Archive for November, 2009

Potential for Fed to hyperinflate

Monday, November 30th, 2009

Full story here from Bob Chapman. Sorry for the downer Monday, but I don’t make it up, I just report it…

“The following information may be the most important we have ever published. One of our Intel sources, highly placed in banking circles, tells us that on 1/1/10 all banks that have received TARP funds have been informed by the Federal Reserve that they must further restrict any commercial lending. Loans have to be 75% collateralized, 50% of which has to be in cash, which is a compensating balance. (more…)

US bankruptcy: a guaranteed default

Monday, November 30th, 2009

Full story here.

It’s one of those numbers that’s so unbelievable you have to actually think about it for a while… Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That’s an amount equal to nearly 30% of our entire GDP. And we’re the world’s biggest economy. Where will the money come from? (more…)

Canada’s “missing” gold explained (well, sort of)

Monday, November 30th, 2009

Full story here.

RCMP have solved a bizarre mystery: How did $15.3 million in gold vanish from the Royal Canadian Mint? And while their report is still two weeks away, CTV News has learned the answer.

“Senior government officials say there was a colossal error at the mint itself,” said CTV Ottawa Bureau Chief Robert Fife on Tuesday night.

Mint officials double-counted some gold bullion they sold, and also underestimated the shrinkage of the gold during processing.

The federal government had withheld bonuses for mint executives until the mystery was solved. It’s unclear whether those bonuses will still be paid out.

Junior Transport Minister Rob Merrifield, who’s responsible for the mint, called in the RCMP on June 9 after he learned that an audit would not “rectify the problem” of the missing gold. That’s about 10 weeks after the government first learned of the missing gold.

The Deloitte and Touche audit cost taxpayers $360,000.

Ottawa now requires the mint to report on inventory levels of metals every three months.

Last month, Liberal critic for Crown corporations Joe Volpe said the security, reputation and the quality of the Canadian Mint’s product has been compromised.

In early June, it was discovered that there was an unreconciled difference between the value of gold on the mint’s books and the physical count of gold for the 2008 fiscal year.”

Me again…OK, so they not only double-counted some gold (alertness in the staff is encouraged) but failed to account for “shrinkage” of the gold during processing. Ummm, are they the receiving end on those Cash For Gold commercials? They failed to account for not-pure gold? Is this their first week doing this? Just fell off the mayonnaise wagon and landed at the Mint?! You figure the Mint’s been doing this for some time and might have the odd procedure in place.

Dead files for 24-30 November

Sunday, November 29th, 2009

I thought we could go a week without intrigue or loss. My mistake! Welcome to Planet Earth, where the inmates run the asylum– but the barbeque is excellent.

Nov 27th:

Mark Pittman, the award-winning investigative reporter whose fight to open the Federal Reserve to more scrutiny led Bloomberg News to sue the central bank and win, died Nov. 25 in Yonkers, New York. He was 52.

Pittman suffered from heart-related illnesses. The precise cause of his death wasn’t known, said his friend William Karesh, vice president of the Global Health Program at the Bronx, New York-based Wildlife Conservation Society….


Nov 28th:


Russia’s prosecutor general has opened a criminal case on terrorism charges after 39 people were killed and 87 others injured following a suspected terrorist attack on a passenger train.

Derailed north of the Russian capital, the federal Investigative Committee said the four rear cars of an express train from Moscow to St. Petersburg went off the tracks in the Novgorod province late on Friday.

Dmitry Pertsev, a spokesman for state-run Russian Railways, confirmed the incident took place at 9:30pm (18:30 GMT) near the town of Bologoye, about 350km north of Moscow.

Investigators have already suggested the derailment was caused by an act of terrorism.

Vladimir Yakunin, the head of Russian Railways, did not mix words on a statement he made on state television, standing next to the wreck.

“To put it simply, a terrorist attack”, he said…

My own notes on the matter relate to recent developments, where Russia had announced publicly to develop high-speed rail across the entirety of Russia; Russia looking eastward for money and influence; Russian and Chinese pact for debt cooperation; given this, an attack on the high speed rail is suspicious in its timing. Most people did not see the other news items, only the blast in Russia, which was explained away as Russia being some totally wild west setting. It’s not like that, folks.


