How Much Would It Cost To Buy Congress Back From Special Interests?

Submitted by Charles Hugh Smith from Of Two Minds
How Much Would It Cost To Buy Congress Back From Special Interests?
Here's a thought: let's buy our Congress back from the special interests who now own it.

We all know special interests own the U.S. Congress and the Federal machinery of governance (i.e. regulatory capture). How much would it cost the American citizenry to buy back their Congress? The goal in buying our Congress back from the banking cartel et al. would not be to compete with the special interests for congressional favors--it would be to elect a Congress which would eradicate their power and influence altogether.

A tall order, perhaps, but certainly not impossible, if we're willing to spend the money to not just match special interest contributions to campaigns but steamroll them.

A seat in the U.S. Senate is a pricey little lever of power, so we better be ready to spend $50 million per seat. Seats in smaller states will be less, but seats in the big states will cost more, but this is a pretty good average.

That's $5 billion to buy the Senate.

A seat in the House of Representatives is a lot cheaper to buy: $10 million is still considered a lot of money in this playground of power. But the special interests-- you know the usual suspects, the banks, Wall Street, Big Pharma, Big Insurance, Big Tobacco, the military-industrial complex, Big Ag, public unions, the educrat complex, trial lawyers, foreign governments, and so on--will fight tooth and nail to maintain their control of the Federal machinery, so we better double that to $20 million per seat. Let's see, $20 million times 435....

That's $8.7 billion to buy the House of Representatives.

It seems we're stuck with the corporate toadies on the Supreme Court, but the President could scotch the people's plans to regain control of their government, so we better buy the office of the President, too.

It seems Obama's purchase price was about $100 million, but the special interests will be desperate to have "their man or woman" with the veto power, so we better triple this to $300 million.

Add these up and it looks like we could buy back our government for the paltry sum of $14 billion. This is roughly .0037% of the Federal budget of $3.8 trillion, i.e. one-third of one percent. That is incredible leverage: $1 in campaign bribes controls $300 in annual spending--and a global empire.

Once we bought back our government, what would be the first items on the agenda? The first item would be to eradicate private bribes, a.k.a. private campaign contributions and lobbying.

If you allow $1 in campaign contributions, then you also allow $10 million. There is no way to finesse bribery, so it has to be cut and dried: no member of Congress can accept any gift or contribution of any nature, monetary or otherwise, and all campaigns will be publicly financed.

Is this system perfect? Of course not. There is no perfect system. But the point here is that a system which allows even a $1 private contribution to a campaign cannot be restricted; after the courts have their say, then all attempted limitations prove worthless.

So it's really all or nothing: either we put our government up for auction to the highest bribe, or we ban all gifts and private campaign financing and go with public financing of all elections in the nation.

That is the only practical and sane solution. Any proposal that seeks to finesse bribery will fail, just like all previous attempts at campaign finance reform.

Any member of Congress who accepts a gift, trinket, meal, cash in an envelope, etc. will lose their seat upon conviction of accepting the gift. Once again, you can't finesse bribery. It has to be all or nothing, and the only way to control bribery is to ban it outright.

As for lobbying, thanks to a Supreme Court dominated by corporate toadies, it will be difficult to ban lobbying outright. However, that doesn't mean Congress shouldn't try to force the toadies on the Supreme Court to make a distinction between a corporation with $100 billion in assets and billions to spend on bribes and a penniless citizen.

(Those two are not coincidental; in a nation run by and for corporations, the citizens all end up penniless unless they own or manage said corporations, or work for a Federal fiefdom which can stripmine the nation at will.)

Congress should pass a law banning paid-for lobbying. If a citizen wants to go to Congress and advocate a position, they are free to do so--but they can't accept money to do so. If they receive any compensation from any agency, enterprise, foreign government, other citizen, you name it, from any source, then they will be sentenced to 10 years of fulltime community service in Washington D.C., picking up trash, etc.

If the Supreme Court toadies strike down that law, then here's another approach:

Require all paid lobbyists to wear clown suits during their paid hours of work.

In addition, all lobbyists are required to wear three placards, each with text of at least two inches in height.

The first placard lists their total annual compensation as a lobbyist.

The second lists the special interest they work for.

The third lists the total amount of money that special interest spent the previous year on lobbying, regulatory capture, bribes to politicos and political parties, etc.

Every piece of paper issued by lobbyists must be stamped in large red letters, "This lobbying paid for by (special interest)", and every video, Powerpoint presentation, etc. must also be stamped with the same message on every frame.

The second item on the agenda is a one-page tax form. The form looks like the current 1040 form except it stops at line 22: TOTAL INCOME. A progressive flat tax is then calculated from that line. Once again, you cannot finesse bribery or exemptions, exclusions, loopholes and exceptions. Once you allow exemptions, exclusions, loopholes and exceptions, then you've opened Pandora's Box of gaming the system, and the financial Elites will soon plow holes in the tax code large enough to drive trucks through while John Q. Citizen will be paying full pop, just like now.

The entire charade of punishing and rewarding certain behaviors to pursue some policy has to end. Any deduction, such as interest on mortgages, ends up creating perverse incentives which can and will be gamed. It's really that simple: you cannot finesse bribery or exemptions, exclusions and loopholes, because these are two sides of the same coin.

The tremendous inequality in income, wealth, power and opportunity which is distorting and destroying our nation all flow from the inequalities enabled by bribery and tax avoidance. The only way to fix the nation is to eliminate bribery (campaign contributions and lobbying) entirely, and eliminate tax avoidance entirely by eliminating all deductions, exemptions, loopholes, etc. State total income from all sources everywhere on the planet, calculate tax, done.

When you think about how tiny $14 billion is compared to the $3.8 trillion Federal budget and the $14.5 trillion U.S. economy, it makes you want to weep; how cheaply we have sold our government, and how much we suffer under the whip of those who bought it for a pittance.

Silver Update 6/20/11

Submitted by: Francis Soyer

Not alot to talk about these days. The Greek debt issue as far as I can recon is a side show intented to divert attention away from the facts that the U.S. is still in a state of defacto default with a deadline approaching of 8/2/11 to either raise the debt ceiling or begin defaulting on U.S. treasury payments.

If a debt ceiling comprimise is reached, the size of that package by lets says 2 or 3 trillion will do little more than buy Geitner 12 months of time to avoid bouncing checks. Yes the debt is that big and the force of compounding interests on that debt 16 or so trillion is so massive that next year Geitner will be asking for an additional 5 to 7 trillion to avoid bouncing checks for the next year. Even with draconian austerity measures of multi trillions a default or total collapse in value of the USD is a dead certainty. To understand more about the mechanics of how that works visit: http://www.chrismartenson.com/

In the meantime while the fed and their clepto banking freinds crash the equity markets to build political will for the next QE program or whatever they decide to call it expect sideways movement in precious metals.

Economic Recovery?

Sumbitted by: Francis Soyer 5/31/11

From time to time, on the radio or maybe on propoganda sources like CNBC the spin continues that here in the USA we are experiencing economic recovery. Take a look below and tell me if this looks like economic recovery to you.

Co-Founder Of Reaganomics, Paul Craig Roberts, "There Is Probably More Democracy In China Than There Is In The West"

Paul Craig Roberts: "The west prides itself that it is the standard for the world, that it is a democracy. But nowehere do you see democratic outcomes: not in Greece, not in Ireland, not in the UK, not here, the outcomes are always to punish the innocent and reward the guilty. And that's what the Greeks are in the streets, protesting. We see this all over the west. There is no democracy, there are oligarchies, some of these smaller European countries are not even run by their own governments, they are run by Wall Street... There is probably more democracy in China than there is in the west. Revolution is the only answer... We are confronted with a curious situation. Throughout the west we think we have democracy, we hold ourselves up high, we demonize China, we talk about the mafia state of Russia, we talk about the Arabs and so on, but where is the democracy here?"

