who solidified a reputation as one of the most hawkish members on the Fed’s interest rate-setting Federal Open Market Committee with three dissents against steep rate cuts, echoed Bernanke.

    “We want to make sure the message is clear … that we will not countenance building inflationary expectations,” he told the Council on Foreign Relations in New York.

    Read moreFed Claims They Will Get Tough Against Inflation

    Bilderberg Seeks Bank Centralization Agenda

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    “Jim Tucker from the American Free Press speaking on the Alex Jones show today stated that one of his Bilderberg sources revealed to him that the global elite are planning to push forward their cashless society grid agenda with the use of implantable microchips. The implantable microchips would be sold as a way for people to easily move through the militarized control grid that they’ve setup via the bogus terror war.”
    _________________________________________________________________________________________

    Fresh off of the 2008 Bilderberg Meeting, it looks as if New York Federal Reserve president Timothy Geithner is set to push a new agenda in the world of central banking that was likely decided upon at Bilderberg. Geithner yesterday, wrote an article in the Financial Times calling for a global regulatory banking framework.

    In addition, Geithner called for the Federal Reserve to have an instrumental role in this new framework. Geithner cites all of the problems that were actually created by the central bankers in the first place as the rationale for having greater centralized power. It is interesting Geithner decides to write this piece right after the Bilderberg Meeting where some of the most powerful figures in the world of central banking attended.

    Not only did Geithner attend, but the attendee list included Ben Bernanke the Federal Reserve Chairman, Henry Paulson the U.S. Treasury Secretary, Jean-Claude Trichet the president of the European Central Bank, Robert Zoellick the president of the World Bank and other high profile bankers.

    With the who’s who of central banking attending the Bilderberg Meeting, it is highly unlikely that what Geithner is proposing in his Financial Times article was not discussed at the Bilderberg Meeting. It is no secret that the true objective of the Bilderberg Meeting is to steer the world into accepting a global government.

    By establishing a new global regulatory banking framework, this will inch the planet ever closer to a one world currency operating in a cashless society where microchips are used to facilitate transactions. Make no mistake about it, this system will not be good, because it will be controlled by a bunch of criminal psychopaths like the one’s who attended the 2008 Bilderberg Meeting.

    In his Financial Times article, Geithner wrote the following:

    Read moreBilderberg Seeks Bank Centralization Agenda

    Credit crisis expands, hitting all kinds of consumer loans

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    WASHINGTON – The credit crisis triggered by bad home loans is spreading to other areas, forcing banks to tighten credit and probably extending the credit crisis that’s dragging down the economy well into next year, and perhaps beyond.

    That means consumers are going to have an increasingly difficult time getting bank loans for car purchases, credit cards, home equity credit lines, student loans and even commercial real estate, experts say.

    When financial analyst Meredith Whitney wrote in a report last October that the nation’s largest bank, Citigroup, lacked sufficient capital for the risks it had assumed, she was considered a heretic.

    However, Whitney was proved correct: Citigroup pushed out its CEO, sought foreign investors and slashed its dividend. Her comments now carry added weight on Wall Street, and she has a new warning for ordinary Americans: The crisis in credit markets is far from over, and it increasingly will affect consumers.

    “In fact, we believe that what lies ahead will be worse than what is behind us,” Whitney and colleagues at Oppenheimer & Co. wrote in a lengthy report last month about threats faced by big national banks, including Bank of America, Wachovia and others.

    The warning is scary considering what’s already behind us in the credit crisis – the resignation or firing since last August of CEOs at almost every large commercial or investment bank; the Federal Reserve lowering its benchmark lending rate by 3.25 percentage points; a Fed-brokered deal to sell investment bank Bear Stearns; and weekly auctions of short-term loans from the Fed worth billions of dollars to keep credit markets functioning.

    (Got Gold and Silver? – The Infinite Unknown)

    Read moreCredit crisis expands, hitting all kinds of consumer loans

    Gold

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    Realated articles (Gold, Silver, M3):
    – Buying Opportunity For Gold And Silver
    – Fed’s Direct Loans to Banks Climb to Record Level
    – How Low Can The Dollar Go? Zero Value

    What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.

    Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times. You can put a list of mining stocks on the wall, throw a dart at them, invest in the holes and make a lot of money, in effect creating your personal mutual fund. When the wind blows, even the turkeys fly. Of course you can make lot more money picking the sheep from the goats, and that is what the Ruff Times is for, separating the biggest winners from the holes in the ground surrounded by liars.

    A word of caution: all my words of advice are for the long term only. In the short term, gold and silver can do anything, go anywhere. In the last bull market of the ‘70s-‘80s gold went from $120 to $850, but there were discouraging retreats of as much as 30% several times along the way. It was attacked by speculators, central banks, and even Uncle Sam through Jimmy Carter. But gold and silver prevailed, even though chickens bailed out from time to time. I was new to the advice business back then, and even I got scared out once for a little while.

    Actually, this is “déjà vu all over again,” as said the master of malapropism, Yogi Berra. It’s an eerie repeat of the 1970s, only more so. All the same factors that drove that historic 1970s bull market are back, only a lot more so; an explosion of money creation by the Federal Reserve that is so great they have even stopped publishing a monthly report on M-3, the most trustworthy measure of changes in the money supply. I guess they no longer know, or don’t want you to know, the embarrassing numbers.

    Actually, it’s worse than that. Did you know that the phrase “printing press” no longer means much when it comes to money? Actually, less than five percent of the money is actually minted, printed or coined! The rest of it is in cyberspace, created at the Federal Reserve, or by commercial banks. The amount is beyond comprehension. This process is called “monetary inflation,” and that is what ultimately drives price inflation and drives gold and silver. The more money is created, the higher go the precious metals.

    Read moreGold

    U.S. Media Blackout On Bilderberg 2008

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    The 2008 Bilderberg Meeting is now in full swing at the Westfields Marriott in Chantilly, Virginia, USA but you wouldn’t know it from the media blackout of this event by virtually all mainstream media outlets in the United States. Each year, Bilderberg hosts some of the most powerful people in North America and Europe where these individuals set and shape policies for the world. The 2008 Bilderberg Meeting is slated to run from June 5th through June 8th. Since 1954, Bilderberg has met in secrecy primarily thanks to the intentional lack of media attention paid to it. One would think that an event where over 100 of the most high profile and powerful people from North America and Europe are meeting would receive a great deal of mainstream media attention, but there is virtually none. As a result of the media blackout, only independent journalists and alternative researchers have been covering this event on a year to year basis. Due to a greater amount of attention being paid to this event, a press release on the Bilderberg Meeting was issued from a group that identified themselves as the American Friends of Bilderberg. The press release provides spin on how wonderful Bilderberg is and even provides a contact number that can be used to obtain a list of attendees. The Logan Act states that it is illegal for those holding public office in the United States to attend secret meetings like Bilderberg where policy is set. Regardless, that has not stopped people like Rick Perry from attending the 2007 Bilderberg Meeting as the sitting Texas governor. Jim Tucker, who has covered the Bilderberg meeting for over 30 years, has accurately made future predictions based upon information he has received from moles within Bilderberg. There is no doubt that policy is set at this meeting and quite frankly if you think that some of the most powerful people in the world are getting together just for laughs, you are sorely mistaken.

    Below is taken directly from the press release on the Bilderberg Meeting issued by the American Friends of Bilderberg which provides positive spin for the Bilderberg Meeting.

    Read moreU.S. Media Blackout On Bilderberg 2008

    Bilderberg meeting attracts prominent politicians, businessmen

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    The 56th Bilderberg Meeting, an annual conference of influential politicians and businessmen, began Thursday in Chantilly, Virgina, according to a press release from the organization.

    The Conference will end Sunday and deals mainly with a nuclear free world, cyber terrorism, Africa, Russia, finance, protectionism, US-EU relations, Afghanistan and Pakistan, Islam and Iran.

    According to the press release, the meeting is private in order to encourage frank and open discussion.

