The Federal Government almost shut down today

US Senate OKs 1-Mo Emergency Extension Of Federal Government Funding Levels
By Corey Boles, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Facing a midnight deadline, the U.S. Senate Wednesday approved an emergency one-month extension of current funding levels for the federal government.

The extension is necessary because lawmakers have been unable to complete work on the 12-must pass spending bills required to keep the various arms of the federal government running each year.

With the federal government's fiscal year in its waning hours, all non- essential parts of the government would have been required to shut down at midnight had the extension not been agreed to.
The Senate voted 62-38 to agree to the extension.
House lawmakers voted strongly in favor of the measure last week.

President Barack Obama must sign it into law by midnight to avert the shutdown.

The extension was attached to one of the spending bills - legislation to fund Congress and its related agencies. It is the first of the dozen bills that lawmakers have finished.

As such, Democrats were accused by their Republican counterparts of putting Congress' interests before the rest of the country's. This bill was most likely completed first as it is the least controversial of the 12 pieces of legislation.

The minority party was also critical of the package because it includes language allowing the U.S. Postal Service to defer a $4 billion payment to its employees' pension fund.
LINK HERE

Coming Soon: Banking Crisis of Historic Proportions
LINK HERE

Americans Are Oblivious as to What's Coming. As FEMA says: Are you Ready?

By Stuart Gerald
America is coming unglued. The core of the population is living in poverty, soon to become severely undernourished, massively unemployed and homeless. 40 million Americans are now considered living in a state equal to an underdeveloped nation. (link here) Does the US census bureau accurately count; the homeless, unemployed, illegal immigrants, expired unemployment insurance recipients or self employed making under $10,000 yearly that live in this country? I suspect the numbers are much higher, possibly double. The media/government has to come up with a figure to give to the general public, an amount that will shock, but safely manage our beliefs.
Will this undernourished nation bring civil unrest, chaos and revolts unseen before in the US? People starving with food prices too high to manage, irrational behavior erupts. Large grocery chains will begin to close down, due to massive theft and unemployment, as in Detroit, where not a grocery chain exists today. (link here)
Tax revolts here have begun to nurture, taking on little steps. Megaphones and signs with large gatherings were organized throughout counties and states without any affect. At what point will the remainder of the public say, enough is enough, I will not pay my taxes, my bills or my mortgage. When we are starving? When the dollar is considered worthless? If 300 million people hold useless dollars unable to buy a loaf of bread or a gallon of gas to get to work what happens?
In 1999-2002 when Argentina collapsed and their dollar became as worthless as a pine needle, the population was only 37 million. The government then enacted a set of measures (informally known as the corralito) that effectively froze all bank accounts for twelve months, allowing for only minor sums of cash to be withdrawn. Large companies were destroyed, demonstrations turned violent, many died and the government toppled. The World Bank, as we now know, is talking about the flight away from the dollar. China, Japan, Iraq are slowly moving out of the US dollar. The sad part about all this, only a VERY small fraction of Americans are aware of these details. The remainder is oblivious, unemployed, starving or could care less. As FEMA says: Are you ready?

Falling Tax Revenue BIG TIME:
The decline was the sharpest since at least the 1960s

The Present Slums? Everywhere in the USA

Strange days are upon the residents of many a suburban cul-de-sac. Once-tidy yards have become overgrown, as the houses they front have gone vacant. Signs of physical and social disorder are spreading.

At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son’s bedroom and into her own, Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told The Charlotte Observer, “I thought I’d bought a home in Pleasantville. I never imagined in my wildest dreams that stuff like this would happen.”
In the Franklin Reserve neighborhood of Elk Grove, California, south of Sacramento, the houses are nicer than those at Windy Ridge—many once sold for well over $500,000—but the phenomenon is the same. At the height of the boom, 10,000 new homes were built there in just four years. Now many are empty; renters of dubious character occupy others. Graffiti, broken windows, and other markers of decay have multiplied. Susan McDonald, president of the local residents’ association and an executive at a local bank, told the Associated Press, “There’s been gang activity. Things have really been changing, the last few years.”
LINK HERE

The ‘Top Dollar’ could soon be History: World Bank President

The US consumer is no longer all-powerful – and it’s time to ‘re-balance’

By Edward Helmore
FIRST POSTED SEPTEMBER 29, 2009

The post-G20 fall-out continues. Robert Zoellick (former Goldman Sachs Exec)president of the World Bank, warned yesterday that America's days as an unchallenged economic superpower are numbered and that the dollar is likely to lose its No. 1 spot as the global reserve currency to the euro and the Chinese renminbi.

"The United States would be mistaken to take for granted the dollar's place as the world's predominant reserve currency," he warned, offering the euro as a "respectable alternative" for international transactions and predicting that the renminbi would "evolve into a force in financial markets".
Some commentators believe Zoellick is being purposefully provocative. At the same time, he's amplified the main lesson of the Pittsburgh summit: as the global economy undergoes a kind of de-centralisation, so the global system of currencies will shift.
There is growing belief that the US consumer is blown out as the pre-eminent engine of global economic growth

Zoellick's larger point has been made many times before: while the dollar remains the global currency of choice today, the US lack of discipline over spending and its budget deficits will ultimately diminish or even collapse the currency.
LINK HERE

Silver Shortage Follows Explosion in Price

Based on the supply and demand situation of silver, it's only a question of time when a silver shortage will come. Nobody can predict exactly when this is going to happen, but we have more and more signs that those who control the price of silver are sweating to balance the supply.

