Gold ends at six-month high on safe-haven buying

Holdings in the largest gold ETF have leaped 8% in one month to record high

By Moming Zhou, MarketWatch

Last update: 2:32 p.m. EST Jan. 30, 2009

NEW YORK (MarketWatch) -- Gold futures rose Friday, ending the week at their highest level in six months as investors sought the safety of the metal following government data that showed the U.S. economy contracted the most in 27 years during the fourth quarter.

Rising demand for the metal has pushed holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, to a new record level.

Gold for February delivery closed up $22.20, or 2.4%, at $927.30 an ounce on the Comex division of the New York Mercantile Exchange, the loftiest closing level for a front-month contract since July.

The benchmark contract has risen 3.5% this week and 4.9% this month.

"Demand remains very high internationally for ETFs, gold certificates and bullion coins and bars," said Mark O'Byrne, executive director at Gold and Silver Investments. We've seen "continuing safe haven demand for gold" due to "sharp deterioration in the global economy."

Spurring the safe-haven moves into gold, the government reported that the nation's gross domestic product contracted at a 3.8% annualized rate in the fourth quarter. That shrinkage is the largest on record since the first quarter of 1982.

Most economists expected that GDP would shrink at a 5.5% annual rate.

However, the decline would have been worse except that the government counts an unwanted buildup of goods on store shelves as growth. Excluding the inventory buildup, GDP contracted at a 5.1% pace. See Economic Report on GDP data.

In spot trading, the London afternoon gold-fixing price -- a benchmark for gold traded directly between big institutions -- stood at $919.50 an ounce Friday, up $27.25 from the previous day.

SPDR holdings

On Thursday alone, holdings in the SPDR gold fund rose 10.49 tons, or 1.3%, to reach the new high of 843.59 tons, according to latest data from the fund. SPDR gold holdings have jumped 63 tons, or 8%, in January.

The fund's gold holdings are now nearly 80 tons higher than official gold holdings in Japan, the world's seventh-largest official gold holder.

The SPDR Gold Trust .

In other economic news, U.S. employment costs rose at the slowest pace in at least 26 years in 2008, the Labor Department reported, a sign that rising unemployment has been keeping a lid on wages and benefits. See Economic Report on unemployment.

Also on the Nymex Friday, March copper rose 0.8% to $1.4685 a pound, while March silver rose 3.5% to $12.565 an ounce. March palladium gained 1.3% to $193.30 an ounce, while April platinum gained 1.7% to $991.30 an ounce.

Among gold miners, shares of Barrick Gold Corp. , the world's largest gold mining company, fell 1.8% to $37.88. Goldcorp Inc. gained 0.8% to $29.73, and South Africa's Gold Fields Ltd. lost 0.8% to $10.56.

In other equities, the Amex Gold Bugs Index , which tracks the share prices of major gold companies, rose 2.4% to 309.15.

The iShares Gold Trust ETF added 1.8% to $91.18, while the iShares Silver Trust ETF gained 1.5% to $12.44.

The Market Vectors-Gold Miners ETF rose 2% to $35.10.

Moming Zhou is a MarketWatch reporter based in New York.

3 More Banks Fail Today

Per the FDIC website:

Ocala National Bank, Ocala, FL
Suburban Federal Savings Bank, Crofton, MD
MagnetBank, Salt Lake City, UT

Zimbabwe abandons its currency

Zimbabwe abandons its currency

Zimbabweans will be allowed to conduct business in other currencies, alongside the Zimbabwe dollar, in an effort to stem the country's runaway inflation.

The announcement was made by acting Finance Minister Patrick Chinamasa.

BBC southern Africa correspondent Peter Biles says the Zimbabwean dollar has become a laughing stock. A Z$100 trillion note was recently introduced.

Until now only licensed businesses could accept foreign currencies, although it was common practice.

The country is also facing a deepening humanitarian crisis as well.

A cholera outbreak has killed over 3,000 people according to the World Health Organization (WHO).

And the World Food Programme (WFP) has revised up the number of people it says need food aid.

It now says seven million Zimbabweans are in need of food aid, up from 5.1 million in June.

WFP regional spokesman Richard Lee said the situation had deteriorated rapidly.

"The economic situation has worsened more dramatically than we had anticipated," he told AFP.

"The agency is being forced to halve the cereal rations given to hungry Zimbabweans so that all the people in need can receive aid."

Hyperinflation

Mr Chinamasa made the announcement as he delivered the annual budget to parliament.

"In line with the prevailing practices by the general public, [the] government is therefore allowing the use of multiple foreign currencies for business transactions alongside the Zimbabwean dollar," he said.

The country is in the grip of world-record hyperinflation which has left the Zimbabwean dollar virtually worthless - 231m% in July 2008, the most recent figure released.

Teachers, doctors and civil servants have gone on strike complaining that their salaries - which equal trillions of Zimbabwean dollars - are not even enough to catch the bus to work each day.

Worthless

A 40-year-old Zimbabwean primary school teacher from the capital Harare, told the BBC news website earlier this week it cost nearly US$2 a day to travel to work, but inflation had reduced the average teacher's wage to the equivalent of US$1 a month.

He said he now made a living reselling maize to families in high density areas, as it made more money than teaching.

Before the announcement, shops in Zimbabwe were increasingly demanding payment in US dollars - a reality acknowledged by Mr Chinamasa.

"In the hyper-inflationary environment characterising the economy, our people are now using multiple currencies alongside the Zimbabwean dollar. These include the [South African] rand, US dollar, Botswana pula, euro and British pound among others."

A Harare resident said even street vendors were refusing to accept Zimbabwean notes.

Last year, the Central Bank was forced to slash 10 zeros from the local unit in an effort to make the currency more manageable.

Correspondents say that although the local currency will still be printed, all prices will be set in US dollars, making the Zimbabwe dollar irrelevant.

The country's economy is now on the brink of collapse - a situation worsened by the political crisis that resulted from last year's disputed presidential elections.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/africa/7859033.stm

Published: 2009/01/29 19:01:38 GMT

© BBC MMIX

Jim Sinclair's Important Comments on Systemic Corruption

When there is no ethics or transparency in government, confidence collapses and so does the U.S. dollar as people convert their money to more honest "stores of value" such as gold and silver.

Read Jim's comments here:

http://jsmineset.com/index.php/2009/01/29/in-the-news-today-97/

The Myth that Laissez Faire Is Responsible for Our Financial Crisis

This is an excellent piece that can be found here.

Ron Paul tells it like it is...

...but they still don't get it.

Iceland's PM: Government Has Collapsed

Iceland's PM: Government Has Collapsed

Iceland's prime minister says his ruling coalition has collapsed under pressure from the global financial crisis. Geir Haarde said he will speak to the president, Olafur Ragnar Grimsson, Monday in an effort to dissolve the government.

Mr. Haarde's government, a coalition featuring his Independence party and the Social Democratic Alliance, has been under mounting public pressure since the crisis hit the island-nation in October.

Last week, the prime minister, who suffers from cancer, called early national elections in May and said he would not run. At the time, analysts questioned whether the government could survive four more months.

