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THE INTERNATIONAL FORECASTER

SATURDAY, JUNE 26, 2010

062610(8) IF

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Wednesday 6/30/10



US MARKETS

Many investors wonder how are markets able to propel themselves back and

forth as they do. How do corrections turn into rallies? The secret is liquidity and the

question is where does it come from?

As you know the Fed up until 14 months ago increased what once was called

M3 by 15% annually. Foreign major central banks did the same cutting back a couple

of months sooner than the Fed. The Fed increased M3 for 5-1/2 years and the other

central banks for about four years. Starting four years ago all currencies started falling

versus gold. The US dollar started about ten years ago.

Contrary to what government officially has to say about inflation for the past 18

months the sources of liquidity, fiscal money creation by the debt route by the current

administration has been $2.2 trillion. The Fed has added $1.2 trillion over that period,

but we do not believe their figures for a moment. We believe the number is closer to

$1.8 trillion. That is only for the purchase of MBS/CDOs from banks, Wall Street,

insurance companies and other corporations. Then we have at least $500 billion in

swap arrangements. Those funds were supposedly re-exchanged five months ago.

Since then there has been another swap, but we cannot find out what the numbers

are. Then there are zero interest rates, which force investors to seek more speculative

returns. As an example, funds in money market funds have fallen about $1 trillion over

the last 18 months. That is why bonds are at highs and the market can rally. Then

there is the adding of liquidity by the Fed via the repo market. Finally, there has been

the re-leveraging of banks, or at least the maintaining of 40 to one leverage, and the

re-leveraging of corporate balance sheets, sovereign wealth funds and hedge funds,

although the numbers are tame versus two years ago. There you have it. The

foregoing on a net basis is larger than what existed at the beginning of the credit crisis

almost three years ago. New liquidity has been created to replace that which was lost.

As a result gold and silver have appreciated in a big way over that period. We see no

proclivity to end this massive onslaught. In spite of official figures real inflation is some

7% and that is why currencies keep losing value against gold, which is the only

barometer to measure the real devaluation of currencies as a result of monetary and

fiscal profligacy.

Markets are torn by near zero interest rates and risk aversion. A trillion have

left money market funds over the past 16 months. Some have gone into bonds, junk

bonds and into the market. You cannot have it both ways. Bonds cannot go higher and

the market is very dangerous, especially with three quarters coming up with passable





1

to bad results. Then there is the possibility of tax increases next year to accompany 19

new taxes in the Medical Reform package. There is also the possible passage of Cap

& Trade, which would double gas prices, illegal alien amnesty and government taxing

or taking over your retirement plans. These issues are why it is so important to replace

almost all the incumbents in November. Not to be treated lightly is the problems of

sovereign debt. Not only for those 20 countries on the edge of insolvency, but for those

who are owed the debt. There is an excellent chance 5 to 7 countries may leave the

euro. The euro may then fade and the other 10 euro zone members may go back to

their original currencies. It is any wonder gold is hitting new highs and silver is soon to

follow. Gold is not rising to inflation and anticipated inflation, but because of

unserviceable deteriorating debt worldwide. You cannot wait for the next crisis – you

have to anticipate it. You have to be ahead of the curve and the crowd. Does anyone

really believe bailouts and future bailouts and stimulus will solve anything? They

haven‘t up to now and they won‘t in the future. They only make matters worse. What

kind of insanity is it to have the Fed buy $1.2 trillion, that they admit too, of toxic MBS

and 80% of Treasury issuance, with money created out of thin air? Small and medium-

sized business cannot expand and hire new people. They supply 70% of all jobs.

Government should be cutting taxes, not expanding them. They should be cutting

costs and employees by 30% for starters.

Zero interest rates may fatten the profits of major manufacturers and

transnational conglomerates, but it does little for anyone else, except Wall Street and

banking. Interest rates on credit cards have risen, not fallen as banks fatten their

bottom lines at the expense of the populace. That is why retail sales have fallen over

the past two months and probably will continue to do so. A battle wages over M3.

Some say it is negative, some say it is in double digits. We will certainly find out

shortly. The housing stimulus and credit is now over and prices are falling.

Unemployment is rising and risk taking is falling. Now that the dollar has had a large

appreciation there is ample reason to believe it could well have a sharp correction.

Those in the carry trades know that sovereign debt has a much greater degree of risk

than in the past. That means more caution and less liquidity.

On the state level the financial situation is dire. Illinois sold $300 billion in Build

America Bonds at a yield 40% higher than Treasuries. Worldwide credit is being

bought judiciously. Greece and the other PIIGS have intractable problems, but so do

the lenders who bought the toxic waste. As a result the cost of credit default swaps

have risen substantially. States and countries in the euro zone cannot print money as

the Fed and the ECB can. The market is nervous and it should be. We see major

unavoidable trouble ahead, so watch out below.

