THE INTERNATIONAL FORECASTER

WEDNESDAY, MAY 13, 2009

051309 (4)_IF
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An international financial, economic, political and social commentary.

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*****
NEXT SCHEDULED ISSUES
SATURDAY, MAY 16, 2009
WEDNESDAY, MAY 20, 2009
SATURDAY, MAY 23, 2009
WEDNESDAY, MAY 27, 2009
SATURDAY, MAY 30, 2009

We recommended a short on General Motors at $41.31 – we now believe it

is time to cover that short by buying in at about $1.15 a share.

US MARKETS
The Secrets of the Federal Reserve: The Federal Reserve Act was legislated in
1913 to end recessions, panics and depression. Over that almost 100-year period they
have been eminently no more successful then their predecessors. The Fed is a private
corporation, which guides US monetary policy. Its staff is from Wall Street, banking,
and transnational conglomerates and occasionally from academia. Of the 12 Federal
Reserve banks the New York bank is the most powerful. The staffing of the Fed at the
least is incestuous, because the member banks take part in the staffing, as they filter
to the Fed what actions they should take. That is done by the FOMC, The Federal
Open Market Committee. As a further example the recent stress test done by the Fed
was done on many of their owners. Sadly the public is unaware of this and even
business majors and those with business masters degrees do not know that the Fed is
privately owned or what they actually do. For those of you who would like to get a
better understanding read G. Edward Griffith’s, “Creature from Jekyll Island” and the
secrets of the Federal Reserve” by Eustace Mullins.
Recently we discovered that $101.4 billion was originally secretly funneled
through AIG to AIG counterparties - parties that were owed these sums by AIG, which
had not collateralized derivative contracts. That is like writing insurance and having no
collateral reserves set aside for losing events. The Federal Reserve in their wisdom
paid off AIG’s debt with what eventually will be taxpayer debt. This is wrong and it
should not have been done secretly. When demanded by a Federal Judge to reveal to
whom these monies were paid and under what circumstances, the Fed said it would
harm their reputations and it was a “state secret.”
The biggest gun in the Fed arsenal is the New York Fed. The recently
appointed Secretary of the Treasury Timothy Geithner was the NY Fed’s previous
governor. Mr. Geithner had worked in government previously and was in part
responsible for the Asian financial disaster in 1997-1998. He is also a Goldman Sachs
alumnus. He is part of a never-ending exchange of the denizens of Wall Street and
banking being appointed to government positions. In fact Wall Street and banking have
been running our government for a long time. Many say for too long.
This kind of relationship makes government a tool of major financial interests
and it breeds corruption, as we just witnessed in the case of Stephen Friedman,
formerly of Goldman Sachs, and until he resigned last week, for having purchased
some Goldman Sachs stock, was Chairman of the NY federal Reserve, the position
Mr. Geithner had held before him. This raises the fundamental question of
appointment and corruption. Never mind the other issues the Fed is involved in. this is
America’s most powerful financial institution and it is run by corrupt and perhaps
incompetent people. The NY fed has a very special position, because it is actively

3
running markets every day via the 21 dealers it uses to manipulate and uses these
markets. This is part of the program never spoken of that exists to assist the “Working
Group on Financial Markets, which manipulates markets 24/7, under an Executive
Order signed in August 1988 by then President Ronald Reagan. This was executed to
protect against market failures such that had taken place the previous October. The
order was for emergencies. The Treasury, the Fed, Wall Street and banking have
distorted its original intent. The Fed also sets interest rates and regulates the issuance
of money and credit. Thus the Fed holds a pivotal role in our financial well-being. They
also are to insure the soundness and stability of the banking system. If our banking
system breaks down it is the fault of the Fed. When that happens it should not be the
province of the Fed to commit trillions of dollars of taxpayer money to bail out its own
owners.
You can get an idea of the incestuous nature of the Fed and Wall Street in
looking at the select committee that not that long ago picked Timothy Geithner to head
the NY Fed. Hank Greenberg defrocked former Chairman of AIG, who for some
reason was never criminally prosecuted in the scandal; John Whitehead a former
Chairman of Goldman Sachs; Peter Peterson, a former Chairman of Lehman Bros.;
and Walter Shipley, a former Chairman of Chase Manhattan, now with JP Morgan
Chase. We wonder why the media never questions these kinds of connections all of
which are tied together by the Council on Foreign Relations.
Then there is the composition of the NY Fed board on which six board
members are public representatives. We do not see any common business people on
this board. They are all very wealthy New Yorkers, who are all connected to one
another. There have been occasionally members of labor and academia, but they can
only be considered tokens. It is very definitely an insiders club.
This means the Fed’s real consideration is the maximizing of profits for
banking, Wall Street, insurance and real estate. This goal of almost 100 years has
made these individuals and their families’ mega-rich. Competent or incompetent they
always win. They have information and intelligence no one else has and you can be
sure their inner circle has the same privileged information. As usual they are
essentially unregulated, which gives the Fed an additional advantage. The lack of
banking oversight of recent years has brought our entire financial system into
insolvency. We do not know how you could call it anything else when most major
banks, brokerage houses, some insurance companies and other lenders are simply
broke. The Fed, and particularly the NY Fed, has been complicit in banks and
brokerage houses using leverage of more than 50 times assets. In some cases such
as JP Morgan Chase the figures are much higher. In fractional banking 8 to 10 times is
considered appropriate. This is the biggest bailout of poorly managed corrupt banks in
history. This failure is far greater than the failure of the Lombard System in Venice in
1348, the year of the great bubonic plague that swept Europe and killed 50% of its
inhabitants. These elitists have brought the world economy to its knees. It is ironic, but
true to insider dealing, that not one CEO or senior executive has been fired, as trillions
of dollars have been lost.
That said this is the perfect segway to bring to your attention a bill calling for
the Comptroller General of the US to audit the private Federal Reserve. At last report
124 members of the House have joined Rep. Ron Paul’s bill HR 1207, as co-sponsors,
to his Federal Reserve Transparency Act of 2009. Both the Fed’s Board of Governors
and the Federal Reserve Banks would be required to report to Congress before the
end of 2010. This could be the most important bill in modern American history and
could lead to our financial and economic recovery. When the Congress sees what the
Fed has done they might just abolish it, which is really the solution. As Rep. Paul says,

4
“Congress should reassert its constitutional authority over monetary policy.” The
Constitution gives Congress, not the private Federal Reserve, “the Authority to coin
money and regulate the value of the currency.” “The Fed has presided over the near-
complete destruction of the US dollar,” says Rep. Paul. “Since 1913 the dollar has lost
over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose
money policy.” “How long will we as a Congress stand idly by while hard-working
Americans see their savings eaten away by inflation?” Only big-spending politicians
and politically favored bankers benefit from inflation,” he said. “Since its inception, the
Fed has always operated in the shadows, without sufficient scrutiny or oversight of its
operations.”
The Fed can enter into agreements with foreign central banks and foreign
governments, and the GAO’s prohibited from auditing or even seeing these
agreements. There are no enforcement powers over the Fed. The Fed’s funding
facilities including the Dealer Credit Facility, Term Securities Lending Facility, and the
Term Asset-Backed Securities Lending Facility should be subject to congressional
oversight.
Every problem we have had in our economy from the Fed’s conception and
passage can be directly traced to Federal Reserve policy.
Legislation should be passed to abolish the Fed and that the OMB, the Office
of Management and Budget liquidate Fed assets to insure a quick transfer of their
functions to the Treasury.
HR 1207 is now in the House Committee of Financial Reserves and has been
there for 3 months.
This could be the most important legislation ever submitted due to the financial
conditions in America at this time.
In the Senate, Sen. Bernard Sanders (I-VT) has submitted a similar bill, which
has been in the Senate Banking, Housing, and Urban Affairs Committee for 2 months.
As Rep. Paul says, “auditing the Fed is only the first step towards exposing this
antiquated insider-run creature to the powerful forces of free-market competition. Once
there are viable alternatives to the monopolistic fiat dollar, the Federal Reserve will
have to become honest and transparent if it wants to remain in business.
Contact everyone in Congress and let him or her know how you feel about this
issue as soon as possible.
As Joseph Schummpeter argues that monetary measures do not allow
policymakers to eliminate economic depression, only to delay it under penalty of more
severity in the future. In a market economy, economic depressions are painful but
unavoidably recurring. Counter cyclical monetary measures to provide more money
and credit to keep ill-timed investment on a high level in a depression are not creative
destruction, but positive destruction, and such measures will ultimately be detrimental
to the general welfare. This is what we’ve been preaching for some time.
Unemployment is a natural extension for stabilizing production and
consumption, and its solution cannot be implemented by holding up asset prices in a
depressed market economy. Unemployment is usually reduced by deficit-financing and
high wages. Today that is not easy with a $2 trillion deficit, rising interest rates,
monetization and the insane creation of money and credit. Plus, how can you maintain
wages, or raise them, with an army of illegal aliens working for next to nothing and
offshoring and outsourcing still going at full tilt? Monetarist measures cannot hold up
asset prices with today’s problems, which are the worst since the early 1870s.
Looking back Herbert Hoover was wrong in starting off the Socialist-Fascist era
that began the 1930’s Great Depression. Franklin Delano Roosevelt carried out that
program and it was a failure. America was saved by war at a terrible price. Andrew

5
Mellon was right in advocating that government must keep its hands off and let the
slump liquidate itself. Purge the rottenness out of the system. Mr. Mellon said liquidate
labor, stocks, farmers and real estate. No more high living, people will work harder and
lead a more moral life. Values will be adjusted, and enterprising people will pick up the
wrecks from less competent people.
The economics of monetarism are nothing more than a formula promulgated to
save the financial sector and not the country, by using an elitist trickle down theory,
which as recent as the 1980s had been proven unworkable. Bail out the rich on Wall
Street, the bankers and insurance companies and let the poor and working poor fend
for themselves. This is class economics and this is what turns the masses toward
socialism. Bankers, who caused the problem, are bailed out by the masses, and the
public is left to drown on their own. We are told the bankers and Wall Street must be
saved or we’ll have no economy. We call this the myth of saving the criminals.
Under a Federal Reserve System the Fed has in private hands unlimited state
power to create money and credit backed by the full faith and credit of the American
people, which denies those people the rights of sovereignty.
Via the Fed and via Executive Order and the “Working Group on Financial
Markets” we allow the Fed and the Treasury to manipulate our markets. Thus our
financial elite grow richer and richer, and worse yet even professionals do not know
what is going on, never mind the public. The creation of money and credit is effected in
such a way that the financial sector is protected and the burden of loss of purchasing
power is cast upon American workers. The capitalists do business as usual. Such
pursuits have often ended in revolution. The fruits of low wages in America, a result of
free trade, globalization, offshoring and outsourcing, have taken their toll. The result is
more than two years of recession and now more than three months of depression. The
working poor cannot afford to buy what they produce and they cannot pay the debt
cast upon them by Wall Street and the banking establishment. There are no free
markets. The markets are what these people want them to be. Today they feed their
own debt bubble hoping, hope against hope they can bail out the system again.
These miscreatants, in what is called a shadow banking system securitized
mortgages and other debt by fraud via a corrupt rating system worldwide monetizing
their liabilities and buried thousands of professionals worldwide. This unpayable debt,
now lost, along with derivatives present problems that are really just beginning to be
addressed. All this is done with little transparency in order for these institutions, guided
by the Fed, to dump their financial risks.
There you have it. A manmade disaster created by the Federal Reserve,
banking and Wall Street, and these are the same corrupt group who our government
has chosen to rectify the problem. Their answer is to take the funds from the public to
cover their losses, be it by inflation or taxes. The answer is get rid of the Fed and
purge the system once and for all.
*****
Is Anyone Minding the Store at the Federal Reserve?
http://www.youtube.com/watch?v=PXlxBeAvsB8
"No one is keeping track of the off-balance sheet transactions conducted by the
Federal Reserve," and the "losses on lending since last September." The IG for the
Federal Reserve states she has no jurisdiction to audit reserve bank activities.
Congressman Ron Paul's Audit the Fed bill, HR 1207, is critically needed, along with
increased Congressional oversight. The above short video provides additional insight
into why this bill needs to be adopted.
*****

6
 Inflation is rearing its ugly head again, and markets want the Federal Reserve
to do something about it. Unfortunately the Fed is in a box and they can do little to stop
it. As a result real interest rates are rising, as have been commodity prices. Commodity
prices are already outperforming the stock market. Next to move up and out of
powerful formations are gold and silver. Thus it is now inflation, credit and solvency
concerns.
As you are aware the bond market has begun its decent as yields climb higher.
If most debt instruments decline financial firms’ balance sheets will deteriorate
severely. Lower bond prices also portend major derivative problems. We haven’t had a
bond bear market in 20 years. When it comes it takes no prisoners in its savagery. The
CDS outstanding are about $60 trillion and how much is naked or uncollateralized
remains to be seen. The artificial manipulation of bond markets by the Fed has come
home to roast with some very unintended consequences.
The Treasury and the Fed have been monetizing Treasuries, Agencies and
toxic garbage at a horrific rate. That has not gone unnoticed by foreign buyers.
Foreigners also know that TARP recipients are again running wild in the markets using
taxpayer funds to speculate. The public is not aware of what is going on, but they’ll find
out in time when more of these financial institutions go bankrupt. There is revolution in
the Air. You can feel it and smell it and it is not only in the US. In America you do have
Bubba’s, but with the firings in upper middle class and upper class you have a whole
new corp of intelligent malcontents, that government may have to deal with.
Inflation is leading the race to the bottom for all currencies and nations. The
only safe investments left are gold and silver.
Would you have thought that you would have ever seen the 19 largest banks in
America bankrupt? Well, they are bankrupt – Stress Test or no Stress Test. We are
told ten banks need $74.6 billion by our government. If the economy does not recover
over the next two years we are told they could need $600 billion. Toxic waste CDOs
could be $200 billion and they could sustain trading losses of $100 billion. This can
hardly be representative with short-term unemployment projected to be by us at 11%
and U6 at a real 22%.
This past week and this week banks have been bounding about selling stock in
the billions of dollars hoping to stay afloat financially. Offsetting the more than $300
billion in losses in credit cards, consumer loans and, of course, residential mortgages.
We are told these banks need hundreds of billions of dollars, but they are solvent. How
can that be?
In the latest government report from the BLS, Bureau of Labor Statistics, we
are told the fictitious birth/death model added 226,000 jobs. Supposedly construction
added 38,000 jobs; hospitality, like Vegas casinos, which are laying off like mad,
added 76,000 and professional services added 65,000. The fraud goes on. In the first
quarter U6 rose 14.8%, 15.6% and 15.8%. Our figure is 19.2%. These are the recently
laid off, or a reflection of the 8.9% we see in the controlled media, plus those who have
run out of unemployment checks and discouraged workers. If you add the official job
losses for April 539,000 and the phantom B/D figure the actual job loss was 765,000.
This is supposed to be good news.
The economic Cycle Research Institute’s US Future Inflation Gauge rose to
78.2 in April from 77.9 in March. They saw inflationary moves in measures of vendor
performance, loans, commodity prices and labor market conditions, partly offset by a
dis-inflationary move in interest rates. Interest rates are up 3/8% over this past move,
which means more inflationary pressure.
The bid to cover at the 30-year Treasury auction was 2.14 to 1; (2 to 1 is good),
but at the last five auctions it was 2.32 to 1. The Treasury is beginning to have its

7
credit line shut down by the rest of the world. This in time, as we forecast, will give us
full force monetization and major inflation. That is why we forecast the beginning of
hyperinflation for this month. We predicted the high in the dollar at 89.5. It has since
plunged to 82.43, and is headed, probably quickly, to 71.16. Your positions in gold and
silver related assets are the only thing that can protect you and you had best
remember that. They are the only real wealth that you have.
Consumer credit fell more than expected in March, plunging to a record $11.1
billion, or an annual rate of 5.2% to a total of $2.55 trillion, the biggest drop since 1990.
February’s fall was $8.1 billion. Non-revolving debt on cars, boats, college education
and holidays dropped $5.7 billion, or at a 4.2% rate to $1.6 trillion. Credit and charge
cards fell $5.4 billion, or at a 6.8% rate to $946 billion in March from $9.7 in February.
Bank of America in regard to the Stress Test says it doesn’t need more capital,
but they’ll sell off assets anyway. They said they’d pay back TARP money. They
cannot pay TARP back if they don’t have the funds to do so.
If as we predicted over the next two years we lose another five to seven million
jobs industrial production will fall 11% to 15%; unemployment, U6, will rise to 35% and
under-employment will reach 25%. That means at least another 750,000 foreclosures.
The 30-year fixed-rate mortgage was 4-7/8%, the 15’s were 4.48% and the
one-year ARMs were 4.77%.
Last week the dollar index, the USDX, fell 2.4% to 82.53, as gold rose 3.2% to
$915.35. Silver surged 11.9% to $13.99.
*****
This is a letter sent to us by a subscriber who had sent this letter to a friend, in
the hope that that friend would see what is really going on.
I can see you've done none of the homework or reading I suggested into how the
Bilderbergers, the Council on Foreign Relations (CFR) and the Trilateral Commission
RULE and RUN the western nations and most the world (with the aid of a handful of
affiliated organizations and families like the Warburgs, Rothchilds, Krupp, Rockefeller,
Skull & Bones of Yale, think tanks, foundations and the like). They elected Reagan
and they elected Obama. and Bush, Clinton and just about every POTUS in the last
century.