    About 140 participants will attend, of whom about two-thirds come from Europe and the balance from North America. About one-third is from government and politics, and two-thirds are from finance, industry, labor, education and communications.

    An official list of the attendees can be found at Alex Jones’ Infowars.

    Although it is an international forum, many prominent American officials and politicians attend the conference, including Secretary of State Condoleeza Rice, Chairman of the Federal Reserve Ben Bernanke and Paul Wolfowitz.

    James Johnson, the man tasked with selecting Barack Obama’s running mate, is also on the list to attend the conference.

    InfoWars also reported that Senator Barack Obama’s office has refused to deny that the Democratic nominee attended Bilderberg last night following reports that he and Hillary Clinton were present at “an event in Northern Virginia.”

    Read moreBilderberg meeting attracts prominent politicians, businessmen

    Oil hits new high as Israel calls strike on Iran ‘unavoidable’

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    Oil prices leaped to record highs yesterday as Israel warned about Iranian nuclear sites and the dollar slumped on the biggest jump in American unemployment for 22 years.

    The global crude price ended a run of lower prices earlier this week as it jumped by more than $9 a barrel to $136.79 (£69.44) – it has risen by over $14, or 10%, in just two days. The week before last saw an all-time high of $135.09 a barrel but, by Wednesday this week, prices had receded to as low as $122.

    Already jittery oil markets were sent into spasms by remarks from Israel’s transport minister that an attack on Iranian nuclear sites looked “unavoidable”. Iran is a big Opec oil producer and any attack on the country would threaten oil supplies from the whole region.

    Prices were also boosted by a prediction from investment bank Morgan Stanley that crude prices might reach $150 by July 4.

    Earlier in the day the dollar – in which oil is priced – had fallen against the euro partly on speculation that the European Central Bank might consider raising interest rates to curb inflation.

    But subsequently markets were rocked by a monthly report from the US showing that unemployment suffered its biggest monthly rise since February 1986.

    Shares on Wall Street dived after the US unemployment rate unexpectedly??? jumped to 5.5%, intensifying fears that the world’s biggest economy is sliding into recession.

    The Dow Jones industrial average lost nearly 300 points, or 2.2%, to around 12,320. In London the FTSE 100 closed the week down 1.5%, or 88 points, at 5,906.

    Read moreOil hits new high as Israel calls strike on Iran ‘unavoidable’

    The Derivatives Market is Unwinding!

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    Worldwide, it is $596 TRILLION dollars *. The derivatives market dwarfs the real market for goods and services, and acts likes an unregulated black market.
    _________________________________________________________________________________________

    A couple of months ago, a financial analyst who sells derivatives told me that fears about a meltdown in the derivatives market were unfounded.
    Yesterday, he told me – with a very worried look – “THE DERIVATIVES MARKET IS UNWINDING!”

    What does this mean? What are derivatives and why should you care if the market is unwinding?

    Well, it turns out that the reason that Bear Stearns was about to go belly-up before JP Morgan bought it is that it had held trillions of dollars in derivatives, which were about to go south. (The reason that JP Morgan was so eager to buy Bear Stearns is that it was on the other side of these derivative contracts — if Bear Stearns had gone under, JP Morgan would have taken a huge hit. But the way the derivative agreements were drafted, a purchase by JP Morgan canceled the derivative contracts, so that JP Morgan didn’t experience huge losses. That is probably why the Fed was so eager to broker – and fund – the shotgun marriage. JP Morgan is a much larger player, and if Bear’s failure had caused the derivatives hit to JP Morgan, it probably would have rippled out to the whole financial system and potentially caused an instant depression).

    In addition, the subprime prime loan crisis is intimately connected to the unwinding of the derivatives market. Specifically, loans were repackaged into derivatives called collateralized debt obligations (or “CDO’s”) and sold to both big and regional banks and investment companies worldwide. The CDO’s were highly-leveraged — many times the amount of the actual loans. When the subprime loan crisis hit, the high leverage magnified the fallout, and huge sums of CDO derivatives became essentially worthless.