The biggest question I have is, will the shorts be successful to cover their short position on time?
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So I will give you my calculation. It will be a gradual explosion of prices and slowly the users and the new investors will eat up the world visible silver, which today is around 500 million ounces. In my calculation the first 100 million ounces of visible silver will disappear at a price of $60 to $100 an ounce. The second 100 million ounces will disappear by $250, and the third 100 million ounces will disappear between $250 and the price of gold ounce for ounce.

We will be left with 200 million ounces of silver which the owners will be not taking profits on at any price. The bullion in private hands I calculate will be the first to take profits...
LINK HERE

The Coffin Shaped Recovery

While often wrong, Bernanke is right about the recession. It’s almost over. But a depression is about to replace it.


There has been much discussion about this recovery, whether it will be a “U”, “V” or a “W” shaped recovery. The answer is none of the above. It is going to be “C -shaped” recovery, but not as in the letter “C” but as in coffin.
It would be a miracle if trillions of dollars of debt could be wiped out with one stock market crash and be succeeded by a new bull market driven by another large offering of credit by the Fed.

But such a central bank-engineered miracle today is impossible. Capitalism’s natural cycles derive from central banker’s unnatural infusion of credit into previously free markets. The subsequent distortion causes market demand to expand (which everybody loves) only to be followed by the inevitable contraction—which everybody hates.

Usually, central banks wait until previous levels of excess credit have been absorbed in an economic downturn before embarking on a fresh round of credit creation. This time, however, it is different.

This time, the cumulative buildup of debt over previous cycles where contractions were cut short to minimize economic pain and attendant political consequences is now so large that any contraction is sufficient to bring down the extraordinary backlog of debt built up over previous cycles.

The current contraction is more than sufficient to do so as it is more severe than any downturn since the 1930s; and despite the frantic attempts of central banks to contain the cumulative forces unleashed by previous cycles of credit and debt, the enormous but fragile paper-based economy built by central bankers’ paper money is now collapsing.
LINK HERE

Another Analyst: We Are in a Toilet-Shaped Recovery
LINK HERE

Whole Foods to Food Banks: Middleclass Starving

The Germantown woman was loading boxes of food from the Manna food bank into a shiny sport-utility vehicle one recent afternoon when she was approached by a donor dropping off food.
"What group are you with?" the donor asked the woman, who promptly burst into tears. With her Toyota Sequoia and quilted Vera Bradley bag, she had been mistaken for a volunteer -- rather than a client waiting to take home a bag of potatoes.

"I'm a mother of four just trying to feed my kids," the woman sobbed to the donor, who was taken aback, then sympathetic.

Such awkward scenes are playing out frequently at food pantries and other charities across the region as they struggle to help the still upward-spiraling number of formerly middle-class people knocking on their doors.
LINK HERE

The Push to End the Dollar and The US

WASHINGTON — The president of the World Bank said on Monday that America’s days as an unchallenged economic superpower might be numbered and that the dollar was likely to lose its favored position as the euro and the Chinese renminbi assume bigger roles.

“The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” the World Bank president, Robert B. Zoellick, said in a speech at the School for Advanced International Studies at Johns Hopkins. “Looking forward, there will increasingly be other options to the dollar.”

Mr. Zoellick, who previously served as the United States trade representative and as deputy secretary of state under President George W. Bush, said that the euro provided a “respectable alternative” for financing international transactions and that there was “every reason to believe that the euro’s acceptability could grow.”
LINK HERE

FDIC Discloses Deposit Insurance Fund Is Now Negative. BANK RUN COMING?
In an unprecedented disclosure, the FDIC has highlighted that it expects the DIF reserve ratio to be negative as of September 30. As there are a whopping 48 hours before that deadline, one can safely assume that the DIF is now well into negative territory: as of today depositors have no insurance courtesy of a banking system that has leeched out all the capital of the Federal Deposit Insurance Corporation. Let's pray there is no run on the bank soon.
LINK HERE

Glen Beck: Weimar America with Chart

Federal Reserve Buys MORE Than 100% of Mortgages Issued in 2009

This is important information. What I've found and present below is that the Federal Reserve is not just supporting the housing market, it is the housing market.

Just as important as a person's desire to buy a home is their ability to gain access to mortgage funding.

The mortgage market is a gigantic beast with many moving parts, but it is pretty easy to understand from a high level.

The process works like this: A homeowner secures a mortgage from a bank or mortgage company. Then the mortgage is sold off to another company, with the cash generated by that sale now available to lend to other potential homeowners. Ultimately the mortgage may pass through several sets of hands but ultimately it lands with a terminal holder.

In that chain, the mortgage might get sold off several times, or perhaps sliced and diced by Wall Street wizards, but all that matters is that some company (with cash) is there at the end to buy the mortgage to keep the whole chain moving along.

Lately, the "terminal buyers" in that chain have increasingly ended up being the federal government (through the GSEs) and the Federal Reserve.

And not just by a little bit, but by a lot.

Here are the numbers:
LINK HERE

Retail Stores Closing Doors

Retail's Changing Face
Announcements continue to roll in from retailers that have decided to close stores, slow expansion plans or cease operations altogether.

From Blockbuster to Payless, we update our 2009 roundup with the latest news from the third quarter. See which retailers are closing (at least some) of their doors. Are any of them your favorites?
LINK HERE
Blockbuster Video
Smith & Hawken
Payless ShoeSource
Crabtree & Evelyn
Big 10 Tires
Bank of America
Citigroup
PacSun
Zales Jewelers
Bulgari
Sears & Kmart
Samsonite
1st & 2nd Quarter Announcements

Here is your Independent Audit of the Federal Reserve!