The situation worsened Sunday, when Commerce Minister Bjorgvin Sigurdsson quit, citing his role in the economic collapse and growing public demands that the government resign immediately.

Sigurdsson acknowledged that Icelanders have lost faith in their government, and he said he wants to share in the responsibility for the economic collapse.

The meltdown forced the government last year to take control of three of the country's biggest banks.

Iceland also secured billions of dollars in assistance from the International Monetary Fund and other countries, to avert a collapse of its once-booming economy.

Some information for this report was provided by AP and Reuters.

VOA News


url: http://english.chosun.com/w21data/html/news/200901/200901270009.html

Day the banks were just three hours from collapse

Revealed: Day the banks were just three hours from collapse

By Glen Owen
Last updated at 11:21 PM on 24th January 2009

The Bank of England

Narrow escape: The Bank of England was forced to contact RBS's creditors abroad to persuade them not to withdraw their funds

Britain was just three hours away from going bust last year after a secret run on the banks, one of Gordon Brown's Ministers has revealed.

City Minister Paul Myners disclosed that on Friday, October 10, the country was 'very close' to a complete banking collapse after 'major depositors' attempted to withdraw their money en masse.

The Mail on Sunday has been told that the Treasury was preparing for the banks to shut their doors to all customers, terminate electronic transfers and even block hole-in-the-wall cash withdrawals.

Only frantic behind-the-scenes efforts averted financial meltdown.

If the moves had failed, Mr Brown would have been forced to announce that the Government was nationalising the entire financial system and guaranteeing all deposits.

But 60-year-old Lord Myners was accused last night of being 'completely irresponsible' for admitting the scale of the crisis while the recession was still deepening and major institutions such as Barclays remain under intense pressure.

The build-up to 'Black Friday' started on Monday, October 6, when the FTSE 100 dropped by nearly eight per cent as bad news on the economy started to multiply.

The following day, Chancellor Alistair Darling began all-night talks ahead of an announcement on the Wednesday that billions of pounds of taxpayers' money would be used to pour liquidity into the system.

But shares continued to plummet, turning into a rout on the Friday when the FTSE crashed by ten per cent within minutes of opening.

Both Royal Bank of Scotland and HBOS were nearing complete collapse - but Lord Myners, who built up his fortune during a long career in the City, said the problems ran far wider.

'There were two or three hours when things felt very bad, nervous and fragile,' he said. 'Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks.'
Lord Myners

Lord Myners: 'There were two or three hours when things felt very bad, nervous and fragile'

The threat to the system was so severe that the Bank of England was forced to contact RBS's creditors in New York and Tokyo to persuade them not to withdraw their funds, but it is not known which other banks faced a run on their reserves.

'We faced the very real problem of how banks could stop depositors from withdrawing their money,' a Treasury source said yesterday.

'The banks themselves were selling their shareholdings, accelerating the stock-market falls, and preparing to shut up shop. Mortgages would have been sold on and savers would have been spooked, to put it mildly. It would have been chaos.'

After a weekend of crisis talks, which concluded at dawn on the Monday, it was announced that Lloyds TSB was taking over HBOS, supported by £17billion of taxpayers' money, and RBS would receive an injection of £20billion - prompting the resignation of RBS's infamous chief executive, Sir Fred 'the shred' Goodwin. Share prices at last started a small rally.

Ruth Lea, economic adviser to the Arbuthnot Banking Group, said last night that it was 'highly irresponsible' for Lord Myners to reveal the scale of the problems because it could serve to further wreck already fragile levels of confidence.

'We are not out of the woods yet,' she said. 'I fear for Barclays, after the fall in its share price, and Lloyds has been damaged by the HBOS takeover.'

She added: 'If it was panning out in that way, then the Government would have had no choice but to step in and nationalise the entire financial system.'

Angela Knight, chief executive of the British Bankers Association, said: 'The issues related only to HBOS and RBS. To imply that all the banks would have gone under is wrong. It is complicated.'

Lord Myners also said that bank executives had been 'grossly over-rewarded' during the 'golden days' of big bonuses. 'They are people who have no sense of the broader society around them,' he said. 'There is quite a lot of annoyance and much of that is justified.'


Find this story at www.dailymail.co.uk/news/article-1127278/Revealed-Day-banks-just-hours-collapse.html

Another Bank Bites the Dust

California-based 1st Centennial Bank fails
By MarketWatch

Last update: 1:13 a.m. EST Jan. 24, 2009
SAN FRANCISCO (MarketWatch) -- 1st Centennial Bank of Redlands, Calif. was seized by the Federal Deposit Insurance Corp. and state regulators on Friday. It was the third bank failure this year, and brings to 28 the number of banks that have closed since the beginning of the current credit crisis.
First California Bank, based in Westlake Village, Calif., will assume the bank's insured deposits, the FDIC said in a statement.

The six branches of 1st Centennial will reopen on Monday as branches of First California Bank. Depositors of the failed bank will automatically become depositors of First California.
As of Jan. 9, 1st Centennial had total assets of $803.3 million and total deposits of $676.9 million, of which there were approximately $12.8 million that exceeded the insurance limits. 1st Centennial also had approximately $362 million in brokered deposits that are not part of Friday's transaction. The FDIC said it will pay the brokers for the amount of their insured funds.

The FDIC said First California agreed to assume the insured deposits for a 5.29% premium. It will also purchase approximately $293 million of the failed bank's assets. The assets are mainly cash, cash equivalents and marketable securities. The FDIC will retain the remaining assets for later disposition.

The cost to the FDIC's Deposit Insurance Fund is estimated to be $227 million. End of Story

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More on Gun Control: Learn from the Brits

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Carrying Several Passports? It’s Not Just for Spies

January 20, 2009
Carrying Several Passports? It’s Not Just for Spies
By MICHAEL T. LUONGO
NY Times

Alessandro Pappalardo, an artist in New York, holds passports from Italy and Argentina and, last year, added an American one. Previously an executive with Aerolíneas Argentinas, he said, “I used to go a lot to Brazil, and I would always decide what passport to show depending on what line was shorter.”

Stefan Stefanov, a citizen of the United States and Bulgaria who works for FirstApex Group in Warsaw, said he decided which passport to use depending on where he was going. “Of course, I don’t hide that I am a U.S. citizen,” Mr. Stefanov said. “But I don’t parade it either.”

Dual passports are no longer the sole province of people who grew up in more than one country. Millions of American citizens potentially qualify for various reasons — ethnic heritage, religion, country of birth or where their spouse was born.

“The fact is people don’t think about it until it is pointed out to them,” said Jan Dvorak, president of Travisa, a passport services company in Washington. Some Americans, he said, “don’t realize that they actually have dual nationality.”

While there are no hard numbers, more Americans seem to be trying to qualify for additional passports. “Savvy travelers and business travelers want to make sure they have two passports based on nationality because there are certain advantages,” Mr. Dvorak said.

Among those is the ability to work without restriction in various countries, particularly with passports from countries in the European Union. Also, Mr. Dvorak said, it is “a way of hiding where one has been,” when traveling among countries with soured relations.