    Do you remember when wealthy Orange County, California, went bankrupt in 1994? Yup, that was because it had invested in bad derivatives.

    And, according to a recent article by one of the world’s top derivative insiders, the market for credit default swap (“CDS”) derivatives is also unraveling.

    And reported just today, Lehman Brothers is now on the edge, due to exposure to derivatives.

    Derivatives are the Elephant in the Living Room

    The subprime mortgage crisis is bad, and is hurting many people, and slowing the economy. High oil and food prices are bad, and are hurting many people, and bringing down the economy. But — according to top insiders — derivatives are the elephant in the room . . . the single largest threat to the U.S. and world economy.

    One reason is that, according to Paul Volcker, the former chairman of the Federal Reserve, the entire modern financial system is based upon derivatives, and the financial system today is entirely different from the traditional American or global financial system because derivatives – a relatively new concept – now underly the entire fabric of the financial system. In short, many of the people who know the most about derivatives say that the current system is a house of cards built upon derivatives.

    Moreover, as mentioned above, the subprime and derivatives crises are closely linked. Similarly, Britian’s New Statesman newspaper links derivatives and rising food and commodity prices:

    Read moreThe Derivatives Market is Unwinding!

    Fed Attentive To Sagging Dollar?

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    Federal Reserve chairman Ben Bernanke, in unusually sharp comments on foreign exchange, said Tuesday the central bank is “attentive” to the sagging dollar because of its potential impact on inflation.

    Bernanke, speaking via satellite to a monetary conference in Barcelona, Spain, offered a mixed assessment of US economic conditions, while highlighting concerns about inflation and the dollar.

    His comments on currency marked a first for Bernanke, who normally defers to the Treasury on such matters.

    “The challenges that out economy has faced over the past year or so have generated some downward pressure on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation,” he said, according to the text of the remarks released in Washington.

    “We are attentive to the implications of the changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of an erosion in longer-term inflation expectations.”

    The Fed’s dual mandate is to maintain price stability and promote maximum employment in the US economy.

    Bernanke maintained that “the Federal Reserve’s commitment to both price stability and maximum sustainable employment … will be key factors ensuring that the dollar remains a strong and stable currency.”

    The greenback strengthened after the comments, with the euro falling to 1.5449 dollars from 1.5540 in New York late on Monday.

    Bernanke noted that “in collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets.”

    “This is a major shift for the Federal Reserve towards the US dollar as chairman Bernanke specifically mentions the importance of the currency for the Federal Reserve,” said Andrew Busch at BMO Capital Markets.

    “This should mean the (Fed) is concerned about the lower value of the currency on inflation and thus the likely reluctance of the interest rate setting body to lower interest rates further. And perhaps signals that rates are poised to be raised in the future due to inflation.”

    Read moreFed Attentive To Sagging Dollar?

    Fed auctions $75 billion to banks to ease credit stresses

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    Fed auctions $75 billion to banks to ease credit woes, total is $435 billion since December

    WASHINGTON (AP) — Battling to relieve stressed credit markets, the Federal Reserve said Tuesday it has provided a total of $435 billion in short-term loans to squeezed banks since December to help them overcome credit problems.

    The central bank announced the results of its most recent auction — $75 billion in short-term loans — the 11th such auction since the program started in December.

    It’s part of an ongoing effort by the Fed to help ease the credit crunch, which erupted last August, intensified in December and January and took another turn for the worst in March.

    The housing, credit and financial crises have weakened the economy and threaten to push it into recession.

    In the latest auction, commercial banks paid an interest rate of 2.220 percent for the loans.

    There were 71 bidders for the slice of the $75 billion in 28-day loans. The Fed received bids for $96.62 billion worth of the loans. The auction was conducted on Monday with the results released Tuesday.

    In mid-December the Fed announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crisis has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses.

    Read moreFed auctions $75 billion to banks to ease credit stresses

    Don’t Be Afraid Buy Gold

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    As the price of gold has taken some lumps since it crashed into the symbolically significant $1,000 per ounce mark back in March, those on Wall Street who had consistently underplayed its potential on its way up are now assuring its continued retreat. According to these gold market spectators, prices have risen solely as a result of financial panic, and now that the fear has apparently subsided, gold’s gains will evaporate as well.