David Stockman "A Technical Default (on U.S. Debt) Is a Virtual Certainty"

Submitted by: Francis Soyer 5/24/11

Who is David Stockman? He is the former budget director for Ronald Reagan, affiliated with neither party and has seen and predicted the current fiscal mess that exists years ago and has been more vocal lately as we approach financial Armageddon.

He has some salient points listed below in addition to the very basic fact that the U.S. Treasury has to borrow $6 Billion per day just to prevent checks from bouncing. Video below

"I don't have any hope they'll come to a substantive agreement on the big things that need to be done because both parties have ruled off the table the essential things that are necessary.”

Barney Frank: U.S. government default likely

U.S. Rep. Barney Frank (D-Newton) says America might have to default on its bills for the first time ever because Democrats and Republicans can’t agree to raise the government’s $14.3 trillion debt ceiling.




“I’m pessimistic about anything reasonable (winning congressional approval) in the near term,” Frank, the ranking Democrat on the House Financial Services Committee, told the New England Council in a Boston speech today. “It may be that we’re going to have to see some failure to raise the debt limit and some temporary hiatus in our ability to pay our bills (for lawmakers to act).”



The U.S. government officially hit its congressionally mandated debt ceiling on Monday when the nation’s red ink reached $14.3 trillion

Oh I Get it Now! The REAL REASON our Soldgiers are In HARMS Way IN AFGHANISTAN

WAKE UP AMERICA! WAKE THE FUCK UP!

Turn off the fucking TV, Stop Watching Dancing with The Stars and Take a LOOK at How Fucking Curropt our GOVERNMENT IS!

A team of JP FUCKING MORGAN bankers starts to tap the country's vast mineral riches, with help from the Pentagon.
By James Bandler, editor-at-large

FORTUNE -- Qara Zaghan, Afghanistan: The four Black Hawk helicopters sweep down on this remote river valley, flying fast and single file. Snow covers the mountains' peaks, but the lower slopes look like rust -- dry, rocky, and bare. As we bank around the river bend, we see our first flash of green in the fields below and then the rectangular mud huts of the village, where hundreds of Afghans mass to greet us.
"That's the mine over there," one of my companions says, pointing to the cliffs rising above the village.
That's it? That's the gold mine? It doesn't look all that different from the forbidding country we've been traversing: just another pile of rocks and scree. The jet-lagged man in the seat across from me knows better. His sleepy eyes are suddenly alert. If anyone can wrest a fortune from Afghanistan's rubble, it is this man, Ian Hannam.
Arriving in a developing nation with his iPad and his enigmatic smile, Hannam personifies the soft side of Western power. He doesn't bend people to his will with weapons or threats. But there is no mistaking the dealmaker's impact: In his wake, mountains are razed, villages electrified, schools built, and fortunes made.
To Hannam, chairman of J.P. Morgan Capital Markets, Afghanistan represents a gigantic, untapped opportunity -- one of the last great natural-resource frontiers. Landlocked and pinioned by imperial invaders, Afghanistan has been cursed by its geography for thousands of years. Now, for the first time, Hannam believes, that geography could be an asset. The two most resource-starved nations on the planet, China and India, sit next door to Afghanistan, where, according to Pentagon estimates, minerals worth nearly $1 trillion lie buried. True, there is a war under way. And it's unclear how the death of Osama bin Laden will impact the country's political and economic environment. But Hannam is not your usual investment banker: A former soldier, he has done business in plenty of strife-torn countries. So have all the members of his team, two of them former special forces soldiers who have fought here.

Attending the ribbon cutting were (from left) mine owner Sadat Naderi; Mining Minister Wahidullah Shahrani; J.P. Morgan's Ian Hannam; and (behind Hannam) investor Pairoj Piempongsant.

As he flies to the mine for the ribbon-cutting ceremony, Hannam thinks back over the past 12 months. This little mine, where operations have yet to commence, is puny by J.P. Morgan's (JPM) standards, but he knows it might be the project for which he is remembered. A lot of powerful people, including the commander of U.S. forces in Afghanistan, Gen. David Petraeus, are counting on him to demonstrate that the country is safe for foreign investors. Hannam has chafed at times under the pressure from the Pentagon, and the cold-eyed realist in him wonders whether unrealistic expectations are being placed on this business venture.
Hannam ducks his head and climbs out of the chopper, necktie flapping in the prop wash. As he trudges up the hill, even the jaded, 55-year-old banker seems swept away by the pageantry of the moment: the village elder in a ceremonial robe, the silhouettes of women watching from the ridges, the saluting Afghan soldier. Hannam is enveloped in a crush of local tribesmen chattering excitedly in Dari. One of them puts a garland around his neck. Another hands him a Ziploc bag containing a chunk of Afghan gold. A mullah utters prayers. Afghanistan's minister of mining gives a long speech.
Hannam and his local partner, Sadat Naderi, walk up the hill to pose for photographs. Naderi points to a narrow band of quartz that runs in an east-west line across the cliff side. It shimmers in the sun. That is the treasure, he says.
"Unless," Hannam mutters, "it's fool's gold."
Absurd risks vs. amazing rewards
Investing in conflict zones is often thrilling, but the great commodities rush that J.P. Morgan and the Pentagon are trying to spark in Afghanistan creates a risk/reward equation of a different magnitude. It's extreme at both ends.
When J.P. Morgan launched its Afghan initiative in 2010, violence was at its worst since the American-led occupation began in 2001. The Taliban have made a point of killing Westerners and have specifically said they would attack any companies involved in mining. Before our trip to the mine was done, our group would get a taste of the insurgents' ability to strike violently and unpredictably.
Then there's the Afghan infrastructure -- or rather, there isn't. Big mines need power, lots of it. Outside of cities, only 15% of Afghanistan is electrified. The mountain roads -- ungraded and often without guardrails -- are perilous, I learned the hard way, particularly in winter. Seat belts? No one bothers. You crash, you die.
If the brutal war and roads don't give a businessperson pause, the country's governance and corruption problems should. Massive fraud marred recent elections. Transparency International rates Afghanistan as the second most corrupt country on earth after Somalia. The last minister of mining was identified in a Washington Post report as the recipient of a massive bribe, an allegation he denied to Fortune. The current minister, who had been widely described as an honest reformer, has recently had his integrity questioned in State Department cables released by WikiLeaks. He, too, told Fortune he has done nothing improper.
But if the risks are absurd, the potential rewards are off the charts. Hundreds of billions of dollars' worth of iron, copper, rare earth metals, and, yes, gold are buried beneath Afghanistan's deserts and mountains. This wealth has lain there mainly undisturbed for thousands of years as armies of Persians, Greeks, Mongols, Britons, Russians, and now Americans tramped above. Invaders have dreamed of exploiting it since the time of Alexander the Great, but no one has yet succeeded on a large scale.

A Chinese company is trying to start a copper operation in strife-torn Logar province, but actual mining is years away.

