Sunday, October 31, 2010

Nord Stream gas pipeline underwater construction starts



Projected routes of Nord Stream, Nabucco and South Stream pipelines


http://www.fairwarning.org/2010/11/decrepit-aging-u-s-pipelines-overwhelm-inspectors-pose-safety-problems/

Construction of the controversial Nord Stream pipeline from Russia to western Europe under the Baltic Sea has been officially launched.

Gazprom holds 51% of Nord Stream, which will run from the Russian port of Vyborg to Germany’s Greifswald.

Russian President Dmitry Medvedev and German Chancellor Angela Merkel attended the ceremony near Vyborg.

The project was given the go-ahead only in February amid fears that the pipeline could damage the Baltic Sea.

President Medvedev said at the ceremony that the pipeline “for the first time – which may be one of its main achievements – will ensure direct supplies of Russian gas to western Europe, bypassing transit territories”.

The existing pipelines run from Russia to EU countries via Ukraine, Belarus and Moldova.

‘Binding obligations’

All the gas volumes have either been contracted, or have been formalized in binding obligations
Alexander Medvedev, Gazprom

Russia provides up to 30% of the gas consumed in Europe, and many European countries have been keen to secure alternative energy supplies.

Critics have argued that European countries do not need more gas from Russia and that the project is too expensive.

But Gazprom deputy chief executive Alexander Medvedev said there was plenty of demand for the gas.

“All the gas volumes have either been contracted, or have been formalized in binding obligations,” he told journalists.

Gas supplies from Russia to Europe have been threatened or disrupted in the past due to political and financial disputes between Moscow and its neighbours.

But Russian President Dmitry Medvedev said at the ceremony: “This country [Russia] has been cooperating with European neighbours in the gas sector for over 40 years.

“This cooperation has stood the test of time to the full extent.”

The ceremony was also attended by Nord Stream board chairman and former German Chancellor Gerhard Schroeder, Dutch Prime Minister Jan Peter Balkenende and European Commissioner for Energy Gunther Oettinger.

First phase

Gazprom CEO Alexei Miller, Russian President Dmitry Medvedev and former German Chancellor Gerhard Schroeder
President Medvedev and Gerhard Schroeder were among the guests

Russian gas monopoly Gazprom said on Wednesday that the first pipe had been laid under the sea.

The pipeline will be passing through Russian, Finnish, Swedish and German waters.

Last month, Nord Stream secured a 3.9bn-euro ($5.4bn; £3.5bn) fund to complete the first phase of the pipeline.

“Debt financing will cover 70% of the project costs while the remaining 30% will be provided by the project shareholders,” said Paul Corcoran, financial director of Nord Stream AG.

German companies BASF-Wintershall and E.On Ruhrgas each own 20% of Nord Stream, while Gasunie of the Netherlands holds 9%.

Alexey Bulgakov from Troika Dialog investment bank pointed out that “Gazprom and its partners seem to have managed to raise funds at rather low interest rates.”

The overall cost of the project, due for completion in 2012, is expected to reach 7.4bn euros.

Environmental worries

Nord Stream
The first pipe was laid under the sea on Wednesday

Russia hopes to pump up to 55bn cubic metres of gas a year to EU countries through the pipeline.

Supporters of the project say that it will secure gas supplies from Russia to Europe.

But environmentalists argue that building the pipeline could lead to toxins lying on the sea bed being stirred up, as the Baltic sea is one of the most polluted in the world.

Finland had refused to give the green light to construct the pipeline, but finally agreed to it in February under the condition that ships laying the pipeline do not lay anchor in Finland’s economic zone.

The final hurdle was overcome after Russian Prime Minister Vladimir Putin assured Baltic leaders that the project was safe, as extensive research had been carried out into any environmental impact of the pipeline construction.

Alternative projects

Apart from the Nord Stream, Russia has been planning another pipeline, the South Stream, which will run from southern Russia to Bulgaria under the Black Sea.

Meanwhile, Turkey, Romania, Bulgaria, Hungary and Austria last July signed an agreement to construct the long-planned 3,300km Nabucco natural gas pipeline.

It is expected to pump up to 31bn cubic metres of gas annually from the Caspian and the Middle East across Turkey and into Europe.A construction worker during a ceremony marking the start of Nord Stream pipeline construction

The construction project is due for completion in 2012.

Will ‘Megatons To Megawatts’ Solve The Uranium Supply Pinch ?

http://www.bloomberg.com/news/2010-11-01/china-becomes-boss-in-peru-on-50-billion-mountain-bought-for-810-million.html
Commodities

Best Financial Markets Analysis ArticleBy: Andrew_McKillop

MEGATONS TO MEGAWATTS...

[Atomic reactors are international status symbols, especially in the developing world. Russia boosts its standing, while sucking-up profits that shouldn't be wasted on unprofitable boondoggles, which is exactly how the idea of nuclear power expansion should be considered. Ten years from now, if non-fuel producing countries like Vietnam are still making money, the price of uranium fuel will have sky-rocketed, the world economy will be flat and the S. China Sea tensions will already have boiled over. Freaking con job. The little Russian man, Medvedev.... in the designer suits really is a lawyer.]

http://goliath.ecnext.com/coms2/gi_0199-7787045/The-case-against-the-West.html

http://www.marketoracle.co.uk/Article23826.html

World uranium supply deficit, currently running at about 12 500 to 15 000 tons (2010 mine and supply forecasts relative to demand forecasts), or about 20 percent, is covered from sources especially including stocks held by mining companies, power plant operators and builders. This massive deficit is also partly covered, perhaps by 4 000 tons of uranium equivalent per year, with recycled and diluted highly radioactive wastes including plutonium that are converted to so-called MOX fuel (Mixed OXide), almost exclusively in France and the UK.

There is one other “supply side solution”, which is given periodic headline treatment, and that is the US-Russian “Megatons to Megawatts” programme, turning Russian arms, and an undisclosed number of US warheads into ploughshares by dismantling surplus atom bombs and recycling their atomic materials as reactor fuel. This programme was first mooted from just before the collapse of the USSR, in 1990-1991. The first physical operations, concerning 500 tons of Highly Enriched Uranium (HEU) from Russian bomb warheads started in July1993, but the first arrivals in the USA of 24 tons of Low Enriched Uranium (LEU) reactor grade fuel produced from 0.786 tons of Russian HEU only started in January 1995.

For this first year of shipments from Russia, the specially created US public-private entity US Enrichment Corp. (USEC) which administers this trade and partners with a small number of fully private entities on the commercial downstream received atomic materials equivalent to about 244 nuclear warheads (or 6.1 tons of HEU able to replace 186 tons of LEU reactor grade fuel). As of end 2009, the USEC says on its Web site that some 15 294 warheads have been “recycled” this way. According to the US Natural Resources Defense Council, the combined US and Russian atomic weapons stockpiles peaked in the 1985-1987 at about 41 000 warheads, and had already fallen well below 40 000 warheads by the time the Soviet Union collapsed.

Megatons to Megawatts is basically a “diluting” operation, stepping weapons-grade HEU down to the LEU fuels needed for most conventional civil power reactors. Plutonium is also separated, and can be “cut” into utilisable fuel using the MOX route although the amounts treated this way are not published and may be very low. The amount of fresh mined uranium the programme “displaces” , almost exclusively in the USA and not elsewhere, is however controversial. It is claimed by some sources like the WNA (World Nuclear Association) and the OECD’s NEA (Nuclear Energy Agency) to have “displaced” about 13 percent of world reactor fuel requirements, around 8 000 tons of uranium in 2009, covering about 45 percent of the USA’s total reactor fuel that year.