Ronald Wilson Reagan was a member of the United World Federalists

(http://en.wikipedia.org/wiki/World_Federalist_Movement) for 13 years, an organization
that wanted to DO AWAY with the U.S.A. so that a New World Order could come to
be. Red Ronnie was also a member of the Committee for a Democratic Far East
Policy, a known instrument of the Soviet Union as implicated by the California House
Ctte on Un-American activities. So, it's interesting that he picks 33 members (a known
significant Masonic number) to help him drum up unnecessary concern over a country
that's about to collapse...
http://www.historycommons.org/entity.jsp?entity=richard_v._allen

and yes, those same families and groups funded this guy's rise to power as well,
another great "communicator"...
http://www.youtube.com/watch?v=CyNj0fnfUnQ

World War I was set up to test out biological warfare agents (there was a worldwide flu
outbreak during that war) and stage Germany as the driver for the next major war.
WWII helped establish NWO entities and movements like the United Nations as well
as test extermination projects and mind control techniques. To supposedly end WWII,
they celebrated another Masonic ritual by UNNECESSARILY dropping nukes at the

8
33rd parallel when Japan was set to surrender. And to this day, we are still the only
nation to attack another with atomic weapons.
Bringing us up to current day, I can virtually guarantee we will be engaged in
third global war at some point during Obama's illegitimate Presidency for so many
reasons that serve the global controller's agenda, I won't even begin to cover them at
this late hour. All I can say is we all need to get over the left-right paradigm crap and
every other ridiculous, intelligence-insulting game they play on us over and over
again. Instead, we need to get into PREDICTING their next likely steps and preparing
for them (like fraudulent elections, I really don't think there's much we can do to
prevent them). And the best place to start might be to ask the Creator for some
guidance.
*****
Confidence in the US dollar is ‘fraying’ and a shift away from the greenback
after the financial crisis is inevitable, Nobel Prize-winning economist Joseph Stiglitz
told Emerging Markets newspaper. The question is whether the move will be chaotic
with regional swap arrangements, semi-currencies or multiple reserve currencies, or
done in a more organized way, Stiglitz told the newspaper. The dollar won’t remain the
world’s reserve currency as the inflationary impact of a rapidly expanding Federal
Reserve balance sheet has undermined confidence in the greenback, he told the
newspaper.
Most US banks expect loan delinquencies and losses to increase this year, a
Federal Reserve report showed. More than 70% of respondents on net said bad loans
will rise should the economy progress “in line with consensus forecasts,’ the Fed said.
More firms made it tougher for consumers to get home and credit-card loans in the
past three months than in the previous survey, while fewer tightened terms for
businesses. Banks are hoarding a record $1.1 trillion of cash even after the Treasury
and central bank made emergency capital injections and set up special lending
programs to ensure lenders extended credit to households and businesses.
Investors’ aversion to risk fell to the lowest level since July 2007 according to a
Bank of America Corp. gauge. The Financial Stress Index, which uses 12 components
including credit spreads, stock volatility and the price of gold, fell to minus 0.12 today.
Values between plus 1 and minus 1 show investors are risk neutral. The measure
peaked at 4.68 after Lehman Inc.’s collapse in September.
The number of US homes valued at more than $729,750, the jumbo-loan limit
in the most affluent areas, entering the foreclosure process jumped 127% during the
first 10 weeks of this year from the same period of 2008. The rate rose 72% for homes
valued at less than $417,000 and 78% for all homes, RealtyTrac said.
It is worth noting first quarter bond issuance data from the Securities Industry
and Financial Markets Association (SIFMA). Total Bond issuance (Muni, Treasury,
mortgage-related, corporate, agency, and ABS) jumped to $1.420 TN during the
period. This was a notable 71% increase from a dismal 4th quarter to the strongest
issuance since Q2 2008 ($1.598TN). If the first quarter’s pace is maintained, total
2009 issuance of $5.680 TN would trail only 2003 and 2007.
First quarter bond sales were actually up 3.2% from Q1 2008, led by a 60% y-
o-y increase in Treasury issuance ($326.8bn). On a quarter-over-quarter basis,
Agency issuance was up 332% to $413.7bn; Mortgage-Related issuance increased
69% to $364.8bn; and Corporate issuance surged 188% to $215.1bn. Exemplifying
the scope of the unfolding Government Finance Bubble, Treasury and Agency debt
issuance combined for an incredible $740.5bn during the first quarter, up 59% y-o-y to
a record annual pace of $2.962 TN.

9
 From Fannie today, 5/9/09: “In March, Fannie Mae provided $93.3 billion in
liquidity to the market through Net Retained Commitments of $5.4 billion and $87.8
billion in MBS Issuance. March refinance volume increased to $77 billion, nearly twice
the refinancing volume reported in February and our largest refinance month since
2003. We expect that our refinance volumes will remain above historical norms in the
near future. Fannie Mae began accepting deliveries of refinance mortgage originations
under the Making Home Affordable program in April 2009.
Fannie’s “Book of Business” (retained mortgages and MBS guarantees)
expanded at a 12.3% rate during March to $3.144 TN (largest increase since February
2008). Fannie MBS guarantees grew at a 15.4% annualized pace during March to
$2.640 TN. The $31.4bn increase in guarantees was the largest in 13 months. The
company’s “New Business Acquisitions” jumped to $92.8bn from February’s $53.8bn
and January’s $28.8bn.
By the end of the year, we would not be surprised to see upwards of $1.0 TN of
“private” mortgage exposure having been shifted to the various government-related
agencies (Fannie, Freddie, Ginnie, FHA, and FHLB). The wholesale transfer of
various private sector risks to “Washington” is a key facet of the Government Finance
Bubble. Nowhere is such redistribution accomplished as effectively and surreptitiously
as when the mortgage marketplace is incited to refinance by (Fed-induced) collapsing
yields. Think in terms of our government placing its stamp of guarantee on hundreds
of billions of risky, illiquid and unappealing mortgage securities – transforming them
into coveted “money”-like agency securities. Such dynamics work wonders…
Previous holders of these mortgages receive cash, while the entire marketplace
benefits from higher mortgage/MBS prices.
The markets are setting themselves up for disappointment. We would posit
that the more energized the markets and economy the greater the amount of Credit
issuance that will need to be absorbed by the markets (debt and currency). So far, it is
mainly Treasury yields that are rising. Government Finance Bubble dynamics would
seem to dictate, however, that agency debt and MBS yields could provide the key to
both artificial economic recovery and inevitable disappointment. And we would not
expect a sinking dollar to support the markets for agency securities or Treasuries.
Cyber espionage and attacks from well-funded nations or terror groups are the
biggest threats to the military’s computer networks, a top US officer said.
Gen Kevin Chilton, who heads US Strategic Command, said he worries that
foes will learn to disable or distort battlefield communications.
Chilton said even as the Pentagon improves its network defenses against
hackers, he needs more people, training and resources to hone offensive cyber war
capacity. At the same time, he asserted that the US would consider using military force
against an enemy who attacks and disrupts the nation’s critical networks.
“Our job would be to present options. I don’t think you take anything off the
table when you provide options” to the president, in the wake of an attack, whether the
weapon is a missile or a computer program, he said.
Chilton’s comments shed the most light to date on the Pentagon’s ongoing
debate over how to beef up its abilities to wage and defend against cyber warfare. And
they came as the military is planning to set up a new cyber command at Fort Meade
not far from Washington that would report to Strategic Command.
Chilton said that his biggest fear is that enemies hack into military battlefield
systems, and when an American commander sends out an order that says forces
should go left, it is changed to say forces should go right. While most systems are
classified and walled off, he said there are often ways to cross into those networks.

10
 The other worry is more internal. When a soldier or sailor sits down at a
computer, Chilton said “it’s like he’s stepping to the guard gate at his base,” and can
open the digital gate and let adversaries in.
General Motors Corp. says the U.S. government is guaranteeing the warranties
of its cars and trucks sold in Mexico.
The government announced it would guarantee warranties of vehicles sold in
the U.S. starting March 30. The move was designed to stimulate sales by easing fears
GM might go into bankruptcy and wouldn't be able to back its warranties.
GM says it will pay part of the warranty guarantee costs and will borrow the rest
from the U.S. government. The guarantees cover GM vehicles sold in the U.S. and
Mexico during the company's restructuring period.
GM made the statement in its quarterly report filed with the Securities and
Exchange Commission on Friday.
GM said it is negotiating a similar program with the Canadian government.
A group of “insider” investors was sued by the trustee liquidating Bernard L.
Madoff Investment Securities LLC over claims its members received more than $1
billion from Bernard Madoff’s Ponzi scheme.
Similar lawsuits will be filed in coming weeks and months, said the trustee,
Irving Picard, in an e-mailed statement. Stanley Chais, a philanthropist and investment
adviser in Los Angeles, was named in the complaint filed yesterday in U.S. Bankruptcy
Court in New York. The suit also named his companies including Brighton Co. and
trusts in family members’ names.
“Stanley Chais was a beneficiary of this Ponzi scheme for at least thirty years,”
Picard said in the complaint. Since December 1995, Chais and the other defendants
“collectively profited from this scheme through the withdrawal of more than one billion
dollars, and knew or should have known that they were reaping the benefits of
manipulated purported returns, false documents and fictitious profits.”
Madoff, 71, pleaded guilty in March in federal court in Manhattan to running the
biggest Ponzi scheme ever. He faces a prison sentence of as many as 150 years.
Before his Dec. 11 arrest, Madoff told his thousands of clients that they had
about $65 billion, prosecutors said.
Picard, a lawyer with Baker & Hostetler LLP in New York, has recovered about
$1 billion for investors in Madoff’s money- management business, known by its initials
as BLMIS.
“This is the first of several actions that will be brought against entities that
either acted as insiders with Bernard Madoff and BLMIS or that benefited from
Madoff’s scheme to the severe detriment of other customers of BLMIS,” David
Sheehan, an attorney for Picard, said in the statement.
Intel Corp., accused by the European Union of giving computer sellers rebates
to exclude a rival’s chips, may be ordered to stop the discounts and pay a record
antitrust fine of more than 1 billion euros ($1.36 billion).
The European Commission will rule this week on charges that Intel impeded
competition and harmed consumers by muscling out Advanced Micro Devices Inc.
from the chip market. The penalty could double the record 497 million-euro fine against
Microsoft Corp. in 2004 for abusing its monopoly in personal computer operating
systems, said Thomas Graf, an antitrust lawyer at Cleary, Gottlieb, Steen & Hamilton
LLP in Brussels.
“There is a good chance that there could be a record fine for an abuse of
dominance case, and that it could exceed the fine against Microsoft,” Graf said.
The commission decision may increase pressure on Intel as computer sales
decline because of the economic downturn. Intel the world’s biggest computer-chip

11
maker, has kept its market share at about 80 percent by granting rebates that are
conditional on computer makers buying all or the majority of their chips from the
company, the commission has charged.
Intel has been entangled in the dispute with the EU for more than eight years
following a complaint by AMD. Intel, facing a related civil lawsuit filed by AMD in
federal court in Delaware and an investigation by the U.S. Federal Trade Commission
for alleged unfair business practices, is likely to start a lengthy appeal at European
courts to prevent the EU ban on rebates from taking effect, lawyers said.
General Motors Corp. said it’s more probable than previously thought that it will
need to file for bankruptcy.
Chief Executive Officer Fritz Henderson declined to comment on a conference
call about a specific probability figure. The automaker is evaluating the possibility of
bankruptcy on a “country by country” basis, Henderson said.
General Motors isn’t planning to modify terms of a bond exchange, Henderson
said.
On other topics, Henderson said the company has shown “willingness” for GM
to hold a minority stake in the Opel unit in Germany.
The trend of employment in the U.S. weakened in April but at a more moderate
pace than in previous months, a report Monday said.
The Conference Board said that its April employment trends index fell by 0.7%
to a reading of 89.5, from March's unrevised level of 90.1. The index was down 22%
from a year ago.
Unemployment in the world's developed economies rose to 7.6% in March this
year as companies around the world slashed staff in order to trim costs in an attempt
to ride out the economic recession, figures released by the Organization for Economic
Cooperation and Development showed Monday.
The OECD said the unemployment rate was up from 7.3% in February and
6.6%in March last year.
In the euro zone, the jobless rate rose to 8.9% in March from 8.7% in February,
while in the U.S. unemployment jumped to 8.5% in March from 8.1% a month earlier.
The unemployment rate in the major seven OECD economies rose to 7.5% in
March from 7.2% in February, while Germany's unemployment rate was 7.6% from
February's 7.4%, the OECD said.
The Federal Reserve significantly scaled back the size of the capital hole
facing some of the nation's biggest banks shortly before concluding its stress tests,
following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different
measurement of bank- capital levels than analysts and investors had been expecting,
resulting in much smaller capital deficits.
Shortly before the test results were unveiled Thursday, the capital shortfalls at
some banks shrank, in some cases dramatically, according to people familiar with the
matter.
Bank of America's final gap was $33.9 billion, down from an earlier estimate of
more than $50 billion. Citigroup's capital shortfall was initially pegged at roughly $35
billion, according to people familiar with the matter. The ultimate number was $5.5
billion.
In other words, the ‘Stress Test’ is a sham, a fraud perpetrated to help banks
raise capital and to allay fears about the condition of the US financial system and
economy. And the government & insiders knew they could count on the Street, most
of the media and thoughtless momentum buying to swallow the scheme.