To get to the meat of the matter, scroll down 2/3rds the way through the report on each until you get to the statistical section. There you will see as to collective numbers. Most of the numbers are noted as being in "millions" so add six (6) zeros. After you look there then go back up in the report and it is very informative reading on the preceding pages.

I NOTE: What really caught my eye was in the 2008 report, page 418, under "Loans and other credit extensions" the increases starting in September through Oct, Nov, Dec, of 2008, WOW, stands out above all other aspects in the 2008 report, and broke all the standards from previous monthly activity in 07, 06 and before. There you will see a 400% to 700% increase over the monthly standard previously shown. They have gotten some pretty big fish on the hook... Board of Governors is on page 365.

The following Audit of the Federal Reserve for 2008:
2008 PDF FILE LINK HERE


2007 Link Here

2006 LINK HERE

MAIN LINK:
HERE

Many Selling Kidneys to Pay off Debt

British victims of the credit crunch are offering to sell their kidneys for £25,000 or more to help pay debts, an investigation by The Sunday Times has revealed.

At least a dozen adverts have appeared on the internet offering kidneys for sale from British “donors”. Five of the sellers corresponded with undercover journalists, who posed as friends and relatives of sick patients to negotiate sales.

One person willing to sell a kidney is a 26-year-old mental health nurse who said he needed the money to pay debts after a business he set up went bankrupt. Another is a 43-year-old taxi driver from Lancashire, who wants to raise cash to pay off some of his mortgage and buy a new kitchen.
LINK HERE

Japan to Dump the US Dollar?

Yukio Hatoyama is Japan’s new leader. He officially took office last Wednesday, and he is already threatening to split with the United States.

Hatoyama blames America for the global economic crisis and says that the U.S. is responsible for “the destruction of human dignity.” He campaigned on protecting traditional Japanese economic activities and reducing U.S.-led globalization.

During the run-up to the election, Hatoyama’s finance minister told the bbc he was worried about the future value of the dollar, and that if his party were elected in the upcoming national elections, it would refuse to purchase any more U.S. treasuries unless they were denominated in Japanese yen.

Japan is the world’s second-largest economy. It is also America’s second-most-important creditor. The U.S. government owes Japan over $724 billion! The only nation America owes more money to is China ($800 billion). The U.S. also imports $140 billion worth of goods from Japan each year.
If Japan were to follow through with its threat to only lend in yen, the dollar would probably fall hard. What would that mean? America gets more expensive consumer goods, higher unemployment, and currency inflation. If other nations like China follow suit, we would be looking at a currency crisis—Zimbabwe-style.
LINK HERE

Germany declares economic war on Britain
LINK HERE

Zoellick Says U.S. Dollar’s Primacy Not a Certainty
LINK HERE

BILDERBERGERS WANT GLOBAL CURRENCY NOW
LINK HERE

Everything is OK

Job Market is Bleaker Than Ever

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In Milwaukee, Debbie Kransky has been without work since February, when she was laid off from a medical billing position — her second job loss in two years. She has exhausted her unemployment benefits, because her last job lasted for only a month.

Indeed, in a perverse quirk of the unemployment system, she would have qualified for continued benefits had she stayed jobless the whole two years, rather than taking a new position this year. But since her latest unemployment claim stemmed from a job that lasted mere weeks, she recently drew her final check of $340.

Ms. Kransky, 51, has run through her life savings of roughly $10,000. Her job search has garnered little besides anxiety.

“I’ve worked my entire life,” said Ms. Kransky, who lives alone in a one-bedroom apartment. “I’ve got October rent. After that, I don’t know. I’ve never lived month to month my entire life. I’m just so scared, I can’t even put it into words.”

Last week, Ms. Kransky was invited to an interview for a clerical job with a health insurance company. She drove her Jeep truck downtown and waited in the lobby of an office building for nearly an hour, but no one showed. Despondent, she drove home, down $10 in gasoline.
LINK HERE

The Unemployment Rate for Young Americans has Exploded to 52.2 percent
LINK HERE

Michigan to shut down next week?

LAINGSBURG, Mich. (AP) - Economically beleaguered Michigan faces a possible government shutdown - shuttering highway rest areas, state parks, construction projects and the state lottery - if lawmakers fail to reach a budget deal in the next few days.

The state with the nation's highest unemployment rate has a nearly $3 billion shortfall. Federal recovery act money will fill more than half the gap, but the spending cuts or tax increases needed to fill the rest have caused bitter infighting at the state Capitol.
LINK HERE

35 Million Americans on Food Stamps: 12 Percent of U.S. Population

There are a few statistics that you can look at to see actual human pain in the real economy. You can look at the recent stock market rally yet even a 50+ percent rally is unable to create jobs or stem the economic pain of those at the lower end of the economic spectrum. Looking at food stamp participation from the United States Department of Agriculture shows us a very disturbing picture. When we did a report on this in August of 2009 we had 34 million Americans on food stamps. In the span of one month, the number jumped by over a million.
The raw data shows us that a stunning 12 percent of our entire population is receiving some form of food stamp assistance. The program is now called Supplemental Nutrition Assistance Program but the theme is still the same. Let us look at some of the raw data:
This is the highest percentage of Americans receiving food stamps since records started being kept back in 1969. The average person receiving assistance now receives $133 per month but even a number this low with such a high number of participants is costing the government $56 billion on an annualized basis.
Here are the top 5 states:
-1. Texas - 3.068 million participants
-2. California - 2.99
-3. New York - 2.57
-4. Florida - 1.77
-5. Illinois - 1.71
What is telling with the data above is that Texas has 24 million people while California has 37 million yet Texas has more people receiving food stamps. Florida and Illinois have nearly the same amount of participants although Florida has 18 million people while Illinois has 13 million people.
LINK HERE

The New Housing Economy: Squatters Rights

Miami's squatter problem has garnered national media attention over the past year and a half, as the foreclosure crisis threatened to transform the Magic City into something resembling a lawless, "Mad Max"-esque landscape.