According to the US Council on Foreign Relations in a paper published January 14, 2010 and as of December 2009, a total of about 382 tons of HEU, equal to 15 294 warheads, has been turned into about 11 000 tons of fuel, for which the Russian government received more than US $8 billion, valuing the uranium equivalent fuel at around US $ 72 per kilogram (well below the current uranium price and far behind the 2007 most recent peak price of about US$ 290 per kilogram). The potential value of cut-down and diluted bomb materials, recycled as reactor fuel, can be gauged from analysts forecasts for uranium prices, in 2011, probably attaining US $ 175 per kilogram

END IN SIGHT ?

One major problem for this rather small but heavily mediatized fuel source is the probable near-term end to the “Megatons to Megawatts” programme, which is presently scheduled to stop in 2013. The “political and policy considerations” include just how much more of their weapons stockpiles the USA and Russia want to scrap. They also include the willingness or not of Russian suppliers to sell at below-market prices, into a very opaque market that can quickly add 20% or more to reported prices for the declared transactions that are used to report prices. Other factors weighing against Megatons to Megawatts include technical and technology issues, notably the amount of converted bomb material that can be used in reactors.

When we look at the actual declared amounts that are traded, by commercial private companies, we find quite large “missing amounts” of finished fuel (or upstream scrapped weapons), suggesting that uranium stocks and reactor (but not bomb warhead) materials are increasingly entering the programme.

The major authorized private company operating this market, the world’s largest uranium mining and fuel supply company Cameco, is estimated by industry observers as buying and reselling around 7 million pounds (3182 tonnes) of Russian ex-military source uranium fuel each year, in the past 2 to 3 years. Other suppliers handle much less than this, and Cameco’s agreement with the sole Russian supplier, the state firm Techsnabexport (Tenex) will terminate in 2013 unless president Obama and the Medvedev-Putin duo make a decision to continue scrapping warheads.

For the select group of North American re-seller companies including Cameco, for which this supply represents about one-quarter of its total sales of uranium, termination will represent a major challenge. For the USA’s 100-plus civil reactors in current operation, a claimed 45 percent or more of their present annual fuel generates a need for at least 8000 tons a year, perhaps more, to satisfy the 45 percent claim.

The most important point is that any start of phasing down in operations of the Megatons to Megawatts programme from the most recent rate (since 2006) of an average 1200 warheads scrapped each year, which was already lower than the rate in the preceding 3 years 2002-2005), will automatically increase the quantities of “fresh mined” uranium needed by US reactor operators. This will quickly add another twist to a world supply/demand context already heavily in deficit.

OPAQUE MARKET – TRANSPARENT PRICE OUTLOOK

There is no “open market” for uranium fuel of any kind, either produced or “fabricated” from fresh mined uranium, or MOX fuels derived from nuclear wastes, or fuels from scrapped nuclear weapons. The few entities which provide price data, such as TechTrade and UxC, report prices given on private transactions by the parties concerned, often with several weeks delay, and with no capacity for verifying the actual or real amounts, and prices. The Megatons to Megawatts programme fits well with this secretive hard to verify business, to the extent that real amounts of uranium equivalent fuel supplied may be well below the published amounts. On the Russian side these are likely made up to the declared amounts through mine stocks of uranium, and uranium fuel stocks from so-called “research and military” reactors, for which no data is available.

All of these sources to, and substitutes of the Megatons to Megawatts programme are unlikely to increase their net supplies of uranium equivalent fuel, and the majority may quite rapidly decrease. As already mentioned we have a basic and massive undersupply of world uranium fuel supply, but also have some 56 new reactors under construction and 439 in operation, with perhaps as many as 200 more reactors planned or proposed for the next 9 years (2011-2020). Results of this “outright and announced crisis” will certainly include a radical increase of uranium prices, triggering more mine investment and development, and possibly a Russian decision to cash in on the coming uranium price boom through staying their decision to stop scrapping bomb warheads in 2013.

To be sure, fuel costs for nuclear reactors are a small slice of total costs, but over and above about a uranium price of US $ 80 to 100 per pound, fuel costs start to become very significant for power plant operators and builders, because of stockpiling needs and their costs, with first loading requirements of a typical industry standard 900 MW reactor being about 250 – 350 tons. Probably much more important for the industry, any long-term structural-type fuel shortage will cast a long and deep shadow on the highly mediatized “Nuclear Renaissance”.

By Andrew McKillop

gsoassociates.com

Project Director, GSO Consulting Associates

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

Friday, October 29, 2010

Kazakhstan deepens relations with Europe

http://milaz.info/en/news.php?id=5112

Kazakhstan deepens relations with Europe
By Robert M Cutler

MONTREAL - Kazakhstan's President Nursultan Nazarbaev has just completed a two-day official visit to Belgium, the present chairman-in-office of the European Union Council. Kazakhstan it itself president-in-office of the Organization for Security and Cooperation in Europe (OSCE), and has convinced OSCE leaders to permit it to host, in Astana at the beginning of December, the first top-level OSCE summit in 11 years.

Nazarbaev's visit to EU headquarters in Brussels early in the week also allowed for bilateral Kazakhstani-Belgian meetings on state-to-state relations, and it was followed by a visit to France for developing bilateral relations with France. Brussels is also where one finds the headquarters of the North Atlantic Treaty Organization (NATO), and Nazarbaev did not miss the opportunity for high-level meetings there either, where the organization's secretary general, Anders Fogh Rasmussen, accepted an invitation to attend the OSCE summit in Astana.

Nazarbaev's visit to Europe had another important dimension. The International Monetary
Fund expects Kazakhstan's economy, which grew only 1.2% in 2009, to expand by 5.4% in the current year and by 5.1% in 2011. Accordingly, one of the president's chief goals in visiting Brussels was to seek foreign direct investment, particularly in accord with the so-called "Path to Europe" government program in Kazakhstan that seeks to institutionalize legal and economic reforms that would dovetail with EU standards.

Kazakhstan signed a Partnership and Cooperation Agreement (PCA) with the EU in 1995 that entered into force in 1999 for an initial period of 10 years, so that it is therefore now up for renewal and revamping. Both sides look forward to enhancing this arrangement. As Nazarbaev told New Europe, changes over the past decade have necessitated "work on a new basic agreement [that] is now ongoing" so that "in the 21st century we will strengthen our strategic interaction on addressing modern problems."

On the EU side, these negotiations will be guided by the organization's "New Partnership" concept-strategy for Central
Asia, adopted in June 2007, which seeks to strengthen bilateral and regional relations in all areas of cooperation. This strategy posited that future European assistance to the region at large would focus on reform in the political, economic, and judicial spheres, social reform, infrastructure building, and energy cooperation.

Indeed, as early as in November 2006 the EU and Kazakhstan signed a memorandum of understanding (MoU) on cooperation in the energy sphere. This was followed in 2009 by an MoU on cooperation over transport issues. In April this year, Kazakhstan signed a cooperation agreement with the European
Investment Bank that was followed up during the current trip by a declaration of intent on a series of energy-related projects. (Two-thirds of EU investment in Kazakhstan already goes to the energy sector.) It is expected that a new "PCA Implementation Plan" will be submitted for approval to the Joint Cooperation Committee in Brussels in December.

Trade between the two sides reached 20 billion euros (US$27.6 billion) in 2009, and has reached nearly three-quarters that amount in just the first half of 2010. The EU's trade volume with Kazakhstan exceeds that with all other Central Asian countries put together.