12
 Will Procrastination Pay? Though the stress tests could be dismissed as little
more than political theater, even the harshest critics concede they accomplished
something important: breathing room.
The strategy of procrastination worked," said Kip Weissman, a partner at Luse
Gorman Pomerenk & Schick PC. "The Obama administration was playing for time,
hoping things would get better. That seems to be what is happening. Banks have a
lot more options than they did 60 days ago."
Morgan Stanley and Wells Fargo rushed to sell more than $15.5 billion of stock
and bonds after the U.S. government said top financial companies need to fill a $75
billion capital hole, while two European banks said bad debts are rising.
The April employment report is a fabrication and should dispel any doubts
about big brother’s determination to obfuscate & deceive as well as the fin media’s
unwillingness to delve into details.
Unfathomably the BLS added 226,000 Business Birth/Death jobs in April. For
April 2008, the BLS added 176,000 jobs - and that was bogus. These are jobs that the
BLS believes are being created by small businesses. This is the third largest B/D job
creation in history!
Alan Abelson notes that the US government hired 72,000 [temporary] census
takers. David Rosenberg notes that without the census jobs and excess B/D jobs, the
NFP would have lost nearly 670,000 jobs.
McClatchy News caught two important facts in the report: Job losses slow, but
is it from government hiring?
Private-sector employment actually fell by 611,000 jobs, but government hiring,
which added 66,000 jobs, mostly for the upcoming census, offset some of them.
Some 498,000 more Americans moved into the ranks of the long-term
unemployed in April, the Bureau of Labor Statistics reported, bringing the total to 3.7
million. Of that large pool, some 2.4 million joined those ranks since the recession
began in December 2007. The long-term jobless now are more than 27 percent of all
the unemployed, the highest ever since records began in 1948, Stettner said.
John Williams notes that net of revisions, NFP fell 605,000. ‘Forced’ part-time
job holders have more than doubled, to more than 9 million, over the past 18 months.
The B/D model fabricated 226,000 jobs, which is ludicrous. Government
created 66,000 jobs. The long-term unemployed jumped to a record as did ‘forced’
part-time workers. Yet most of the Street and media herald the April employment
report as a sign of economic stability or budding growth. You can’t make up stuff like
this!!!
Of those who say they are unemployed and looking for work, the proportion of
people who are out of work because they were discharged from their old job — as
opposed to because they quit the job, or were temporarily laid off, or are new to the
labor force — is at a record high. These are the people who are used to having work.
The average length of unemployment has climbed to 21.4 weeks, exceeding the
previous record of 21.2 weeks, set in July 1983. (The data goes back to 1948.)
There is a possibility that BLS models went berserk and fabricated an
unreasonable amount of jobs because Passover and Easter were in April. But that
should already be in the seasonal adjustment.
Political risk is becoming a growing concern for investors in the United States
as the government plays a larger and more controversial role in private enterprise.
State intervention in economic affairs is always closely watched by investors for what it
means for their decisions on where to allocate money, although this is usually more of
a worry in emerging markets than in developed economies. Political risk is becoming

13
more of a U.S. issue as some investors howl over what they see as arbitrary intrusion
by the government in business affairs.
The Obama administration threatens to rescind billions in stimulus money if
Gov. Schwarzenegger and lawmakers do not restore wage cuts to unionized home
healthcare workers.
Mussolini’s acolytes rationalized his fascism by averring that ‘at least the trains
run on time’. Perhaps we can excuse smiley-faced fascism by proclaiming ‘stocks and
Goldman are rallying on time.’
US President Barack Obama will hold a town hall meeting next week in New
Mexico to promote congressional efforts to reform credit card practices, the White
House said on Friday.
The American Bankers Association trade group, which represents many of the
biggest credit card issuers, have warned that legislation could reduce the amount of
credit available and make it more expensive for card users going forward.
The US government is pouring billions into General Motors in hopes of reviving
the domestic economy, but when the automaker completes its restructuring plan, many
of the company's new jobs will be filled by workers overseas. [The US taxpayer is the
ultimate patsy, and they know it. But there is an anger building.]
According to data from the Association of American Railroads (AAR),
originated carload volumes decreased 22.3% during the week ending May 2 (the 17th
week of the year), compared to the same week of 2008, the sixth consecutive week of
20%+ declines.
• For the week ending May 2, the percentage decrease in originated and received total
commodity carloads on a rolling four-week average was 25.3%, a 50bp deterioration
from the prior week.
• All carload groups were again down double digits this week, led by Metals (-53%)
and Automotive (- 39%) which have been hurt by the auto production shutdowns and
steel mill utilization rates ~40%+.
• Coal (-16% QTD) has begun to slip recently on lower electricity demand and slightly
above average stockpiles at utilities, though BNI shipments have remained steady,
down only 1% QTD.
• Originated intermodal volumes decreased 17.5%, as high unemployment has
retailers continuing to drawdown inventory levels to match the cautious consumer.
Enjoy the rally while it lasts - but expect to take a sucker punch:
Our delicious spring rally is nearing the limits. The 40pc rise on global bourses since
March assumes that central banks have conjured away the debt overhang by slashing
rates to zero and printing money.
Nothing of the sort has occurred. Two thirds of the world economy will be in
deflation by July.
Bear market rallies can be explosive. Japan had four violent spikes during its
Lost Decade (33pc, 55pc, 44pc, and 79pc). Wall Street had seven during the Great
Depression, lasting 40 days on average.
James Montier at Société Générale said that even hard-bitten bears are starting
to throw in the towel, suspecting that we really are on the cusp of new boom. That is a
tell-tale sign. "Prolonged suckers' rallies tend to be especially vicious as they force
everyone back into the market before cruelly dashing them on the rocks of despair yet
again," he said. Genuine bottoms tend to be "quiet affairs", carved slowly in a fog of
investor gloom.
Another sign of fakery – apart from the implausible 'V' shape – is the "dash for
trash" in this rally. The mostly heavily shorted stocks are up 70pc: the least shorted are

14
up 21pc. Stocks with bad fundamentals in SocGen's model (Anheuser-Busch, Cairn
Energy, Ericsson) are up 60pc: the best are up 30pc.
The Controller of California did not see any green shoots in April. From his
budget report: The State’s revenues continued to deteriorate in April. Total General
Fund revenues were down $1.89 billion (-16%) from the latest estimates found in the
2009-10 Budget Act.
Personal income taxes were $1.06 billion below the estimate (-12.6%),
corporate taxes were below the estimate by $831 million (-35.6%) and sales taxes
lagged the estimate by $108 million (-19.9%).
Over the past five months in CA we have seen a surge in new Notice-of-
Defaults yet they have not translated into actual foreclosures YET. That is all about to
change. In April foreclosures increased significantly over March but are still well off
the last six months average and down 60% from year ago levels -- before all of the
state and bank-specific moratoriums began pouring out.
There is already good evidence that May will be the month that actual foreclosures
start to pour out of courthouses and onto the market just in time for the summer busy
season -- what a coincidence!
A Goldman proprietary survey of over 2,800 US consumers suggests that
consumers will spend little of the estimated $110B in income tax relief. Goldie
estimates that consumers will spend only 10% of tax rebates and the balance will be
used to repay debt and build up savings.
Some analysts are debunking the notion that consumers are increasing
savings as reported by the BEA. They note that the Fed’s H6 report implies that
savings plunged at a 12% annualized rate, over the last five weeks that ended last
month. Bank savings are down $16B and small CDs and retail money market assets
declined $37B. Lies, lies and more lies.
Members of the Trilateral Commission are proposing a new plan for troubled
banks -- let the Fed be the "supercop" to make sure that bank failure doesn't disrupt
the market. This incestuous relationship signals that the "big four" banks are ready to
help the Fed out by acquiring the weaker bank competitors. The market is at an
important crossroad that will decide its direction, either up or down, for at least the next
few weeks.
In the first settlement of its kind in the country, Massachusetts Attorney General
Martha Coakley has reached a $60 million agreement with a Wall Street investment
bank that helped facilitate the frenzy of subprime lending that saddled so many
homeowners with mortgages they could not afford to pay.
Wall Street giant Goldman Sachs Group agreed to reduce the size of subprime
loans for some 700 Massachusetts homeowners by up to 35 percent, Coakley said
yesterday. The investment bank played a key role in perpetuating sales of subprime
mortgages by packaging the loans into securities that were sold to investors, with the
proceeds used to fund new rounds of mortgages.
"This is a landmark case. It is one of the few times we've seen somebody who
didn't actually originate the loans being held accountable," said Guy Cecala, the chief
executive of Inside Mortgage Finance, a mortgage industry newsletter. "It is a
significant precedent. The question begs to be asked: If Massachusetts can do it with
Goldman Sachs, who else can they do it with?"
Economists downgraded their projections for a recovery from the deepest U.S.
recession in half a century, now seeing the jobless rate exceeding 8 percent through
2011, a Bloomberg News survey showed.
Unemployment will average 8.5 percent in 2011 after a 9.6 percent rate next
year, higher than previously expected, according to the median forecast in the survey

15
taken from May 4 to May 11. The economy may expand 2.8 percent in 2011, less than
estimated last month, after a 1.9 percent rise in 2010.
“The worse the labor market is and the longer that lasts, the more difficult it’ll
be for consumers to recover,” said Joshua Shapiro, chief U.S. economist at Maria
Fiorini Ramirez Inc., a New York forecasting firm. “The economy isn’t going to come
roaring out of the box here.”
Paul Krugman, Princeton University’s Nobel Prize-winning economist, said
global economic prospects don’t justify the two-month rally that has restored $8.9
trillion to stock markets around the world.
Speculation government spending packages and interest-rate cuts worldwide
will reinvigorate the global economy has helped the MSCI World Index rally 37 percent
since falling to its lowest since 1995 on March 9. The U.S. Standard & Poor’s 500
Index surged 34 percent in that time.
“It looks to me now as if the markets are now pricing in a rapid recovery, that
they’re pricing in a V-shaped recession, which I consider extremely unlikely,” Krugman,
56, said at a forum in Shanghai today. “The market seems to be looking as if this is
going to be an average recession, but it’s not.”
Krugman, who won the 2008 Nobel Prize for economics, joins New York
University’s Nouriel Roubini in calling for a more cautious outlook on growth. Roubini
said last week analysts expecting the U.S. economy to rebound in the third and fourth
quarter were “too optimistic.” Nassim Nicholas Taleb, the author of “Black Swan,” said
the current global crisis is “vastly worse” than the 1930s.
The International Monetary Fund said on April 22 the global economy will
contract 1.3 percent this year, downgrading its January projection of 0.5 percent
growth. A recovery will take longer than normal because the slump was precipitated by
a worldwide financial crisis, the IMF said.
David Tice, the chief portfolio strategist for bear markets at Federated Investors
Inc., said the Standard & Poor’s 500 Index will probably plunge about 62 percent. He
spoke during a Bloomberg Television interview today. The Federated Prudent Bear
Fund that he founded returned 6.7 percent last year as the S&P 500 plunged 38
percent, the most since 1937. Tice said the benchmark index for U.S. stocks may
slump to about 325. It closed today at 865.30. The measure has surged 28 percent
since March 9, the most in five weeks since the 1930s.
Hedge funds and other investors stand to make billions of dollars on credit
insurance contracts if GM declares bankruptcy, a prospect that is complicating efforts
to persuade creditors to agree to a restructuring plan for the automaker, analysts say.
Across the six-county Chicago metropolitan area, foreclosure filings rose 6% in
the first quarter to 17,819, the highest one-quarter total since the housing crisis began
in mid-2006.
The bank stress test results, released Thursday, suggested that the nation’s 19
biggest banks could expect nearly $82.4 billion in credit card losses by the end of 2010
under what federal regulators called a “worst case” economic situation.
But if unemployment breaches 10 percent, as many economists predict, the
rate of uncollectible balances at some banks could far exceed that level.
General Motors Corp. reported that six executives sold shares in the company,
as the largest U.S. automaker said it’s more probable than previously thought that it
will need to file for bankruptcy.
National chain store sales rose 0.1% in the first week of May versus the
previous month, according to Redbook Research's latest indicator of national retail
sales released Tuesday.
The rise in the index was compared to its targeted 0.1% fall.

16
 The Johnson Redbook Index also showed seasonally adjusted sales in the
period were up 0.3% compared with May 2008, compared to a targeted 0.2% gain.
Redbook said that on an unadjusted basis, sales in the week ended Saturday were up
0.3% from the same week in 2008 after a 0.3% rise the prior week.
The trade deficit widened for the first time in eight months during March, as the
price and use of imported oil both climbed.
The US deficit in international trade of goods and services increased to $27.58
billion from February's revised $26.13 billion, the Commerce Department said
Tuesday. Originally, the February deficit was estimated at $25.97 billion.
US exports in March slipped by 2.4% to $123.62 billion from $126.63 billion as
trading partners bought less consumer goods and cars from the US US imports fell at
a lower rate, dropping 1.0% to $151.20 billion from February's $152.76 billion.
The U.S. deficit with China widened during March, to $15.62 from $14.20 billion in
February. The overall U.S. trade deficit of $27.58 billion was smaller than expected on
Wall Street. Economists surveyed by Dow Jones Newswires estimated a $29.7 billion
shortfall in March.
The real, or inflation-adjusted, trade deficit also rose in March, climbing to
$35.90 billion from $35.67 billion. Trade is a component of gross domestic product, the
government's broad measure of U.S. economic activity. Analysts monitor the real
deficit when trying to determine trade's effects on the overall economy. Despite the
small climb in March, the real deficit was lower early this year than in the fourth quarter
of 2008. The first estimate of GDP for the first quarter of 2009 showed trade added
1.99 percentage points to the economy, as exports plunged but imports fell at an even
sharper rate.
Overall GDP dropped 6.1% January through March, a big drop but one that
was smaller than the 6.3% decline in the fourth quarter. Signs the U.S. economy is
deteriorating less than it once was have been popping up. A report Friday, for
instance, showed the pace of job losses eased last month, with the labor force losing
539,000 non-farm jobs. Non-farm payrolls had shed 699,000 jobs in March.
The increase in the nominal trade deficit, to $27.58 billion, was the first climb
since July. Imported oil prices rose during March, the trade data Tuesday showed. The
value of crude oil imports increased in March to $11.98 billion, from $10.00 billion in
February. The Commerce report's average price per barrel of imported crude in March
rose by $2.14 to $41.36 from $39.22. It was the first increase in eight months. Last
year, imported oil topped at $124.66 billion in July, and then started a deep slide.
The International Council of Shopping Centers and Goldman Sachs Retail
Chain Store Sales Index rose 0.3% in the week ended Saturday, May 9, from its level
a week before on a seasonally adjusted, comparable-store basis. On a year-on-year
basis, retailers saw sales rise 0.5% in the latest week.
Home prices in the U.S. dropped the most on record in the first quarter from a
year earlier, led by California and Florida, as banks sold foreclosed properties. The
median price fell 14 percent to $169,000, the National Association of Realtors said
today. Prices dropped in 134 of 152 metropolitan areas, with the deepest declines in
Cape Coral-Ft. Myers, Florida, and the San Francisco and San Jose areas.
Distressed sales increased transactions in 17 states from the fourth quarter as
speculators and first-time buyers purchased bank-owned properties. Such homes
typically sold for 20 percent less than others, the NAR said today. The inventory of
previously owned homes on the market dropped to 3.7 million in March from 3.8 million
a month earlier, according to NAR data. The number of new homes for sale fell to
311,000, the lowest since January 2002, according to the Commerce Department.