The squatters mostly kept a low profile, moving in -- with the help of activist group Take Back the Land -- to neighborhoods where they could take over unnoticed.

Take Back the Land placed squatters in Belle Meade, Opa Locka, Liberty City and Overtown, finding modest dwellings for families without a place to live.

But now come reports that squatters are seeking out more ritzy neighborhoods, including the pricey, tree-lined streets of Coral Gables.
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"We think that wherever there are empty homes there should be people in them," Rameau said. "The housing crisis is impacting people on all kinds of income levels."

With over 44,000 foreclosed properties in Miami-Dade this year and thousands in Broward, real extate experts say the potential of sqauatters is there no matter where you live.

And there's little authorities can do about it.

"The police department, if you check the records, have been out there numerous times. They cannot go into the house they say," Hornik said.

Real estate experts say the only way to get squatters out is to have owner get them evicted, which requires going to court.

Until then, Gables residents will just have to get used to their new neighbors.
LINK HERE

Iran stops using the US Dollar to buy OIL

TEHRAN – Iranian President Mahmoud Ahmadinejad ordered the use of the euro instead of the dollar as the basic foreign currency in the Forex Reserve Fund calculations.

The Mehr News Agency reported that this order was issued in line with a decision made in this regard by the board of trustees of the Forex Reserve Fund.

Prior to this, the Islamic Republic of Iran had announced that it had stopped selling oil in dollars and started using euro in its oil transactions.
LINK HERE

Green Shoots or Greater Depression? Does the Fed Manipulate the Stock Market?

Green Shoots or Greater Depression?
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No one likes to be the bearer of bad news, but absent an immediate about-face by the wildly interventionist government, you can ignore all reports of green shoots.Instead, things are likely to get progressively worse as the year drags on, with hundreds of small to mid-sized U.S. banks being closed over the next year due to commercial real estate troubles. U.S. municipal defaults are also not out of the question, though in that event we would expect the federal government to again step into the breach with more bailouts.
But make no mistake, the patience of U.S. taxpayers and foreign investors for bailout upon bailout, coupled with expensive new programs in healthcare, energy, and general stimulus spending is not without limits. The government is playing a dangerous game with the dollar – a game that, if it continues, risks a devastating devaluation. Simply, this crisis is far from over. Caution in all things financial remains the watchword. Tell your friends.
PDF LINK HERE

PITTSBURGH G20 Riot Police
YOUTUBE VIDEO LINK HERE

MILITARY ARREST at the G20 Meeting
YOUTUBE LINK HERE

Why the U.S. Economy CAN'T “Recover”. Exciting new homes for the unemployed.

The U.S. propaganda-machine now reports on a daily basis that a “U.S. economic recovery” is underway – despite not one piece of evidence to support this “bold assertion” (shameless lie?).



Let's start with a definition of “recovery” suitable to the current, economic context: economic “recovery” means the economy is returning to (or “recovering”) a previous level of economic activity. In other words, with an economy which has shrunk by more than 10%, a “recovery” could only be occurring if the economy is already growing.

There is still absolutely no evidence that the U.S. economy is growing. Granted, the propagandists already know that the Treasury Department will report “economic growth” this quarter – regardless of what is actually happening in the real world. However, contrast this with the extremely cautious attitude of the same “experts” and “economists” when the U.S. economy started its collapse. Despite enormous volumes of evidence showing that the U.S. economy had started a serious collapse, these shameless shills refused to declare a “recession” had started for many months after that fact was obvious to the entire world.
LINK HERE

Exciting New Homes Sprouting Up. The Recovery...Finally.
LINK HERE

US May Face 'Armageddon' If China, Japan Don't Buy Debt

The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”
LINK HERE

Spain tips into depression
Spain is sliding into a full-blown economic depression with unemployment approaching levels not seen since the Second Republic of the 1930s and little chance of recovery until well into the next decade, according to a clutch of reports over recent days.
LINK HERE

The Economy is a Huge Lie Today

Americans cannot get any truth out of their government about anything, the economy included. Americans are being driven into the ground economically, with one million school children now homeless, while Federal Reserve chairman Ben Bernanke announces that the recession is over.

The spin that masquerades as news is becoming more delusional. Consumer spending is 70% of the US economy. It is the driving force, and it has been shut down. Except for the super rich, there has been no growth in consumer incomes in the 21st century. Statistician John Williams of shadowstats.com reports that real household income has never recovered its pre-2001 peak.
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The worst part of the decline is yet to come. Bank failures and home foreclosures are yet to peak. The commercial real estate bust is yet to hit. The dollar crisis is building.

When it hits, interest rates will rise dramatically as the US struggles to finance its massive budget and trade deficits while the rest of the world tries to escape a depreciating dollar.

Since the spring of this year, the value of the US dollar has collapsed against every currency except those pegged to it. The Swiss franc has risen 14% against the dollar. Every hard currency from the Canadian dollar to the Euro and UK pound has risen at least 13 % against the US dollar since April 2009. The Japanese yen is not far behind, and the Brazilian real has risen 25% against the almighty US dollar. Even the Russian ruble has risen 13% against the US dollar.