Christopher Davis, the chief executive of G3 Visas & Passports in Washington, said that his company regularly processes British passports. For clients who become dual nationals, he said, “there are distinct benefits to it, especially now that the E.U. has grown in size and scope, especially if you need to take an assignment there.”

Mr. Davis said foreign passport applications can be complicated, particularly for Italy and France, at times requiring a long series of documents to “show the progression of the genealogy.”

He also cautioned that for Americans, “it doesn’t matter how many passports you have, you must enter and leave with a U.S. passport.”

In addition, he recommended that anyone considering dual passports think first of the tax consequences and the potential for military service, though, he added, “you can get exemptions for all of this because you’re a U.S. citizen.”

Israel allows anyone of Jewish heritage to use what is called aliyah, or the Law of Return, to become a citizen, but the military draft can be an issue. Noam Greenberg, a press officer with the Israeli Consulate in New York, said that the maximum age for the draft is 28 for men and 22 for women, although married women are exempt at any age. Americans can apply for exemptions.

The draft was an issue for Abdullah Daglioglu, an actor whose stage name is Neil Malik Abdullah. Born in Austria to parents from Turkey, he has both nationalities, but avoided Turkey because, he said, “I would have to do the military.” He lives in Germany and works on films throughout the European Union. “I can act in movies all over Europe,” he said. “There’s no visa necessary.”

Mr. Daglioglu, who played one of the Sept. 11 terrorists, Ahmed al-Haznawi, in the British television movie “Hamburg Cell,” said he used his Austrian passport for the United States visa that he needed for part of the filming in Florida.

On paper, there was “no background showing I am actually Turkish,” Mr. Daglioglu said. “It’s easier to travel with the Austrian passport because it is European, rather than the Turkish passport. Everybody makes a problem when your last name is Abdullah.”

Ruth Yoffe also has dual passports. She started Reloop Designs, a company that hires handicapped people in Cambodia to weave colorful baskets from recycled plastic bags.

A citizen of the United States and New Zealand, she travels frequently throughout Southeast Asia. “For obvious safety reasons, I always try and travel and put my visas on my New Zealand passport,” she said via e-mail. “On a plane, I don’t want to be identified as an American if I have that choice, depending on where I am heading.”

Visas are also cheaper for New Zealanders. “They assume anyone else from any other country can’t be as rich” as Americans, Ms. Yoffe said.

Alex Thomas, the corporate manager of Travel Document Systems, a visa and passport services company in Washington, said that some of his clients are “uneasy traveling with a U.S. passport, and if they have an additional passport, they prefer to use it.”

In fact, in the terrorist attacks in November in Mumbai, the terrorists specifically sought out American and British passport holders, releasing some tourists with other passports.

Mr. Thomas cited globalization and marriage to immigrants as reasons that more Americans are getting dual citizenship, but the wars in Afghanistan and Iraq and the recent economic collapse also came up as issues for some dual nationals.

Mr. Thomas said there are “four or five people a month who ask specifically what they need to do to get a passport” for another country. “Because of the way things are going in the world,” he said, he expects that number to rise.
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Jim Rogers: 'Sell sterling, take cash out of Britain'

From The Times
January 21, 2009
'Sell sterling, take cash out of Britain'

Patrick Hosking, Banking and Finance Editor

Outside frontline politics, few people can move financial markets simply by opening their mouths. One such is Jim Rogers, an American investment guru who yesterday pushed Britain deeper into gloom and austerity with apocalyptic words about the pound and the country's economy.

Hours after the Prime Minister pledged hundreds of billions of pounds to sustain Britain's banks, Mr Rogers added vinegar to the already souring international sentiment about the rescue plan, its impact on the public purse and its capacity to cure the sickening economy.

“I would urge you to sell any sterling you might have,” Mr Rogers advised his army of investment followers. “It's finished. I hate to say it, but I would not put any money in the UK.”

The reaction was instant - though it is impossible to say how much was attributable to Mr Rogers. The pound slumped, by almost 4 per cent at one point, falling to a seven-year low against the dollar and an all-time low against the Japanese yen.

Not since Black Wednesday in 1992, when the currency was expelled from the European Exchange Rate Mechanism, had there been such a steep fall in a day.

Worries intensified yesterday that the vast liabilities of Britain's wobbling banks could swamp the public finances. Between them, Royal Bank of Scotland, Lloyds and Barclays have total liabilities of £4.5 trillion. That is about twice the country's entire output and 40 times current government borrowing.

The shaky reputation of Britain's financial system took a further pulverising, with bank shares hammered again. Lloyds Banking Group, now 43 per cent owned by the taxpayer, bore the brunt of investor worries, slumping by as much as 48 per cent yesterday. They ended the day at 44.8p, down 31 per cent on the day. Barclays was down 17 per cent and RBS, whch is 70 per cent owned by the state, fell another 11 per cent on top of Monday's collapse.

Analysts yesterday were starting to suggest the previously unthinkable: that Britain might lose its AAA rating - a measure of impeccable creditworthiness from international credit ratings agencies that ensures the Government can borrow at rock-bottom interest rates.

The Chancellor did little to soothe financial market jitters when he gave his strongest hint yet that his November forecast of a contraction in the economy of no more than 1.5 per cent this year might be too optimistic. Alistair Darling admitted there had been a further, substantial, deterioration in the economy since that prediction.

He refused to answer questions about the sharp fall in the pound or accept that the country's finances might be compromised by the latest bailout of banks. “Markets have been volatile for some time now. We don't provide a running commentary on them,” he said.

Mr Rogers gave no further reasons for his contemptuous assessment of Britain's prospects, but his view of America's bail-ut plan, which is similar to Britain's in many respects, probably explains his scepticism.

“The idea that you can fix a period of excess borrowing and excess consumption by more borrowing and more consumption to me is just ludicrous,” he has said.

He is also deeply gloomy about the time it will take to resolve the problems of the credit crunch. “Most Americans alive today won't be around by the time the last of this credit market mess is finally cleared away,” he said last August.

The echoes of Black Wednesday are apposite: George Soros, the hedge fund manager estimated to have made £1 billion betting against the pound back then, was a former business partner of Mr Rogers. In the 1970s, the two men set up the phenomenally successful Quantum hedge fund.

They parted company long ago, but Mr Rogers's reputation as an investment genius still rests largely on that ten-year period, when he and Mr Soros multipled their clients' money a spectacular 43 times over.

Now 66, Mr Rogers splits his time between investing, book-writing and the world lecture circuit, where his prognoses of ruin from some investments and untold riches from others has helped him win many fans. In a world where most investment analysts are timid, mealy-mouthed and intent on sticking close to the consensus, Mr Rogers stands out as a man prepared to make bold forecasts.

With his trademark bow tie and Alabaman twang, Mr Rogers is ubiquitous on the financial TV networks. Like a beardless Branson, he plays to the gallery, once climbing on to a full-size replica pig to illustrate his upbeat prospectus on farm product prices.

He backs his ideas with his own cash, and more. In 2006 Mr Rogers put his $16 million mansion in New York up for sale to move with his young family to Singapore, so convinced was he of America's long-term decline and Asia's economic rise. His young daughters are looked after by a Chinese nanny who schools them in Mandarin.