That being so, in light of Kazakhstan's growing energy and commercial with China and traditional long-standing ties with Russia, former EU trade commissioner Peter Mandelson told the Wall Street Journal that a failure by the EU to engage Kazakhstan, "a resource-rich country with an economic base that's ripe for modernization and diversification", would mean "missing a very big opportunity to do a lot of business, to deepen trade and investment links".

European Commission president Jose Manuel Barroso stated after the conclusion of the two-day meetings that the EU would support Kazakhstan's application for membership of the World Trade Organization.

Numerous bilateral contracts were signed in Brussels, including one between the leading nuclear research centers of the two countries to cooperate on the study of peaceful applications of nuclear energy and its sustainable development.

Still larger trade agreements were reached with
France during Nazarbaev's visit there, in an amount exceeding 2 billion euros. The highest-profile of these includes the sale of locomotives and helicopters by the French industrial group Alstom to Kazakhstan's national railroads. Also Atrium, a subsidiary of the European space and defense group EADS, will participate in the construction of an aerospace center in Kazakhstan for the assembly, integration, and testing of space satellites. The French nuclear group Areva and the Kazakhstani state firm Kazatomprom signed an industrial cooperation agreement as well.

Specific energy cooperation agreements were also reached or discussed during Nazarbaev's sojourn in
Paris, even though nothing was specifically announced in this respect. The French energy major Total participates with a 16.8% share in the consortium exploring and developing of the offshore Kashagan deposit.

A year ago, a French consortium composed of Spie, Manesmann-France, Europipe, GTS, and Arcelor-Mittal signed an agreement to negotiate terms of construction of the Eskene-Atyrau pipeline that is planned as part of the Kazakhstan-Caspian Transport System to take Kashagan oil overland inside Kazakhstan to a place from where it can be either shipped or moved by pipeline across to Baku for insertion in the Baku-Tbilisi-Ceyhan oil export pipeline to world markets.

Whether any further agreements are announced will be of no little moment. Progress on the Eskene-Atyrau project in particular may need further attention. At a minimum, the two presidents, who attended the original signing ceremony together a year ago, would have reviewed developments and sought to provide an additional impetus to negotiations. Kazakhstan will need, indeed already needs, additional export routes for its oil production, the current level of which does not match its actual capability due to the shortage of such routes.

Wednesday, October 27, 2010

Understand Why QE2 Is Now Almost Inevitable.....


13 Bankers: The Wall Street Takeover and the next Financial Meltdown.

http://www.washingtonsblog.com/2010/10/michael-hudson-debt-grows-exponentially.html

http://www.washingtontimes.com/news/2010/oct/29/managing-decline/


For reasons which aren't worth going into now, I'm reading through a recent report by Deutsche Bank Global Markets Research entitled "From The Golden To The Grey Age" this afternoon. The report (all 100 pages of it, many thanks to researchers Jim Reid and Nick Burns who produced the thing) looks at the extent to which a variety of macro indicators - like GDP growth, inflation rate, equity yields, etc - may have been influenced by demographic forces over the last 100 years or so. It is certainly one of the most systematic reports of its kind I have seen, and well worth losing a Saturday afternoon to read.

But in the middle, there is an argument which caught my eye, and I thought it worth reproducing. Basically the starting point is this chart, which if you haven't seen by now (or something like it) I'm not sure where exactly you've been during the last 2 or 3 years.



Obviously, just the most cursory of glances at the thing should lead even the most untrained of eyes to get the point that what is going on around us is not some passing phenomenon, and that there are deep structural factors at work.


As our Deutsche Bank researchers put it:
As can be seen (from the above chart) there was a step change in the US economy’s indebtedness from the early 1980s onwards and then an additional one in the late 1990s/early 2000s. A similar picture is apparent across most of the Western World.

Basically from the early 1980s to the onset of the Global Financial Crisis the economy added on more debt every year and business cycles were extended as a result. Indeed the Fed and Central Banks around the world were afforded the luxury of operating in a secular falling inflation regime (globalization) that allowed them to cut rates, further allowing the accumulation of debt, every time the economy may have naturally been rolling over into a normal recession consistent with those seen through history. This debt accumulation undoubtedly helped smooth the business cycle and contributed to the period being known as the ‘Great Moderation’. This period came to a spectacular end with the onset of the crisis and it is possible that going forward we will revert to seeing business/credit cycles more like they were prior to the ‘Great Moderation’.

Now here comes the clever part. Our researchers then go on to take a look at the the average and median length of the 33 business cycles the US economy has seen since 1854. For the overall period they found the average cycle from peak to peak (or trough to trough) lasted 56 months (or 4.7 years). However, the averages are boosted by an occasional elongated "superbusiness cycle", and thus the median length is a much smaller 44 months (3.7 years). As they comment, such numbers must look very strange to those who have only ever analyzed business cycles over the last 25-30 years. Within these 33 cycles the contraction period lasted 18 months on average or 14 months in terms of median length. This equated to the economy being in recession 31% or 32% of the time depending on whether you look at the averages or the median numbers. Taking just the period before the “Great Moderation” the average US cycle lasted 5 months less at 51 months (or 4.3 years) with the median at 42 months (3.5 years). Over this period the US economy was in recession 35% and 36% of the time respectively depending on whether you look at averages or the median.

Now we used to think that all of that was behind us, but then we used to think that the "Great Moderation" had gotten things under control, and not simply temporarily extended the cycle length by facilitating long-term-unsustainable levels of indebtedness. So in fact, given that, as they say some sort of cycle or other has been with us since at least biblical time, what we might now expect are more "normal" cycles (in historical terms), which put a little better means shorter ones with more frequent recessions.

"Given all we know about the ‘debt supercycle’, it is likely that the onset of the Global Financial Crisis ended the “Great Moderation” period. Unless we find a way of continually adding more debt at an aggregate level in the Developed World it is likely that we will see much more macro volatility and more frequent business cycles going forward. Given the fact that Developed World Government balance sheets are under pressure, and given that interest rates around the Western World are close to zero, the post-crisis ability to fine tune the business cycle is extremely limited. We may need to put an immense amount of faith in the experimental force of Quantitative Easing to deliver economic stability. This will be an experiment with little empirical evidence as to how it will turn out. For now the base case must be that we revert more towards business cycles more consistent with the long-term historical data".


So then our authors do their calculations concerning the average length of US cycles since 1854 in order to make a rough estimate of when the next few US downturns will start, as illustrated in the following chart.



Now, without dwelling on the gory details, if we look at the spread between the upside, median, and downside cases, we could pretty rapidly come to the conclusion that the next US recession has a high probability of starting sometime between next summer, and the summer of 2012 - which, as you will appreciate, isn't that far away. I am also pretty damn sure that Ben Bernanke and his colleagues over at the Federal Reserve appreciate this point only too well, and hence their imminent decision on more easing, since a recession hitting the US anytime from next summer will really come like a jug of very icy water on that very fragile US labour market, not to mention the ugly way in which it might interact with the US political cycle.

I think the mistake many analysts are making at this point is basing themselves on some sort of assumption like, "if the recession was deep and long, then surely the recovery should be just as pronounced and equally long", but, as the DeutscheBank authors bring to our attention, business cycles just don't work like that.

Now, why I think this is an interesting argument is that the starting point for looking at the recovery is rather different from the norm, in that instead of peering assiduously at the latest leading indicator reading, they do a structural thought experiment, and work backwards from the result. Now, one thing I'm sure Ben Bernanke isn't is stupid, so it does just occur to me that either he, or someone on is team, is well able to carry out a similar kind of reasoning process.