In an 1841 article in a journal of Asiatic studies, Capt. Henry Drummond, a member of the British 3rd Bengal Light Cavalry, described his rambles through the wildest parts of Afghanistan to conduct the first Western mineral survey of the country. He found "abundant green stains" of copper, some of which rivaled the deposits of Chile, and veins of iron ore that "might no doubt be obtained equal to the Swedish." While many of his countrymen viewed Afghanistan as an untamable place, where a man could not stray many yards from his home or tent without risk of being murdered, Drummond was smitten. Mining, he felt -- not the gun -- offered the best hope to pacify the territory and win over Afghans.
"Give them, however, but constant employment, with good wages and regular payment; encourage a spirit of industry, both by precept and example; let strict justice be dealt out to them without respect of persons; and we shall shortly see their swords changed into plowshares, industry take place of licentiousness, and these people be converted into peaceable and useful subjects," Drummond wrote. But the Afghans weren't keen on the idea of handing over their minerals to occupiers, or on the British occupation itself, for that matter. A year later they massacred the entire British army, save one English survivor, at Gandamak.
During the Cold War, both Soviet and U.S. geologists conducted surveys. The Russians bored thousands of test holes and identified big deposits of copper, zinc, mercury, tin, fluorite, potash, talc, asbestos, and magnesium. But instability in the countryside put an end to serious mining exploration.
After the toppling of the Taliban by the U.S.-led coalition, the Afghan government, with financial assistance from the U.S. Agency for International Development, commissioned new, high-tech aerial surveys of Afghanistan. The results were stunning: The U.S. Geological Survey identified huge veins of copper, iron, lithium, gold, and silver. The Afghan government solicited bids for one of the biggest of the copper deposits, a site south of Kabul that had been identified by both Drummond and the Soviets. China, offering a rich price, won the bid in 2007, beating out four other mining companies. But the Chinese mining company has yet to extract any copper from the site because of delays clearing land mines from the area, and the discovery of archeological relics.
Then, in 2009, mining in Afghanistan got the push it needed -- from the U.S. military. Petraeus had been appointed commander of U.S. Central Command, which had ultimate authority over Afghanistan. He realized that a U.S. exit from Afghanistan depended on getting the country's economy running. Up to 60% of Afghanistan's $15 billion GDP comes from foreign aid, according to Pentagon estimates, and another 20% comes from the illicit drug trade -- poppies. What Afghanistan needed was the real hope that it might achieve economic sovereignty. "I'm an old economist," the general says in an interview at his headquarters in Kabul. "And at the end of the day this is about progress for the [Afghan] people and giving them the prospect for a much brighter future for them and their families. That's what persuades the citizenry to support the government rather than support the Taliban."
Realizing that conventional foreign-aid organizations weren't getting the job done, Petraeus moved a crack economic stabilization team from Iraq into Afghanistan. That team quickly realized that mining would be key.
Enter Ian Hannam.
"This is the time in Afghanistan for the adventure venture capitalists -- for those who can do business in tough places in the world," Petraeus says.
From special forces to making billionaires

Villagers at Qara Zaghan hope mining will bring jobs, electricity, schools, and a health clinic.

Ian Charles Hannam seemed bound for a swashbuckling career at an early age. Raised in a working-class neighborhood in South London, the son of a council worker who oversaw a housing and street-repair crew, Hannam grew up knowing that nothing would ever be handed to him. He joined the Territorial Special Air Service at age 17, one of the younger men to pass the service's grueling selection process.
Hannam's unit, the Artists Rifles, was a part-time regiment akin to a U.S. National Guard special forces unit. The Artists Rifles had a storied past and a reputation for attracting adventure seekers from all social classes. Since then, Hannam has counted his old SAS cronies as his closest friends, often calling on them to help him in the world's tougher places.
While serving in the Artists Rifles, Hannam pursued a degree in civil engineering from England's top school in that field, Imperial College. Upon graduation in 1977, he took a job with Taylor Woodrow, a large British construction firm. His first assignment was to build roads, radar stations, and airstrips in Oman for the SAS, which was in the final stages of crushing a Marxist-led insurgency that had been boiling in the Dhofar region for more than a decade. The experience convinced Hannam that revolts could be beaten with a counterinsurgency program that emphasized developing a country's infrastructure and natural resources.
Still working for Taylor Woodrow, Hannam went to Nigeria and then back to Oman. Living in a tent, he could not help noticing how well oil-company executives lived. That's when he decided to go to business school and become rich.
After graduating from the London Business School, Hannam got a job in 1984 in the training program at Salomon Brothers in New York. At the airport on his way home to London for Christmas that year, he was detained by immigration officials because he had no U.S. entry stamp on his passport. The reason: He had parachuted into the U.S. with an SAS unit that was training with American special forces, and then traveled to New York to start the training program.
With a work ethic that former colleagues describe as ferocious and an engineer's taste for understanding complex financial mechanisms, Hannam was fast-tracked to the bank's vaunted debt syndicate desk. "His embrace of complexity and change, his indifference to organizational hierarchy and abundant self-confidence born of experience set him apart," recalls Terry Fitzgerald, founder of Longbow Capital Partners, who was at Salomon with Hannam.
When Salomon was hired to advise media baron Robert Maxwell's Mirror Group during its public offering, Hannam was one of Salomon's lead bankers charged with marketing the IPO. Salomon lost money on the deal. Months later Maxwell died and Mirror Group collapsed amid investigations into accounting fraud and raids on its pension fund.
Hannam left Salomon soon after the fiasco and was hired by merchant bank Robert Fleming, a Scottish firm founded by the grandfather of James Bond creator Ian Fleming. By 2000, Hannam was the highest-paid employee at Fleming, making more than the CEO. After the bank was acquired by J.P. Morgan, much of Fleming's staff was laid off. Not Hannam. He helped engineer a joint venture with, and eventual takeover of, venerated British banking house Cazenove.
Among the old guard at Cazenove -- which was subsumed by J.P. Morgan, though the British franchise still bears its name -- Hannam was regarded as a bit of a barbarian. He bragged about his wealth. He had appalling table manners. "I've got more degrees than I can count, but I still talk like I'm illiterate, and my colleagues hate me for it," he'd say.
From Congo to Colombia, from Iraq to Sierra Leone, Hannam and his small team of soldiers-turned-bankers and advisers did business with oligarchs, gem dealers, and former mercenaries. He could be bracingly direct. When he landed in Baghdad for a meeting with Iraq's oil minister, the minister asked, "What are you here for?"
"I'm here to make five new Iraqi billionaires every year for the next 10 years," Hannam said with a twinkle in his eyes. It was an effective icebreaker, recalled his friend Richard Williams, a former SAS commander who is now CEO of the Afghan gold mine. "They're all thinking, 'How can I be one of those?' Which is not a question that a minister should be thinking." However crude, Hannam's point -- it would be Iraqis, not Westerners, who were getting rich -- worked.

At an emerald mine high above the Panjshir Valley, work is done by kerosene lantern.

Over the years Hannam had starring roles in a string of huge deals, including the combination of BHP and Billiton (BHP) and its listing on the London exchange, the creation of mining group Xstrata, and the formation of Kazakh commodities giant Kazakhmys. In 2007, Hannam's appetite for risk and intrigue nearly sank him. A group of Omani investors had hired him to explore the possibility of a leveraged buyout and breakup of Dow Chemical. Hannam and another top J.P. Morgan executive held clandestine meetings with two Dow Chemical executives at the Compleat Angler, a luxury hotel on the bank of the Thames.
The only problem: Dow's CEO had no idea that the meeting was taking place. The scandal attracted front-page notice around the world.
In 2008, Hannam was passed over for the top job at Cazenove in favor of an outsider. Hannam flew to New Zealand for two weeks, turned off the phone, and brooded. But he decided to stay at the bank, and soon he was doing multibillion-dollar deals again, including lead work on the recapitalization of HSBC. With a job that paid bonuses as high as 10 million pounds, Hannam had come a long way from his boyhood in Bermondsey. He had a wife and three children, a townhouse in Notting Hill, a wild game preserve in the Stormberg mountains of South Africa, and a 230-acre estate in Vermont. But the council worker's son was hungry for something bigger.
In 2009, at a dinner in Baghdad, he met the man who would give him his chance. The name of their meeting place was fitting for a rendezvous that would help touch off a 21st-century version of the Great Game: the Baghdad Hunting Club.
Hannam was at the banquet hall for a reception thrown by the Trade Bank of Iraq to honor J.P. Morgan. Also at the reception was Paul Brinkley, a deputy under secretary of defense charged with jump-starting Iraq's stalled economy. A former tech company executive, Brinkley served as a matchmaker of sorts between Iraqi entrepreneurs and foreign businessmen. With the blessing of Defense Secretary Robert Gates, he operated outside normal bureaucratic channels, eschewing the bulletproof vests and helmets his civilian colleagues wore in combat zones. In three years he had secured some $8 billion in private investment contracts for Iraq, helping start textile mills, cement factories, and electronics companies. Hannam and Brinkley had heard about each other's work. J.P. Morgan had been one of the first Western companies to plant the flag in Iraq, overseeing the country's currency and setting up a big oil project in Iraqi Kurdistan. Hannam and Brinkley fell into conversation about Afghanistan, which was to be Brinkley's next posting.
"I've got a problem in Afghanistan," Hannam remembers Brinkley saying. Brinkley was talking to the right man.