Born in Wetumpka, Alabama, in 1942, the eldest of five brothers, he demonstrated a precocious talent for moneymaking, selling peanuts and sodas at the age of five at the local high school's Friday night games.

He won a scholarship to Yale and, later accepted a scholarship to Balliol College, Oxford. There he coxed in the Varsity boat race. Returning to the United States, he spent two years in the Army, at one point helping to invest his base commander's money, according to Fortune magazine. He left for Wall Street and soon met Mr Soros.

After their ten-year partnership at Quantum, he embarked on a series of travelling adventures, including a 100,000 mile motorbike trip, which he detailed in his book Investment Biker.
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The Constitution of No Authority

Reason. The ability to reason is a special quality. It is the ability to think things through logically without the biases and presuppositions that most people are burdened with. It is the ability to examine the facts and make logical conclusions. This ability was profoundly demonstrated by Lysander Spooner in his essay "No Treason IV: The Constitution of No Authority".

Lysander Spooner was an American individualist anarchist, entrepreneur, political philosopher, abolitionist, supporter of the labor movement, and legal theorist of the 19th century. In his essay referenced above, he eloquently exposes the illegitimacy of the U.S. Constitution. He shows that the Constitution was nothing more than a statement of ideas and beliefs that had no binding effect on anyone.

The reason the Constitution had no binding effect was two-fold: First, the 39 people who put their name to the document only did so as "witnesses" and did in no way agree to be bound by it in proper legal form. Second, even if the original 39 people did enter into a legitimate contract - they could do so only with each other. They could not bind all the people living at that time, much less you or I and the millions of others who weren't even born yet because we were not parties to the contract.

The document starts out in the preamble "We the people...establish this Constitution...". Logically, ask yourself who are "we the people" and where are their signatures signifying their voluntary consent to be bound by this statement of ideas written upon a piece of paper?

The truth is that the only way this government gets its power is by force. If you do not obey their dictates you risk your life, liberty and property.

It is time to recognize those in government office for what they are: killers, thieves, and liars. Unfortunately, most are so intellectually lazy that they honestly believe that their existence is legitimate and, instead of being a liar, they are simply ignorant. These are the most dangerous.

If you have not read Lysander Spooner's essay, I highly recommend it. It not only exposes the fallacy of the current form of government, but it also exposes all of its derivatives such as taxation, voting, and police protection.

Another good resource is http://www.voluntaryist.com. Voluntaryism is the belief that all social interactions must be based on mutual voluntary consent (without threat, duress, or coercion). Anything to the contrary is illegitimate and immoral. Here is the Statement of Purpose from their site:

Statement of Purpose: Voluntaryists are advocates of non-political, non-violent strategies to achieve a free society. We reject electoral politics, in theory and in practice, as incompatible with libertarian principles. Governments must cloak their actions in an aura of moral legitimacy in order to sustain their power, and political methods invariably strengthen that legitimacy. Voluntaryists seek instead to delegitimize the State through education, and we advocate withdrawal of the cooperation and tacit consent on which State power ultimately depends.

Another great exercise in logic and reason is the excellent book by Marc Stevens entitled Adventures in Legal Land. This book gives you some great strategies for dealing with bureaucrats.

To conclude today's post I challenge you to begin exercising reason. Question every opinion offered to you - especially those opinions that are presented as facts. Question my opinions. This quote from Rudyard Kipling says it well:

I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

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President Obama's First Lie

Any intelligent person who takes a moment, and really thinks about it, knows that the U.S. Constitution has no legitimate authority (see "The Constitution of No Authority"). Nonetheless, Obama will put his hand on the Bible today and swear to uphold the Constitution. Here is where his first lie comes in. Bill Bonner of The Daily Reckoning says it best:

The founding charter of the U.S.A. made no allowance for going into the banking business…nor the auto business…nor any other kind of business. Neither did it allow invasions of foreign countries, without a declaration of war…or imagine a standing army that costs about as much as all the rest of the world's armies put together.

In the beginning, the U.S. government was specifically limited in what it could do. Now, very little remains that it can't do. But in all matters - big or small…torturing people or taking their money - government leaders must pretend to be acting in the national interest. It's a low-down, dirty business that usually attracts people of the same sort. People like George W. Bush and Joseph Biden…people with no sense or no principles - or neither. People who don't know a lie when they hear it or…don't mind telling one.

That's why we're sorry to seem Obama in the trade; he seems like such a nice fellow.

But politics…alas, someone's got to do it. As the old Latin expression puts it: The voters want to be deceived; then let them be deceived.

Yes, it's possible that Obama can try to reverse these things but it just can't happen when the system is corrupt from its inception. For this reason, I will continue to buy gold & silver.
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http://www.pacificbullion.com

Flow White's Money Bomb

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Depositors lose 39 million with Bank Closure

If they had their money in gold or silver they would be okay. I know I keep driving this point home - and that I'm preaching to choir most of the time - but we need to expose these risks to our loved ones so they don't become victims too.

Bank of Clark County to reopen as Umpqua
Portland Business Journal
Monday, January 19, 2009, 2:08pm PST | Modified: Monday, January 19, 2009, 4:59pm

Following state and federal regulators’ takeover of Bank of Clark County on Jan. 16, the Vancouver bank’s two branches will open on Tuesday as new branches of Umpqua Bank.

Umpqua Holdings Corp. (NASDAQ: UMPQ), the Portland-based parent of Umpqua Bank, agreed to take the insured deposits of Bank of Clark County, as well as the locations, at the request of the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions.

The state agency said regulators decided to close the bank because it had inadequate capital and liquidity. Bank of Clark County had $446.5 million in assets as of Jan. 13.

The bank had $39.3 million in uninsured deposits in approximately 138 accounts, out of total deposits of $366.5 million. An account owner can have up to $250,000 in FDIC-insured deposits at any bank. Anything over that is uninsured.

The uninsured deposits are under the FDIC’s control. The people or businesses that placed the deposits at Bank of Clark County will become creditors of the Bank of Clark County.

Any deposits in excess of $250,000 that were placed by public bodies such as city or state government are protected by Washington’s Public Deposit Protection Act.

Umpqua, which received a $214 million investment from the U.S. Treasury as part of its Troubled Asset Relief Program, is taking over about $185 million in insured deposits. The actual cash the bank receives from the FDIC will be net of the assets the bank gets along with Bank of Clark County’s two branches.

“We don’t know the final amount yet,” said Ray Davis, CEO of Umpqua. “We’ll put the cash to work so we can make money.”

Umpqua’s stock rose slightly on the news, to close at $9.38 on Monday, up from $9.16 on Friday. The bank’s stock has traded between $8.57 and $20.35 over the past 52 weeks.

At the end of September, Bank of Clark County’s capital ratio was just below the level of a well-capitalized bank.

But problems at the bank escalated quickly after September, said Brad Williamson, director of the Division of Banks at Washington’s Department of Financial Institutions.

“They had rapid and severe credit problems that were identified late in the year,” Williamson said. “It was surprising how rapidly the deterioration occurred. It was almost unprecedented.”