Watch Out, Here Comes The QE2

In fact, it would be an understatement to say that the forthcoming QE2 launch is causing a great deal of excitement in the financial markets. As the news reverberates around the world, it seems more like people are getting themselves ready for some kind of "second coming". Right in the front line of course are the Europeans and the Japanese, and the yen hit yet another 15 year high (this time of 81.11 to the dollar) during the week, while the euro was up at 1.4122 at one point. Greeks, where are you! Can't you engineer another crisis? We need help from someone or we will all capsize in the backwash created by this great ocean liner as it passes.

But joking aside, a weaker USD is going to be both the natural and the intended consequence of the coming bout of additional QE by the Fed, and it will have a strong collateral effect on the already weakened and export dependent economies of the EuroArea and Japan.



With this prospect as the background, it should not come as a surprise that talk of currency wars and competitive devaluations is rising by the day. Japan only last week threatened "resolute action" against China and South Korea, Thailand has placed a 15% tax on bond purchases by non resident investors, and central banks from Brazil to India are either intervening to try and keep their currency from rising too fast, or threatening to do so.

And the seriousness of the situation should not be underestimated. Many have expressed disappointment that the recent IMF meeting couldn't reach agreement, and hope the forthcoming G20 can do so. But really what kind of agreement can there be at this point, if the real problem is the existence of the ongoing imbalances, and the inability or unwillingness of the Japan's, Germany's and China's of this world to run deficits to add some demand to the global pool. Push to shove time has come, I fear, and if this reading is right then it is no exaggeration to say that a protracted and rigorously implemented round of QE2 in the United States could put so much pressure on the euro that the common currency would be put in danger of shattering under the pressure. Japan is already heading back into recession, as the yen is pushed to ever higher levels, and Germany, where the economy has been slowing since its June high, could easily follow Japan into recession as the fourth quarter advances.

Indeed, I think we can begin to discern the initial impact of the QE2 induced surge in the value of the euro in the August goods trade data. The EuroArea 16 have been running a small external trade surplus in recent months, and to some extent the surplus has bolstered the region's growth. It is this surplus that is now threatened by the arrival of the QE2. The first flashing red light should have been the news that German exports were down for the second month running in August, but now we learn from Eurostat that the Euro Area ran a trade deficit during the month.

"The first estimate for the euro area1 (EA16) trade balance with the rest of the world in August 2010 gave a 4.3 bn euro deficit, compared with -2.8 bn in August 2009. The July 20102 balance was +6.2 bn, compared with +11.9 bn in July 2009. In August 2010 compared with July 2010, seasonally adjusted exports rose by 1.0% and imports by 1.8%".


Basically the euro-zone countries had been managing to run a timid trade surplus (see chart below, which is a three month moving average to try and iron out some of the seasonal fluctuation) and this had been underpinning growth to some extent. Now this surplus is disappearing, and with it, in all probability, the growth. Maybe we won't get a fully fledged "double dip" in the short term, but surely we will see a renewed recession (and deepening pain) on the periphery and at the very least a marked slowdown in the core.



In fact the current situation is extraordinarily preoccupying. We are now in the fourth year of the present crisis (however you choose to term it, the second great depression, the very long recession, or whatever) and there seems to be no sustainable solution in sight. The underlying problems which gave birth to the crisis are excessive debt (both private and public) and large global imbalances between lender and borrower countries, and neither of these issues has so far been resolved, nor are there proposals on the table which look capable of resolving them.

And unemployment in the United States (which is currently at 9.6%, and may reach 10% by the end of the year) is causing enormous problems for the Obama administration. The US labour market and welfare system are simply not designed to run with these levels of unemployment for any length of time. In Japan the unemployment rate is 5.1%, and in Germany it is under 8%. So people in Washington, not unreasonably ask themselves why the US should shoulder so much extra unemployment and run a current account deficit just to maintain the Bretton Woods system and the reserve currency status of the US Dollar.

My feeling is that the US administration have decided to reduce the unemployment rate, and close the current account deficit, and that the only way to achieve this is to force the value of the dollar down. That way it will be US factories rather than German or Japanese ones that are humming to the sound of the new orders which come in from all that flourishing emerging market demand.

I think it is as simple and as difficult as that.

The problems created by the way the crisis has been addressed now exist on a number of levels. In emerging economies like Brazil, India, Turkey and Thailand, ultra low interest rates in the developed world are creating large inward fund flows which are making the implementation of domestic monetary policy extremely difficult, and creating sizable distortions in their economies.

At the same time, a number of developed economies like Spain, the United States, the United Kingdom became completely distorted during the years preceding the crisis. Their private sectors got heavily into debt, their industrial sectors became too small, and basically the only sustainable way out for them is to run current account surpluses to burn down some of the accumulated external debt. Traditionally the solution to this kind of problem would be to induce a devaluation in the respective currencies to restore competitiveness, but in the midst of an effectively global crisis doing this is very difficult, and only serves to produce all sorts of tensions. As Krugman once said, "to which planet are we all going to export".

At the same time, two of the world's largest economies - Germany and Japan - have very old populations, which effectively means (to cut a long story short) they suffer from weak domestic demand, and need (need, not feel like) to generate significant export surpluses to get GDP growth and meet their commitments to their elderly population. The very existence of these surpluses also produces tensions, and demands for them to be reduced. But this is just not possible for them, and Japan is the clearest case. For several years Japan benefited from having near zero interest rates and becoming the centre of the so-called global "carry trade", which drove down the currency to puzzling low levels, and made exporting much easier. Large Japanese companies were even expanding domestic production and building new factories in Japan during this period (a development which had Brad Setser scratching his head at the time, trying to work out how the yen could have become so cheap).

Then the crisis broke out, the Federal Reserve took interest rates near to zero, and the United States became the centre of the carry trade. The result is that every time the Fed threatens to do more Quantitative Easing the yen hits new 15 year highs, even while the dollar continues its decline, with the result that Toyota are having a change of heart, and are now thinking of closing a plant in Japan to move it to Mexico. The present situation is just not sustainable for Japan, which is basically being driven back into what could turn out to be quite a deep recession.


Unfortunately I think there is no obvious and simple solution to these problems. As we saw in the 1930s, once you fall into a debt trap, it can take quite a long time to come out again. You need sustained GDP growth and moderate inflation to reduce the burden of the debt, and at the present time in the developed world we are likely to get neither. In the longer term, the only way to handle the presence of some large economies which structurally need surpluses is to find others who are capable of running deficits, but this is a complex problem, since as we have seen in the US case, if the deficit is too large, and runs for too long, the end result is very undesirable. Basically the key has to lie in reducing the wealth imbalance which exists between the developed and the developing world, but this is likely to prove to be a rather painful adjustment process for citizens in the planet's richer countries, so policy makers are somewhat reluctant to accept its inevitability.


Basically, the structural difficulty we face is that all four major currencies need to lose value - the yen, the US dollar, the pound sterling and the euro - and of course this basically is impossible without a major restructuring of what has become known as Bretton Woods II. The currencies which need to rise are basically the yuan, the rupee, the real, the Turkish lira etc. But any such collective revaluation to be sustainable will need to be tied to a major expansion in the productive capacity of the economies which lie behind those currencies.