China PBOC: New IMF Leadership Should Reflect New World Order

Comment by: Francis Soyer

In a language that everyone can understand what the article below is about is the following. China as confirmed by wickileaks in anticipating the new monetary system a year or so from now that WILL be GOLD and SIlVER backed is sending the message that as probably the LARGEST holder of Gold and Silver will INSIST on having the LARGEST voting power at the IMF. Is a case of "he who has the gold makes the rules" type of thing...

Thursday, May 19, 2011 - 07:54


China PBOC: New IMF Leadership Should Reflect New World Order

BEIJING (MNI) - The new IMF leadership needs to reflect changes in the world economic order and be more representative of emerging market economies, Chinese central bank governor Zhou Xiaochuan said Thursday in his first public comments since the arrest of Dominique Strauss-Kahn.
"The senior management team of the IMF should better reflect changes in world economic patterns and should be more representative of emerging market economies," he said.
Zhou also said he regretted Strauss-Kahn's decision to resign as the Managing Director of IMF.
"The current world economy is recovering slowly from the financial crisis and the European sovereign debt crisis is at a key stage. A powerful IMF support is needed to overcome current difficulties facing Europe and ensure world economic developments are on a robust, sustainable and balanced track," Zhou added.
German Chancellor Angela Merkel reiterated earlier today that the next head of the International Monetary Fund should be a European again.
beijing@marketnews.com ** Market News International Beijing Newsroom: 86-10-5864-5274 **

Another Presentation on What The Federal Reserve Is and How It Came to Be

Submitted by: Francis Soyer 5/18/11

Lets review! After talking with some friends and colleagues some of whom work as professionals in the Financial Services industry specifically Investment Management it is clear to me that some are still confused about what the Federal Reserve Bank is, it's purpose and how it came to be. Rather than waste your time and mine in that I am not a teacher by profession here is a video lecture from a man named Michael Badnarik who explains things much more elegantly and to the point than I can.

World Bank sees end to dollar’s hegemony

By James Politi in Washington Financial Times

Published: May 17 2011 18:41 | Last updated: May 17 2011 18:41

The World Bank expects the US dollar to lose its solitary dominance in the global economy by 2025, as the euro and the renminbi establish themselves on an equal footing in a new “multi-currency” monetary system.

The shift will be driven by the increasing power and strength of emerging market economies, with six countries – Brazil, China, India, Indonesia, Russia and South Korea – accounting for more than half of global growth in 14 years.

According to the World Bank report – released on Tuesday – emerging economies will grow at a rate of 4.7 per cent between now and 2025, a much faster pace than advanced economies which are expected to grow by 2.3 per cent over the same time-frame.
“The balance of global growth and investment will shift to developing or emerging economies,” said Mansoor Dailami, the lead author of the report.

The implications are wide-ranging. For instance, Mr Dailami said this power shift would lead to big boosts in investment flows to the countries driving global growth, with a significant increase in cross-border mergers and acquisitions activity, and a changing corporate landscape in which “you’re not going to see the dominance of established multinationals”.

In addition, a different international monetary system will gradually evolve, wiping out the US dollar’s position as the world’s main reserve currency.

“The current predominance of the US dollar would end sometime before 2025 and would be replaced by a monetary system in which the dollar, the euro and the renminbi would each serve as full-fledge international currencies,” the report said, highlighting what it considered the “most likely” of three scenarios for the currency markets in 15 years.

The report identified the euro as the most “credible” rival to the US dollar, with one caveat. “Its status is poised to expand, provided the euro can successfully overcome the sovereign debt crises currently faced by several of its member countries and can avoid the moral hazard problems associated with bail-outs of countries within the European Union,” the report said.

On China, the report noted that authorities there had already started “internationalising” the renminbi by developing an offshore market in the currency and encouraging the use of the renminbi in settling and invoicing international trade transactions.

“A larger role for the renminbi would help resolve the disparity between China’s great economic strength on the global stage and its heavy reliance on foreign currencies,” the report said.
The scenario presented by the World Bank means that financial institutions will have to “adapt fast to keep up,” said Justin Yifu Lin, the group’s chief economist.

Ex-Sen. Feingold says Lieberman, McCaskill, Hoyer fit for 'shame'

Ex-Sen. Feingold says Lieberman, McCaskill, Hoyer fit for 'shame'


By Michael O'Brien - 05/17/11 12:03 PM ET


Former Sen. Russ Feingold (D-Wis.) has tabbed two Democrats and Independent Sen. Joe Lieberman (Conn.) as fit for "shame" for being too beholden to corporate interests.


Feingold, the former liberal senator who leads a new PAC called Progressives United, singled out House Minority Whip Steny Hoyer (D-Md.), Sen. Claire McCaskill (D-Mo.) and Lieberman (Conn.), an independent who caucuses with Democrats, for a close relationship with corporations.


"This culture of corporate influence and corruption is precisely what we at Progressives United want to change. So we've decided to take on those legislators who are unwilling to stand up to corporate power, and we're naming names," Feingold wrote in an email, asking for $5 donations to "shame" those lawmakers with online ads.

1 Kilo Gold Futures Start Trading On Hong Kong Merc

1 Kilo Gold Futures Start Trading On Hong Kong Merc


Submitted by Tyler Durden on 05/17/2011 20:48 -0400
Hong KongPrecious Metals


As of 8 pm Eastern, the Comex' monopoly to the precious metals futures is over. As we reported previously, today, at 8 am local time, is when the Hong Kong Mercantile exchange would start trading the inaugural Asian precious metal futures contract: the 32 ounce /1 kilo/ gold futures. In the first 30 minutes of trading it appears to have been a subdued session, with just 22 contracts changing hands in the August 2011-June 2012 frame. How this trading will impact prices: nobody knows (yet). The spot price of gold has barely budged in the past hour. That said, now that PM futures fragmentation is starting, we expect that within 2 years we will have various deranged HFT algos trading tonnes of gold, quote stuffing globally, and otherwise creating one of the most volatile trading environments imaginable.

And since we know you are asking: the margin schedule for the HKMerx will be kept and listed by the same LCH.Clearnet that hikes and lowers Irish and Portuguese bond margins by 10% on an almost weekly basis. Let see now how the Comex hikes its gold margins with impunity if it has competition that keeps margins "artificially" low, and provides disgruntled Comex clients with an alternative venue that accepts far less cash collateral to trade.

It's called competition Chicago: get used to it.

Why no Wall St. bigwig has been prosecuted

By Roger Lowenstein


Business Week

updated 5/15/2011 12:17:42 PM ET 2011-05-15T16:17:42

Share Print Font: +-"Forgive me," began Charles Ferguson, the director of Inside Job, while accepting his 2011 Oscar for Best Documentary. "I must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail, and that's wrong." The audience erupted in applause.


Ferguson is not the first to express outrage over the lack of criminal cases to spring from the financial crisis, and his speech triggered a wave of similarly prosecutorial sentiments. Since that February night, financial journalists, bloggers, and who knows how many dinner party guests have debated the trillion-dollar question: When will a Wall Street executive be sent to jail?


There are those who have implied that prosecutors are either too cozy with Wall Street or too incompetent to bring cases to court. Thus, in a measured piece that assessed the guilt of various financial executives, New York Times columnist Joe Nocera lamented that "Wall Street bigwigs whose firms took unconscionable risks … aren't even on Justice's radar screen." A news story in the Times about a mortgage executive who was convicted of criminal fraud observed, "The Justice Dept. has yet to bring charges against an executive who ran a major Wall Street firm leading up to the disaster." In the same dispassionate tone, National Public Radio's All Things Considered chimed in, "Some of the most publicly reviled figures in the mortgage mess won't face any public accounting." New York magazine saw fit to print the estimable opinion of Bernie Madoff, who observed that the dearth of criminal convictions is "unbelievable." Rolling Stone, which has been beating this drum the longest and with the heaviest hand, reductively asked, "Why isn't Wall Street in jail?"