As we predicted the risk of a double-dip recession /depression have risen

substantially over the past two months. Retail, housing and employment are fading

and fading fast. It points out that the US economy cannot function positively without

massive stimulus. Bank credit is falling as well as individuals pay down debt. In

addition exports are starting to fall in the face of a strong dollar, which gives the euro

zone participants a 15% price advantage. This is a big price to pay to enrich Wall

Street and take down the euro as the dollar‘s competitor. We do not believe the dollar

can maintain current levels, but damage will continue for another 6 to 12 months. Can

you imagine the fallout with the euro at parity? Not only does Europe and the US have

trouble, so does China that has to unravel bad bank debt domestically, a market fall

that already is off some 25%, but worse they have to deflate a property bubble that will

be very painful. De-leveraging for the US, Europe, China and Japan has really just

begun and this is why a year or two from now there will be another meeting like the

Smithsonian in the early 1970s, the Plaza Accord of 1985 and the Lourve Accord of





2

1987, where everyone will devalue, revalue, and default. An Illuminist jubilee. That

could be triggered by a bond market collapse. A market that has been in a bull market

for 29 years. Timing of events is very difficult. We could be off by one to five years.

The point is bad – things are on the way, so prepare yourself.

The economy is beset with slowing retail sales, a plunging housing sector and

falling credit usage. You might call this individual austerity. Consumer sentiment is

consistent with recession. Job creation is negative as are loans to small and medium-

sized businesses that create 70% of the jobs. The dollar‘s strength is wreaking havoc

for US exports, which had been improving.

Greece and Spain are in the soup prominently followed closely in the euro zone

by Portugal, Ireland and Italy. China has seen a 9-month 25% fall in their stock market

and they are facing a collapse in credit and in real estate.

We no longer consider the oil spill a major factor. It can be solved and turned

off any time the Illuminists want to do so.

Politically, Israel has finally gone a step to far and Turkey finally realizes that

the EU is never going to accept them due to religious reasons. Turkey is now in the

Muslim block. That will be a problem for some of the pro-US-UK Muslim states in the

Gulf in the future. Geopolitical risks abound and they are worsening along with

sovereign debt problems.

Those who have been reaching for bond yields will eventually pay a very high

price. The bond market is no longer a safe place to be, whether it is sovereign foreign

bonds, corporates or US paper. The US still has 7% to 8% inflation that isn‘t going to

go away soon, and in all probability that inflation will soon worsen. Those 10% to 20%

returns cannot continue indefinitely, as the US government manipulates the US bond

markets. Who would want to buy Treasuries yielding from zero to 3.2% with real

inflation of 7%, when you can own gold and silver coins and shares that are

appreciating? We know most of the funds entering mutual funds are in bonds. These

―boomers‖ who are the big buyers are looking for safety and will continue to do so. As

you can see not as much money will be going into the stock market. In spite of losing

money on bond holdings those in their 50s and upward are staying away from new

market commitments. They want safety, or at least perceived safety, not capital

appreciation, but capital preservation. The market on a net basis has been even for 11

years and that includes a bear market rally and a real estate boom. Incidentally during

that period the gold and silver shares have done well. AEM from $5.00 to $83.50

presently $62.70 is a perfect example. The price of gold went from $252.00 to

$1,265.00. This was one of our recommendations, but then again what do we know.

We are not, and never will be on CNBC, because they cannot handle the truth, and

they do not want the public to know the truth. Mind you, during those 11 years, the US

government relentlessly suppressed the prices of gold, silver and the shares. They

cannot do it indefinitely. Just last week equity funds saw an outflow of over $2.9 billion

and bond funds saw an inflow of almost $5 billion.

Switching to the euro zone we find a letter signed by 100 Italian economists

who object to the euro zone fiscal program. They want Keynesian free money and

credit forever, strains of Benito Mussolini. The rest of the euro zone, except for the

other Club Med members, want austerity much to the chagrin of the US Treasury. In

fact, the Fed is already blaming the healthy euro zone members‘ austerity program for

the failure of the US recovery. Germany, France, the Netherlands, Belgium and Austria

are having a very hard time explaining to their citizens why they should defend the

euro and bail out the profligate members. Yes, if the PIIGS leave the pen and revert

back to their original currencies the other members will be at a disadvantage, but isn‘t







3

that better than having the PIIGS on life support indefinitely and draining the life out of

solvent members?

This is what happened during the ―Great Depression.‖ Make work programs

and deficit spending, some 45% of GDP, did not work. The depression only ended

when the Illuminists arranged another world war. The system worldwide has to be

purged. There simply under classical economics is no other way. The employment

situation worldwide continues to deteriorate and there can be no recovery without

rising employment. Government and central banks continue to spend money they do

not have, most of which ends up in the financial sector creating nothing except profits

for those who produce nothing. No lending, no jobs. Then there is the collapse of

confidence very evident particularly in the publics‘ relationships with their

governments. They know the CPI, PPI and employment numbers are a lie, they know

inflation is robbing them and they know taxes are going higher. The worst possible

thing that can happen is more taxation. Taxes should be cut and government spending

in every country should be cut 30%. The big question is what will be the untoward

event that brings down the entire world financial system? In 1931 it was Creditanstalt

in Austria that failed, that pulled the trigger. Could it be the failure of Deutsche Bank or

Citicorp? We don‘t know but there are big uncontrollable surprises out there that can‘t

be factored in. Eventually austerity and failure forced Britain off the gold standard and

pound holders, except in the colonies, were screwed if holding pounds. Yes, there are

plenty of precedents for what you are seeing today. Failing to purge the system will

only lead to a deeper wider purge later.