Last summer, when analysts were beginning to look askance at many banks, Bank of Clark County attracted attention because its level of delinquent loans to total loans was high. Analysts also wondered whether the bank had sufficient reserves to cover its delinquent loans.

At the end of September, 79 percent of the bank’s loans were in real estate. The decline in house prices has hit Clark County harder than Portland, largely because houses closer to city centers have been selling more quickly and for better prices than equivalent houses that are further from commercial centers.

The liquidity problems mentioned in public statements weren’t as extreme as the runs on deposits that California-based IndyMac or Seattle-based Washington Mutual experienced.

But in the last few days before regulators took it over, Bank of Clark County did have “major issues of that nature,” Williamson said.

“I think somehow word got out that they were having problems over the last day or two.”

One liquidity issue was the high percentage of brokered deposits that Bank of Clark County had.

Out of $366.5 million in total deposits, the bank had $117.8 million in brokered deposits, or deposits from “non-core” customers who don’t have other business with the bank, such as checking accounts or loans.

Banks normally don’t seek brokered deposits, which they attract by offering high interest rates, unless they lack sufficient deposits from “core” customers.

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Mustang Ranch

I received the following e-mail that speaks for itself:

Mustang Ranch and $850 billion bail-out

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

They failed and it closed. Now, we are trusting the economy of our country and 850+ Billion Dollars to a pack of nit-wits who couldn't make money running a whore house and selling booze.

Now if that don't make you nervous, what does??? "

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Ruble Drops to Pre-1998 Crisis Low on 6th Devaluation This Year

Ruble Drops to Pre-1998 Crisis Low on 6th Devaluation This Year

By Emma O’Brien

Jan. 19 (Bloomberg) -- The ruble fell below the weakest level seen in the 1998 Russian crisis after the central bank devalued for the sixth time in seven days to protect reserves.

The currency slid to as little as 33.0455 per dollar today, the lowest since early 1998, before the government defaulted on $40 billion of debt. The ruble has lost 7.3 percent since official trading resumed this year, extending the decline to 29 percent since August.

Prime Minister Vladimir Putin pledged last month to use the nation’s foreign-exchange reserves to avoid “sharp” currency swings, after the 71 percent decline against the dollar in 1998 caused investors to flee and savers to pull bank deposits. Investors have withdrawn $245 billion from Russia since August as a 69 percent drop in oil, Russia’s war with Georgia and the disruption to gas exports exacerbated the effect of the global financial crisis, according to BNP Paribas SA data.

“Fear of another devaluation means nobody wants to buy rubles right now,” said Lars Rasmussen, an emerging markets analyst in Copenhagen at Danske Bank A/S, which rates itself among the five biggest traders of ruble in the world through Finnish subsidiary Sampo Bank Plc. “The ruble has begun to look more and more overvalued because of the fall in the oil price.”

Russia’s reserves, the world’s third-largest, have dropped by $171.6 billion to $426.5 billion since August, as policy makers sold currency.

The ruble weakened 1.4 percent to 37.8179 against the basket by 1:29 p.m. in Moscow, extending this year’s drop to 6.8 percent.

Lowered Forecast

Danske lowered its forecast for the ruble today, seeing a further 15 percent depreciation versus the basket to 44.45 in three months, down from a prediction of 38.6 in December.

The quickened pace of devaluations is encouraging investors to place so-called short positions on the ruble-basket rate, Rasmussen said. A short is a wager a security is going to decline.

Non-deliverable forwards predict an 11 percent decline in the ruble to 36.93 per dollar in the next three months. NDFs fix a currency at a particular level at a future date and are used by companies to protect against foreign-exchange fluctuations.

Bank Rossii, which manages the currency against a basket of about 55 percent dollars and the rest euros, widened its target range today, a bank official said. The currency has fallen 29 percent versus the basket since Aug. 1.

The ruble fell to 43.8880 per euro, the lowest since the common currency’s introduction in 1999, and is down 6.1 percent this year.

Crude Prices

Urals crude, Russia’s main export blend, has declined 69 percent to $44.43 a barrel from a record in July, below the $70 a barrel needed to balance the budget this year.

Russia’s MosPrime rate, the average interest rate banks charge to lend money to each other, rose to a two-month high of 12.5 percent today, according to the central bank.

To contact the reporter on this story: Emma O’Brien in Moscow at eobrien6@bloomberg.net

Last Updated: January 19, 2009 05:39 EST

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Hyperinflation Rap

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The accelerating trend of bank failures

Per the FDIC website here is the number of Bank Failures since the year 2000. Remember, this list does not include those banks that were bailed out when they were technically insolvent.

Year/Bank Failures

2000 - 2
2001 - 4
2002 - 11
2003 - 3
2004 - 4
2005 - 0
2006 - 0
2007 - 3
2008 - 25

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2,000 year old gold coins found

The irony is that this gold was found near the town of Milton Keynes. Remember, it was John Maynard Keynes (no relation) the economist who's theories are to blame for the current financial fiasco. It is he who glibly stated "In the long run, we are all dead". It looks like he is the one who is dead and gold is still around as money after 2,000 years.

Boudicca's gold hoard unearthed
January 17, 2009
The Independent

The largest hoard of prehistoric gold coins in Britain in modern times has been discovered by a metal detectorist in East Anglia. The 824 gold staters, worth the modern equivalent of up to £1m when they were in circulation, were in a field near Wickham Market, Suffolk. Almost all the coins were minted by royal predecessors of Boudicca, the warrior queen of the Iceni tribe who revolted against Rome in AD 60.

The solid gold staters – each weighing just over five grams – were made between 40BC and AD 15, most of them in the final 35 years of that period. They were buried in a plain, wheel-thrown pottery vessel, possibly inside some sort of rectilinear religious compound, between 15 and AD 20. Although it has not yet been proved, it is likely that the hoard represented part of the accumulated wealth of an individual or community and that it was buried as a votive offering at a time of a political stress, drought or other natural disaster.

Although this is the first major Icenian gold coin hoard found, the tribe did have a tradition of making votive offerings of other gold objects. At one of their major religious centres, Snettisham in northern Norfolk, the tribe buried at least 30kg of gold and silver jewellery, mainly neck and arm torcs. Significantly, these were also buried within a rectilinear enclosure.

The new discovery is particularly important because it highlights the probable political, economic and religious importance of an area on the southern fringe of Icenian territory, near its border with the neighbouring Trinovantian tribal kingdom. The Wickham Market area of south-east Suffolk where the hoard was found seems to have been of great importance in Iron Age times. Within just a few miles of the find spot are two other important Iron Age sites. The larger was a vast, triple-ditched, quasi-urban centre where metal and textile manufacturers worked, with evidence of mysterious rituals, involving human skulls.

The second site was a probable market where dozens of Iron Age silver and silver-plated, mainly Icenian coins, have been found over the years.

"The [new] hoard is absolutely unique," said Ian Leins, the British Museum's curator of Iron Age coins. "It is the largest hoard of British Iron Age gold coins to be studied in its entirety."