PIMCO's Largest "Equity" Holding - Gold

Many have been wondering why Bill Gross, with his atavistic aversion to holding US paper, has not yet branched out into precious metals which are the natural hedge to surging rates (not to mention sovereign default). Probably the primary reason for this is that the firm's flagship credit funds do not have the mandate, nor permission, to invest in such asset classes. As such, the firm's $200+ billion TRF flagship fund, at least, is limited to fixed income securities. However, the same limitation does not apply to the firm's other funds, especially the recently launched $1.2 billion equity fund, the Pimco EqS Pathfinder. The fund was launched in 2009 under the stewardship of Anne Gudefin and Charles Lahr, who jointly ran the $16 billion Mutual Global Discover mutual fund. So in an interview recently granted to Fortune by Gudefin, we were not very surprised to hear her response on what her largest investment position is in: "The largest position in the fund is gold, which we think is a very good form of protection against what can go wrong. We were encouraged by the fact that a lot of the central banks, especially in Asia, are big buyers. We think that's an underlying trend that's very favorable for gold." So to all those asking why Gross does not invest in the yellow metal, here is your answer.Should the EqS Pathfinder fund grow in AUM, one can assume that an increasingly bigger pro rata portion will be allocated to precious metals.

WPI Students Flip the Bird to CEO of Exxon Mobile Rex Tillerson

Comment by: Francis Soyer 5/16/11
Here is an example of why WPI is ranked as one of the top engineering schools in the world. Looks like they are getting a good education on not just how things work but WHY things work they way they do. Bravo and hats off to the WPI clan!

See article below:

Peak Oil: A Chance to Change the World

For advice about life after graduation, students at Worcester Polytechnic wanted to hear from peak oil scholar Richard Heinberg instead of Exxon's CEO. Here's what he told them.

by Richard Heinberg

posted May 14, 2011

Photo by schoCreative

Worcester Polytechnic Institute in Worcester, MA invited Rex Tillerson, CEO of ExxonMobil, to give the commencement speech at its 2011 graduation ceremonies on May 14. When students heard this, many were surprised and upset. As Linnea Palmer Paton of Students for a Just and Stable Future put it in a letter to the college president, “[W]e, as conscientious members of the WPI community and proud members of the Class of 2011, will not give [the Exxon CEO] the honor of imparting ... his well-wishes ... for our futures ... when he is largely responsible for undermining them.”
The students then invited Richard Heinberg, Senior Fellow of Post Carbon Institute, to give an alternative commencement speech. After a few days of negotiations, the college administration agreed to give Heinberg the podium immediately after the main ceremony. Many students chose to walk out during Tillerson’s address. This is what Richard Heinberg had to say.

---

"We will not give the Exxon CEO the honor of imparting his well-wishes for our futures when he is largely responsible for undermining them.”
-Linnea Palmer Paton,
WPI student

ExxonMobil is inviting you to take your place in a fossil-fueled twenty-first century. But I would argue that Exxon’s vision of the future is actually just a forward projection from our collective rear-view mirror. Despite its high-tech gadgetry, the oil industry is a relic of the days of the Beverly Hillbillies. The fossil-fueled sitcom of a world that we all find ourselves still trapped within may, on the surface, appear to be characterized by smiley-faced happy motoring, but at its core it is monstrous and grotesque. It is a zombie energy economy.
Of course, we all use petroleum and natural gas in countless ways and on a daily basis. These are amazing substances—they are energy-dense and chemically useful, and they yield enormous economic benefit. America started out with vast reserves of oil and gas, and these fuels helped make our nation the richest and most powerful in the world.

The End of the Cheap Oil Economy

But oil and gas are finite resources, so it was clear from the start that, as we extracted and burned them, we were in effect stealing from the future. In the early days, the quantities of fuel available seemed so enormous that depletion posed only a theoretical limit to consumption. We knew we would eventually empty the tanks of Earth’s hydrocarbon reserves, but that was a problem for our great-great-grandkids to worry about.
Yet U.S. oil production has been declining since 1970, even with huge discoveries in Alaska and the Gulf of Mexico. Other countries are also seeing falling rates of discovery and extraction, and world crude oil production has been flat-lined for the past six years, even as oil prices have soared. According to the International Energy Agency, world crude oil production peaked in 2006 and will taper off from now on.
ExxonMobil says this is nothing we should worry about, as there are still vast untapped hydrocarbon reserves all over the world. That’s true. But we have already harvested the low-hanging fruit of our oil and gas endowment. The resources that remain are of lower quality and are located in places that are harder to access than was the case for oil and gas in decades past. Oil and gas companies are increasingly operating in ultra-deep water, or in arctic regions, and need to use sophisticated technologies like hydrofracturing, horizontal drilling, and water or nitrogen injection. We have entered the era of extreme hydrocarbons.
This means that production costs will continue to escalate year after year. Even if we get rid of oil market speculators, the price of oil will keep ratcheting up anyway. And we know from recent economic history that soaring energy prices cause the economy to wither: when consumers have to spend much more on gasoline, they have less to spend on everything else.
But if investment costs for oil and gas exploration and extraction are increasing rapidly, the environmental costs of these fuels are ballooning just as quickly. With the industry operating at the limits of its technical know-how, mistakes can and will happen. As we saw in the Gulf of Mexico in the summer of 2010, mistakes that occur under a mile or two of ocean water can have devastating consequences for an entire ecosystem, and for people who depend on ecosystem services. The citizens of the Gulf coast are showing a brave face to the world and understandably want to believe their seafood industry is safe and recovering, but biologists who work there tell us that oil from the Deepwater Horizon disaster is still working its way up the food chain.

Never mind starving polar bears—we’re facing the prospect of starving people.

Of course the biggest environmental cost from burning fossil fuels comes from our chemical alteration of the planetary atmosphere. Carbon dioxide from oil, gas, and coal combustion is changing Earth’s climate and causing our oceans to acidify. The likely consequences are truly horrifying: rising seas, extreme weather, falling agricultural output, and collapsing oceanic food chains. Never mind starving polar bears—we’re facing the prospect of starving people.

The Misinformation Machine

But wait: Is this even happening? A total of nearly half of all Americans tell pollsters they think either the planet isn’t warming at all, or, if it is, it’s not because of fossil fuels. After all, how can the world really be getting hotter when we’re seeing record snowfalls in many places? And even if it is warming, how do we know that’s not because of volcanoes, or natural climate variation, or cow farts, or because the Sun is getting hotter? Americans are understandably confused by questions like these, which they hear repeated again and again on radio and television.

Why We Find it so Hard to Act Against Climate Change

Now of course, if you apply the critical thinking skills that you’ve learned here at WPI to an examination of the relevant data, you’ll probably come to the same conclusion as has been reached by the overwhelming majority of scientists who have studied all of these questions in great depth. Indeed, the scientific community is nearly unanimous in assessing that the Earth is warming, and that the only credible explanation for this is rising levels of CO2 from the burning of fossil fuels. That kind of consensus is hard to achieve among scientists except in situations where a conclusion is overwhelmingly supported by evidence.
I’m not out to demonize ExxonMobil, but some things have to be said. That company plays a pivotal role in shaping our national conversation about climate change. A 2007 report from the Union of Concerned Scientists described how ExxonMobil adopted the tobacco industry’s disinformation tactics, and funded some of the same organizations that led campaigns against tobacco regulation in the 1980s—but this time to cloud public understanding of climate change science and delay action on the issue. According to the report, between 1998 and 2005 ExxonMobil funneled almost $16 million to a network of 43 advocacy organizations that misrepresented peer-reviewed scientific findings about global warming science. Exxon raised doubts about even the most indisputable scientific evidence, attempted to portray its opposition to action as a positive quest for “sound science” rather than business self-interest, and used its access to the Bush administration to block federal policies and shape government communications on global warming. All of this is well-documented.