17
 “There are a lot of forces pushing the market in different directions,” said Brian
Bethune, economist at IHS Global Insight in Lexington, Massachusetts. “We’ve seen
huge improvements in affordability, not only in prices but also in terms of mortgage
rates below 5 percent, but what’s pushing down those prices is foreclosures and job
losses.”
California’s budget deficit has grown so severe that Governor Arnold
Schwarzenegger said he may be forced to release 40,000 prisoners or lay off 51,000
teachers if voters next week reject three budget balancing measures.
The state’s projected deficit will swell to $15 billion between now and June
2010, Schwarzenegger told lawmakers late yesterday. Half the gap falls in the current
fiscal year that ends in seven weeks. If voters reject plans to sell bonds backed by
lottery profits and siphon tax receipts from tobacco and high earners already dedicated
to special programs then the deficit would expand by another $6 billion.
The ballooning deficit comes three months after lawmakers passed a package
of spending cuts and tax increases to fill a record $42 billion shortfall and end a cash
shortage that prompted officials to prepare to issue IOUs for the first time since the
Great Depression. In the intervening months, tax revenue declined further along with
the state’s economy. “The severe economic downturn that California, like the rest of
the nation, has been facing has worsened substantially,” Schwarzenegger said in a
letter to lawmakers.
“These changes in the state’s economic and revenue pictures have caused a
significant new budget problem to emerge.” California’s full faith and credit pledge is
rated A by Standard & Poor’s and an equivalent A2 by Moody’s Investors Service, five
grades below the top investment ranking.
Note how they took the DOW, S&P and HANG SENG markets down Monday
to support the dollar and US treasuries. If they don't attempt to support the dollar and
US treasuries by continuing to crash the markets, then gold and silver and their shares
are headed for a huge breakout. On Tuesday, the PPT was trying to support the dollar
without crashing the markets, but weren't succeeding very well, as the USDX was just
moving sideways. There was, however, a big intra-day DOW sell-off on Tuesday that
could have been meant for US treasury support, with yet another end-of-day PPT
miracle to keep the markets from crashing. The liquidity needed to support markets is
usually provided to the PPT via the repo pool. This intra-day sell-off on Tuesday may
have also been due to the placing of shorts by elitist insiders, in anticipation of the
coming crash, which shorting activity generates selling pressure on stocks, with the
PPT covering up the effects of their illicit shorting and insider trading activities via the
aforesaid end-of-day PPT miracle. Most insider shorting, however, is being done out
of view of regulators via dark pools of liquidity that are opaque and unregulated. Also,
the NASDAQ, FTSE and NIKKEI were down Tuesday, especially the NIKKEI, and,
overall, this would have been dollar and treasury supportive.
Remember, the crashing of foreign stocks is dollar supportive due to the
necessity of exchanging sales proceeds denominated in foreign currencies for US
dollars which are needed to acquire US treasuries, but crashing of all stock markets,
domestic and foreign, is supportive of US treasury bonds which are still a perceived
safe-haven. Also, we can see them hitting oil again for the dollar supportive "Euro
Effect" at some point, probably after they have run out of other options. The
alternatives are going to get used up quickly. We are still expecting a stock market
crash, especially if gold and silver and their shares break out big, which appears to be
happening, in order to generate selling pressure in stocks and commodities to meet
margin calls while simultaneously supporting the dollar and US treasuries. However,
we believe the elitists are going to find that a greater percentage of cash generated by

18
the crashes will go into gold this time than in former crash situations because of the
rising rates for treasuries, which will destroy the principal value of treasury bonds going
into the future, as well as the now sealed fate of the US dollar on account of massive
"Quantitative Easing." Their fear that gold may be preferred over US treasuries may
be what is holding them at bay right now. They are scared out of their wits that gold
might outshine US treasuries, which would be a certifiable disaster for them.
Meredith Whitney continues to be cautious on the banking sector and says this
will not be the last time banks have to raise money. She recommended shorting retail,
consumer discretionary shares and being in cash.
The newest White House deficit forecast for this fiscal year ended 9/30/09 is
$1.84 trillion representing a massive 12.9% of GDP, up from $1.75 billion. More
spending, lower revenues, higher unemployment costs, bank failures and food stamps
cause this. It never occurs to government that they might cut spending.
Annual budget deficits may never dip below $500 billion again and will reflect a
deficit of $7.1 trillion over 2010-2019. These figures are based on a 1.2% decline in
GDP in 2009 and 3.2% GDP growth next year, which we believe is totally impossible.
It is estimated Goldman Sachs will profit more than JP Morgan Chase over the
next year due to its direct line in the Treasury and its access to what is in store for
markets.
The President has proposed increasing the FDIC’s borrowing power with the
Treasury to $100 billion from $30 billion. The Senate has proposed an increase to
$500 billion.
The Treasury will issue $14 billion in 30-year bonds tomorrow, and the Fed on
Monday bought back $3.5 billion worth to increase market liquidity, as the Ponzi
scheme widens and as monetization spreads.
The dollar as a safe haven is being abandoned in favor of gold. The Fed will
purchase a minimum of $3 trillion in Treasuries and toxic waste over the next 1-1/2 to
2 years. They will print dollars until the dollar reaches 40 on the USDX. It is currently
$82.43, as interest rates rise and real estate collapses further.
Wait and see what happens to the market when the economy only increases
slightly over this second quarter. The psychological impact will be devastating. Due to
the size of Treasury borrowing everyone will be crowed out of the market and interest
rates will rise substantially. The market participants do not see this coming and that the
game is over. The system is buried in Ponzi debt by a fraudulent Fed. We estimate
now that $14 trillion is running loose in the system. Just wait until banks start lending
as Citigroup indicated on Tuesday they would. They will lend $45 billion of TARP funds
that will immediately become monetized.
The media virtually failed almost totally to report on the forced resignation of
NY Fed Chairman, Stephen Friedman, formerly of Goldman Sachs. Had it not been for
Elliot Spitzer’s scathing article Friedman would have never resigned. Friedman bought
Goldman stock on insider information.
The New NY Fed Chief, Bill Dudley, formerly was also a Goldman Sachs
partner. As you see they keep it “all in the family.”
Markets are screaming hyperinflation is at hand. Buy all the gold and silver you
can get your hands on. Commodity prices are surging, bonds and the market are
falling, Citigroup is monetizing $45 billion in TARP money, as interest rates surge and
the dollar falls. Do we have to beat you over the head to make you understand that this
is it? The big hyperinflationary move is on. Do not hold US Treasuries and get out of
bonds and the market, except for gold and silver shares. If you have to be in cash buy
Canadian Treasury bonds. US Treasuries will be swamped by supply and
detrimentally effected higher interest rates and a falling dollar. Remember, $1.3 trillion

19
in Treasuries and toxic waste will be monetized over the next couple of months. In
addition, the Chinese are Treasury and Agency sellers. As this transpires the new
administration has Kamikaze spending plans.
Our government continues to flaunt the law. Just take a look at what has happened at
Enron and in the Madoff scandal. Widespread conflict of interest and breach of trust,
as well as outright corruption. Government and their regulatory agencies such as the
SEC and CFTC looking the other way instead of prosecuting illegal behavior. The
result has been endemic corruption.
Chrysler LLC’s bankruptcy might take as long as two years, not the two months
President Barack Obama suggested as a target, an administration official said.
The 60 days projected by the President at an April 30 press conference
announcing the automaker’s bankruptcy only applies to a sale of Chrysler’s best
assets to a new entity, said the official, who can’t be identified because the matter is
confidential. Afterward, creditors would fight over unwanted factories and other assets
to recover money, lawyers said.
Mortgage refinance activity slowed after peaking in the middle of April, while
applications for mortgages to buy homes have been steadily on the rise, the Mortgage
Bankers Association's latest data show.
Interest rates charged on fixed-rate home loans moved lower in the week
ended May 8.
Overall, mortgage application volumes for the latest week were down a
seasonally adjusted 8.6% from the last week of April, according to the Washington-
based MBA's survey released Wednesday. Week-to-week applications had risen 2%
in the period ended May 1. See full story.
Last week's applications were running an unadjusted 28.4% higher compared
with the same week last year. The MBA's survey covers about half of all U.S. retail
residential applications.
Applications filed for mortgages to refinance existing home loans fell 11.2%
week to week, but applications filed for mortgages to purchase homes nudged up a
seasonally adjusted 0.5%.
The MBA's four-week moving average for all mortgages was down 5.1%.
Refinancings made up 71.9% of all applications filed last week, down from 74.4% the
week before, while adjustable-rate mortgages accounted for 2.3% of filings, up from
2.1%.
The 30-year fixed-rate mortgage carried an average rate of 4.76%, down from
4.79% the week before; to obtain the rate, points increased to 1.18 last week from 1.17
the week before. A point is equal to 1% of the mortgage amount, charged as prepaid
interest.
Fifteen-year fixed-rate mortgages averaged 4.50% last week, down from
4.57%; points to obtain the rate increased to 1.08 from 1.07.
However, rates on one-year ARMs averaged 6.41%, up from 6.36%; points to obtain
the rate decreased to 0.11 from 0.12.
Prices of goods imported into the U.S. increased in April for the second straight
month, as oil costs rose.
The import-price index increased 1.6 percent, more than three times as much
as forecast, after a revised 0.2 percent gain in March, the Labor Department said
today in Washington. Excluding oil, prices fell 0.4 percent.
Rising prices for oil and other commodities are helping to allay concerns that
deflation, an extended drop in prices, may take hold and delay an economic recovery.
Still, the worst global downturn in the postwar era is choking demand for goods and

20
services, keeping inflation tame and allowing the Federal Reserve to focus on thawing
credit markets and boosting growth.
Retail sales in the U.S. unexpectedly dropped in April for a second month,
indicating that the rising unemployment rate is prompting consumers to boost their
savings.
The 0.4 percent decrease followed a revised 1.3 percent drop in March that
was larger than previously estimated, the Commerce Department said today in
Washington. Excluding auto dealers, sales fell 0.5 percent.
Las Vegas Sands Corp., controlled by billionaire Sheldon Adelson, plans to cut
as many as 4,000 more jobs in Macau as the casino operator seeks to reduce costs.
Between 3,000 and 4,000 jobs will be eliminated by September, on top of the
company’s workforce reduction to 17,500 from “close to 20,000” at its headcount peak
in Macau, new Chief Operating Officer Michael Leven said in an interview.
Las Vegas Sands last year stopped work on its $12 billion, 20,000-room
complex of hotels and casinos on Macau’s Cotai Strip amid near-frozen credit markets,
dwindling revenue and the risk of defaulting on some loans. The company, which also
shelved the $600 million St. Regis Residences in Las Vegas and other projects in
Pennsylvania, raised capital and cut worker hours and jobs to trim more than $470
million in costs.
Word from the OMB, the Office of Management and Budget is that
Fannie Mae and Freddie Mac will need at least $92.2 billion more in fiscal 2010. This
is on top of $78.2 billion in aid they have received since they were taken over by the
government in September.
We estimate the cost to be $500 billion with a 50% failure rate. Remember this
estimate.
The IBD, Daily & Techno Metrica Market Intelligence Optimism Index fell to
48.6 in May from 49.1 in April, which had been the index’s strongest level since
November 2008.
The index is 4.2 points above its 12-month average of 44.4 and 2.7 points
below its all-time high average of 51.3.
The Treasury says the Social Security Trust fund will be exhausted in 2037 and
versus last year’s estimate of 2041. Medicare will be insolvent in 2017 versus 2019
last year.
The Atlanta Fed had a meeting at Jekyll Island in the same room where the
Fed was formed in 1913. Ben Bernanke was in attendance. What arrogance – it
doesn’t end.
We are surprised that so few have picked up on the Fed setting swap lines for
as much as $110 billion in euros, 10 trillion yen, $45 billion in pounds and $40 billion in
Swiss francs. The swaps are used to avoid having to sell US dollars.
The rally in the market on Tuesday was caused by the Fed monetizing $6
billion of 3 and 4-year paper. It only monetized $3 billion on Monday.
John Taylor, a former undersecretary of the Treasury for international affairs
and author of the widely cited Taylor Rule of central banking, ran his own numbers for
the U.S. economy and said the Fed's monetary stance was way too loose.
"My calculation implies that we may not have as much time before the Fed has
to remove excess reserves and raise the rate," he said in remarks prepared for a
financial markets conference hosted by the Federal Reserve Bank of Atlanta. "We
don't know what will happen in the future, but there is a risk here and it is a systemic
risk," he said.
Long before the current financial crisis, nearly two years ago, a little-noticed
cloud darkened the horizon for the US government. It was ignored. But now that

21
shadow, in the form of a warning from a top credit rating agency that the nation risked
losing its triple A rating if it did not start putting its finances in order, is coming back to
haunt us.
That warning from Moody’s focused on the exploding healthcare and Social
Security costs that threaten to engulf the federal government in debt over coming
decades. The facts show we’re in even worse shape now, and there are signs that
confidence in America’s ability to control its finances is eroding.
In early 2007 the ‘word’ on The Street was that one or more NY Fed officials
confided to some large hedge funds, that they would love to do a Japan and stretch
out the inevitable reckoning and crappy paper write-offs over several years.
Will Advanta Plan Spook Market for Card Paper? Advanta Corp.'s decision to
let its securitization funding vehicle unwind and stop lending to account holders could
unsettle a market for credit card-backed securities that has just started to rebound.
The plan, disclosed Monday after the market closed, may intensify credit
deterioration in the Spring House, Pa., company's portfolio and expose investors in its
credit card-backed bonds to greater risk of principal losses.
Advanta Corp., the credit-card issuer for small businesses, may leave 1 million
customers scrounging to find new lenders and debt holders facing losses of 35 percent
after the company shut down accounts to preserve capital.
Advanta will cease lending June 10 after uncollectible debt reached 20 percent
as of March 31, according to a statement and filings yesterday by the Spring House,
Pennsylvania-based firm. The lender earmarked $1.4 billion to buy back securitized
card loans with offers of 65 cents to 75 cents on the dollar.
There's little belt-tightening in evidence in Washington, D.C.: Counting benefits,
the average pay per federal worker will leap from $72,800 in 2008 to $75,419 next
year.
Meanwhile, according to Forbes' layoff tracker, there have been 558,087 layoffs
since November 2008 at large public companies; even local school districts aren't
immune. That's just a sliver of the total unemployed, which government data estimate
to be 8.6 percent of the workforce, or an alternate method of reckoning that counts
discouraged workers puts at 20 percent.