What sort of recovery is it when the safest investment is to bet against the US dollar?
LINK HERE

A $4 billion bailout for the Postal Service?
LINK HERE

Peter Schiff: U.S. Rally Is Doomed, Gold Will Hit $5000

Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason."

The worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.

A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.

Schiff believes gold is currently "climbing a wall of worry" but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.

Schiff's forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold's ascent in the 1970s. "Obama is making the same mistakes as Bush, but he's doing them on a grander scale," says Schiff, who is running for U.S. Senate in Connecticut as a Republican.

Consumers Using Credit Cards Then Not Paying and S & P 500 to drop to 400

Ever wonder why iPhone sales are through the roof? It might have to do with this. Consumers are once again using their credit cards, however taking a cue from the Chairman's promotion of moral hazard to a state-sponsored nationwide doctrine, they have decided simply not to pay their bills. Moody's Credit Card Index confirms this, after hitting an a new record Charge-off Rate in August of 11.49%, a 68.5% increase year over year. And where charge offs rule, delinquencies are not far behind: August delinquency rate hit 5.8%, a 26.2% increase YoY. August was a sharp reversal in prior improving trends, indicating that the consumer weakness is not getting any better, and in fact, just the opposite. Read below from Moody's:

After improving over the past several months, credit card performance broadly deteriorated in August, according to metrics tracked by our Credit Card Index. Notably, the charge-off rate index advanced resoundingly to a record-level high 11.49%. Accompanying the rise in charge-offs was an increase in the delinquency rate. Even early-stage delinquencies rose, ending a trend of four consecutive months of improvement.

LINK HERE

Richard Duncan: Economic Collapse equal to " The Fall of Rome" Coming to the US

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Sept. 23 (Bloomberg) -- U.S. budget deficits will continue to pile up in the next decade, eventually reaching an unsustainable level that may result in an economic collapse, according to Richard Duncan, author of “The Dollar Crisis.”

The U.S. has little chance of resolving its deteriorating financial position because the manufacturing industry continues to shrink, leaving the nation with few goods to export, said Duncan, now at Singapore-based Blackhorse Asset Management.

In “The Dollar Crisis,” first published in 2003, Duncan argued that persistent current account deficits by the U.S. were creating an unsustainable boom in global credit that was destined to break down, resulting in a worldwide recession.
LINK HERE

Are You Prepared for the Chinese Derivative Default?

China’s decision to default on its commodity derivatives is a very clever means of slapping the US Federal Reserve in the face without “going nuclear” by selling Treasuries outright.

Commodities account for the smallest portion of derivatives on US commercial bank balance sheets ($938 billion out of $200 trillion). A default here would trigger a chain reaction that could essentially wipe out the Fed’s attempts are re-capitalization (the US banks would suddenly be on the hook for billions in losses that they didn’t expect). It’s a very serious indirect way of China saying, “if you want to continue screwing around, we’ll simply walk away from the table.” But they’re doing it in a select asset class that no one but Wall Street engages in (derivatives).

The primary issues now are:

* Whether China WILL actually begin defaulting (remember, so far it’s just a threat).
* Whether or not China’s decision would trigger a larger chain reaction in the derivatives markets.
* How the US will respond to China’s threat.

I do not know the answer to these issues. No one does.

I DO know, however, that a derivative chain reaction throughout the financial system could cause a full-blown implosion like September-November 2008.
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But if I am right, and things do get MESSY, then stockpiling now means you’ve got food on the table later. Again, we have the making of several black swan events that could push an already weak economy into SERIOUS trouble. Among them are:

* China defaulting on derivatives (triggering a chain reaction in the financial markets)
* China selling Treasuries (flight from the dollar and all paper money)
* Japan sell Treasuries (ditto)
* The $7 trillion commercial real estate market (as bad if not worse that the US residential market)
* Some other chain reaction event in the $1 QUADRILLION derivative market
* The H1N1 virus (a major flu pandemic would stop all economic growth in its tracks)
* A major bank failure (rumors of Wells Fargo or someone else are swirling)
* Some other item no one sees coming (e.g. Gmail shut down for an hour a few weeks ago, imagine if the NYSE’s servers did the same thing).
LINK HERE

Thift is in: Nobody is Buying Anything

You wanna know what is going on? David Rosenberg explains…

“US consumers are cutting back, and where they are not cutting back, they are scaling down. This new cycle is all about ‘getting small’ and it is deflationary. For yet another in the litany of signs pointing in the direction of social change towards thrift, have a look at what is transpiring at the upper echelons of the income strata – Now Even Millionaires See the Benefits of Budgeting on page B5 of the Saturday NYT is a must read.

“Not only are the rich trading down, but the article quotes a high net worth financial advisor who said ‘many of our clients are very happy to be sitting on bond portfolios and cash reserves.’ And see the article on page 2 of the Sunday NYT – Beauty Products Lose Some Appeal During Recession. According to the NPD Research Group, total sales of department store beauty products are down 7% from year-ago levels. Women are apparently opting for the ‘natural look’ – “some people are selectively replacing higher-priced items with cheaper products from drug stores and discount stores.”