This is a big victory for ExxonMobil, but it is a disaster for democracy, for the Earth, and for your generation.

And it worked. Over the course of the past few years one of our nation’s two main political parties has made climate change denial a litmus test for its candidates, which means that climate legislation is effectively unachievable in this country for the foreseeable future. This is a big victory for ExxonMobil. Its paltry $16 million investment will likely translate to many times that amount in unregulated profits. But it is a disaster for democracy, for the Earth, and for your generation.
But here’s the thing. Everyone knows that America and the world will have to transition off of fossil fuels during this century anyway. Mr. Tillerson knows it as well as anyone. Some people evidently want to delay that transition as long as possible, but it cannot be put off indefinitely. My colleagues at Post Carbon Institute and I believe that delaying this transition is extremely dangerous for a number of reasons. Obviously, it prolongs the environmental impacts from fossil fuel production and combustion. But also, the process of building a renewable energy economy will take decades and require a tremendous amount of investment. If we don’t start soon enough, society will get caught in a trap of skyrocketing fuel prices and a collapsing economy, and won’t be in a position to fund needed work on alternative energy development.
In my darker moments I fear that we have already waited too long and that it is already too late. I hope I’m not right about that, and when I talk to young people like you I tend to feel that we can make this great transition, and that actions that have seemed politically impossible for the past forty years will become inevitable as circumstances change, and as a new hearts and minds comes to the table.
Even in the best case, though, the fact that we have waited so long to address our addiction to oil will still present us with tremendous challenges. But this is not a problem for ExxonMobil, at least not anytime soon. When the price of oil goes up, we feel the pain while Exxon reaps the profits. Even though Exxon’s actual oil production is falling due to the depletion of its oilfields, corporate revenues are flush: Exxon made almost $11 billion in profits in just the past three months. This translates to jobs in the oil industry. But how about the renewable energy industry, which everyone agrees is the key to our future?
For the past forty years, every U.S. president, without exception, has said we must reduce our country’s dependence on imported petroleum. Addiction to oil has become our nation’s single greatest point of geopolitical, economic, and environmental vulnerability. Yet here we are in 2011, still driving a fleet of 200 million gasoline-guzzling cars, trucks, and SUVs. The inability of our elected officials to tackle such an obvious problem is not simply the result of ineptitude. In addition to funding climate denial, fossil fuel companies like Exxon have contributed to politicians’ election campaigns in order to gain perks for their industry and to put off higher efficiency standards and environmental protections. Denying looming fuel supply problems, discouraging a transition to renewable energy, distorting climate science—these are all understandable tactics from the standpoint of corporate self-interest. Exxon is just doing what corporations do. But once again, it is society as a whole that suffers, and the consequences will fall especially on your generation.
Mr. Tillerson may have informed you about his company’s Global Climate and Energy Project at Stanford University. Exxon is now funding research into lowering the cost and increasing the efficiency of solar photovoltaic devices, increasing the efficiency of fuel cells, increasing the energy capacity of lithium-ion batteries for electric cars, designing higher-efficiency engines that produce lower emissions, making biodiesel fuel from bacteria, and improving carbon capture and storage. This is all admirable, if it is genuine and not just window-dressing.
Here’s a reality check in that regard: Exxon is investing about $10 million a year in the Global Climate and Energy Project—an amount that almost exactly equals Mr. Tillerson’s personal compensation in 2010. Ten million dollars also equals about three hours’ worth of Exxon profits from last year. You tell me if you think that is a sensibly proportionate response to the problems of climate change and oil depletion from the world’s largest energy company.
Even if Exxon’s investments in a sustainable energy future were of an appropriate scale, they come late in the game. We are still in a bind. That’s because there is no magic-bullet energy source out there that will enable world energy supplies to continue to grow as fossil fuels dwindle.
Renewable energy is viable and necessary, and we should be doing far more to develop it. But solar, wind, geothermal, tidal, and wave power each have limits and drawbacks that will keep them from supplying energy as cheaply and as abundantly as we would like. Our bind is that we have built our existing transport infrastructure and food systems around energy sources that are becoming more problematic with every passing year, and we have no Plan B in place. This means we will probably have less energy in the future, rather than more.

A Chance to Change the World

Again, I am addressing my words especially to you students. This will be the defining reality of your lives. Whatever field you go into—business, finance, engineering, transportation, agriculture, education, or entertainment—your experience will be shaped by the energy transition that is now under way. The better you understand this, the more effectively you will be able to contribute to society and make your way in the world.

You will have the opportunity to participate in the redesign of the basic systems that support our society—our energy system, food system, transport system, and financial system.

We are at one of history’s great turning points. During your lifetime you will see world changes more significant in scope than human beings have ever witnessed before. You will have the opportunity to participate in the redesign of the basic systems that support our society—our energy system, food system, transport system, and financial system.
I say this with some confidence, because our existing energy, food, transport, and financial systems can’t be maintained under the circumstances that are developing—circumstances of fossil fuel depletion and an unstable climate. As a result, what you choose to do in life could have far greater implications than you may currently realize.
Over the course of your lifetime society will need to solve some basic problems:

• How to grow food sustainably without fossil fuel inputs and without eroding topsoil or drawing down increasingly scarce supplies of fresh water;
• How to support 7 billion people without depleting natural resources—including forests and fish, as well as finite stocks of minerals and metals; and
• How to reorganize our financial system so that it can continue to perform its essential functions—reinvesting savings into socially beneficial projects—in the context of an economy that is stable or maybe even shrinking due to declining energy supplies, rather than continually growing.

Each of these core problems will take time, intelligence, and courage to solve. This is a challenge suitable for heroes and heroines, one that’s big enough to keep even the greatest generation in history fully occupied. If every crisis is an opportunity, then this is the biggest opportunity humanity has ever seen.
Making the best of the circumstances that life sends our way is perhaps the most important attitude and skill that we can hope to develop. The circumstance that life is currently serving up is one of fundamentally changed economic conditions. As this decade and this century wear on, we Americans will have fewer material goods and we will be less mobile. In a few years we will look back on late 20th century America as time and place of advertising-stoked consumption that was completely out of proportion to what Nature can sustainably provide. I suspect we will think of those times—with a combination of longing and regret—as a lost golden age of abundance, but also a time of foolishness and greed that put the entire world at risk.

It’s a time when it will be possible to truly change the world, because the world has to change anyway.

Making the best of our new circumstances will mean finding happiness in designing higher-quality products that can be re-used, repaired, and recycled almost endlessly; and finding fulfillment in human relationships and cultural activities rather than mindless shopping. Fortunately, we know from recent cross-cultural psychological studies that there is little correlation between levels of consumption and happiness. That tells us that life can in fact be better without fossil fuels.

In the Face of this Truth
It’s time to talk honestly about collapse–no matter how others may respond.

So whether we view these as hard times or as times of great possibility is really a matter of perspective. I would emphasize the latter. This is a time of unprecedented opportunity for service to one’s community. It’s a time when it will be possible to truly change the world, because the world has to change anyway. It is a time when you can make a difference by helping to shape this needed and inevitable change.
As I travel, I meet young people in every part of this country who are taking up the challenge of building a post-petroleum future: a 25-year-old farmer in New Jersey who plows with horses and uses no chemicals; the operator of a biodiesel co-op in Northampton; a solar installer in Oakland, California. The energy transition will require new thinking in every field you can imagine, from fine arts to banking. Companies everywhere are hiring sustainability officers to help guide them through the challenges and opportunities. At the same time, many young people are joining energy and climate activist organizations like 350.org and Transition Initiatives.