29 Nov:

Fred Joseph, who as CEO of investment bank Drexel Burnham Lambert helped create the modern junk-bond market in the 1980s before the firm’s collapse, has died. He was 72.

Joseph died Friday at New York Presbyterian Weill Cornell Medical Center after a long fight with multiple myeloma. His death was announced by John F. Sorte, CEO of Morgan Joseph & Co. Inc., an investment bank Joseph helped found…

He was named CEO of Drexel in 1985. With fellow executive Michael Milken, the company expanded the market for low-rated bonds, which most investors at the time considered too much of a risk but which quickly began to dominate the financial world.

The proceeds from junk-bond sales helped finance a wave of cutthroat corporate buyouts and made Drexel one of the most revered firms on Wall Street. But the company ultimately succumbed to a four-year criminal investigation into charges that Milken and others had used inside information to trade shares of companies considered takeover targets.

Milken ultimately pleaded guilty in 1989 to securities violations, served 22 months in prison and was fined $600 million. The scandal drove Drexel to file for Chapter 11 bankruptcy protection the following year.

Joseph ultimately accepted blame for failing to supervise Milken, saying at the time that as CEO, he must bear responsibility for whatever “transpired on my watch.” Joseph was banned from any managerial position with a securities firm for some time and agreed to pay a $3 million fine to federal thrift regulators.

He went on to serve as chairman of consulting firm Clovebrook Capital from 1994 to 1998, and then as an adviser and managing director at ING Barings LLC for three years.


Fed doesn’t want banks to increase lending

Saturday, November 28th, 2009

Full story here from Italy (because they don’t bother telling the truth here anymore).

“Tim Duy – Director of Undergraduate Studies of the Department of Economics at the University of Oregon and the Director of the Oregon Economic Forum - noticed an amazing sentence in the minutes of the most recent meeting of the Fed Open Market Committee:

As has already been widely noted, the minutes of the most recent FOMC meeting reiterated the Fed’s eagerness to reverse, not extend, policy: (more…)

Gold is, well, gold, in this economy

Saturday, November 28th, 2009

Full story here.

Investors buy gold when there is inflation and when there is a flight to quality. They buy gold when they no longer trust currencies, due to government or central bank profligacy. Due to those and other reasons gold has broken out to new highs. It could well be that gold may never see $1,000 again. Long ago the world’s central banks set the course for a planned collapse of the world economy to implement world government and there is now no turning back. We have proof stretching back to 1965 that intervention by the Treasury and the Fed was taking place in the gold market. The illegal sale of gold on 10/19/87 was a good example of that. Then came the FOMC memos of the 1980s and 1990s to kill the perception that gold be allowed to reflect a policy of a weak dollar unbacked by gold. It is all there and probably more proof which our government and the Fed hides from us. We have to laugh at the smug who say why would the Treasury bother to rig the gold price? The point is they have and they are still doing it. (more…)

Pulling a SWIFT one

Friday, November 27th, 2009

Full story here from ZeroHedge.

Normally, discussion of the “Surveillance State” touches on Zero Hedge’s core focus (finance) only tangentially.  But every once in a while something significant bounces us radar returns in this sector.  This definitely qualifies:
SWIFT is now moving all its data centers outside the EU and the US, to Switzerland. In order to continue allowing the US authorities accessing all banking data a high level agreement between the EU and the USA is currently being negotiated. It is likely to be agreed on in the EU council of minister meeting next Monday, 30 November 2009.
For the uninitiated, the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) is…
…a member-owned cooperative through which the financial world conducts its business operations with speed, certainty and confidence. Over 8,300 banking organisations, securities institutions and corporate customers in more than 208 countries trust us every day to exchange millions of standardised financial messages.1
Given the backbone nature of the SWIFT network, it was the natural home for the (eventually scandalous) Terrorist Finance Tracking Program, in no small part part of the large rift that grew between the most recent Bush administration and Europe.  Brusselsblogger explains:
The move of SWIFT the data server to Switzerland would be an excellent opportunity to stop the nearly unlimited access of US authorities on EU bank transactions. But EU justice and interior minister are apparently keen agree a deal as soon as possible, on 30 November. Why 30 November? Because one day later, on 1 December 2009, the EU’s Lisbon Treaty will be in force and would allow the European Parliament to play a major role in the negotiations of the deal with the USA. A deal one day before will be a slap in the face of democracy in the EU.
SWIFT handles 15 mio bank transactions daily for more than 9000 banks worldwide. Nearly every transnational bank transaction within the EU is recorded in the SWIFT data centers, including amount, sender, recipient, and transaction comments. The agreement will even allow to transmit “other personal data”.
This will allow US authorities to establish a huge data mining database, allowing to query [sic] every substantial business link within the EU. No question that the United States will never admit that openly.
Interestingly, the agreement is not bilateral.  The EU enjoys no reciprocity in data sharing.  For the United States here it is all take and no give.  In its role as the latest American lapdog, Switzerland is unlikely to hinder the New Moon-like U.S. thirst for the financial lives of others (like tax evadersterrorists, for instance).  Nice work if you can get it.
Read the whole Dysonesque suction improvement agreement (no clogged filters!) here.