In fact, the failure to find solutions is increasingly leading to calls for protectionism and protectionist measures. The steady disintegration of consensus into what some are calling a "currency war" is, as I said above, another sign of this pressure. On one level, the move to protectionism would be the worst of all worlds, so I really hope we will not see this, but if collective solutions are not found, then I think we need to understand that national politicians will come under unabating pressure from their citizens to take just these kind of measures. The likely consequence of them succumbing to this pressure, which I hope we will avoid, would be another deep recession, possibly significantly deeper than the one we have just experienced. And, not least of the worries, the future of the euro is in the balance at the present time.

The structural imbalances which we see at the global level, between say China and the United States, also exist inside the euro-zone, between Germany and the economies on the periphery (Ireland, Portugal, Spain, Italy, Greece). These latter countries failed to take advantage of the opportunities offered by the common currency to carry out the kinds of structural reform needed to raise their long run growth potential, and instead they simply used to cheap money available to get themselves hopelessly in debt. At the same time the crisis has revealed significant weaknesses in the institutional structures which lie behind the monetary union, weaknesses which go way beyond the ability of some members to fail to play by the rules when it comes to their fiscal deficits. Steps are now being taken in a night-and-day non-stop effort to try to put the necessary mechanisms in place, but it is a race against the clock, and it is not at all guaranteed that the attempt will be successful, especially if the volume of liquidity about to hit the global financial system drives the euro onwards and upwards beyond supportable limits.


Saturday October 30, 2010


http://lh4.ggpht.com/_k_AummjdWTA/SOWGIwcPMII/AAAAAAAAAP0/86boGsKMpA4/s400/FederalReserve2.JPGhttp://t3.gstatic.com/images?q=tbn:ANd9GcTXkgNUNmjuapdpFLiWVdEZDllOGFN0LXeBU-utNLX7ABTMwhg&t=1&h=167&w=223&usg=__xc7yStjMFgyqYOZWjKmpwmkIazk=
FINANCIAL TERRORISTS: Federal Reserve [PRIVATELY OWNED] and Citibank


UNITED STATES of America - It can now be reported that the criminal banking elite that occupy America are once again involved in major financial criminal activity that involves NON-margined bogus electronic trading and terror threats aka "False Flags" designed to promote the financial agenda of this criminal banking elite.

Note: The U.S. Federal Reserve is currently considering a new round of proposed economic stimulus known as "QE2". This alleged stimulus program involves purchases of U.S. bonds.

Translation: QE2, which was recently defined as nothing more than a Ponzi Scheme by Bill Gross of Pacific Management Inc., is nothing more than a back door bail out of the criminal banking elite aka Goldman Sachs and U.S. Citibank.

QE2 actually involves the purchase of various mortgage-backed securities aka derivatives that are commonly known now as toxic assets.

These derivatives are now used as margin aka collateral in various electronic high frequency trading platforms parked in various offshore trading locations.

Item: None of these financial transactions aka trades involve any actual denominated currency that is used for margin aka collateral for these transactions.

So the question is: What is being used as margin and collateral by the criminal banking elite in these alleged trades aka spoof trades.

The answer is Letters of Credit from numerous banks across the world in which the Letters of Credit are flipped from one bank to the other on a nightly basis as to effect the price fluctuation in the worldwide financial markets.

Now we are going to deal with yesterday's chronology in what we will define as "Financial Terrorist Activity".


Item 1. At exactly 7:47 a.m. EST on 10-29-10, two massive electronic trades were placed aka purchases of December gold Comex futures that pushed the price of gold up $9 in less than 50 seconds (1343 to 1352).

Reference: This type of price fluctuation on what is commonly known as the night board trading session is unprecedented.

Again, the trades took place 7:47 a.m. EST and gold Comex futures begin actual day session trading at 8:20 a.m. EST.

We can now divulge that these trades originated simultaneously at 7:40 a.m. EST from trading platforms in Dubai (United Arab Emirates) and Mumbai, India.

And, it gets worse!

The conspiratorial out-of-control, PRIVATELY OWNED Federal Reserve leaked the GDP report on the U.S. economy to its business partner, Goldman Sachs, at exactly 7:47 a.m. EST on 10-29-10.

http://www.tehrantimes.com/News/10875/14_GOLDMAN11.jpg

Reference: Goldman Sachs, who along with the Federal Reserve, have a 3-second lead time on all overnight electronic trading, immediately piggy-backed these Comex gold trades.

Of course, folks, this is illegal. It is called "electronic bucketing".

Note: At this hour, the U.S. Senate Banking Committee is allegedly investigating this financial chicanery, as well as the relevant financial regulatory bodies that oversee financial trading transactions.

Let's hope that Christopher Cox, formerly BushFRAUD SEC Chairman, and Bernard Madoff are not sitting on the Senate Banking Committee.

This direct manipulation of gold and silver prices by the Federal Reserve and Goldman Sachs was designed to 'bail out' Citibank and the Saudi oil interests that currently hold billions of dollars of cross-collateralized EURO currency, gold and silver, gasoline, and crude oil derivatives tied to Citibank with Goldman Sachs being none other than the counter party to the derivatives.

Reference: 80% of Citibank stock is owned by none other than the Saudi Royal Family.

10-29-10 chronology continues


Midway through the Comex trading day session, during the regular Comex session, the corporate-controlled, fascist, extortion-friendly U.S. media began to bombard the airwaves with an alleged "terrorist" threat aka "False Flag" originating out of the nation of Dubai, United Arab Emirates, that dealt with an alleged explosive device in an ink toner cartridge on a UPS aircraft that allegedly flew out of the Yemenite capital Sanaa.

http://static.timesofmalta.com/media/serve/20101030--095545-wor_02.jpg
This video still allegedly shows the ink toner cartridge found in a package aboard a UPS cargo plane
that made a routine stopover at East Midlands Airport in central England yesterday. Photo: CNN/AFP


Fact: There is NO record of any cargo flight, including UPS and Federal Express, leaving the Yemen capital or anywhere in Yemen in the last 48 hours.

Fact: CNN had originally reported that the explosive found in the ink toner cartridge was benign.

Fact: The source for the current information and alleged evidence dealing with this incident is none other than the Dubai Police aka the Israeli Mossad.

Yemen Officials: Packages Didn’t Come From Yemen

With the eyes of the world on Yemen and officials pointing the finger squarely at the al-CIAda in the Arabian Peninsula (AQAP) group based in the nation’s south, Yemen’s government is cautioning against jumping to conclusions, and denying that the bomb plot packages came from Yemen at all.

No U.S. Commercial or Private Plane left Yemen to the U.S. over last 48 hours; Yemeni Official

A Yemeni official told Yemen Post that no U.S. cargo aircraft of any American company flew out of Yemen over the last 48 hours. "Whether UPS, Fed Ex, DHL or any other U.S. cargo company left Yemen over the last 48 hours."

Cartridges never sounded so dangerous!

One can only laugh at the desperation shown when a government resorts to “terrorist threats” whenever it needs to garner enough support for its sinister plans.

Suspicious Package to U.S. not from Yemen; Yemenia Air Cargo Director

Mohammed al-Shaibah, Air Cargo Director for Yemenia Airways said to Yemen Post, "No UPS cargo plane left Yemeni lands over the land 48 hours. These accusations are false and baseless." He added, "No UPS or DHL cargo packages heading to Chicago through Yemen took place in the last 48 hours as well."

Question: Did the Dubai Police visit the noted Dubai trading platform before they began their investigation of this alleged "terrorist" incident aka "False Flag"?

The effect of this "False Flag" terrorist scare was to further the financial interests of the noted criminal banking elite. As soon as the terrorist scare hit the airwaves and news wires midway through the New York Comex trading session the price of gold, silver, gasoline and crude oil began to escalate. This was to enhance and disguise the derivative holdings of Citibank and, in effect, increase the balance sheet holdings of Citibank in advance of the Federal Reserve's decision concerning their stimulus package aka QE2.