*****
Here come the Obamamobiles
Ready to own small, plug-in electric cars?
http://www.redalert.wnd.com/index.php?fa=PAGE.view&pageId=312
*****
Global Crisis: How Much Time do We Have?

by Adrian Salbuchi
http://www.globalresearch.ca/index.php?context=va&aid=13544
*****
Banks got the grades they wanted not deserved.
http://mgray12.wordpress.com/2009/05/08/grading-the-stress-test-on-a-curve/
Michael Gray
Deputy Sunday Business Editor
New York Post
mgray@nypost.com
*****
Obama Wants Fed to Be Finance Supercop:

22
Sources - Hail to the Fed! More Power to the Elitists.
http://www.truthout.org/050909C?n
*****
Obama's Chilling Crew: The legal harassment of those investigating Tony Rezko
http://www.wikileaks.org/wiki/Obama%27s_Chilling_Crew:_The_legal_harassment_of_
those_investigating_Tony_Rezko
*****
CIA OSC: Secret Israeli database shows full extent of illegal settlements, Apr
2009
http://www.wikileaks.org/wiki/CIA_OSC:_Secret_Israeli_database_shows_full_extent_
of_illegal_settlements%2C_Apr_2009
*****
Introducing "We Are Change"
http://www.brasschecktv.com/page/616.html
*****
Western Internet censorship: The beginning of the end or the end of the
beginning?
http://www.wikileaks.org/wiki/Western_internet_censorship:_The_beginning_of_the_en
d_or_the_end_of_the_beginning%3F
*****
New Jersey Seeks $2 Billion in Credit as Taxes Slump (Update1)
http://www.bloomberg.com/apps/news?pid=20601110&sid=aECXSIuhEaMc
*****
Berkshire Posts Loss on Derivatives, ConocoPhillips
http://bloomberg.com/apps/news?pid=20601087&sid=aD9JnV1CU6sw&refer=ho
me
*****
Prudential Sued by Debt Holders Over Subprime Loss Disclosure
http://www.bloomberg.com/apps/news?pid=20601110&sid=apV5r6iyozfU
*****
Reviewing Ellen Brown's "Web of Debt:" Part III - by Stephen Lendman

http://sjlendman.blogspot.com/
*****
Reviewing Ellen Brown's "Web of Debt:" Part IV - by Stephen Lendman
http://sjlendman.blogspot.com/
*****
House Bill Aims to Strip “Rightwing Extremists” of Second Amendment Right
Kurt Nimmo
http://www.infowars.com/house-bill-aims-to-strip-rightwing-extremists-of-
second-amendment-right/
*****
ELEVEN MILLION Germans
Were Murdered AFTER WWII
By Richard K. Mariani
5-10-9
http://www.rense.com/general85/mill.htm
*****
If China loses faith, the dollar will collapse
By Andy Xie
http://www.ft.com/cms/s/0/46db5314-390d-11de-8cfe-00144feabdc0.html

23
 *****
Unfit for Combat
http://www.truthout.org/051209J?n
*****
Money launderers wash billions through international trade
By JOSEPH A. MANN
http://www.miamiherald.com/business_monday/v-print/story/1041027.html
*****
It Is Getting Very Serious Now
by Chuck Baldwin
http://www.chuckbaldwinlive.com/c2009/cbarchive_20090512.html
*****
APFN
AP- WASHINGTON D.C. - In a move certain to dispute our president’s
citizenship.
http://disc.yourwebapps.com/discussion.cgi?disc=149495;article=123965;title=A
PFN
*****
Citigroup: TARP loans near $45 billion mark
http://news.yahoo.com/s/ap/20090512/ap_on_bi_ge/citigroup_lending;_ylt=AirPFup68jVYUAZtj01CyL.yBh
IF
*****
Senator Reid Pushes Loophole That Would Increase Tarp Bailout Price Tag
Above $700 Billion
http://www.washingtonsblog.com/2009/05/senator-reid-explicitly-endorses.html
*****
Rape Victim Billed for Evidence Costs
http://www.truthout.org/051209WA?n
*****
Time to End the Bailouts
The Banker Boys Are Alright!
http://www.counterpunch.org/baker05122009.html
*****

Scientists Experiment with Vaccinations in GMO Corn

Bryan Salvage

http://www.infowars.com/scientists-experiment-with-vaccinations-in-gmo-corn/

On the above Link Alex and Joyce Reilly discuss government home invasion
and it is chilling.

*****
Electronic Police State Rankings
https://secure.cryptohippie.com/pubs/EPS-2008.pdf

*****
Montana Nullifies Federal Gun Laws!
http://www.campaignforliberty.com/blog.php?view=17935
*****

24
From a Fellow Subscriber:
ATF Knocking at your door?...Yes
Ernest Hancock
Website: www.ernesthancock.com
Date: 05-08-2009
Subject: Gun Rights

The credibility of this info is elevated due to a friend that has had his company truck
tracked and photographed by the FBI because an employee purchased 10,000 rounds
of ammo at a Gun Show. They want interview, but not with lawyer.
http://gunfighterforum.com/viewtopic.php?p=3226#3226
ATF Knocking at your door?...Yes
Hoff
Joined: 28 Jun 2007
Location: Warrior Nirvana
Posted: Thu May 07, Post subject: ATF Knocking at your door...Yes

I just received this email from a friend. He is a well-respected, hard working

Texan/American:
BRIAN, JUST HAD 2 ATF OFFICERS LEAVE MY HOUSE WANTING TO SEARCH
MY GUN SAFE AND TAKE DOWN SERIAL NUMBERS DUE TO THE FACT I HAVE
PURCHASED A LOT OF GUNS LATELY. NICE GUYS AND YOU KNOW I AM A
STRONG SUPPORTER OF LAW ENFORCEMENT BUT APPARENTLY THE NEW
ADMINISTRATION IS SENDING ATF OFFICERS TO TEXAS TO CURTAIL GUN
PURCHASES THINKING THAT THERE A BUNCH OF FOLKS HERE IN TEXAS
SUPPLYING THE SORRY, NO GOOD, LOW LIFE DRUG LORDS OF MEXICO.
THESE OFFICERS CONDUCTED THEIR SELVES FIRST CLASS BUT I DENIED
THEM TO LOOK AT MY WEAPONS. I DID NOT THINK I WOULD LIVE TO SEE THIS
DAY COME BUT HERE IT IS. THE TWO OFFICERS WERE FROM COLORADO
AND NEW YORK, HERE TO HELP OUT TEXAS ATF. NOTHING AGAINST THE
OFFICERS BUT MY OPINION IS THAT THIS IS AN OBAMA POLITICAL
MOVEMENT. A STARTLING DAY FOR ME AND MY AMERICAN AND
CONSTITUTIONAL BELIEFS. JUST THOUGHT I WOULD SHARE THAT INFO WITH
YOU. -REGARDS
This does not surprise me at all. If you have listened to the spin form the Obama
administration they have been blaming the Mexican Drug violence on American guns.
The will vilify the American Gun Owner just as they labeled those who attended all the
Tea Parties as "Racist Radicals" even though that is the farthest thing from the truth. It
is a shame that patriotic Americans will be spun as villains to achieve a political
agenda which seems to be much more than just big government. Its looking more like
totalitarian socialism is more goal. If we are not careful “For the people by the people”
will become unknown history as it will not be tolerated in the books by a government
who re-writes history as “For the Government by the Government.”
Once we lose the first amendment (Freedom of speech), we then will lose the 2nd
amendment (Right to own and bare arms) then we have lost our country and it will be
too late to save it.
*****
From a Fellow Subscriber:

25
United States Southern Command (USSOUTHCOM) - NEWS
<http://www.southcom.mil/appssc/news.php?storyId=1750> And Medicare is broke
and baby boomers will see treatment on a means basis and waiting list till they expire,
but its good to know we now a billion dollar hospital ship as a floating vet clinic in
Central and South America.
*****
From a Fellow Subscriber:
The truth warriors have been making an impact on YouTube. YouTube has started and
all out war against us YouTube truthers. Many channels, Alex Jones channel, Jason
Bermas channel all got suspended. Supposedly YouTube is an unprofitable business
model and they are purging more than just truth content. However this could merely be
a plausible excuse to cut off this valuable channel of communication of quality
information. Since YouTube is abandoning this sector of business an opportunity to
anyone who replace YouTube. Tech talent is much cheaper today due to the
depression and a small nimble company can tweak the business model
unencumbered by bureaucracy. Furthermore this business model could be especially
attractive to "alternative" advertisers of products and services often sought after by
quality information seekers.
*****
From a Fellow Jewish Subscriber:
Hi Bob—Rumor has it that Gordon Brown will increase the personal tax rate to 50% in
the UK—which will backwardize the UK tax code to pre Margaret Thatcher era—which
means that all the hot money in the UK will flee the country along with all the foreign
resident millionaires and billionaires—rumor has it that Gordon Brown is a homosexual
in the closet and a pedophile—whose police files for pedophilia were “disappeared”—
rumor has it that he is a top Scottish rite free mason and a “master mason” so he is
totally untouchable by UK law enforcement or the courts—when the 50% tax rule takes
affect— the British pound and British “Gilts” will not be worth the paper they are written
on—the FTSE could go from a 4 digit index to a 3 digit index—since there will be
nothing to measure —as per your reporting in the IF and on the radio—most likely
“INSIDER” Scottish Rite illuminists in the UK will not pay any of these confiscatory
taxes—THEY WILL “INSTEAD” HAVE EVERYBODY ELSES TAXES PAID TO THEM
IN THESE BOGUS “BAILOUTS” — Ad infinitum — it is just a scam to loot all the non
Scottish Rite free masons unfortunate enough to live or work in the UK—this will also
most likely be the final nail in the coffin of UK real estate prices WHEN ALL THE
DESIGNATED PATSYS SIMULTANOUSLY DUMP THEIR UK REAL ESTATE
HOLDINGS IN A MASSIVE SELF OFF— including elite projects such as Canary
Wharf which will become a ghost town—what if everyone in the UK sold all their UK
real estate and bought it all back in Spain instead at a fraction of the UK price—sell all
their UK garbage real estate—WITH NO CENTRAL HEATING—NO INSULATION—
NO BASEMENTS—NO CENTRAL AIR CONDITIONING and buy back “brand new”
just built in Spain—and put all their money into Spanish banks—that would be total
revenge for the Spanish armada Rothschild scam—the Rothschilds are desperate and
they are now grabbing at straws—for hundreds of years they were “Einsteins” at
“BLOOD LIBELING “ others for their own “FIENDISH” crimes and “FIENDISH
GENOCIDES” world wide including intentionally “CULLING” their own “co-religionists”
"BY THE MILLIONS"--that they have "INTENTIONLY" sold out over and over again—
that is all now coming to an abrupt end—now everyone knows what the real return
address ON THE ROTHCHILDS 100’S OF YEARS OF “CABALIST” AND
“TALMUDIC” BASED SATANISM really is—if anyone in the subscriber base of all
religions just takes a peak at the Cabala and Talmud that are all over the net that can

26
read or down loaded for free—you will soon see that you have the “ROSETTA
STONE” -of the last 1000 years of human history—you will have an “EURIKA
MOMENT” where all the "insanity" of the “past” and “current events”—starts to make
sense—and what is even worse for the Rothschilds—their socially engineered future
"INSANITY" that they have planned for all of us becomes glaringly “PREDICTIBLE”.
*****
From a Fellow Subscriber:
Dear Bob, FYI, a note from my employer. Interesting how they mention about press
coverage... This is not marked as a confidential email and looks like there is nothing
confidential in it. Information for California and Arizona employees ONLY:
Effective with the May 8 payroll, state income tax withholding for both Arizona and
California were increased for most employees. For California specifically, no apparent
notice or media news was provided. Payroll researched the changes and found the
appropriate links to the state websites with reference to the withholding changes. Also
included is the tax withholding forms.

California income tax rates were changed effective January 1, 2009 however the
withholding rates are effective as soon as payroll service providers could install the
necessary programs. Employers are instructed to take no action collecting retroactively.
This means some employees could be under-withheld. Each employee needs to determine
whether their own withholding is adequate, be sure to obtain tax advice if necessary.
California EDD website notice:
http://www.edd.ca.gov/Payroll_Taxes/2009_PIT_Schedules_Replaced.html
California DE-4 withholding form:
http://www.edd.ca.gov/pdf_pub_ctr/de4.pdf
For Arizona :
http://www.azdor.gov/Newsroom/Releases/SB-1185-Withholding-Q-A.pdf
Arizona A-4 withholding form:
http://www.azdor.gov/Forms/2008/withholding/May/A-4_f.pdf

*****
From a Fellow subscriber:

Thought you might enjoy this, looks like we may be movin to Oklahoma...
An update from Oklahoma

The state law passed today, 37 to 9, had a few liberals in the mix, an amendment to
place the Ten Commandments on the front entrance to the state capitol. The feds in
D.C., along with the ACLU, said it would be a mistake. Hey this is a conservative state,
based on Christian values...! Guess what..........We did it anyway.

We recently passed a law in the state to incarcerate all illegal immigrants, and ship
them back to where they came from, unless they want to get a green card and become
an American citizen. They all scattered. Hope we didn't send any of them to your state.
This was against the advice of the Federal Government, and the ACLU, they said it
would be a mistake. Guess what.........we did it anyway.

Yesterday we passed a law to include DNA samples from any and all illegals to the
Oklahoma database, for criminal investigative purposes. Pelosi said it was
unconstitutional.

Guess what........We did it anyway.

27
Several weeks ago, we passed a law, declaring Oklahoma as a Sovereign state, not
under the Federal Government directives. That, for your information, makes Oklahoma
and Texas the only states to do so. Guess what.........More states are likelyto follow.
Louisiana, Alabama, Georgia, both Carolina's, Tennessee, Kentucky, Missouri,
Arkansas, West Virginia, just to name a few. Should Mississippi act, so will Florida.
Save your confederate money, it appears the South is about to rise uponce again.

The federal Government has made bold steps to take away our guns. Oklahoma, a
week ago, passed a law confirming people in this state have the right to bear arms and
transport them in their vehicles. I'm sure that was a set back for the Kennedys and Ms
Pelosi. Guess what..........We did it anyway.

By the way, Obama does not like any of this.. Guess what....who cares...were doing it
anyway.
*****

From Liberty Calling:

Species Act Won't Be Used to Force Lower Emissions
http://www.washingtonpost.com/wp-
dyn/content/article/2009/05/08/AR2009050802103.htmll
LC Editor’s Comment: This time the elitists have designed their message to pluck the
heart strings of would be Polar Bear huggers, whom they hope will nag their
representatives in Congress to pass legislation that will put a legal cap on so-called
greenhouse gas emissions an tax alleged polluters who exceed an allowed emissions
level. This legislation has languished on Capitol Hill in recent months and the elitists
want to get the show on the road now. These elitists are such compulsive over-
controllers!

When and if this legislation ever becomes law, the Barky administration would be in a
position to transfer revenues collected this way to the United Nations. The way the
con goes, the U.N. would divvy out the money to NGOs (non-governmental
organizations) to support research on means of reducing the effects of greenhouse
emissions on the surface temperature of planet Earth.

That is the plan. Of course, the UN would end up siphoning off some of this revenue
flow and use it to support the growth of world government, and this is why the elitist-
Illuminists and their minions, who are Hell bent on transforming our world into a prison
planet lorded over by them, push the greenhouse gas scam all the time.

LC readers should not get all teary-eyed about alleged scientists’ warnings reported in
this article that polar bears may become extinct by 2075 unless a cap is put on global
warming. Environmental groups, typically NGOs or supported by NGOs erroneously
claim greenhouse gases in our atmosphere trap the heat produced solar heat of our
planet, giving rise to a gradual increase in its surface temperature.

In fact, as my LC readers should know by now, the greenhouse effect is a negligible

contributor to global warming, which is due almost entirely to still inexplicable
increases in the radiant energy output of the Sun. Equally puzzling to legitimate earth
scientists– as opposed to shill scientist on the elitists’ payroll who continue to push the
greenhouse gas myth – are periodic decreases in the radiant energy output of the sun,

28
which have given rise to periods of global cooling during the lifetime of Earth.

Global heating and global cooling are facts of life and earth scientists have known this
for hundreds of years. What’s happening now is that the elitists-Illuminists have
decided to create a mythology around global warming and exploit it further their push
for world government.