Police seek evidence of sex attack from IMF chief

By JENNIFER PELTZ AND ANGELA CHARLTON, Associated Press Jennifer Peltz And Angela Charlton, Associated Press– 1 min ago

NEW YORK – The head of the International Monetary Fund was examined for evidence that could incriminate him in the alleged sexual assault of a hotel maid, charges that stunned the global financial world and upended French presidential politics.
Dominique Strauss-Kahn, a married father of four whose reputation with women earned him the nickname "the great seducer," faced arraignment Monday on charges of attempted rape and criminal sexual contact in the alleged attack on a maid who went into his penthouse suite at a hotel near Times Square to clean it.
Strauss-Kahn was taken into custody on Saturday and spent more than 24 hours inside a Harlem precinct, where police say the maid identified him from a lineup, then headed to a hospital for a "forensic examination" requested by prosecutors to obtain more evidence in the case, defense lawyer William Taylor said. He was taken to a Manhattan court early Monday.
Another defense attorney, Benjamin Brafman, said the IMF managing director "intends to vigorously defends these charges and he denies any wrongdoing."
A member of France's Socialist party, Strauss-Kahn was widely considered the strongest potential challenger next year to President Nicolas Sarkozy, whose political fortunes have been flagging.
Environment Minister Nathalie Kosciusko-Morizet lamented the shadow the incident could cast on all of France.
"I'm very surprised to see at what speed in France we rush to political conclusions about a subject that is a serious one. He is accused of very serious acts. We are hardly speaking at all of the alleged victim," she said Monday on Canal-Plus television. In addition to the hotel maid, Koscuisko-Morizet said there is another "clear victim, which is France."
Strauss-Kahn, 62, was nabbed less than four hours after the alleged assault, plucked from first class on a Paris-bound Air France flight that was just about to leave the gate at John F. Kennedy International Airport.
He was alone when he checked into the luxury Sofitel hotel, not far from Times Square, on Friday afternoon, police said. It wasn't clear why he was in New York. The IMF is based in Washington, and he had been due in Germany on Sunday to meet with Chancellor Angela Merkel.
The 32-year-old maid told authorities that when she entered his spacious, $3,000-a-night suite early Saturday afternoon, she thought it was unoccupied. Instead, Strauss-Kahn emerged from the bathroom naked, chased her down a hallway and pulled her into a bedroom, where he sexually assaulted her, New York Police Department spokesman Paul J. Browne said.
The woman told police she fought him off, but then he dragged her into the bathroom, where he forced her to perform oral sex on him and tried to remove her underwear. The woman was able to break free again, escaped the room and told hotel staff what had happened, authorities said.
Strauss-Kahn was gone by the time detectives arrived moments later. He left his cellphone behind. "It looked like he got out of there in a hurry," Browne said.
The NYPD discovered he was at JFK and contacted officials at the Port Authority of New York and New Jersey, which runs the airport. Port Authority police officers arrested him.
The maid was taken by police to a hospital and was treated for minor injuries. Stacy Royal, a spokeswoman for Sofitel, said the hotel's staff was cooperating in the investigation and that the maid "has been a satisfactory employee of the hotel for the past three years."
Strauss-Kahn was arrested on charges of a criminal sex act, attempted rape and unlawful imprisonment. Authorities were looking for any forensic evidence and DNA.
His wife, Anne Sinclair, defended him in a statement to French news agency AFP.
"I do not believe for one second the accusations brought against my husband. I have no doubt his innocence will be established," said Sinclair, a New York-born journalist who hosted a popular weekly TV news broadcast in France in the 1980s and '90s.
The arrest could throw the long-divided Socialists back into disarray about who they could present as Sarkozy's opponent. Even some of his adversaries were stunned.
"It's totally hallucinating. If it is true, this would be a historic moment, but in the negative sense, for French political life," said Dominique Paille, a political rival to Strauss-Kahn on the center right, on BFM television. Still, he urged, "I hope that everyone respects the presumption of innocence. I cannot manage to believe this affair."
Candidates need to announce their intentions this summer to run in fall primary elections.
"If he's cleared, he could return — but if he is let off only after four or five months, he won't be able to run" because the campaign will be too far along, said Jerome Fourquet of the IFOP polling agency.
"I think his political career is over," Philippe Martinat, who wrote a book called "DSK-Sarkozy: The Duel," told The Associated Press. "Behind him he has other affairs ... I don't see very well how he can pick himself back up."
Strauss-Kahn is known as DSK in France, but media there also have dubbed him "the great seducer." His reputation as a charmer of women has not hurt his career in France, where politicians' private lives traditionally come under less scrutiny than in the United States.
In 2008, Strauss-Kahn was briefly investigated over whether he had an improper relationship with a subordinate female employee. The IMF board found his actions "reflected a serious error of judgment" yet deemed the relationship consensual.
But attempted rape charges are far more serious than extramarital flings and could do far more damage to his reputation in France and abroad.
"It's sure that a future president already mired in judicial problems is not well seen by the French," said Patricia Bous, a lab researcher in Paris' Left Bank on Monday.
"It's obvious that this is someone a lot of people were counting on, and because of this all of the cards are being reshuffled. So I don't know what's going to happen, but for me there is a presumption of innocence and we await the proof so we'll see," said university employee Hubert Javaux, also in the Left Bank.
French newspapers all put Strauss-Kahn on their front pages Monday morning, with grim headlines and photos. "DSK Out" read the banner headline on the left-leaning Liberation. "The Doors of the Elysee Are Closing for DSK" read that in Le Soir.
The New York allegations come amid French media reports about Strauss-Kahn's lifestyle, including luxury cars and suits, that some have dubbed a smear campaign. Some French raised suspicions about the sexual assault case as well.
"Perhaps this affair will unravel very quickly, if we learn that there is in the end no serious charge and that what was said by this woman was not true, and we all wish for this," former Socialist Party boss Francois Hollande said on Canal-Plus television. "To commit an act of such seriousness, this does not resemble the man I know."
A former economics professor, Strauss-Kahn served as French industry minister and finance minister in the 1990s, and is credited with preparing France for the adoption of the euro by taming its deficit.
He took over as head of the IMF in November 2007. The 187-nation lending agency provides help in the form of emergency loans for countries facing severe financial problems.
Sarkozy, who did not comment publicly Sunday, had championed Strauss-Kahn to run the IMF. Political strategists saw it as a way for Sarkozy to get a potential challenger far from the French limelight.
Caroline Atkinson, an IMF spokeswoman, issued a statement Sunday that said the agency would have no comment on the New York case. She referred all inquiries to Strauss-Kahn's personal lawyer and said the "IMF remains fully functioning and operational."
The fund's executive board was expected to be briefed on developments related to Strauss-Kahn on Sunday, but the meeting was postponed. John Lipsky, the IMF's first deputy managing director, would lead the organization in an acting capacity in Strauss-Kahn's absence.
Strauss-Kahn was supposed to be meeting in Berlin on Sunday with Merkel about increasing aid to Greece, and then join EU finance ministers in Brussels on Monday and Tuesday. The IMF is responsible for one-third of Greece's existing loan package, and his expected presence at these meetings underlined the gravity of the Greek crisis.
___
Charlton reported from Paris. Associated Press writers Elaine Ganley in Paris, Colleen Long, Cristian Salazar and Verena Dobnik in New York and Martin Crutsinger in Washington contributed to this report

David Morgan on the Utah Coin Act. Silver / Gold Update 5/12/11

In short what has occured in Utah is that the state has chosen to excersise its ability as a State of the U.S.A. to implement Gold and Silver as a legal tender under "Article1, Section 10 of the United States Constitution which provides that no state shall make anything but gold and silver coin a tender for payment of debts."

This means that the State Legislators in Utah observing the outright lunacy at the Federal Government level with money printing just to keep up with Interest on the $14+ Trillion are taking action to pre empt Weimer Germany type situation where wheel barrels of money are required to purchase a loaf of bread. Good for them...

Other states that are looking at something similar:
Virginia House Joint Resolution 557
Georgia Constitutional Tender Act
Ohio Honest Money Project
Idaho Silver Gem Act, Bill No. 633
South Carolina House Bill No. 4501
Missouri House Bill No. 561
Washington House Joint Memorial 4010
Colorado Honest Money Act (HB09-1206)
Indiana Senate Bill No. 453
Montana House Bill No. 639
New Hampshire Gold Money Bill 1.