P.S. At this hour we can report that Yemenite officials are holding two female suspects that relate to this alleged terrorist incident aka "False Flag". They were both traveling in Yemen on foreign passports and may have links to Saudi Intelligence and the Israeli Mossad.

We can also divulge that French Intelligence has absolutely confirmed, after reviewing the manifest, that NO cargo flights left Yemen in the last 48 hours.

The question is, where did the flight originate from?

The answer is: There may not have been a flight at all!

We now see how financial and political interests across the world have combined their forces in waging what is now FINANCIAL TERRORISM using bogus electronic trading and "False Flag" terrorist threats to enhance their globalist agenda.

They, of course, are assisted by the corporate fascist, Federal Reserve controlled, extortion-friendly worldwide media consortium aka FOX News and Bloomberg News.

So you see, folks, we have media "terrorists" too.

P.P.S. Question: Have you heard any politician in the United States, Democrat or Republican, talk about this overt financial terrorist war being directed against the American People by the out-of-control, PRIVATELY owned Federal Reserve?

The answer is: NO!

In my opinion there is only former California Governor, now Democratic gubernatorial candidate Edmund G. Brown Jr. aka Jerry Brown.
...?

http://t3.gstatic.com/images?q=tbn:ANd9GcSlpi-2Eyey5VGai0pNKzZWlk4IQIxY0mSOsAOvgww6c2ijor8&t=1&usg=__jUJYO_4q8mNLMA4EwQgZjVStwF0=


...
Dozens of Israeli Navy Commandos of Yemeni origin are roaming Yemen for years...



Monday, October 25, 2010

USA, FRANCE, UK and the PIIGS head for the cliffs...



http://www.antipope.org/charlie/blog-static/2010/11/conspiracy-theories.html

http://www.washingtonsblog.com/2010/10/head-of-bank-of-england-maybe.html



I thought I had seen and heard it all after the ludicrous Ben Bernanke, asinine chairman of the Federal Reserve, announced that the official (and thus a lie!) 2% inflation in prices was too, too low, and he wanted higher inflation because, somehow, in some weird little fantasy world that only he and other neo-Keynesian econometric cyber-nerds can see, higher inflation
is "consistent with the mandate of the Fed" to achieve stable prices (zero inflation)! Hahahaha!

This is so bizarre that I had a hard time dealing with it, as I have enough problems of my own in distinguishing reality from my own weird little mental world without this dimwit forcing his schizophrenia on me....
http://www.isn.ethz.ch/isn/Current-Affairs/ISN-Insights/Detail?lng=en&id=123592&contextid734=123592&contextid735=123580&tabid=123580

So I cleverly doubled up on some of my medications, which didn't help much, although I finally did relax enough to unclench one fist.
Of course, the other mandate of the Fed came in the '70s when Hubert Humphrey and other leftist weirdo morons changed the Fed's charter to include a mission to, somehow, with magic perhaps but certainly with creating more and more money and driving
interest rates down and down, always maximize employment. Maximize employment! How convenient an excuse for the Fed to create more money!

And speaking of maximizing, I thought I had, with this one statement by the chairman of the Federal Reserve to purposely create the horror of higher inflation, maximally achieved a state of complete loathing for the Federal Reserve.

With my newfound Maximum Mogambo Contempt (MMC) for Ben Bernanke and the Federal Reserve, you can imagine that I was not very surprised to see an essay with the title "Three Horrifying Facts About the US
Debt Situation" by Graham Summers of gainspainscapital.com.

Initially, I was "ho-hum" mostly because I can, offhand, think of about a thousand horrifying facts about the US debt situation, and that is all without even touching upon the inflationary horror of the federal government deficit-spending untold trillions of dollars per year, year after year, increasing the national debt by borrowing an avalanche of
money that the foul Federal Reserve magically creates out of thin air, and that the Federal Reserve will itself use, in an outrageous episode of historically treacherous monetary infamy known as "monetizing the debt," to buy the trillions and trillions of T-bonds, a terrifying example of fiscal and monetary insanity that will, to wax poetic, reverberate through the ages.

You can tell by the way I ended that paragraph with a mere period instead of an exclamation point to denote horror and terror that I was pretty bored.

Well, I was, until he went on that, firstly, "The US Fed is now the second-largest owner of US Treasuries" after just recently overtaking the stash of US bonds owned by Japan, "leaving China as the only country with greater ownership of US debt".

http://www.leap2020.eu/GEAB-N-50-est-disponible--Crise-Systemique-Globale-Second-Semestre-2011-Contexte-europeen-et-catalyseur-US-Explosion-de_a5617.html


To his credit, he went on that the horror is that "we're printing money to buy it. Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June ... as in four months ago. Want an explanation for why
stocks, commodities, and gold are exploding higher?"

I raised my hand to make a comment about how, "We're Freaking Doomed!" but before I could interrupt, he went on that, secondly, "There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years."

Out of all this, he deduces the third point, which is that "The US will Default on its Debt".

http://www.mecanopolis.org/?p=20711

Apparently, he had a second thought about that "will default" thing, as he says, correctly, "either that or experience hyperinflation. There is simply no other option."

I am happy to see that Mr Summers still maintains some of that sunny optimism of youth, a quality that I completely lost years ago when the realization of the immense degree of stupidity and corruption in the world crushed my hopes, when he says that there are no other options except default or hyperinflation.

I say, ominously, which explains the scary and ominous soundtrack, that the other option is (pause for effect) "both."

And speaking of "both" if ever there was a time when you should buy both gold and silver, this is it! And the fact that you can get them by merely plunking down depreciating Federal Reserve Notes in payment should make you giddy with delight, so that you giggle as you say, "Whee! This investing stuff is easy!"

La fin est proche.....

-Les fameux PIIGS sont obligés d'emprunter à des taux de plus en plus élevés. Si la FED élève son taux de base ça sera encore pire.

-Mai 2010, au moins 2 grosses banques européennes furent pendant quelques heures en cessation de paiement. La situation fut si tendue que les USA réactivèrent les accords de swap.

-Facteurs aggravants: Les ratio d'endettement de nos grosses banques européennes qui sont absolument hors-normes. Particulièrment en France, si une de nos 4 grosses banques fait faillite, tout le système s'écroule. Le montant cumulé des dettes de ces banques représentent plus de 3 fois le PIB français. Ne parlons pas bien sûr de la dette publique.

Ce n'est pas un hasard si des rumeurs de plus en plus insistantes éclosent à propos de la perte par la France de sa note AAA. Si cette évantualité se concrétise, cela signifie que nous ne pourrions plus emprunter aux taux préférentiels actuels. Les effets en seraient désastreux.

les remêdes?

-sortir de l'Euro, revenir au franc, dévaluer le franc avec un taux de change fluctuant.

-démanteler les grosses banques, les recapitaliser, et forcer les dirigeants de ces banques à respecter les règles prudentielles élémentaires sous peine de graves sanctions

-Baisser le taux d'imposition absolument ahurrissant dans notre pays, particulièrment en ce qui concerne le travail.

Qui aura le courage en France de prendre de telles mesures? Personne pour l'instant. Il faudra pour cela que nous soyons au pied du mur. Cette échéance est je pense maintenenant proche.....