During this cycle of Earths temperature the Polar Bears may take a serious hit in their
numbers. So be it. Capping carbon emissions to a lower level than they are at now,
or even shutting down all businesses the produce greenhouse gases will have only a
miniscule effect on global warming, or global cooling for that matter.

So if the pending carbon tax legislation becomes law, any revenues collected from the
owners of greenhouse emitting industrial operator would be more wisely spent on
building thousands of air conditioned dens for the world’s Polar Bears than putting it
into the hands of the elitists.
*****

From a Fellow Subscriber:

Hi Bob: In case you have not seen it yet Fox News has ousted Sen. Feinstein
and her husband Richard Blum — something that you did in the IF months ago. AS
PER YOUR CONSTANT REPORTING IN THE IF AND ON THE RADIO, THE US
CONGRESS IS NOTHING BUT A — “PAYOLA BORDELO” — so more and more of
your reporting is going mainstream by media that were previously the enablers of
these same viscous criminals that you have been going after hammer and tongs for 50
years. If anyone in the subscriber base wants to have a look link is below.
http://www.foxnews.com/politics/2009/04/21/sen-feinsteins-husband-cashes-crisis/

PS - There is starting to be an anti-Semitic backlash in America against Wall Street by

both Christians and Jews—in almost identical poll numbers—link is below.

http://www.presstv.com/detail.aspx?id=94044&sectionid=3510203
*****

COMMODITIES
*****
EU signs deal on new gas pipeline
http://english.aljazeera.net/news/europe/2009/05/200958113442753374.html
*****

GOLD, SILVER, PLATINUM AND PALLADIUM

Early Monday was not good for the market. The Dow fell 66 to 8450; S&P lost
66; Nasdaq fell 88 and the FTSE fell 43 Dow points. The Nikkei rose 19; the CAC fell
38 and the DAX fell 20. The yen rose .0047; the euro fell .0046 and the pound fell
.0103. The 2-year was 0.95%; the 10’s were 3.24%; one-month Libor was 0.37% and
the 3-month 0.94%. Oil fell $1.05; gas lost $0.02 and natural gas gained $0.01. Gold
lost $0.70 to be $917.20; silver lost $0.05 to $13.91 and copper fell $0.06 to $2.08.
On Monday spot gold fell $1.10 to $913 and silver fell $0.02 to $13.91. The
outside months were about the same or a bit higher. Gold open interest rose 5,024
contracts to 348,495, as silver OI rose 533 to 94,463. The HUI fell 1.65 to 341.69.
The Dow closed at 8417, -156; S&P fell 180 and Nasdaq fell 153 Dow points.

29
 The yen rose .0012 to .9739; the euro fell .0025 to $1.3596; the pound fell
.0084 to $1.5132; the Swiss franc fell .0024 to $1.1088; the Canadian dollar rose .0031
to $.8280 and the USDX rose 31 to 82.80.
The 2-year was 0.90% and the 10’s were 3.17%. Oil fell $0.13 to $58.50; gas
fell $0.04 to $1.67 and natural gas rose $0.01 to $4.32. Copper fell $0.06 to $2.09;
platinum fell $27.10 to $1,120 and palladium fell $6.80 to $235.50.
Early Tuesday saw the Dow up 14; S&P up 9; Nasdaq up 6 and the FTSE off
34. The Nikkei fell 153; the CAC fell 18 and the DAX rose 14. The yen was up .0015;
the euro rose .0047 and the pound rose .0147. The 2-year was 0.91% and the 10’s
were 3.19%. Oil rose $0.30; gas was plus $0.01 and natural gas rose $0.06. Gold was
up $4.70 to $918.20; silver was up $0.26 at $14.17 and copper rose $0.03.
On Tuesday spot gold rose $10 to $923.00, as silver rose $0.31 to $14.22. The
outside months were about the same. Silver after breaking $14.50 will rise to $16.00.
That would put gold at $980 to $1,000. Gold open interest rose 2,328 contracts to
350,823, as silver OI rose 1,077 to 95,946. Tocom no longer supplies daily trades.
Goldman Sachs forced them to stop releasing daily reporting statistics. The XAU
gained 4.88 to 141.75 and the HUI surged 13.19 to 354.88. AEM rose 6.15%, or $3.98
to $51.44; GG rose 5.70%, or $1.83 to $33.93; SSRI rose 5.96%, or $1.18 to $21.02
and MFN rose 5.54%, or $0.45 to $8.58.
The ECB says gold and gold receivables fell 12 million euros or 0.54 tons, the
same as last week.
The Dow in the last hour moved up 100 points to end up 50 to 8,469, another
miraculous recovery. The S&P fell 8 and Nasdaq fell 92 Dow points.
The yen rose .0111 to $.9635; the euro rose .0042 to $1.3638; the pound rose
.0140 to $1.5272; the Swiss franc rose .0027 to $1.1055; the Canadian dollar fell .0005
to $.8610 and the USDX fell .35 to 82.33.
The 2-year was 0.89%; the 10’s 3.17%; one-month Libor 0.35% and 3-month
0.92%.
Oil rose $0.30 to $58.80; gas was up $0.01 at $1.67 and natural gas rose $0.20
to $4.50. Copper was $2.09 unchanged; platinum rose $17.80 to $1,138 and palladium
fell $1.75 to $235.25.
Early Wednesday saw the Dow off 15 at 8421; S&P off 15, Nasdaq off 10 and
the FTSE off 20 Dow points. The Nikkei rose 42; the CAC rose 5 and the DAX fell 5.
The yen was off .0002; the euro fell .0041 and the pound fell .0101. The 2-year was
0.89%; the 10’s were 3.19%; one-month Libor was 0.35% and the 3-month was
0.91%. Oil was up $0.60; gas rose $0.02 and natural gas rose $0.07. Gold rose $0.80
to $924.70, silver was unchanged and copper rose $0.01.

*****
From a Fellow Subscriber:
Bob, I thought your readers might find this interesting, confirming what you preach. It is
a list of a few mining shares from 1975 to 1980 showing prices bought at pennies per
share turning into $300 to $400 per share! I'm certain the inflation coming will be
much greater than then!!!
http://www.preciousmetalstockreview.com/m_2.asp
*****
Murray Pollitt: The gold monetization scheme is ending
http://www.gata.org/node/7415
*****
A Presidential Bombshell

30
By: Theodore Butler
http://news.silverseek.com/TedButler/1242061902.php
*****
CANADA
Home prices have declined 2.4% year on year in Canada, for the third
consecutive time, while they fell 0.5% month on month, according to data released by
National Statistics. USD/CAD rebound from 6-month low at 1.1475 has extended
above 1.1550 after the release of new home sales, and the USD advances now at
1.1570; 100 pips above today’s 6-month low.
March International Merchandise Trade up to C$1.11B.

*****
PART 1 Restricting Our Freedoms - Shawn Buckley About Bill C-6
http://www.youtube.com/watch?v=X7_0HlCwb8A
*****

LATIN AMERICA
Brazil's general price index, known as the IGP-M, dropped 0.52% in the April
21-30 period, compared with a fall of 0.53% in the March 21-31 period, the private
Getulio Vargas Foundation, or FGV, said Monday.
The latest figure was below analysts' expectations, which ranged from a
decrease of 0.32% to an increase of 0.18%.
The rolling IGP-M inflation rate in the 12 months through April 30 was 3.18%.
Wholesale prices, which carry a 60% weighting in the overall index, fell 0.78%
in the April 21-30 period, compared with a drop of 0.94% in the March 21-31 period.
Consumer prices accelerated 0.15% in the period, compared with an
acceleration of 0.42% seen in the March period. Consumer prices carry a 30%
weighting in the overall index.
Construction costs dropped 0.36% in the period, compared with a fall of 0.08%
in the previous period. Construction costs carry a 10% weighting in the index.
With recent figures indicating inflation is under control and signs of an
economic slowdown, Brazil's central bank cut the Selic base interest rate to 10.25%
from 11.25% at the end of April.
The pace of consumer inflation in Brazil's largest city, Sao Paulo, picked up
0.34% in the four weeks ended May 7, as personal spending accelerated in the period,
the Fipe research foundation said Monday.
The figure was in line with market forecasts for an increase of between 0.26%
and 0.35%.
Fipe, which is affiliated with the University of Sao Paulo, said that personal
spending picked up 2.47% in the four weeks ended May 7, compared with an increase
of 1.92% seen in April.

MEXICO
*****
Mexico Debt Rating Outlook Cut to Negative by S&P
http://www.bloomberg.com/apps/news?pid=20601086&sid=aYAIyPJCAvj8&refer=latin
_america
*****

EUROPE

31
 Jean-Claude Trichet has dragged the European Central Bank into a new era by
pursuing direct asset purchases over the objections of Germany’s Bundesbank.
President Trichet yesterday announced the ECB will buy 60 billion euros ($80
billion) of covered bonds, taking markets by surprise after Bundesbank chief Axel
Weber had campaigned against such a policy. For a central bank that’s been slow to
follow counterparts around the world, the move marks a change in mentality toward
battling the financial crisis.
Latvian annual economic output shrank nearly a fifth in the first quarter,
demonstrating just how dreadful the country's adjustment will be from overheated
growth in the middle of the decade, data showed Monday.
Latvia is aiming for a budget deficit of 7% of gross domestic product this year,
which is above the limit agreed with the International Monetary Fund, Latvia's Prime
Minister Valdis Dombrovskis said Monday.
The Baltic State's gross domestic product fell 18% year-on-year in the first
quarter, Statistics Latvia said in a preliminary estimate.
The decline was broad-based, with manufacturing down 22%, retail trade down
25% and hotel and restaurant services output 34% lower from a year earlier.
-Italian industrial production in March, adjusted seasonally and for the number
of working days, fell at its sharpest annual rate since records began in 1990, plunging
23.8%, statistics agency Istat said Monday.
On the month, industrial production fell a steeper-than-expected 4.6% in
March, the same rate as in February, as investment and consumer goods output fell,
Istat said.
The 23.8% annual fall was more than expected and compares with a revised
21.2% drop in February that is steeper than previously reported, Istat said.
A Dow Jones Newswires survey of economists had forecast a 1.8% monthly
drop in March and a 21.2% drop on the year.
On the month, investment goods fell 4.1%, while intermediate goods
plummeted 5.4% and consumer goods fell 4.3%.
In the first three months of the year, industrial production fell 21%, compared
with the same period last year.
Italy's rate of month-on-month industrial production decline in March was three
times that of France, which registered a 1.4% drop in industrial production during the
month.
French industrial production posted in March its largest drop in more than 18
years, confirming fears that the global downturn ravaged the euro zone's second
largest economy through the end of the first quarter, data showed Monday.
Industrial production dropped 16.1% in March from the same month a year
earlier, with output down in all categories of goods except coke and refined petroleum
production, which showed a moderate 0.7% increase, Insee data showed.
Month on month, however, the fall was less dramatic. Industrial output was
down 1.4% in March from the previous month, less than the average monthly fall over
the past six months of 2.4%.
The Danish consumer price index increased 1.4% in April from a year earlier,
but fell 0.1% from March, Statistics Denmark said Monday.
The rate of increase slowed from the previous month, when CPI was up 1.8%
on a yearly basis, mainly due to lower yearly price increases of electricity and food, the
agency said.
The Danish European Union harmonized consumer price index, or HICP, was
up 1.1% in April from a year earlier but down 0.1% on the month, Statistics Denmark
said.

32
 PERSONAL greed is often the explanation given for the disastrous forays of the
world’s banks into America’s subprime mortgages. In Germany, however, many of the
worst decisions were made not by the bonus-driven crowd in Frankfurt but by
ostensibly well-intentioned public servants in the country’s public banks, or
Landesbanken.
The extent of the damage wrought on the Landesbanken, most of which are
owned by state governments and local savings banks, was revealed late last month in
a leaked document that was published by the Süddeutsche Zeitung, a newspaper. It
said that the financial regulator, BaFin, reckoned that German banks—mostly
Landesbanken—held €816 billion ($1.1 trillion) in toxic securities. On May 6th five
Landesbanken had their ratings cut by Standard & Poor’s. So deeply in debt are the
hardest-hit of this unwieldy bunch that only the central government has the cash to
prop them up. Yet instead of lamenting, many in Berlin see this as the first opportunity
in decades to fix a banking system that is plagued by fragmentation and poor
profitability. The main problem facing German banks is that there are too many of
them. The country has more than twice as many banks relative to its population as
countries such as Britain, Canada and Japan, according to the IMF (see chart). The
intense competition for customers means that they are far less profitable in Germany
than in the rest of Europe, according to Moody’s, a rating agency.
In an open market, profitable banks would solve this problem by swallowing their
weaker rivals. Yet in Germany this has not happened because state governments
have blocked takeovers of public banks and many savings banks have also been
protected by law.
In an open market, profitable banks would solve this problem by swallowing their
weaker rivals. Yet in Germany this has not happened because state governments
have blocked takeovers of public banks and many savings banks have also been
protected by law.
Government guarantees are also to blame. Until 2005 the debts of
Landesbanken were backed by state governments. This allowed the public banks to
borrow and lend more cheaply than privately owned institutions. New guarantees have
since been banned, but before the prohibition came into force, Landesbanken were
allowed to load up with debt (the debt does not mature until 2015).
Moody’s reckons that they still have as much as €300 billion of guaranteed loans
on their books. Much of this was used to fund subprime securities. The weaknesses in
Germany’s banking system have long been a worry for the federal government. In
talks with the IMF last year both sides agreed that the country’s fragmented banking
system posed huge risks. Yet most of the government’s efforts to get Landesbanken to
merge have been stymied by the states, which have proved reluctant to lose control of
their wards.
Now change may finally be forced on the Landesbanken by adversity. The
central government controls the purse strings of a federal bail-out fund, and it is
understood to have made consolidation a condition for offering help with toxic assets.
People familiar with the plan expect the number of Landesbanken to shrink to between
two and three, from seven now.
Consolidation of these public banks would be a useful first step, but better still
would be the tougher job of privatising them and of merging the country’s savings
banks. Germany should also take a hard look at how its pre-2005 guarantees of public
banks encouraged them to behave recklessly. The lessons it learns may prove useful
to governments around the world that are now having to stand behind the debts of
their banks to stop them from collapsing, while at the same time desperately trying not
to sow the seeds of the next financial crisis.