Normally, discussion of the “Surveillance State” touches on Zero Hedge’s core focus (finance) only tangentially.  But every once in a while something significant bounces us radar returns in this sector.  This definitely qualifies:

SWIFT is now moving all its data centers outside the EU and the US, to Switzerland. In order to continue allowing the US authorities accessing all banking data a high level agreement between the EU and the USA is currently being negotiated. It is likely to be agreed on in the EU council of minister meeting next Monday, 30 November 2009.

For the uninitiated, the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) is… (more…)

Dubai asks for debt relief

Friday, November 27th, 2009

Full story here. Never a dull moment on Planet Finance. Seems Joe Schmoe-behind-on-his-payments is in good company with Dubai.

“Just a year after the global downturn derailed Dubai’s explosive growth, the city is now so swamped in debt that it’s asking for a six-month reprieve on paying its bills — causing a drop on world markets Thursday and raising questions about Dubai’s reputation as a magnet for international investment.

The fallout came swiftly and was felt globally after Wednesday statement that Dubai’s main development engine, Dubai World, would ask creditors for a “standstill” on paying back its $60 billion debt until at least May. The company’s real estate arm, Nakheel — whose projects include the palm-shaped island in the Gulf — shoulders the bulk of money due to banks, investment houses and outside development contractors. (more…)

Tungsten-gold bars from back in 1983

Wednesday, November 25th, 2009

Got the message here.

Austrians Seize False Gold Tied to London Bullion Theft

Published: December 22, 1983

The Austrian police announced the arrest today of 5 men and the discovery of 10 counterfeit gold bars stamped with numbers and refiner’s name to match 6,000 real bars stolen in Britain last month.

The police said the five arrested in Vienna on Tuesday night apparently planned to sell the counterfeit gold, passing it off as part of the haul of three tons of bullion stolen by masked gunmen from a warehouse near London’s Heathrow Airport on Nov. 26.

A police spokesman said the police did not know how the men had discovered the numbers stamped on the stolen bars.

The police at first suspected the counterfeit bars were part of the Heathrow booty, but the spokesman said tests showed the bars were made of tungsten and only coated with gold.

The fake bars were seized in a police raid on a hotel where the five men – four Italians and an Austrian – were meeting.




I have been unable to find any news reports regarding these 5 men having ever been charged with the theft or having ever had a trial. Most likely, the entire matter was quietly hushed so that the public would never know that the bullion warehouse vault was filled with fake gold.


Judge blasts bad bank, erases mortgage

Wednesday, November 25th, 2009

Full story here. God bless those morally outraged judges. My fondest Xmas wish is to have several class-action suits end up doing the same thing to all the jerkoff lenders out there.

“A Long Island couple is home free after an outraged judge gave them an amazing Thanksgiving present — canceling their debt to ruthless bankers trying to toss them out on the street.

Suffolk Judge Jeffrey Spinner wiped out $525,000 in mortgage payments demanded by a California bank, blasting its “harsh, repugnant, shocking and repulsive” acts.

The bombshell decision leaves Diane Yano-Horoski and her husband, Greg Horoski, owing absolutely no money on their ranch house in East Patchogue.

Spinner pulled no punches as he smacked down the bankers at OneWest — who took an $814.2 million federal bailout but have a record of coldbloodedly foreclosing on any homeowner owing money. (more…)