    I have been buying gold and gold stocks for myself and my clients since 1999 and not once did I buy out of fear. In fact, from my perspective the only fear I’ve observed in the gold market is from those who have been too afraid to buy.

    While fear may from time to time play a role in creating price spikes in gold, the underlying bull market has been driven by solid fundamentals. Those who have been too afraid to buy simply do not understand the underlying dynamics and have instead decided that the market is irrational. As a result, gold continues to climb the classic wall of worry as any dip in its otherwise upward trajectory causes the speculative investors to jump ship.

    Read moreDon’t Be Afraid Buy Gold

    Wall Street May Get Permanent Access to Fed Loans

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    May 30 (Bloomberg) — Federal Reserve Board Vice Chairman Donald Kohn raised the possibility of giving Wall Street securities firms permanent access to loans from the central bank, as long as regulators tighten oversight of the companies.

    Kohn also advocated continuing Fed auctions of funds to commercial banks and loans of Treasuries to Wall Street dealers even after markets stabilize. Such channels would stay open “either on a standby basis or operating at a very low level,” he said in a speech in New York yesterday.

    The remarks go beyond Fed Chairman Ben S. Bernanke, who has indicated the central bank would shut lending to investment banks when the credit crisis passes. Lawmakers and regulators are debating how to approach the supervision of investment banks in the aftermath of the Fed’s rescue of Bear Stearns Cos. in March.

    “If you are a bondholder in one of these Wall Street firms, you know you have a big `Sugar Daddy’ now called the Federal Reserve that’s going to back you up,” said Jeff Pantages, chief investment officer of Alaska Permanent Capital Management in Anchorage, which oversees $1.8 billion in assets.

    “But if you are a stockholder this kind of worries you” because investment banks “will be more highly regulated and won’t be able to use leverage as much as” before, he said.

    Kohn said he hasn’t decided whether securities firms should continue to gain access to loans from the central bank.

    More Extensive

    “The more extensive the access, the greater the degree to which market discipline will be loosened and prudential regulation will need to be tightened,” Kohn said in his speech to a conference hosted by the New York Fed. “Unquestionably, regulation needs to respond to what we have learned about the importance of primary dealers and their vulnerabilities to liquidity pressures.”

    Read moreWall Street May Get Permanent Access to Fed Loans

    US banks likely to fail as bad loans soar

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    US banks set aside a record $37.1bn to cover losses on real estate loans and other credits during the first quarter in a sign of the growing economic pain being caused by the global credit crisis, regulators said on Thursday.

    Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, said it was likely loan-loss provisions and bank failures would rise in coming quarters as the fallout from market turmoil hits the real economy.

    “While we may be past the worst of the turmoil in financial markets, we’re still in the early stages of the traditional credit crisis you typically see during an economic downturn,” she said, adding: “What we really need to focus on is the uncertainty surrounding the economy . . . and again it is all about housing.”

    Ms Bair spoke as the FDIC released its quarterly banking profile, which showed loan-loss provisions in the first quarter were more than four times higher than last year’s level. That was the main reason bank earnings fell 46 per cent to $19.3bn from the first quarter in 2007 for the commercial banks and savings institutions where the FDIC insures customer deposits.

    Following restatements by banks, the FDIC revised the industry’s net income for the fourth quarter of last year from $5.8bn to $646m – the lowest since the end of 1990.

    Meanwhile, the FDIC said the number of “problem” banks rose in the first quarter from 76 to 90, with combined assets of $26.3bn. Three US banks have failed this year, compared with three for the whole of last year and none in 2005 and 2006.

    Ms Bair said she expected more bank failures but emphasised that the number of problem institutions remained well below the record levels of the savings and loan crisis of the 1980s and 1990s – when one in 10 banks were in that category.

    However, she said one worrying trend was the declining “coverage ratio”, which compares bank reserves with the level of loans that are 90 days past due. This ratio fell for the eighth consecutive quarter, to 89 cents in reserves for every $1 of noncurrent loans, the lowest level since the first quarter of 1993.