LINK Here

Except the Chinese, They are buying everything with US DOLLARS
LINK Here

SAVE $15 MILLION you're going to NEED IT!
LINK HERE

Marc Faber on the Future: Total Collapse of Society

"The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society," Marc Faber writes in the September issue of The Gloom, Boom & Doom Report.
A statement like that pretty much speaks for itself, but it's a bit more complicated than appears on first blush.
LINK HERE

WORLD INTERACTIVE DEBT CHART
DEBT CHART BY COUNTRY: LINK

Ron Paul: The Administration Guarantees a Great Depression with 10 Years of Misery

Two weeks ago, both the administration and the Fed announced with straight faces that the recession was over and the signs of economic recovery were clear. Then last week, the president made a stunning decision that signals the administration’s determination to repeat the mistakes of the Great Depression. Much like the Smoot-Hawley Tariffs that set off a global trade war and effectively doomed us to ten more years of economic misery, Obama’s decision to enact steep tariffs on Chinese imported tires could spark a trade war with the single most important trading partner we have. Not only does China … Continue reading..

In Spain, thousands protest against Opel job losses
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Obama paints gloomy unemployment picture
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GOLD MANIA IN CHINA
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GOVERNMENT WILL ASK THE BANKS FOR A BAILOUT!
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Complete Monetary Collapse Coming Between 2010-2012

Capital is leaving at an accelerating rate. This means interest rates should be raised. The Fed is monetizing and in all likelihood that will increase and that will lead to a currency crisis. The Fed has said it will ease quantitative easing, but if it does the stock and bond market will fall. If they increase there will be a currency crisis. There is now no question the dollar is being sacrificed. The idea is to allow it to fall incrementally and as slowly as possible.
We have continued to state the Amero will not replace the dollar and that it is and has been a false issue. The dollar will be replaced by another dollar in either 2010, 2011 or 2012. As we explained in early May when the dollar was 89.5 on the USDX, that this was the top. Next stop by the end of October would be 71.18, or at least by yearend. After that comes 40 to 55 and then an official devaluation and default; as all currencies and debt would be dealt with at a special meeting involving all countries.
Debt in the banking system is going to be absorbed by the Fed. Almost all major banks are bankrupt. That is why you do not want to have much money in banks and no CD’s; cash value life policies or annuities. Next year we will witness a second round of debt write offs and a crisis in the derivative market. If the Fed doesn’t monetize the debt the system will collapse, but then again there may be no Fed if HR1207 becomes law. Every problem would then lie in the lap of the Treasury. The American financial system is unsustainable and our foreign wars and occupations will come to a close in 2010 or 2011. The cost will no longer be sustainable. The US stock and bond markets will fall and you will not want to own any US government obligations. It could be that the role-played by the Fed, if the Fed is replaced, could in part be played by Goldman Sachs and JP Morgan Chase. Due to the Fed’s absorption of bad assets it could be that the Fed will self-destruct in the process of being legislatively being eliminated. Recovery of the US economy would then depend economically on tariffs on goods and services to bring manufacturing back to America.
A CBS News blogger named Declan McCullagh seized on the documents, which CEI obtained through a Freedom of Information Act request, and said: "The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent." He added: "At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year."
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60 Million FREE HOUSES?
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10 Commandments for BUYING GOLD AND SILVER
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HSBC: The Dollar is Finished

The dollar looks awfully like sterling after the First World War," said David Bloom, the bank's currency chief.
"The whole picture of risk-reward for emerging market currencies has changed. It is not so much that they have risen to our standards, it is that we have fallen to theirs. It used to be that sovereign risk was mainly an emerging market issue but the events of the last year have shown that this is no longer the case. Look at the UK – debt is racing up to 100pc of GDP," he said

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10 Companies that will Probably Go Bankrupt

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Government Subsidized Training: Equals New Skills and No Job

In a massive makeover of the U.S. work force, hundreds of thousands of laid-off Americans are undergoing federally subsidized retraining designed to provide them with the skills and education to land new jobs.

For some, it already feels like an exercise in futility.

“I’ve tried and tried (to find work) and it’s discouraging,” said Jama Eisman, 49, of Elkhart, Ind., a laid-off recreational vehicle worker and single mom who has been looking for a job — any job — since she graduated from a six-month information technology program in early August. “... A lot of places they have signs on the doors saying they’re not even accepting applications.”
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Eisman said she fears she will lose the home she shares with her three sons — D.J., an 18-year-old high school senior, Michael, 15, and Eric, 11 — when her unemployment benefits expire on Nov. 1, unless Congress passes another extension.

Former Forest River employee Jama Eisman took an IT course but has been unable to find work.
“My child support pays for my house payment, and I pay for everything else,” the divorced former factory worker said. “I won’t make it.”

Many thousands of laid-off workers have found work during the recession after being trained in new occupations. But thousands of others are finding it can be difficult to hit a moving target when jobs are still shifting and vanishing.
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Housing: It gets Worse, Way Worse

The speculative mania in housing has been extended by massive Federal Reserve and government intervention; the government now owns or guarantees 2/3 of U.S. mortgages.

While speculative bubbles may pop in terms of sales and valuations, the psychology that underpinned the mania lives on for some time--especially if government extends the speculation with massive interventions.

I sincerely doubt the average American understands the full measure of Federal intervention to prop up the U.S. housing market. The numbers casually dropped (with little context, of course--this is pure MSM "coverage," after all) in the Wall Street Journal report No Easy Exit for Government as Housing Market's Savior (WSJ.com) are truly mind-boggling:

To keep funds flowing to the housing market, the government bailed out Fannie Mae and Freddie Mac last year and now effectively owns the mortgage finance giants and their combined $5.4 trillion in loan portfolios. To keep mortgage rates low, the Federal Reserve is on track to purchase nearly $1.5 trillion in debt issued or guaranteed by the government's various mortgage arms and another $300 billion in Treasurys, which set the benchmark for home lending.