33
 European Union bank regulators plan to conduct a confidential stress test by
September, stepping up scrutiny of risks after lenders worldwide have absorbed more
than $1 trillion of losses and writedowns.
Regulators in the 27 EU countries will report aggregate data, not results for
individual banks, to their finance ministers and the EU’s executive arm, a
spokeswoman for the Committee of European Banking Supervisors said in London.
The twice yearly exercise is organized by CEBS to look out for risks in EU
financial markets. The test won’t assess banks’ capital needs, according to CEBS, in
contrast to a program completed by the U.S. last week.
The test is “an assessment of the European financial system, to test it’s
resilience to shocks and to contribute to best practices,” Efstathia Bouli, spokeswoman
for CEBS, said in a telephone interview.
The eurozone is one step closer to a breakup. The ECB’s decision to pursue
direct asset purchases over the objection of the Bundesbank. It is only a question of
time now.
Sweden April CPI +0.2% On Month. The following is a press release from
Statistiska Centralbyran, or SCB, the Swedish central government authority for official
statistics.
The inflation rate dropped to -0.1% in April (0.2% in March). The Swedish
consumer price index increased by 0.2% from March to April (0.4% in April 2008). The
CPI for April 2009 is 299.26 (1980=100).
Higher prices of petrol (3.0%), actual rentals of housing (1.0%), clothing and
shoes (1.5%) and alcoholic beverages and tobacco (1.0%) contributed together by 0.4
percentage points to the March to April increase.
Lower interest rates (-3.0%) and further price decreases on electricity (- 2.1%)
contributed downwards with 0.1 percentage points respectively.
The inflation rate according to CPIF and CPIX was 1.8% and 1.4%
respectively.
The monthly change was 0.3% for both measures. HICP changed by 0.3%
from March 2009 and by 1.8% since April 2008.
Germany Apr CPI unchanged from last month, +0.7% YoY
Unemployment in the euro zone looks set to rise further as employment
opportunities continue to recede while firms continue to trim costs, a survey showed
Tuesday.
The Monster Employment Index slid one point to 111 in April from March, while
the year-on-year comparison declined 33%.
Monster said the steepest declines in online recruitment opportunities were in
the manufacturing and transport sectors. By country, however, there was a surprising
increase in the number of online job opportunities in France, while there was also a
small uptick in the U.K..
"EU online recruitment activity continued to slow in April, but the pace of
deterioration seems to be stabilizing," said Hugo Sellert, head of economic research at
Monster Worldwide. "While current levels of worker demand are not sufficient to
prevent further rises in unemployment, there are signs that businesses across Europe
are becoming slightly more confident in the economy."
The survey follows news that unemployment in the euro zone rose to a three-
and-a-half-year high of 8.9% in March as the economic recession continued to bite.
The EC has imposed a record $1.45 billion fine on Intel, and ordered it to halt
illegal rebates and other practices to squeeze out rival AMD.
Which PC makers took Intel's kickbacks? Find out here. "Intel has harmed
millions of European consumers by deliberately acting to keep competitors out of the

34
market for computer chips for many years," says European Union Competition
Commissioner Neelie Kroes.
The EU executive found Intel guilty of paying computer makers to postpone or
cancel plans to launch products that used AMD chips, paid secret rebates to computer
makers to use Intel chips, and paid a major retailer to stock only computers with its
chips.
The Commission argued that "everyone but Intel was worse off in this anti-
competitive scenario" and has ordered the chip maker to "cease the illegal practices
immediately to the extent that they are still ongoing."
The EU says Intel may continue to offer rebates, so long as they are legal and
not conditional on manufacturers "buying less of AMD's products or not buying them at
all."
The Commission says Intel must pay the fine, which represents 4.15% of the
company's 2008 turnover, within three months of the date of the notification of the
decision.
The EU antitrust fine is the biggest imposed on an individual company, and
follows an investigation of Intel's practices dating back to 2002. Investigators claim
Europe accounts for 30% of Intel's global 22 billion euro market.

*****
Rothschild Difference With Madoff Becomes Geneva’s Obsession
http://www.bloomberg.com/apps/news?pid=20601170&sid=aQFSA42CpZIA
*****
From a Fellow Subscriber re: Ellen Brown article Tower of Basel
Dear Ellen,
Your article on the Tower of Basel is very informative. I lived across the border in
France and thought you'd want to know a few items of trivia about the city.

Its official name is Basel-Stadt, and is the only city-state in Switzerland. All the other
cantons are county-states. There's another canton called Basel-Landschaft, which
means Basel-Countryside. The two Basels used to be one canton, which was split up
to allow the country folk to be free of the cosmopolitan aristocrats of the city, who have
the ideal mentality for a banking capital. Canton Basel is also only one of 3 cantons,
which were allowed to split up, such that each only has one senator, rather than the
two allotted for regular cantons. It's as if West Virginia and Virginia would have one
senator each as a result of splitting up.
The City of Basel is also where the 1st Zionist World Congress was held in
1897.
*****

ENGLAND
Nyasha Kuwana won’t be taken in by signs of recovery in Britain’s battered
housing market.
“I think the market may get worse,” said Kuwana, a 29- year-old insurer who
put off her search for a one-bedroom flat in West London earlier this year. “I will be no
worse off buying in six months.”
A 17 percent slump in prices since their peak last year and the lowest interest
rates in the Bank of England’s history have stoked optimism among banks such as
UBS AG and real-estate agents that buyers will soon return. Mortgage approvals rose
to a 10-month high in March.

35
 As Britain struggles to escape the worst recession since Margaret Thatcher
came to power in 1979, Kuwana and a generation of first-time buyers may
nevertheless need more persuasion before committing their savings.
Earnings will be crimped by rising unemployment, which the Confederation of
British Industry says may climb more than 50 percent to 3.3 million next year. The
International Monetary Fund forecasts that the economy will contract 4.1 percent this
year and 0.4 percent next.
“House prices are still set for another year of declines,” said Willem Buiter, a
former Bank of England policy maker. Capital Economics Ltd. says that home values
have another 20 percent to drop.
UK producer prices jumped the most in 10 months in April after the government
raised taxes and costs of petroleum products and motor vehicles increased.
The price of goods at factory gates rose 0.6 percent, compared with a 0.1
percent gain the previous month, the Office for National Statistics said today in
London. The median forecast in a Bloomberg News survey of 20 economists was for
an increase of 0.2 percent.
The deficit in the UK’s largest company pension plans almost doubled to 61
billion ($91 billion) in the first quarter as falling stock markets cut the value of their
assets, according to Mercer Investment Consulting.
UK business confidence rose to its highest level for five months in April, but the
severity of the country's recession means companies could still face challenging
trading conditions for some time to come, a survey showed Monday.
The monthly Lloyds TSB Corporate Markets Business Barometer showed the
headline balance of firms expecting brighter trading prospects over the next 12 months
rose to +14 percentage points from -4 in March, the highest level and the first positive
reading since November.
However, the breakdown of the balance, which is calculated by subtracting the
percentage of firms expecting a deterioration from those expecting an improvement,
showed confidence is still weak and a sizable proportion doesn't expect any change in
activity by this time next year.
The percentage of firms expecting an increase in business over the next 12
months rose to 35% in April from 22% in March, while the proportion predicting a
decrease dropped to 21% from 26%. However, the percentage expecting no change
eased only slightly to 42% from 46% in March.
The UK’s housing slump eased in April and manufacturing shrank at the
slowest pace in more than a year, evidence the recession may be abating.
The number of real-estate agents and surveyors saying prices fell exceeded
those reporting gains by 59.9 percentage points, the smallest negative margin since
January 2008, the Royal Institution of Chartered Surveyors said today. The Office for
National Statistics said manufacturing output slipped 0.1 percent in March, the least in
13 months.
The Bank of England last week extended by two thirds its program to fight the
threat of deflation by printing money and said that there are “promising” signs that the
recession is moderating. In April, manufacturing contracted at the slowest pace in eight
months, and an index of services industries jumped the most since 1999, surveys by
Markit show.
The cost of insuring against default on UK government bonds is now twice as
high as the market charges for insuring the bonds of Cadbury. “A company that
peddles chocolate coins, in other words, is deemed a better bet than the British
Treasury itself,” the FT’s brilliant columnist Gillian Tett reports.

36
 *****
Somali pirates guided by London intelligence team, report says
http://www.guardian.co.uk/world/2009/may/11/somali-pirates-london-intelligence
*****
ASIA
India’s industrial production fell the most in 16 years in March as the worst
global recession since World War II damped demand for the nation’s exports.
Output at factories, utilities and mines declined 2.3 percent from a year earlier
after a revised 0.7 percent drop in February, the statistics agency said in New Delhi
today. That was more than three times analysts’ estimates and the worst performance
since January 1993, according to Bloomberg data.

CHINA
China’s new lending cooled in April, easing concern that banks are taking on
too much risk in a credit boom after the government dropped restrictions on loans in
November. Money supply rose by a record.
Lending was 591.8 billion yuan ($86.7 billion), the central bank said on its Web
site today. The number is about a third of the record 1.89 trillion yuan in March. M2,
the broadest measure of money supply, rose 26 percent from a year earlier.
China’s new loans in the first four months exceeded a central bank target for
the full year as lenders supported the government’s 4 trillion yuan ($585 billion)
stimulus package. The slowdown in April lessens the risk that credit growth will lead to
asset bubbles and bad debts.
“There were concerns about rising non-performing loans; those concerns will
have eased,” said Ben Simpfendorfer, an economist at Royal Bank of Scotland in
Hong Kong. “If bank-loan growth continues to drop from here that would be a worry,
but I don’t expect that.”
China's inflation rate fell for the third month in a row in April as prices for foods
and energy plunged from high levels the year before.
The consumer price index, which is heavily weighted toward food items, fell 1.5
percent in April from a year earlier after declining 1.2 percent in March and 1.6 percent
in February, the National Statistics Bureau reported Monday.
Food prices fell 1.3 percent, with prices for meat falling 13.5 percent, the
bureau said in a statement on its Web site.
A key factor then was shortages of pork due to an outbreak of blue ear
disease. The ailment, also known as porcine reproductive and respiratory syndrome,
killed hundreds of thousands of pigs before it was brought under control.
The outbreak caused farmers to stop raising pigs because of worries they
would become infected. That sent the price of pork -- China's staple meat -- sharply
higher.
In April, pork prices plunged 28.6 percent, the Statistics Bureau said.
Meanwhile, it reported that producer prices fell 6.6 percent in April from a year earlier,
compared with 6.0 percent in March, thanks largely to lower energy costs.
Overall, costs for fuel and raw materials fell 9.6 percent in April, the report said.
We cannot help but think of the American Japanese unit that fought so valiantly
in WWII against the Germans. Their motto was “Go For Broke,” and they had dice on
their regimental patch.
Today China is going for broke. Year-on-year GDP is up only 6.1% and even
with the stimulus package they will be fortunate to maintain that level.

JAPAN

37
 Toyota Motor Corp. will cut vehicle production 28 percent this year to its lowest
level in seven years.
The world's largest automaker, struggling as sales fall across the globe, says it
aims to produce 6.68 million vehicles in 2009, down from 9.24 million in 2008.
"We expect the severe conditions to continue this year," said Toyota
spokeswoman Ryoko Nishinohara.
Toyota has already said it expects the current fiscal year through March 2010
to be its worst ever financially, forecasting a net loss of 550 billion yen ($5.7 billion).
Japan 'would avoid dollar bonds'; Japan's opposition party says it would refuse
to buy American government bonds denominated in US dollars, if elected.

AUSTRALIA AND NEW ZEALAND

Since World War II, US military dominance has underpinned the Asia-Pacific
region's prosperity and relative peace. So it's cause for concern when one of
America's closest allies sees that power ebbing amid unstable nuclear regimes such
as Pakistan and North Korea and the expanding military power of China.
In the preface to a sweeping defense review released Saturday, Australian
Defense Minister Joel Fitzgibbon writes: "The biggest changes to our outlook . . . have
been the rise of China, the emergence of India and the beginning of the end of the so-
called unipolar moment; the almost two-decade-long period in which the pre-eminence
of our principal ally, the United States, was without question.”
Australia faces record budget deficits until 2016 as it embarks on the biggest
building program in its history, spending on roads, rail lines and high-speed Internet to
blunt fallout from the global recession.
The budget deficit will be A$32.1 billion ($24.5 billion) in the year ending June
30, rising to A$57.6 billion in fiscal 2009-10 as a recession that will linger through next
year drives up unemployment and erodes tax receipts, Treasurer Wayne Swan said in
his annual budget released today in Canberra.
Swan will reduce tax breaks, welfare payments and raise medical insurance
costs for high-income earners as well as sell a record A$60 billion of bonds next fiscal
year to pay for the stimulus plan. He will raise the pension age to 67 years from 65 by
2023, the first increase since the introduction of government payments to retirees in
1909, to achieve long-term savings.
“This is not an easy budget for easy times,” Swan, 54, told parliament today. “It
contains the hard choices that chart the course back to surplus.”
The budget deficit forecast for fiscal 2010 is equivalent to 4.9 percent of gross
domestic product, Swan said. The shortfall will hold at A$57.1 billion in 2011 before
dropping to $44.5 billion in 2012 and $28.2 billion in 2013, he said.
The number of housing-finance approvals in Australia rose a seasonally
adjusted 4.9% in March from February, the Australian Bureau of Statistics said
Tuesday.

HEALTH
NAIL FUNGUS
It appears that 18% of the world population or 35 million people have nail fungus. The
medical profession says that as we get older our risk of getting nail fungus increases.
By the time we reach 40-years-of-age, 25% of adults will have experienced some kind
of nail fungus. Over half of senior citizens have nail fungus. Granted, nail fungus isn’t
life threatening, however more people are concerned about fungus and especially
toenail fungus.

38
THE CAUSE
What tends to kick off this fungus problem? Understanding the cause can help us
avoid getting fungus and prevent it from coming back. Fungus likes dark, warn places
which makes the feet a prime target in socks and shoes. Frequenting spas or working
in places that create a damp and warm environment encourages fungus and increases
our exposure and risk of getting nail fungus. Also, the unsanitary conditions and un-
sterilized equipment at pools, locker rooms, beauty parlors and nail spas can offer
conditions for you to catch nail fungus. The type of shoe can also play a role and
selecting shoes made from breathable material is important. Some medical
professionals believe that nail fungus can be inherited or attributed to poor nail
hygiene. For instance, if you suffer from ingrown toenails this leads to an accumulation
of debris under the nail and the ingrown nails are painful and hard to clean. Wearing
socks and shoes can trap moisture in and give fungus the prime warm and moist
environment it likes. Medical professionals also caution not to share nail grooming
tools such as emery boards, nail clippers, nippers etc.

SYMPTOMS
Toenail fungus (onychomycosis) is your basic fungi microorganism, which is similar to
the fungi in mold and dew. Dermatologists and Podiatrists call these particular nail
fungus dermatophytes because it likes to feed on the keratin (the protein in your nails).
The way dermatophytes survive is similar to a tape worm, which robs the host of
nutrition and starves it. In the case of nail fungus it starves your toenails of protein.
When nails are robbed of protein they become dry and soft. They may turn a dark
color and if the fungus reaches the nail bed, the nail may fall off. Initially the nail will
grow back but will be thick, irregular and brittle. The nail may rise up off the skin and
be attached only at the base of the nail bed. Hitting or bumping the nail produces
extreme discomfort and may cause the nail to bleed at the base. Most people feel that
nails attacked by fungus are unsightly and are embarrassed to wear open-toed shoes
or sandals. For this reason many people elect to treat their nail fungus with highly
advertised prescription drugs.

OTHER FACTORS
Certain individuals may be more susceptible to contracting nail fungus such as
athletes or those with poor circulation, diabetes, HIV/AIDS and autoimmune diseases
which compromise the immune system. The toes that are most affected and the first to
show signs of nail fungus are the big and little toes because they are usually in contact
or rub on the shoe. Prescription medications can clear away the initial infection but
there is a tendency of it returning. Therefore, the immune system plays a vital role in
helping to prevent nail fungus.

TREATMENTS
There are a wide range of treatments available such as over-the-counter remedies,
drugs and natural products. You should weight the pros and cons of each. You should
be aware that treating nail fungus is a slow process due to the slow rate at which
toenails grow compared to your fingernails. I have found that the major difference
between home remedies and prescribed medicine in treating nail fungus is the time
and risk. Where home remedies offer nearly no risk, they may take up to a year of
constant applications to produce results. In contrast to pharmaceutical products, which
may work faster – they offer high risk to your health.