    “This is the kind of thing that gives regulators heartburn,” said Ms Bair. “We also want them to beef up their capital cushions beyond regulatory minimums given uncertainty about the housing markets and the economy . . . It’s only prudent to be building up capital at a time like this.”

    In a sign that some US banks may have underestimated the cost of the housing slump, KeyCorp this week doubled its forecast for loan losses – its second revision in as many months – sending its share price tumbling by more than 10 per cent. During the property boom, KeyCorp expanded in fast-growing regions such as southern California and Florida, where problem loans are now growing.

    By Joanna Chung and Saskia Scholtes in New York
    Published: May 29 2008 20:43 | Last updated: May 29 2008 20:43

    Source: Financial Times

    US and European debt markets flash new warning signals

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    The debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.

    The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe are back near record levels.

    Credit default swaps (CDS) on Lehman debt have risen from around 130 in late April to 247, while Merrill debt has spiked to 196. Most analysts had thought the coast was clear for such broker dealers after the US Federal Reserve invoked an emergency clause in March to let them borrow directly from its lending window.

    But there are now concerns that the Fed itself may be exhausting its $800bn (£399bn) stock of assets. It has swapped almost $300bn of 10-year Treasuries for questionable mortgage debt, and provided Term Auction Credit of $130bn.

    “The steep rise in swap spreads this week is ominous,” said John Hussman, head of the Hussman Funds. “The deterioration is in stark contrast to what investors have come to hope since March.”

    Lehman Brothers took writedowns of just $200m on its $6.5bn portfolio of sub-prime debt in the first quarter even though a quarter of the securities had “junk” ratings, typically worth a fraction of face value.

    Willem Sels, a credit analyst at Dresdner Kleinwort, said the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans. “We believe we’re entering Phase II. The liquidity crisis has eased a little, but the real credit losses are accelerating. The worst is yet to come,” he said.

    Read moreUS and European debt markets flash new warning signals

    Weimar Inflation in America

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    “Instead, take those steps necessary to protect yourself and your family to prepare for the dollar’s inflationary collapse. Buy gold. Buy silver. Avoid the US dollar.” – James Turk
    ___________________________________________________________________________________________

    Probably almost everyone is familiar with the hyperinflationary episode that engulfed Germany after the First World War. That nation’s economy was crippled by monetary problems that resulted in dreadful personal hardships, even though up to that time Germany had achieved one of the highest living standards in the world.

    The newly formed German government, named for the city where their constitution was drafted after the Kaiser’s abdication in 1918, kept pumping up the money supply. The process started relatively slowly, but quickly the pace of money creation accelerated.

    The Weimar government was paying its bills on credit – just like Zimbabwe is now doing. The Weimar government was issuing currency in exchange for valuable goods and services that it was receiving, and the vendors of those goods and services accepted the newly issued currency in the expectation that they would be able to exchange it for goods and services of like value. However, they soon realized that they were deluding themselves. Prices were rising rapidly, with the consequence that a flight from the currency into commodities and other tangibles began.

    There was no discipline on the creation of new currency, with the result that it was being issued to excess. Within a few short years, the German government eventually destroyed the Reichsmark, the currency it had been issuing, making the words Weimar Germany synonymous with hyperinflation, economic collapse, deprivation and personal hardship. All the wealth saved in Reichsmarks was wiped out.

    For example, in his classic book, “Paper Money”, penned three decades ago under the pen name of Adam Smith, George J.W. Goodman recounts the story of Walter Levy, an internationally known German-born oil consultant in New York. Levy told him: “My father was a lawyer, and he had taken out an insurance policy in 1903. Every month he had made the payments faithfully. It was a 20-year policy, and when it came due, he cashed it in and bought a single loaf of bread.”

    The following photo is from an insightful book by Bernd Widdig entitled “Culture and Inflation in Weimar Germany”. This photo shows one way in which people coped with rising prices.