What the reporters fail to mention is the value of all U.S. mortgages is about $10 trillion-- meaning the U.S. government now guarantees over half of all mortgages just with Fannie and Freddie.

But wait--it gets worse--much worse:
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VANCOUVER CANADA HOUSE SHACK SOLD FOR 1.142 MILLION
Five days after that open house, seven agents lined up to make their offers. The asking price was $959,000, but because of the competition, the bidding war pushed the price higher. Only two bids came in at less than $1 million. In the end, the home sold for a staggering $1.142 million – more than $180,000 over the original price tag. 10x10 Master Bedroom. Backs onto a condo complex...and it is just half a block off one of the city's busiest thoroughfares.

Give Up your US Citizenship for Tax Reasons? Legally You're Never allowed Back-Not even to visit

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Naturally, the feds want to raise as much money as they can. So, like bank robbers, they go where the money is – to the “rich.”

Steve Sjuggerud tells us what has happened back at home…in Maryland.

“The state of Maryland couldn’t balance its budget last year. So the state decided the right way to raise tax dollars was to fleece the millionaires… Maryland state politicians created a ‘millionaire’ tax bracket.

“Maryland Governor Martin O’Malley of course expected tax receipts to go up. He said Maryland’s 3,000 millionaires were ‘willing to pay their fair share.’ The Baltimore Sun said the rich would ‘grin and bear it.’

“But the opposite happened…

“Instead of 3,000 Maryland millionaires filing taxes in April 2009, only 2,000 did. According to The Wall Street Journal: ‘Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year – even at higher rates.’

“A friend of mine lives here in Florida. He is not an American citizen. He pays US taxes while he lives here. But under the threat of higher national income taxes, he is contemplating giving up his green card and moving elsewhere.

“When Maryland’s governor raises taxes, Maryland residents leave and government income goes down.

“When the nation’s President raises income taxes, foreigners like my friend leave and government income goes down.

“Unfortunately, YOU CAN’T LEAVE.

“Wait a minute. This is America, land of the free, right?

“Not so fast… The US government will track US citizens everywhere to get tax money. If you leave to work in another country, you still pay US income taxes. America and North Korea are the only countries that tax you on your worldwide income.

“If it gets bad enough, you can just give up your citizenship, right? Nope, you can’t do that either. At least, you can’t do it without paying a potentially massive ‘exit tax.’

“The exit tax acts like an estate tax. If you want to give up your citizenship, you have to give up nearly half your wealth above a certain level. The Economist magazine calls it ‘America’s Berlin Wall.’ Nice, eh?

“Want some more nice? Once you’re gone, you’re not legally allowed to come back and visit family and friends. Yes, if the government decides you have renounced citizenship for tax purposes, a federal law prohibits you from entering the country ever again. (You can look up the rule under 8 USC 1182(a)(10)(E).)

“You can escape states with oppressive taxes. But ‘escaping’ the US – the land of the free – is much more difficult. And you can bet it won’t get any easier as the government needs more and more of your income to pay its bills.”
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World Wide Unemployment Crisis

New reports on unemployment, poverty and hunger released this week demonstrate that the global economic crisis is being used to effect a basic restructuring of social relations characterized by long-term high unemployment and the impoverishment of the working class.
An Organisation for Economic Cooperation and Development (OECD) study released Wednesday reports that by the end of 2010, 10 million jobs will likely be lost among member states, bringing to 25 million the number of jobs eliminated in the thirty-member group of industrialized nations since the economic crisis began at the end of 2007.
The OECD unemployment rate climbed to 8.3 percent in June, the highest on record dating back to World War II, and a sharp increase from the close of 2007, when unemployment stood at 5.6 percent.
Among member states, Spain has the highest unemployment rate, at 18.1 percent, and is joined by two other countries hard hit by the housing bust—Ireland and the US—with the sharpest increases in unemployment this year. Since the beginning of 2007, unemployment rates in Spain, Ireland and the US have increased by 9.7 percent, 7.8 percent and 4.5 percent, respectively.
Official unemployment in the US stands at 9.7 percent and will surpass 10 percent next year, the OECD predicts. Unemployment levels in Germany, France, Italy and Canada are expected to rise rapidly by the end of next year, reaching 11.8 percent, 11.3 percent, 10.5 percent and around 10 percent, respectively.

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Homeowners Strategically Default on Mortgages

A study shows that people who abruptly and intentionally abandon their mortgages often have high credit scores, in stark contrast with most financially distressed borrowers.
Reporting from Washington - Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores?

Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to "strategically default" -- abruptly and intentionally pull the plug and abandon the mortgage -- compared with lower-scoring borrowers.

National credit bureau Experian teamed with consulting company Oliver Wyman to identify the characteristics and debt management behavior of the growing numbers of homeowners who bail out of their mortgages with none of the expected warning signs, such as nonpayments on other debts.
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'It Is Dangerous to Think the Financial Crisis Is Already Behind Us'

Japan Airlines May Receive More Aid From Government, Kamei Says
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U.K. Had Record Deficit in August as Tax Revenue Fell
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The Coming Municipal Government Collapse
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Moody's bearish on housing recovery
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Oil prices mean perpetual recession
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Record Unemployment in California-Michigan Escalates
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COLLAPSING REAL ESTATE CHARTS
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Breakout for SILVER and GOLD next WEEK?
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Thousands in Spain protest Opel job cuts
With Magna expected to cut 10,000 jobs, there are concerns throughout Europe over where the axe would fall.
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95% Of Your Savings, IRA, Checking Account and Retirement will be Gone

There is a headline that has been all over the media ever since September 2008: “Bank Bailout Will Soak Taxpayers.” As obviously true as this headline appears to be, it is in fact, dangerously misleading. Indeed, as we will cover in this article, the idea that taxes will pay for the bailout is ludicrous, an insult to both your intelligence – and your net worth.