The find is the most substantial Iron Age gold coin hoard discovered in Britain since 1849, when a farm worker unearthed between 800 and 2,000 gold staters in a field near Milton Keynes.

The latest coins themselves bear an assortment of motifs, most of which were derived ultimately from Macedonian coins minted by Alexander the Great's father, Philip II in the 4th century BC. Nearly all bear images of horses portrayed in a highly stylised Celtic manner, totally different from the motif's distant Macedonian precursor. But one motif – two crescent moons – which appears on almost half the coins are a purely Icenian numismatic device, possibly associated with the importance of the moon in Iron Age Druidic religion.

To protect the site, archaeologists from Suffolk County Council kept the discovery under wraps for months while they made secret excavations, funded by the British Museum. The area was thoroughly investigated using advanced metal detection equipment to ensure all the coins had been retrieved before the discovery was announced.

It was this excavation, directed by archaeologists John Newman and Jude Plouviez, that led to the discovery of Iron Age and Romano-British earthworks (potentially a sacred enclosure) near where the metal detectorist had found the gold coins.

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2nd Bank Closure of the Year

FDIC, regulators shut down two banks

By John Letzing, MarketWatch
Last update: 1:57 a.m. EST Jan. 17, 2009

SAN FRANCISCO (MarketWatch) - The Federal Deposit Insurance Corporation and state regulators on Friday shut down banks in Illinois and Washington - the first bank failures of the year and the 26th and 27th since the start of the current credit crisis.

Berkeley, Ill.-based National Bank of Commerce was shut down and he FDIC said Republic Bank of Chicago will assume all of National Bank of Commerce's deposits. The two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

The last Illinois bank to fail was Eldred-based Meridian Bank, in October, the FDIC said.

National Commerce Bank had total deposits of $402.1 million as of Jan. 7, and total assets of $430.9 million, the FDIC said.
Republic Bank has agreed to buy roughly $366.6 million in National Commerce Bank's assets at a discount of $44.9 million.

The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million.
Also on Friday, the Bank of Clark County, Vancouver, Wash. was shut down and the FDIC was named receiver. The FDIC said Umpqua Bank, based in Roseville, Ore., will assume the insured deposits.

Bank of Clark County had total assets of $446.5 million and total deposits of $366.5 million. At the time of closing, there were approximately $39.3 million in uninsured deposits held in approximately 138 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Umpqua will not assume the approximately $117.8 million in brokered deposits. The FDIC will pay the brokers directly for the amount of their insured funds. End of Story

John Letzing is a MarketWatch reporter based in San Francisco.

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California goes bankrupt

First, they take your money by force (via taxation) and then they renege on their promise to give you some of it back. Anyone surprised?

California may delay tax refunds

State's cash shortfall could slow payments to businesses, disabled residents

By Andrea Coombes, MarketWatch
Last update: 2:38 p.m. EST Jan. 16, 2009

SAN FRANCISCO (MarketWatch) -- Facing a severe cash crunch, California may delay sending out tax refunds, aid to needy residents, money for some state services and payments to businesses, the state's controller said Friday.

State controller John Chiang said in a press release that expected cash shortages in February "will force him to delay some critical payments next month," including money owed to businesses for services provided to the state, rent and food aid for older and disabled Californians. Money for certain state services and tax refunds for 2008 taxes will also be affected.

Payments for education and debt service have first claim on the state's general fund under the state constitution, federal law and court rulings. If state lawmakers don't address the budget situation, failing to delay certain other payments will put the state $346 million in the red in February and $5.2 billion in the red by April, the controller said. See more on payment delays on California state controller's Web site.

Governor Arnold Schwarzenegger on Thursday called on state lawmakers to close the state's steep budget deficit, expected to hit $42 billion over the next 18 months.

During this difficult economic time, the payment delays will be particularly bad news for some state residents, many of whom are likely hoping for a quick tax refund payment.

Under state law, the state has until May 30 to start paying tax refunds, said Hallye Jordan, spokeswoman for the state controller, in a telephone interview. "Traditionally the state has encouraged people to file early and get their refunds quickly. It's been more of a practice that established the quick turnaround, rather than a legal requirement," she said.

The payment delays will go into effect in February if the state legislature and governor don't address the budget issues by Feb. 1, the controller said. If the budget situation isn't rectified, people may eventually start receiving IOUs instead of their expected checks.

"For months, I have warned state leaders that our cash flow will be in serious danger this spring. Without corrective action from the governor and legislature, there is no way to make it through February unscathed," Chiang said.

"I take this action with great reluctance. I know it will put many California families who rightfully expect their state tax refunds in a desperate position. Individuals who already are vulnerable will be hit hard. Small businesses that don't get paid may have to lay off more workers. Rather than helping stimulate the economy, withholding money from Californians will prolong our pain and delay our economic recovery," he said. End of Story

Andrea Coombes is an assistant personal finance editor for MarketWatch, based in San Francisco.

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Zimbabwe to launch Z100 trillion dollar note

Zimbabwe to launch Z100 trillion dollar note

Nelson Banya
Reuters North American News Service

Jan 16, 2009 13:51 EST

HARARE, Jan 16 (Reuters) - Zimbabwe's central bank will issue a 100 trillion Zimbabwe dollar banknote, worth about $33 on the black market, to try to ease desperate cash shortages, state-run media said on Friday.

Prices are doubling every day and food and fuel are in short supply. A cholera epidemic has killed more than 2,000 people and a deadlock between President Robert Mugabe and the opposition over power sharing has dampened hopes of ending the crisis.

Hyper-inflation has forced the central bank to keep issuing new banknotes which quickly become almost worthless. There is an official exchange rate, but most Zimbabweans resort to the informal market for currency transactions.

As well as the Z$100 trillion dollar note, the Reserve Bank of Zimbabwe plans to launch Z$10 trillion, Z$20 trillion and Z$50 trillion notes, the Herald newspaper reported.

"... the Reserve Bank of Zimbabwe has introduced a new family of banknotes which will gradually come into circulation, starting with the Z$10 trillion," the Herald said, citing a central bank statement.

Previous banknote issues have done little to ease the plight of Zimbabweans who often line up for hours outside banks to withdraw barely enough to buy a loaf of bread.

Critics blame the economic meltdown on government mismanagement, including the seizure and redistribution of thousands of white-owned farms. The once-thriving farm sector has fallen into ruin.

Mugabe, 84, in power since independence from Britain in 1980, says Western sanctions are the main cause of the economic crisis and worsening humanitarian situation.

A worsening cholera epidemic has piled pressure on politicians to bury their differences and try to ease the suffering of millions. The disease has killed 2,225 people out of 42,675 cases, U.N. figures show.

Political analysts say the establishment of a unity government between Mugabe's ZANU-PF party and the opposition Movement for Democratic Change (MDC) is the best hope of reversing the economic slide and the humanitarian crisis.

But power-sharing talks are deadlocked over the control of key ministries. Tsvangirai accuses Mugabe of trying to assign the MDC a junior role and has demanded the release of detained opposition members and activists.

Detainees include rights campaigner Jestina Mukoko, accused with others of plotting to topple Mugabe. A court gave her permission on Friday to ask the Constitutional Court to release her.