    As the inflation worsened, people sold whatever they could to survive. Widdig succinctly describes it in the caption to the above photo as follows: “The impoverished middle class has to sell its cherished possessions.”He should have correctly stated though that it was the “newly impoverished middle class”. They only became destitute after the inflation had destroyed their savings and ability to maintain their standard of living.

    Sadly, the problems of Weimar Germany are now appearing in the US. To survive the impact of rising prices, Americans today – like Germans did eight decades ago – are selling cherished possessions, as explained in a recent story by Associated Press entitled “Americans unload prized belongings to make ends meet”. The full article is available at the following link: http://abcnews.go.com/Business/Economy/story?id=4750846&page=1

    Read moreWeimar Inflation in America

    Congress Is Clueless On The Oil Issue

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    Related video: The Energy Non-Crisis by Lindsay Williams

    The U.S. Congress continues to show an incredible amount of ignorance on the oil issue. This week, the U.S. Senate held a hearing on the high price of oil and called out a group of oil company executives to testify. In addition, the U.S. House of Representatives approved a bill to sue OPEC over the high oil price. All of this grandstanding by our so called elected officials is going to do nothing to resolve the high oil price. This is a case of the U.S. Congress misdirecting the blame of the high oil price on OPEC and the major oil companies when they are really only minor players in this game. Threatening to sue OPEC is an incredibly stupid move because that could very well have the reverse effect and cause OPEC to respond to this threat by reducing the amount of oil they decide to pump. The two major reasons for the high oil price involve the Federal Reserve devaluing the U.S. Dollar through their monetary policies as well as the U.S. occupation of Iraq and Afghanistan. On top of this, it is clear that the Bush administration is looking for any excuse possible to bomb Iran. Israeli Prime Minister Ehud Olmert has even stated that a naval blockade of Iran is an option that should be put out on the table. With the devaluation of the U.S. Dollar and a potential expansion of war in an area where a tremendous amount of oil is drilled, it is no wonder why the oil price has skyrocketed as high as $135 a barrel. This makes the actions of the U.S. Congress entirely insane and intellectually bankrupt. Expect oil prices in the long term to move much higher.

    Since oil is priced in U.S. Dollar denominated terms and the monetary unit of the U.S. Dollar continues to be devalued by the Federal Reserve’s ability to create as many U.S. Dollars as they like, it isn’t a real mystery as to why the oil price is so high. Instead of suing OPEC, the U.S. House of Representatives should be suing the Federal Reserve for fraud. The Coin Act of 1792 states that U.S. Mint employees who are caught debasing the nation’s coinage would be subject to the penalty of death. The Federal Reserve is engaging in the intentional debasement of the nation’s currency which is fundamentally no different and in fact worse than employees of the U.S. Mint debasing the nation’s coinage. Instead of debasing the physical coinage, bankers can simply type digits into a computer to devalue the nation’s currency. Maybe the death penalty should be explored for some of the central bankers that have engaged in these practices.

    The U.S. Congress is also helping to contribute to the high oil price with their ridiculous policies. They have funded the illegal and unconstitutional occupation of Iraq and Afghanistan since 2003. The U.S. Senate just passed another war funding bill which will give the executive branch another $165 Billion to continue military operations in Iraq and Afghanistan. By continuing the military occupation of these countries it makes an attack on Iran all the more likely and contributes to greater uncertainty in the oil producing region.

    General David Patreaus the current commander in Iraq is on the path to being confirmed as the new CENTCOM commander which means he will be in charge of all U.S. military operations in the Middle East. Assuming he gets confirmed, the chances of a strike on Iran will be all the more likely. Admiral William Fallon the former CENTCOM commander resigned from the position due to the perception that he was refusing to play ball with the Bush administration’s agenda on Iran.

    Read moreCongress Is Clueless On The Oil Issue

    How to Profit from the Coming Economic Collapse

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    Peter Schiff is the author of the book: Crash Proof: How to Profit From the Coming Economic Collapse

    Source: You Tube

    (Preparedness is everything! Have a closer look at the World Situation and the Solution.
    – The Infinite Unknown)