Instead, the real source of the bailout monies will not be the taxes you pay, but the value of your savings. The value of your checking account, the value of your IRA or Keogh, and the value of all your investments are the true source of payment for Wall Street’s reckless mistakes. When we combine the bailout with the trouble the US was already in, the result could be a 95% reduction in value for all of our savings, retirement and otherwise, as we will illustrate step by step in this article.
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Martin Armstrong: Depression to Last 23-26 Years

Martin Armstrong (click for pdf report):
“We are facing a Depression that will last 23-26 years. The response of government is going to seal our fate because they cannot learn from the past and will make the same mistakes that every politician has made before them.”

Leading economist Marc Faber has previously said that this will be worse than the Great Depression and Faber’s been calling for a slump lasting for somewhere between 2 and 15 years.

Below are some in-depth research of the economic crisis plaguing the global economy along with some potential life and financial-saving economic analysis.
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U.S. Authorities Probing $100 Billion of Bonds Seized in Italy( Another "seizure")
The U.S. Secret Service is examining more than $100 billion of U.S. government bonds confiscated in northern Italy in August, just two months after $134 billion of allegedly fake securities were seized in a nearby town.
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Massive Foreclosure Crisis Expected

WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset.

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.

"That's the next round of potential foreclosures in our country," he said.
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Global Credit Crunch: Intensifying

The reasoning behind the acceleration of the credit crunch is simple and needs to be reemphasised. The unwinding of the grotesque debt excesses of the last decade have only just begun (see chart above)! Rapid expansion of government debt and QE will not and cannot prevent the revulsion that is now underway (the Fed publishes the Q2 update of the debt data today, Thursday.

In addition, banks are retrenching their loan books as policy makers force higher capital requirements. In all probability this process would occur irrespective of government involvement as banks inevitably act pro-cyclically, exacerbating both boom and bust. But as we repeatedly highlight, one of the lessons from Japan is not to mistakenly believe that banks are the problem. Similarly a healthy, recapitalised banking sector is not the solution. As Japan experienced before, it is de-leveraging that is the problem and retrenchment takes many years, rendering the economy extremely vulnerable to rapid relapses back into recession when any reverse or pause in extreme stimulus occurs. The Great Moderation relied on the debt super-cycle which is dead and buried.

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US credit shrinks at Great Depression rate prompting fears of double-dip recession
Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.
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61% of Americans living Paycheck to Paycheck

Here’s another trend of the “new normal”: the working poor.

30% of Americans making $100,000 or more each year are living paycheck to paycheck, reports a CareerBuilder study this week. That’s up from 21% last year — a number that still seems awfully high.

61% of all Americans say they are in a similar bind… making just enough to finance their lifestyle every month. Just a year ago, 49% were living paycheck to paycheck.

The No. 1 way to make ends meet on a tough month? Cut savings. Check out these quick stats:

* 21% of correspondents have reduced or eliminated 401(k) contributions in the last six months
* 36% don’t put any money toward retirement
* 33% don’t save at all
* 30% that do put some away save less than $100 a month.

Puts an interesting twist on the much belabored rising savings rate, doesn’t it? The personal savings rate as reported by the government has nearly doubled from this time last year — from roughly 2.5% to 5%. But to what end?
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CANADIANS JUST RIGHT BEHIND YOU:
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I Pledge Allegiance to the Debt

Biggest Plunge In World History

We are plunged deep into the biggest credit-business cycle in world history. Many cycles have been worldwide, but this one dwarfs all others, including the Great Depression. An ocean of money and credit flooded every corner of the globe. The culture of easy wealth worked its way into the smallest economies from Norway to Chile, from Iceland to Mongolia. Economies built on commodities exports, even energy exporters, have felt its impact. The inevitable bust sent the world into economic decline wiping out trillions of dollars of wealth. Built largely on credit, the resulting debt is now being liquidated causing worldwide deflation.

Business and credit cycles are always created by central banks and this one is no different. While we can blame the greed of Wall Street and London's City, capitalists are just players on a stage where greed always exists. It takes something more than greed to create massive cycles like these, and that something is the creation of money and credit out of thin air, something only central banks and governments can do.
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Megatrend No.1. The culture of consumption is broken and won’t return to former levels. This is the key to everything.
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THE HISTORY OF JOBS IN AMERICA CHART
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Pentagon prepares for Economic Warfare

The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.
The two-day event near Ft. Meade, Maryland, had all the earmarks of a regular war game. Participants sat along a V-shaped set of desks beneath an enormous wall of video monitors displaying economic data, according to the accounts of three participants.
“It felt a little bit like Dr. Strangelove,” one person who was at the previously undisclosed exercise told POLITICO.
But instead of military brass plotting America’s defense, it was hedge-fund managers, professors and executives from at least one investment bank, UBS – all invited by the Pentagon to play out global scenarios that could shift the balance of power between the world’s leading economies.
Their efforts were carefully observed and recorded by uniformed military officers and members of the U.S. intelligence community.
In the end, there was sobering news for the United States – the savviest economic warrior proved to be China, a growing economic power that strengthened its position the most over the course of the war-game.
The United States remained the world’s largest economy but significantly degraded its standing in a series of financial skirmishes with Russia, participants said.
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