THE MD TREATMENT

39
If you go to your doctor you will have most of your nail removed, filed down and
trimmed. Or your physician may opt to dissolve the nail with a special chemical paste.
If the fungus is not severe and is limited to a small area you may be given a topical
medicine to apply twice a week – there are over a dozen prescriptions your doctor can
choose from. The topical treatments can only penetrate to kill superficial fungus. For
severe toenail fungus your doctor will recommend oral medications (Sporanox or
Lamisil) and possibly in conjunction with the topical treatment. The oral drugs are
taken for three months and works through the bloodstream. There are side effects and
some serious drug interactions – so do your homework. The Sporanox has been
known to cause reversible hepatitis and complete liver failure. Modern medicine
explains that the reason for the liver failure is not understood. Under no circumstances
should anyone with a liver or a heart condition take the oral antifungal drugs. These
drugs are so toxic that liver tests are given to keep a check on your liver enzymes.
Some common side effects to the oral antifungal drugs are nausea, stomach pain,
vomiting, fever, chills, tiredness, vision changes, bleeding, dark urine, yellowing of the
skin and eyes, dizziness, itching, swelling, rash and trouble breathing. One other oral
antifungal drug is Diflucan, however it has not been approved by the FDA for nail
fungus. As a last resort, your doctor may recommend surgery to permanently remove
the toenail when topical or oral treatments haven’t worked. The procedure is done
under local anesthetic and takes about an hour. In these cases when the nail plate is
removed the nail will never grow back and your doctor will also recommend that you
continue to use of topical or oral medication to prevent the recurrence of fungus.

FOLK REMEDIES
There are people who swear by some old-time home treatments such as the beer
soak. Another one is to use vinegar. There is even mention of an unconventional use
for Listerine®. I would never use Listerine orally but then again it may have a purpose
on the other end.

HERBAL OPTIONS
I believe you will be safer using a more natural approach to nail fungus. Take for
instance a topical use of garlic juice and black walnut tincture. The garlic has sulfur,
antimicrobial properties and terpenes and the black walnut has natural iodine and
tannins (vermifuge) to hinder fungal growth. Add to that a natural Calcium Formula
taken orally to assist the body to build up protein in the nails with plants containing
silicon, natural calcium, boron and magnesium and you have a winner. Keep your
immune system in good shape with ginseng, Echinacea and garlic herbal products;
look for Immune Booster, All-In-One, Adult or Children’s Echinacea, American or
Siberian Ginseng, Calcium Formula, Black Walnut Tincture and Garlic Juice at
Apothecary Herbs online http://www.thepowerherbs.com or toll free 866-229-3663,
International 704-875-8010.

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40
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Order your convenient and compact, dehydrated food in the stand-up pouch for food
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are easy to store for your rainy day food shortages and don’t cost a lot to ship. We
have several meals to choose from in single and double serving sizes to avoid waste.
Mix and serve in the stand-up pouch and avoid the need for extra utensils and
cleanup. Order single serving or double serving meals by the case and for a hot meal,
don’t forget the reusable Flameless Oven for just $13.00. Call Apothecary Herbs 866-
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HERB TALK LIVE – with Herbalist Wendy Wilson every Tuesday & Thursday at 7:00
pm EST on AVR www.theamericanvoice.com and Thursday at 4:00 pm on WBCQ
7.415 and Saturday 7:00 am on GCN www.gcnlive.com. Free radio show archives at
http://www.thepowerherbs.com

#10 CANS SURVIVAL FOOD – call Freeze Dry Guy 866-404-3663 or

www.freezedryguy.com.

*****
Blueberries Reduce Belly Fat and Diabetes Risk
http://articles.mercola.com/sites/articles/archive/2009/05/09/Blueberries-Reduce-
Belly-Fat-and-Diabetes-Risk.aspx
*****
Disabling of the Military Vaccination - Dr. Rebecca Carley, MD
<http://www.mediafire.com/?sharekey=75bba2cac37eb2bf7069484bded33bcdf416254
1d7f03283> -- Audio

LC Editor’s Comment: Dr. Rebecca Carley, M.D. hosts the radio show What’s Ailing
America, which is broadcast over the Republic Broadcasting Network
(www.republicbroadcasting.org <http://www.republicbroadcasting.org/> ) on Saturdays
from 2:00 until 4:00 PM Central Time. Dr. Carley’s guest this Saturday (May 9, 2009)
was U.S. Marine, electronics engineer, web news publisher and radio talk show host

41
Drew Raines. The topic of this show is the Disabling of the Military through
Vaccination. It was a well-done, high-content, timely interview.

Here is the link to the directory at my Media File server site containing the MP3 files for
hours one and two of the program. You may download the directory (free) by clicking
on this link. Once at the MF site, just check on the file you want to download and then
download it. All files are virus and spyware free. This is an excellent interview of a
person who knows what’s going on in the military vaccination programs through his
often daily contact with literally thousands of active duty U.S. Marines stationed
throughout the world.

http://www.mediafire.com/?sharekey=75bba2cac37eb2bf7069484bded33bcdf4162541
d7f03283

I’ve known Drew for over two years, email and speak with him often and will vouch for
his authenticity. I was a regular, weekly guest on his radio program for six months
during 2007, reporting on the events surrounding the demise of the Twin Towers on
9/11 from my perspective as a former PhD level physicist and materials scientist.
*****
A Plan Comes Together: The Sheep Obey
<http://www.newswithviews.com/Tenpenny/sherri122.htm>

Dr. Tenpenny, DO: News with Views, May 5, 2009

On May 1, 2009, the LA Times reported <http://www.latimes.com/news/science/la-na-

swineflu-hospitals1-2009may01,0,5362662.story?track=rss> some amazing
occurrences:
• Hospitals on New York’s Long Island were scrambling to bring extra workers in to
handle a 50% surge in visitors to emergency rooms.

• In Galveston, Texas, the local hospital ran out of flu testing kits after being
overwhelmed with patients worried about having contracted swine flu.

• At Loma Linda University Medical Center near San Bernardino, California,

emergency room workers set up tents in the parking lot to handle a crush of similar
patients.

• In Chicago, ER visits at the city's biggest children's hospital are double normal levels,
setting records at the 121-year-old institution.

So far, few of the anxious patients have had more than runny noses. The most
disturbing revelations about these scenarios? They knew this was the way we would
respond. What was published in 2006 has become fact in 2009. FULL ARTICLE=>

http://www.newswithviews.com/Tenpenny/sherri122.htm

LC Editor’s Comment: Here is the address of Dr. Tenpenny’s Vaccine Information

Center site. Regard the VIC as a valuable research resource on the topic of vaccines.
Dr. Tenpenny is an acknowledged medical expert in vaccines and vaccinations and
the author of the book Fowl.

42
In the U.S., a Doctor of Osteopathic Medicine (D.O.) is a fully licensed medical doctor.
In addition to comprehensive medical school training, including obstetrics and surgery,
a D.O. has extra training in the musculoskeletal system and can perform osteopathic
manipulation.
*****
The Wholesale Sedation of America's Youth
http://www.alternet.org/healthwellness/139796/the_wholesale_sedation_of_america%2
7s_youth/?page=entire>

By Andrew M. Weiss <http://www.alternet.org/authors/10630/> ,

Skeptical Inquirer <http://www.csicop.org/si/>
<http://www.alternet.org/ts/archives/?date%5BF%5D=05&amp;date%5BY%5D=2009&
amp;date%5Bd%5D=05&amp;act=Go/>

Eight million kids today have been diagnosed with mental disorders, and most receive
some form of medication. Is this child abuse?

In the winter of 2000, the Journal of the American Medical Association published the
results of a study indicating that 200,000 two- to four-year-olds had been prescribed
Ritalin for an "attention disorder" from 1991 to 1995. Judging by the response, the
image of hundreds of thousands of mothers grinding up stimulants to put into the sippy
cups of their preschoolers was apparently not a pretty one. FULL ARTICLE=>

http://www.alternet.org/healthwellness/139796/the_wholesale_sedation_of_america%2
7s_youth/?page=entire

LC Editors’s Comment: Child abuse? Think of it as child and parent exploitation by

the shrinks and the pharmaceutical companies on behalf of the elitists in their quest for
a sick, dumbed down, impoverished American people, then easily lead to believe that
the cure for all ills and injustices is global governance.
******

From a Fellow Subscriber:

Bob: Ran across this page. Interesting but may be considered controversial. Could pot
stop the medical profit machine? Is this why it remains illegal?
http://gnosticmedia.podomatic.com/entry/2009-02-08T17_34_15-08_00
*****

From a Fellow Subscriber:

In the story below, an aging drug scientist gets a conscience and forces World Health
Org to backpedal. But he doesn't go far enough! This was an intentional Crime
Against Humanity to kick off a global pandemic as a pretext to declare Martial Law.
Obviously, that panic state of operation achieves a WHOLE HOST of agenda items for
our New World Order handlers like...

- directing massive fraudulent profits to companies set to profit from such an

INTENTIONAL virus release like Baxter, Avir (the company Obama invested in as a
senator), Roche and others.

43
 - preplanned eugenics operations to kill literally millions of people around the world
(very likely once the second or third stage of this virus kicks in later this year, as it
recombines in hosts into more virulent forms, as a similar virus did in 1918)
- removing the focus from the most massive financial devastation in history (which
itself is being used as a pretext for a Global Financial Order that the SAME
CRIMINALS will control)
and many many more agenda items. This is DISGUSTING!!!
Is there enough light in the world to shed on these cochroaches? We have a TON of
extermination to do...

Swine Flu May Be Human Error; WHO Probes Scientist’s Claim

By Jason Gale and Simeon Bennett

The World Health Organization is investigating a claim by an Australian

researcher that the swine flu virus circling the globe may have been created as a result
of human error.

Adrian Gibbs, 75, who collaborated on research that led to the development of Roche
Holding AG’s Tamiflu drug, said in an interview that he intends to publish a report
suggesting the new strain may have accidentally evolved in eggs scientists use to
grow viruses and drugmakers use to make vaccines. Gibbs said he came to his
conclusion as part of an effort to trace the virus’s origins by analyzing its genetic
blueprint.

The World Health Organization received the study last weekend and is reviewing it,
Keiji Fukuda, the agency’s assistant director-general of health security and
environment, said in an interview May 11. Gibbs, who has studied germ evolution for
four decades, is one of the first scientists to analyze the genetic makeup of the virus
that was identified three weeks ago in Mexico and threatens to touch off the first flu
pandemic since 1968.

A virus that resulted from lab experimentation or vaccine production may indicate a
greater need for security, Fukuda said. By pinpointing the source of the virus,
scientists also may better understand the microbe’s potential for spreading and
causing illness, Gibbs said.

Possible Mistake

“The sooner we get to grips with where it’s come from, the safer things might become,”
Gibbs said by phone from Canberra yesterday. “It could be a mistake” that occurred at
a vaccine production facility or the virus could have jumped from a pig to another
mammal or a bird before reaching humans, he said.

Gibbs and two colleagues analyzed the publicly available sequences of hundreds of
amino acids coded by each of the flu virus’s eight genes. He said he aims to submit his
three-page paper today for publication in a medical journal.

“You really want a very sober assessment” of the science behind the claim, Fukuda
said May 11 at the WHO’s Geneva headquarters.

44
The U.S. Centers for Disease Control and Prevention in Atlanta has received the
report and has decided there is no evidence to support Gibbs’s conclusion, said Nancy
Cox, director of the agency’s influenza division. She said since researchers don’t have
samples of swine flu viruses from South America and Africa, where the new strain may
have evolved, those regions can’t be ruled out as natural sources for the new flu.

No Evidence

“We are interested in the origins of this new influenza virus,” Cox said. “But contrary to
what the author has found, when we do the comparisons that are most relevant, there
is no evidence that this virus was derived by passage in eggs.”

The WHO’s collaborative influenza research centers, which includes the CDC, and
sites in Memphis, Melbourne, London and Tokyo, were asked by the international
health agency to review the study over the weekend, Fukuda said. The request was
extended to scientists at the Food and Agriculture Organization in Rome, the World
Organization for Animal Health in Paris, as well as the WHO’s influenza network, he
said.

“My guess is that the picture should be a lot clearer over the next few days,” Fukuda
said. “We have asked a lot of people to look at this.”

Lab Escape

Gibbs wrote or co-authored more than 250 scientific publications on viruses during his
39-year career at the Australian National University in Canberra, according to
biographical information on the university’s Web site.

Swine flu has infected 5,251 people in 30 countries so far, killing 61, according to the
WHO. Scientists are trying to determine whether the virus will mutate and become
more deadly if it spreads to the Southern Hemisphere and back. Flu pandemics occur
when a strain of the disease to which few people have immunity evolves and spreads.

Gibbs said his analysis supports research by scientists including Richard Webby, a
virologist at St. Jude Children’s Research Hospital in Memphis, who found the new
strain is the product of two distinct lineages of influenza that have circulated among
swine in North America and Europe for more than a decade.

In addition, his research found the rate of genetic mutation in the new virus outpaced
that of the most closely related viruses found in pigs, suggesting it evolved outside of
swine, Gibbs said.

Some scientists have speculated that the 1977 Russian flu, the most recent global
outbreak, began when a virus escaped from a laboratory.

Other Theories?

Identifying the source of new flu viruses is difficult without finding the exact strain in an
animal or bird “reservoir,” said Jennifer McKimm-Breschkin, a virologist at the
Commonwealth Science and Industrial Research Organization in Melbourne.

45
“If you can’t find an exact match, the best you can do is compare sequences,” she
said. “Similarities may give an indication of a possible source, but this remains
theoretical.”

The World Organization for Animal Health, which represents chief veterinary officers
from 174 countries, received the Gibbs paper and is working with the WHO on an
assessment, said Maria Zampaglione, a spokeswoman.

The WHO wants to know whether any evidence that the virus may have been
developed in a laboratory can be corroborated and whether there are other
explanations for its particular genetic patterns, according to Fukuda.

‘Wild Idea’

“These things have to be dealt with straight on,” he said. “If someone makes a
hypothesis, then you test it and you let scientific process take its course.”

Gibbs said he has no evidence that the swine-derived virus was a deliberate, man-
made product.

“I don’t think it could be a malignant thing,” he said. “It’s much more likely that some
random thing has put these two viruses together.”

Gibbs, who spent most of his academic career studying plant viruses, said his major
contribution to the study of influenza occurred in 1975, while collaborating with
scientists Graeme Laver and Robert Webster in research that led to the development
of the anti-flu medicines Tamiflu and Relenza, made by GlaxoSmithKline Plc.

“We were out on one of the Barrier Reef islands, off Australia, catching birds for the flu
in them, and I happened to be the guy who caught the best,” Gibbs said. The bird he
got “yielded the poo from which was isolated the influenza isolate strain from which all
the work on Tamiflu and Relenza started.”

Gibbs, who says he studies the evolution of flu viruses as a “retirement hobby,”
expects his research to be challenged by other scientists.

“This is how science progresses,” he said. “Somebody comes up with a wild idea, and
then they all pounce on it and kick you to death, and then you start off on another silly
idea.”

To contact the reporters on this story: Jason Gale in Geneva at j.gale@bloomberg.net;

Simeon Bennett in Singapore at sbennett9@bloomberg.net.
Last Updated: May 12, 2009 21:16 EDT

"The truth of the matter is, as you and I know, that a financial element in the large
centers has owned the government ever since the days of Andrew Jackson." --
President Franklin D. Roosevelt, 1933

(Soldiers are) dumb, stupid animals to be used as pawns for foreign policy. - Henry
Kissinger (as quoted in Woodward and Bernstein's "The Final Days", ch. 14)

46