Ceux qui mettront des conditions pour "sauver l'Euro" ce sont les Allemands. Et les conditions qu'ils mettront seront tout simplement inacceptables pour les autre pays de la zone. En effet, on peut s'attendre à ce que les Allemands demandent à avoir tous les leviers pour diriger l'utopique gouvernement économique de l'Union. Hitler a échoué dans sa tentative d'unir l'Europe sous le IIIe Reich au prix de millions de morts, il reste à voir si l'Allemagne d'aujourd'hui peut y parvenir sans déclencher à travers l'Europe toute une collection de guerres civiles. Dans la mesure où, comme vous le dites, l'Europe s'est construite contre ses propres peuples, il n'y a pas d'alternative, dans un avenir prévisible, à l'émergence de conflits violents quelle que soit la voie suivie.....



Saturday, October 23, 2010

70% Of All Stock Market Trades on Wall Street Are Held for An Average of 11 SECONDS, enough to rob you blind in utter corruption...

“All you have to do to be hated is to do hateful things....”

The Fourteenth Banker writes today:

In the stock market, program trading dominates volume. I heard recently that 70% of trade positions are held for an average of 11 seconds.

He's definitely correct....

http://www.kitco.com/ind/willie/oct212010.html

As the New York Times dealbook noted in May:

These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said

Similarly, FT's Martin Wheatley pointed out last month:

I know of one HFT firm operated out of the west coast of the US that boasts its average holding period for US equities is 11 seconds

And market analyst Peter Cohan writes at AOL's Daily Finance:

70% of trading volume on the major exchanges is conducted by high-frequency traders who hold a stock for an average of 11 seconds.
The fact that the vast majority of stock market trades are held for 11 seconds shows that the stock market is not a real market with real traders governed by the law of supply and demand, and that there is no real price discovery.

But as Tyler Durden points out, alot can happen in 11 seconds when the players are high-powered computers:


BATS "Flag Repeater". 15,000 quotes in 11 seconds, dropping the ASK price 1 penny each quote from $9.36 to $8.58 and back up again...

It seems to me that all this could have been corrected long ago by simply making the definition of investment for tax purposes require that you hold the security for a minimum of one year. Any thing less than that would be considered a gambling win or loss and would be treated for tax purposes the same way as winnings on the roulette tables in Vegas. http://republicbroadcasting.org/?p=11579

Of course, no "serious" person wants to fix this because they don't view it as a problem. 11 seconds - hey that's a vital investment and gives a person (usually a corporate person) more rights and privileges over that company than the people who have worked 30 years in its offices or factories. What could be wrong with that?

Sounds like a game of hot potato, hot potato....and utter corruption to the core....Fraud, Fraud and more FRAUD in USA...

http://www.youtube.com/watch?v=xCassMy2frI&feature=related


The Chances of a War with China are Rising : ????

The United States conducts monetary policy the same way it conducts foreign policy; unilaterally. When Fed chairman Ben Bernanke signaled last week that he was planning to restart his bond purchasing program (Quantitative Easing) he didn't consult with allies at the IMF, the G-20 or the WTO. He simply issued his edict, and that was that. The fact that the Fed's policy will flood emerging markets with cheap capital, pushing up the value of their currencies and igniting inflation, is of no concern to Bernanke. He operates on the same theory as former Treasury Secretary John Connally who breezily quipped to a group of euro finance ministers, “The dollar is our currency, but your problem.”

http://www.archive.org/details/SevenFinancialConspiraciesWhichHaveEnslavedTheAmericanPeople


MERS, Fraud and more Fraud in California and all over USA....

Former hedge fund manager Shah Gilani notes:

In creating MERS, these institutions actually changed the land-title system that this country - for much of its history - has relied upon to determine legal ownership status of land titleholders.

Not only did the lenders sidestep (read that to mean avoid) paying billions of dollars in fees to local governments, they paid themselves from the fees that MERS collected.

MERS is facing class-action lawsuits and civil racketeering suits around the country and their members are being individually named in all these suits. One suit alleges that MERS owes California a potential $60 billion to $120 billion in unpaid land-recording fees.

If suits against MERS and all its members are successful, unpaid recording fees and fines (that can be as much as $10,000 per incident) would make every one of them insolvent.
MERS is a shell company, with no employees. However, its parent does have employees.

As Bloomberg notes:
MERS Inc., which holds the liens, has no employees, and MERSCORP, the parent, has only about 50, [the MERS spokeswoman said].
Plaintiffs' lawyers will undoubtedly argue that the "corporate veil should be pierced". In other words, they'll argue that MERS hasn't followed normal corporate formalities, and so the big banks which own it should have to pay any judgments against it.

I am not sure who will win that argument.

But Plaintiffs' lawyers will probably also name the banks directly as co-defendants.

Political priorities are not always already embedded in the economic “clean” analysis of the utterly corrupt USA?

Lets not minimize a major point which the MSM tries to pooh pooh away with reference to health spending etc…. Had the US have spent the trillions of dollars after the barbaric inside Job of 9/11 on serious and effective AIPAC Free....Congressional Inquiries....about this monstrous covert operation of the Deep State in USA....and some global police action, cooperation, development, security sector reform and strengthening in the US and devoted some of those resources – and the political capital after "9/11"...... – to solving some of the core grievances…. Well… where would we likely be now? This is an opportunity cost question which cannot be separated from any supposedly “real” and un-politicized accounting of the track which was in fact taken and which now threatens to tip USA interests and power further over the edge....and off the Cliff for Good....


Today, Whalen provides further details:

The short answer is "innovation." In her column, "One Mess That Can't Be Papered Over," Gretchen Morgenson of the New York Times reveals the practice in FL and other jurisdictions of destroying the physical note. We really like the 4th from last paragraph, the one about the standard practice of Florida bankers to destroy the original note when an electronic form was created, to "avoid confusion." If you know anything about the checkered history of FL real estate over the past century, this one bites you in the leg.

Is it just possible that creative Florida bankers discovered they could "sell" mortgages many times by conveniently delivering a "copy" of the electronic note for each subsequent sale? By delivering a "good" electronic note to each purchaser, the seller/servicer could kite the Ponzi scheme to the sky -- using the proceeds from each sale to pay interest to each new group of investors. As we told [Washington's Blog] in the failure of First National Bank of Keystone , management hid a Ponzi scheme in the loan servicing area for years, fooling regulators and internal auditors (See 'Audit Risk: Grant Thornton & The Keystone Saga', January 29, 2007) .

***

We know people in the servicing sector and related legal specialties who think that the fraud perpetrated upon investors and insurers due to multiple pledges of collateral could be massive. It is also, conveniently enough, another reason for the Obama White House and Fed to continue to prop up the top-three banks with significant GSE exposure -- and the mortgage insurers that help window dress the GSEs already horrible losses.

October , 2010
http://kickthemallout.com/images/Photos/Dees/FedSpider_Web.jpghttp://t3.gstatic.com/images?q=tbn:ANd9GcRJswBSxFMd4DGabevy15C6buGfQtSjoxKhAVu41QWTAlEBHCg&t=1&usg=__GI3g-7GJV33hxyAqLzat9Hp3gF4=


UNITED STATES of America - It can now be reported that German Chancellor Angela Merkel recently confronted both U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Bernard Bernanke at the G-20 Economic Conference in Gyeongju, South Korea.