In neighbouring South Africa, European and South African ministers called on the Zimbabwean parties to implement their agreement.

"Ministers expressed grave concern at the ongoing violence and abductions and recognised that a political solution to Zimbabwe's problems is critical to bringing an end to this cycle," they said in a statement.

The presidents of South Africa and Mozambique meet Zimbabwean political parties on Monday in a new push to break the impasse.

Source: Reuters North American News Service

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Illinois-based Nat'l Bank of Commerce closed

The first of the year if you don't count B of A going back for more TARP handouts:

Illinois-based Nat'l Bank of Commerce closed
By John Letzing, MarketWatch
Last update: 7:48 p.m. EST Jan. 16, 2009

SAN FRANCISCO (MarketWatch) -- Berkeley, Ill.-based National Bank of Commerce was closed by regulators Friday, marking the first bank failure of 2009, the Federal Deposit Insurance Corporation said in a statement.

Republic Bank of Chicago will assume all of National Bank of Commerce's deposits, while the two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said.

While the bank's failure is the first of this year in the U.S., more than two dozen banks last year succumbed to the ongoing financial crisis. The last Illinois bank to fail was Eldred-based Meridian Bank, in October, the FDIC said.

National Commerce Bank had total deposits of $402.1 million as of Jan. 7, and total assets of $430.9 million, the FDIC said.
Republic Bank has agreed to buy roughly $366.6 million in National Commerce Bank's assets at a discount of $44.9 million.

The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million. End of Story

John Letzing is a MarketWatch reporter based in San Francisco.

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Latvia is shaken by riots over its weak economy

Coming to a town near you?

Latvia is shaken by riots over its weak economy (click link)

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Obama Unveils New Grand Plan for the Economy

Obama Unveils New Grand Plan for the Economy

by David Bardallis
LewRockwell.com

WASHINGTON – President-Elect Barack Obama called on Congress to quickly pass a new fiscal stimulus package that would provide nearly $100,000 trazillion gaquillion frijillion in an effort to revive the U.S. economy, which some experts believe has entered a recession.

"Every economist I've ever heard of agrees what we need now is significantly more government investment to offset the negative effects of whatever it is that is happening," Obama said at his Monday press conference. "Accordingly, I and my team of advisors have developed a comprehensive plan that will shore up our financial institutions, put jobless Americans back to work, allow everyone in a house to keep it no matter what, rescue any failing bank or business, provide a hot meal to anyone who is hungry, improve the well being of all citizens, and give a puppy or kitten to every child who wants one.

"But Congress must put ideology aside and act now in a bipartisan manner before some other even worse stuff happens," he added, wiggling the fingers on both his hands to indicate "scary."

Details of the plan were presented by Lawrence Summers, Obama's top economic advisor and one of the plan's key architects. Using a colorful chart with squiggly lines, Summers estimated that 845 jiggashillion new jobs would be created in the plan's first year, with another 491 dubbadillion to follow over the next four years.

"Every American will be able to work two, three, four – heck, 10 or 20 jobs if he or she wants to," said Summers. "And the best part is the income taxes generated from all these new jobs will actually pay for the plan."

Obama emphasized that not only will all the new spending not impose any additional burdens on the middle class, the plan actually targets tax cuts toward politically favored constituencies and whomever else it seems most expedient to target.

"The American people have spoken," said Obama. "They demand change, and I promise that I and every one of my former Clinton administration appointees will work hard to deliver that change." He also said something about hope and sacrifice and believing.

Other highlights of the plan include:

* $43 nurpillion for job training
* $89 bibblydefrillion for community reinvestment
* $505 frappakrillion for infrastructure and public works
* $732 hominavillion for health care and education
* $986 giggitysquillion for Goldman Sachs

Some prominent voices have criticized the plan, however. "It's a good start, but the president-elect doesn't go nearly far enough," Nobel laureate Paul Krugman, Nobel-winning winner of the Nobel Prize in economics wrote today in his New York Times column. "We're talking about the need for another $344 grillion chillion beebopaloobillion, at the very least, to get this economy moving again. Also, tax cuts for anybody: Ick."

Congressional reaction was mixed, as House speaker Nancy Pelosi (D-CA) vowed to pass the stimulus package "even if I have to go around and push the 'yes' button for every member of this chamber myself, and don't think I won't" while some senators cautioned that more debate may be needed.

"A schlopparazillion here, a dreedilyhillion there, and pretty soon we're talking about real money," said Senate Minority Leader Mitch McConnell (R-KY).

But Majority Leader Harry Reid (D-NV) was optimistic about the bill's passage, noting that the Senate has already adopted legislation increasing the national debt ceiling to $4,000 pigglywigglyjibbityjabbityfrippityfroppitybadaboomillion.

When asked what safeguards would be put in place to ensure that none of the unprecedented $100,000 trazillion gaquillion frijillion was lost to waste, fraud, and abuse, Obama pointed behind the press corps, said "Oh my GOD! LOOK!" then quickly exited the room.

January 14, 2009

David Bardallis [send him mail]vents his various frustrations on his blog.

Copyright © 2009 LewRockwell.com

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Saturday Night Live's Answer to Debt

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Twinkies for Obama

This is too funny...

Twinkies for Obama



-------------------------
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When freedom in illegal

"When freedom is illegal,
criminals make laws
and
Outlaws make freedom."

- Claire Wolfe, The Freedom Outlaws Handbook - 179 Things To Do 'Til the Revolution

Protecting Yourself – The Final Steps

From Jim Sinclair:

Protecting Yourself – The Final Steps
Posted: Jan 10 2009 By: Jim Sinclair
Post Edited: January 10, 2009 at 10:22 pm

Filed under: General Editorial

Dear Friends,

Having secured your finances by insuring them with gold and distancing your assets from your financial agents to the greatest degree possible, there comes one more task that you should put some thought into: securing yourself.

There is no question at all that as the jobless rate rises, civil disorder will begin to manifest itself in society.

No matter if you live in NYC or in Flat, Alaska it would behoove everyone to review and improve their home security. You have nothing to lose by being objective. Here are a few ways to achieve a high level of home security:

(1) Install an external intercom so you can talk with people coming to your home without unlocking or opening the door. Itinerant door knockers don’t need to see you or have personal contact with you nor do they need to see inside your home. Door-to-door solicitors, like telemarketers, need to be politely but abruptly, dismissed. Provide them with no information!

(2) Electronic security: Don’t buy a cheap system. It costs several thousand dollars for a competent, monitored system. Once installed, use it! It needs to be activated every night and every time you leave the house. Make it personal policy!

(3) Dogs serve many purposes, the first of which is companionship without conditions. Even a total wimp like Mr. Freddie (my wife’s legacy to me) can raise the alarm when required. Mia not only raised the alarm but also the roof and walls. She chased Victoria’s kids out of my office. She bit my African daughter which made me remind her, like it or not, that Mia is the family dog and her action might be a comment on how often Marlene is home.