Forbes Predicts U.S. Gold Standard Within 5 Yearsby Paul Dykewicz

Forbes Predicts U.S. Gold Standard Within 5 Yearsby Paul Dykewicz

05/11/2011

A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills, Steve Forbes predicted during an exclusive interview this week with HUMAN EVENTS.



“What seems astonishing today could become conventional wisdom in a short period of time,” Forbes said.


Such a move would help to stabilize the value of the dollar, restore confidence among foreign investors in U.S. government bonds, and discourage reckless federal spending, the media mogul and former presidential candidate said. The United States used gold as the basis for valuing the U.S. dollar successfully for roughly 180 years before President Richard Nixon embarked upon an experiment to end the practice in the 1970s that has contributed to a number of woes that the country is suffering from now, Forbes added.


If the gold standard had been in place in recent years, the value of the U.S. dollar would not have weakened as it has and excessive federal spending would have been curbed, Forbes told HUMAN EVENTS. The constantly changing value of the U.S. dollar leads to marketplace uncertainty and consequently spurs speculation in commodity investing as a hedge against inflation.


The only probable 2012 U.S. presidential candidate who has championed a return to the gold standard so far is Rep. Ron Paul (R.-Tex.). But the idea “makes too much sense” not to gain popularity as the U.S. economy struggles to create jobs, recover from a housing bubble induced by the Federal Reserve’s easy-money policies, stop rising gasoline prices, and restore fiscal responsibility to U.S. government’s budget, Forbes insisted.


With a stable currency, it is “much harder” for governments to borrow excessively, Forbes said. Without lax Federal Reserve System monetary policies that led to the printing of too much money, the housing bubble would not have been nearly as severe, he added.


“When it comes to exchange rates and monetary policy, people often don’t grasp” what is at stake for the economy, Forbes said. By restoring the gold standard, the United States would shift away from “less responsible policies” and toward a stronger dollar and a stronger America, he said. “If the dollar was as good as gold, other countries would want to buy it.”


An encouraging sign for Forbes is that key lawmakers besides Rep. Paul are recognizing that the Fed is straying well beyond its intended role of promoting stable prices and full employment with its monetary policies.


Forbes cited Rep. Paul Ryan (R.-Wis.), who, he believes, understands monetary policy better than most lawmakers and has shown a willingness to ask tough but necessary questions. For example, when Federal Reserve Chairman Ben Bernanke appeared before the House Budget Committee in February, Ryan, who chairs the panel, asked Bernanke bluntly how many jobs the Fed’s quantitative-easing program had helped to create.


Politicians need to “get over” the notion that the Fed can guide the economy with monetary policy. The Fed is like a “bull in a China shop," Forbes said. “It can’t help but knock things down.”


“People know that something is wrong with the dollar," Forbes concluded. "You cannot trash your money without repercussions.”

And now for Something Interesting and Fun

Follow up on Last Weeks Smash and Grab on Silver by the CME 5/10/11

Submitted by: Francis Soyer 5/10/11

I came across this article by Theodore Butler regarding last weeks 84% margin hike on silver by the CME a blatant smash and grab technique of magnitude not seen since the Hunt Brothers tried taking on the CME and got their asses handed to them.

"But this week’s intentional price smash in silver brings us to a critical junction. No, I am not worried about the price of silver in the long term, as the realities of the supply and demand factors are stronger than any manipulation. What I am concerned about are the principles of market integrity and the rule of law. In those terms, what happened this week is the worst thing possible. The public has warned the Commission to no end about wrongdoing in the silver market, only to see that wrongdoing blatantly displayed again. There are many legitimate questions about what actually took place, such as the ones I have listed above."

Here is a link to the original article:  http://news.silverseek.com/SilverSeek/1304873055.php

My response to his remarks about being concerned about the rule of LAW and the enforcement of it is this.


The rule of law is in this country is Broken and badly so. There are two laws that exist, the first is that the monopolistic corporations and other corporate interests that recently the Supreme Court ruled must be treated the same as an individual and their respective rights as outlined in the Constitution and then the people and their rights. And the latter of the set of rights the Governement and its enforcement institutions could give two shits their rites. They serve the first set and only them and blatantly so.

The second part of the response would be to say that the Rule of Law does not apply to those who have power either by electoral process or appointment with or without consent of the population. The Iraqi invastion and war, Afghanistan, General Eclectric paying no taxes, no prosecutions for the massive mortgage fraud, a private bank that has complete autonomy from Governemental oversight, Guantonomo bay, The Patriot Act, If you need more examples of why this statement is Truth I suggest you go back and start with Richard Nixon and his pardon given via Jerald Ford. From then on the pattern is clear that there are two sets of laws. One is completely disregarded by those who have money, power and are intertwined with Governmental systems via corporate activity. The other is the LAW of the population that will be wielded by Governments to suppress and maintain a docile population to discourage revolt so that it can maintain its position of control and enforce its power by the fleecing of that population by supporting the corporate interest and taxation.

That said a better way to summarize came from a man named Martin Armstrong.
"It is normal for history to be generally ignored.This has been so because mankind is just arrogant, and most certainly stupid enough to believe that somehow we are more sophisticated today than our ancestors ever were centuries ago, so history offers nothing. It was Machiavelli who had the insightful talent to see why history repeats. He summed up the problem better than anyone else. He said history repeats because man never changes with time. So the greed for power always unfolds with the same result. Those who seize power directly or indirectly, refuse to see the consequences of their self-interests."
"Praetor’s Edict. He promoted this as official civil law for Roman citizens. Law had fallen into the grips of practice so that when people stood in a court, there was no real law, but DISCRETION of the Praetor. Thus, Hadrian realized that the corruption was always a cancer that feeds on the people and the only way to protect the economy is to keep a watchful eye over the Judiciary. For once the courts become corrupt, as we have again today; the economy suffers for CAPITAL is no longer safe. How can money be invested when the Rule of Law is nothing more than the DISCRETION of the judge?

Today’s battle that rages over the Supreme Court is all over “discretion” to change whether or not abortion is legal. In this current budget crisis, again it is social politics dominating fiscal responsibility for the Republicans want to shut down Planned Parenthood because of abortion, not to balance the budget. This proves the point that LAW is nothing more than DISCRETION of the judge; hence the battle over the Supreme Court. It is not really what the law IS, but what one judge IS WILLING to say it is over another. In this legal atmosphere, capital is NOT safe! Judges are not there to defend us or the Constitution, but whatever agenda that the political party might be who appointed them. In times of economic distress as we currently face, we are in serious trouble. The courts no longer provide a check and balance against the Executive or Legislative branches. The entire tripartite form of government has been usurped by politics. This is a CRITICAL prerequisite to the economic collapse. Once capital is no longer truly safe, it migrates and investment that creates economic growth declines as capital is driven to speculation and self-preservation."

Given that Capital is no longer safe what is one to do to survive? Well... they could buy Silver Futures contracts to gain and preserve wealth for the coming storm. Doing this is very dangerous in that the CME is a lawless institution and if you think your financial interests are what they are trying to protect you are in for a big surprise when they default, write your account to zero because they can, basically do whatever the hell they want when it suites them. Trading with them you are literally taking your life putting it into their hands and they will take it when it suites them I guarantee it!

The only way to operate outside this lawless system is to have silver in your hand. Not at a Bank, Not at some bullshit brokerage holding house, not with a SLV etf. It needs to be in your hands in your home, in a safe. This is the "store of value" you need to self preserve your wealth. The only other option is PSLV or a physical silver etf. but even then our government could just say as a matter of national security imports or cross border transactions of Silver are banned and you are fucked again. So in hand is the only option I can see rite now.

In answer to your query, what will Gensler do to remedy this situation? The answer is Absolutely Nothing and that is another guarantee I will stand behind.  Peace and Adonai