Merkel accused both Geithner and Bernanke of blatant manipulation of the EURO currency on the behalf of foreign currency derivatives currently held by noted criminal brokerage firms aka banks Goldman Sachs and Bank of New York Mellon, as well as Warren Buffet's Berkshire Hathaway.

http://cdn.wn.com/ph/img/63/a7/aa7ef9986b7edbeaf723086c7697-grande.jpgU.S. Treasury Secretary Timothy Geithner, right,  and Federal Reserve Chairman Ben Bernanke smile during  the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju, South Korea, Friday, Oct. 22, 2010.
German Chancellor Angela Merkel (L), Federal Reserve Chairman Bernard Bernanke and U.S. Treasury Secretary Timothy Geithner AP

http://t2.gstatic.com/images?q=tbn:ANd9GcRUcZmATK1mTa-GfXFYo7KFVF5oyf_05Ys5mNeFJKvViUDxjEA&t=1&usg=__JjvePvAr71fOstFEgtaHSmlBI2w=http://i2.cdn.turner.com/money/galleries/2009/news/0904/gallery.stress_test/images/bony_mellon_logo.jpghttp://media.cnbc.com/i/CNBC/Sections/CNBC_TV/CNBC_US/Shows/_Documentaries_Specials/Billionaire_Next_Door_Restoring_Trust/Slideshow/buffett_Slide11.jpg

Merkel presented 'smoking gun' evidence supplied to her by European INTERPOL in Brussels, Belgium to Geithner and Bernanke that the U.S. Fed used secret offshore hedge funds controlled by Goldman Sachs in Singapore, Australia and Dubai to inject billions of fiat dollars and Japanese Yen into the overnight forex aka foreign currency markets that artificially lifted the value of the EURO currency against the U.S. dollar while simultaneously boosting the price of gold and crude oil futures contracts...

This financial Black Op title "Flush the Toilet", (a plot to depreciate the value of the U.S. currency), which was enabled by the Central Bank of Japan, utilized a form of electronic order entry from the aforementioned trading platforms called 'high frequency trading'. This sophisticated technology, which is a high bred spin off of the noted PROMIS software technology, enabled the Federal Reserve, along with the criminal brokerage firms Goldman Sachs and Bank of New York Mellon, to get a 3 to 5 second lead time on all electronic currency orders.

This financial black op was also enabled by the corporate-controlled, fascist, extortion-friendly U.S. media, which bombarded the American People, along with the rest of the world, with a 24-hour blitzkrieg of alleged terrorist threats...

Again, folks, there is NO war on terror, there NEVER has been a war on terror. There has been a war directed on the American People and their Constitution by the criminal financial elite that occupy the United States. Once you have read this intelligence briefing, folks, you will understand, again, who the REAL terrorists are....

Believe it or not, this electronic high frequency trading allows the criminal banking elite to take advantage of what is called a forex spread on foreign currency transactions, which allows them to widen the spread and actually be on both sides of the market at the same time. This is called, folks, in layman's terms "electronic bucketing".

Reference: While all of this criminal financial chicanery continues the alleged government financial oversight agencies aka the SEC, etc. ignore all of this criminal misconduct by the criminal banking elite (like they ignored the criminal activity of the Madoff and Stanford Ponzi Schemes....both closely linked to CIA/MOSSAD covert operations.....slush-funds) and, instead, are declaring war on small retail brokerage houses utilizing illegal, UN-Constitutional phone tapping and entrapment methodology. Their modus operandi is to accuse the retail brokerage house of charging excessive commission aka you charge the customer $50 not $45.

Listen to this, folks. Most of the high level board members who represent these government financial regulatory oversight agencies are linked to none other than the criminal banking interests aka Goldman Sachs and Bank of New York Mellon that have LOOTED the U.S. Treasury and then got 'bailed out' for doing it.

Message to criminal banking elite: Your job is simple, don't make it complicated. You are entrusted with the deposits and life savings of your customers to be protected. Other than that your role should be to loan money for the purchase of automobiles and homes. It is clear now that you can not be trusted to do anything else.

Question for the day: What is an investment banker? An investment banker is a whore and the current regulatory agencies are their pimps.

Note: There is no paper trail on electronic trading in overseas markets or offshore hedge funds.

This derivative daisy chain is tied to these numerous U.S. criminal banks aka financial terrorists, who were originally bailed out by the former illegal BushFRAUD Administration with the assistance of current U.S. Speaker of the House Nancy Pelosi aka Nancy Ponzi.

Item: Both BushFRAUD and Nancy Ponzi threatened the U.S. Congress at the time that if they did not 'bail out' these criminal banking interests with U.S. Taxpayers' money a state of "Martial Law" would be declared on American soil.

After receiving their UN-Constitutional 'bail out', these criminal banks, with the assistance of U.S. Taxpayers' money aka TARP, continued their illegal proprietary derivative trading, which continues to this day with the full blessing of the puppet Obama Administration.

P.S. The current derivative holdings of the Fed as well as Goldman Sachs and Bank of New York Mellon are just a spin off of the original toxic assets and derivatives that almost destroyed the U.S. economy in September of 2008. These are actually the same derivatives that were tied to the original 2008 'bail out' of the original Bank of America assisted 2008 'bail out' of Bear Stearns.

All Bank of America has done since 2008 is to compound these toxic mortgage-backed securities derivatives, use them as alleged margin to trade forex foreign currencies, and now create a new foreclosure fiasco that will then call for another 'bail out' all financed by the U.S. Taxpayers' money.
http://t3.gstatic.com/images?q=tbn:ANd9GcRtN3BhyObj-piuj5RWqg3qQsifrEmOMxMdZGv7zYzY50zhGmM&t=1&h=167&w=222&usg=__JWL4ZN0YcPWihDS4kS3tvINxKk4= Reference: Former U.S. Treasury Secretary Henry Paulson aka former CEO of Goldman Sachs (the mastermind of the Bank of America bail out of Bear Stearns) was supposed to use the original TARP funds to buy up toxic assets and clean up the books of these criminal banks. Instead, Paulson and the BushFRAUD Administration bailed these thugs out and basically presented them with TRILLIONS of dollars of free money that they continue to use for proprietary trading.

http://t2.gstatic.com/images?q=tbn:ANd9GcQ64yE36yyesDA9aWZOQ-HwPVhVD0gjPgiv5Va0GjDIVP95lIw&t=1&usg=__BOPgl0mAcG417rRpEmK3yPauy28=http://t1.gstatic.com/images?q=tbn:ANd9GcQvS7u7UvlogW-fgl6L0MKVvp2-_CxkwPtBCILnM3AUmxhggf8&t=1&h=161&w=230&usg=__wjYhApNqh4p8mJv5K3SSrSfCjaI=

Current U.S. Secretary Treasury Timothy Geithner continues to enable this outrageous criminal activity that is taking place with these banks and is now nothing but a bag man for Federal Reserve Chairman Bernard Bernanke.

Let us make it clear, folks. These criminal banks aka "financial terrorists" never cleaned up their own books, received free money aka U.S. Taxpayers' money from the American People and continue to engage in a massive worldwide ponzi scheme that is a dead end and a road to financial ruin.

P.P.S. When you hear financial reports on the news media like Bloomberg News, CNBC or Zionist controlled CNN.... (nothing but a front for the conspiratorial Federal Reserve...), about more "quantitative easing" that the Federal Reserve alleges will stimulate the U.S. economy it is nothing but BULLSHIT!

Quantitative easing is nothing more than a continued 'bail out' and propping up of these corrupt financial institutions(still loaded up with toxic asset derivatives) that have LOOTED the U.S. Treasury and reduced America to a banana republic.

Message to President Obama: If you are going to spend a trillion dollars to revive the U.S. economy you may want to create Roosevelt-type era actual jobs on American soil, like a national high speed rail system, long overdue.... and eliminate the U.S. payroll tax....