Of course, I am kidding. Mia was very sternly reprimanded for that one. Mia was a tough situation as I loved her dearly, but she felt her duty was to protect me from everything and everybody. This is why Barbara changed her name from "Mia" to "My Damn Dog." In sum, Mia fulfilled her self appointed duty by being one mean b—h, (referred to as a female of her species).

(4) If you live like I do in a rustic and somewhat isolated area, then metal detectors at all entrances are a good option. They make excellent wireless systems that now transmit 1,250 feet to the receiver. You can obtain tunes for different entrances.

(5) Automatic perimeter lighting that is triggered either by laser interruption or infrared is also an option to consider. Also, very cheap devices are available now.

Spend no less than 2 1/2 percent of your liquid net assets on home protection, electronics, communication and power generation. Even a small Honda portable generator on the porch of a metropolitan apartment - legal or not -will come in handy when you need it.

Then pray all this is totally unnecessary.

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Buy Gold & Silver

Platinum's turn to shine

Platinum's turn to shine

Don Vialoux, Financial Post Published: Saturday, January 10, 2009

A worker casts an ingot of platinum at the Krastsvetmet nonferrous metals plant in the Siberian city of Krasnoyarsk. The platinum price has plunged but incentives to revitalize the auto industry ...

Ilya Naymushin, Reuters Files

The outlook for platinum is improving. Thackray's 2009 Investor's Guide notes that platinum has a period of seasonal strength from the end of December to the end of May. The trade has been profitable in 17 of the past 22 periods; the average gain per period was 8.3%.

In contrast, the average gain for gold during the same period was only 0.9%.

TECHNICAL INFLUENCES

Technical prospects for platinum have turned positive. A strong recovery rally is due. Platinum fell 67% from its high at US$2,299 per ounce in February to its low at $752.10 in October.

Platinum recently broke above a double bottom pattern on a move above resistance at US$896 and has established an intermediate uptrend. Next intermediate technical target is US$1,200.

The chart shows the optimal entry points over the past seven years.

Other precious metals (gold, silver, palladium) also have developed positive intermediate technical profiles. Platinum will "piggy back" on their strength into spring.

FUNDAMENTAL INFLUENCES

Fundamental prospects for platinum are just starting to turn positive. Demand for Platinum mainly comes from jewellery (40% of demand) and catalytic converters used in the auto industry (37%).

The main reason for the price decline during the past year has been a drop in demand for platinum used in catalytic converters. U. S. auto sales virtually collapsed but the low point appears to have been reached. Canadian and U. S. government support of the auto industry will kick-start demand for autos in the first quarter of 2009.

Demand for platinum by the auto industry will recover as the year progresses. Meanwhile, demand for platinum for jewellery purposes has started to recover due to its current low price relative to gold.

A direct way to invest in platinum for the current period of seasonal strength is to own iPath platinum Exchange Traded Notes (PGM/ NYSE). Technicals on PGM are almost identical to technicals for the commodity.

Platinum equities also are available; consult your advisor for specific recommendations. But avoid junior non-producing companies in the sector.

--- - Don Vialoux, chartered market technician, is the author of a free daily report on equity markets, sectors, commodities, equities and exchange-traded funds. Reports are available at www.timingthemarket.ca. Mr. Vialoux does not own platinum ETFs or stocks mentioned in this report.

'Atlas Shrugged': From Fiction to Fact in 52 Years

Have you read Atlas Shrugged yet?

'Atlas Shrugged': From Fiction to Fact in 52 Years

By STEPHEN MOORE
WSJ.com

Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read "Atlas Shrugged" a "virgin." Being conversant in Ayn Rand's classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only "Atlas" were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster.


Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that "Atlas Shrugged" parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated "Atlas" as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

In the book, these relentless wealth redistributionists and their programs are disparaged as "the looters and their laws." Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the "Anti-Greed Act" to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the "Equalization of Opportunity Act" to prevent people from starting more than one business (to give other people a chance). My personal favorite, the "Anti Dog-Eat-Dog Act," aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion "Emergency Economic Stabilization Act" and the "Auto Industry Financing and Restructuring Act." Now that Barack Obama is in town, he will soon sign into law with great urgency the "American Recovery and Reinvestment Plan." This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion -- in roughly his first 100 days in office.

The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."

When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated -- always in the public interest -- into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to "Atlas," a Wall Street Journal headline blared: "Rail Shippers Ask Congress to Regulate Freight Prices."

In one chapter of the book, an entrepreneur invents a new miracle metal -- stronger but lighter than steel. The government immediately appropriates the invention in "the public good." The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything.

The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in "the public interest."

Ultimately, "Atlas Shrugged" is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear -- leaving everyone the poorer.

One memorable moment in "Atlas" occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:

Galt: "You want me to be Economic Dictator?"

Mr. Thompson: "Yes!"

"And you'll obey any order I give?"

"Implicitly!"

"Then start by abolishing all income taxes."

"Oh no!" screamed Mr. Thompson, leaping to his feet. "We couldn't do that . . . How would we pay government employees?"

"Fire your government employees."

"Oh, no!"

Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax "for purposes of fairness" as Barack Obama puts it.

David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand's ideas, explains that "the older the book gets, the more timely its message." He tells me that there are plans to make "Atlas Shrugged" into a major motion picture -- it is the only classic novel of recent decades that was never made into a movie. "We don't need to make a movie out of the book," Mr. Kelley jokes. "We are living it right now."

Mr. Moore is senior economics writer for The Wall Street Journal editorial page.

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Merrill Lynch says rich turning to gold bars for safety

FYI:

Merrill Lynch says rich turning to gold bars for safety

Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.

By Ambrose Evans-Pritchard
Last Updated: 10:32AM GMT 09 Jan 2009
Telegraph

Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. "People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs," he said, referring to exchange trade funds listed in London, New York, and other bourses.

"They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands," he said.

Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.



The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value. "It's win-win either way," said Mr Dugan.

He added that deflation may prove the greater risk in coming months. "It's very difficult to get the deflation psychology out of the human brain once prices start falling. People stop buying things because they think it will be cheaper if they wait."

Merrill expects global inflation to hover near zero, with rates of minus 1pc in the industrial economies. This means that yields on AAA sovereign bonds now at 3pc will offer a real return of 4pc a year, which is stellar in this grim climate. "Don't start selling your government bonds," Mr Dugan said, dismissing talk of a bond bubble as misguided.

He warned that the eurozone was likely to come under strain this year as slump deepens. "There is going to be friction as governments in the south start talking politically about coming out of the euro.
I don't see the tensions in Greece as a one-off. It is a sign of social strain in countries that have lost competitiveness."

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Obama Nominates a Socialist

From Bob Murphy's site:

Obama Nominates a Socialist

President-elect Obama has tapped former EPA head Carol Browner to take "on a broad new portfolio with responsibility for Obama's ambitious agenda on the environment, energy and climate change."

Guess what? She's a socialist. Really.

I grant you, she's no longer listed at the Socialist International website, but she used to be. "Oh, back in college I suppose, right, you rabid right-winger?!"

Actually, more like, earlier this week (HT2 Dan Simmons):

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Parody of Central Banking

Australian TV: Parody of Central Banking:




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