There is no question that austerity will cause a collapse of the euro zone, which

never should have existed in the first place - a creature of those who desire world

government. Be as it may we will continue this discussion in the next issue and try to

make it clearer as to where we are all headed.

New orders for long-lasting US manufactured goods fell for the first time in May

in six months, off 1.1%, the sharpest drop since 8/09.

Weekly jobless claims were 457,000, off 19,000 from the previous week.

Issuance of commercial paper rose $15.4 billion to $1.099 trillion.

The Baltic Dry Index, a key indicator of future international trade activity, closed

at 4,209 on May 26. In less than a month it collapsed to 2515, a 40% loss. This thing

was the same as in the late spring of 2008, shortly before world equity and

commodities markets collapsed. This is a big red flag.

The Census Bureau fired 243,000 people in June. When reported the total

number is the one to watch. The contraction in June payrolls should be 250,000, a loss

of 70,000 in June versus a gain of 431,000 in May. This could mean a 10% U3 in

June.

July and August will see 330,737 job losses of census hires.

For months, both initial and continuing jobless claims have been revised higher

for the previously reported week. This occurred again on Thursday when initial claims

were revised up to 476,000 from 472k. This allowed the media and intractabulls to

exaggerate the decline in this week‘s claims (457k vs. 463k exp) – even though the

odds tell us that they will probably be revised higher next week.

Continuing Claims are 4.548m, 4.550m exp; but the previous week is revised to

4.593m from 4.571m. Numerous pundits extolled the 2k decline in continuing claims

while ignoring the 22k upward revision.

Senate Democrats abandoned on Thursday efforts to provide fresh aid to cash-

strapped state governments and extend emergency unemployment benefits for

millions of jobless workers, leaving in limbo President Obama's push for more

spending to bolster the economy.





4

Emergency jobless benefits, which provide up to 99 weeks of income support,

expired June 2. Since then, more than 1.2 million people have had their checks cut off,

according to estimates by the Labor

Department. That number is expected to rise to more than 2 million people by the time

Congress returns from its weeklong break. Unless Congress acts, the program would

phase out entirely by the end of October.

For over a year, we have harped that the US and other nations have not

enacted necessary restructurings of economies and financial systems that are

essential for long-term growth. Instead, the US, Japan and Europe have intensified

the use of the decades-old Keynesian and monetarist expediencies of more debt,

more credit, gratuitous consumption and easy money.

US lawmakers plan to collect roughly $19 billion from the nation‘s largest

financial institutions to pay for the cost of financial overhaul legislation, a top House

Democrat said Thursday evening.

Rep. Barney Frank told reporters during a break in negotiations that the cost

would likely be spread out over several years,

Americans spend twice as much as residents of other developed countries on

healthcare, but get lower quality, less efficiency and have the least equitable system,

according to a report released on Wednesday.

The BLS should make a huge negative hedonic adjustment to healthcare costs

in its CPI tabulation. But the hedonic adjusting scam is a one-way only ruse to craft

lower-than-warranted inflation in order to conceal the decline in US living standards.

In a tape, Blagojevich is heard floating another idea -- to ask the president-elect

to ask Warren Buffett or Bill Gates to throw $15 million into a health-care related

charity account that Blago could manage and live off. In exchange, of course, he'd

appoint Valerie Jarrett to Obama's Senate seat.



Since we‘re stuck in a monetary system that allows a tiny private sector

clique to control everything (business, government, military, non-profits, schools,

families, etc) by putting everyone else in debt, we‘ve been living in financial

dictatorship for a long time. It has been a soft PR dictatorship of Hickey-Freeman suits

and Sax 5th Avenue ties, Harvard pedigrees and fratboy schmarm. But hard

dictatorship has been coming out of hiding for several years, especially since 2001.

Not only can the money powers steal trillions from the masses to hand over to

themselves, but they can suck the military into conquering poor countries that aren‘t

subject to their usury vortex system, build Homeland to spy on Americans, and have

the CIA assassinate US citizens.

There is no question that full-blown fascism is planned for the supposed land of

the free as they try to move us into the new global system. And all the Republicans

blaming Obama for it, just like the Democrats who blamed Bush, need to stop being

suckers and realize how the politicians are not in charge. The money powers knew

100 years ago they couldn‘t subject their wealth and power to the whims of mass

political opinion…they learned well from the Teddy Roosevelt days. Ever since, they

have built increasing control into the system.

Blame the politicians? Absolutely…each administration takes an incremental

step for the money powers. But don‘t get suckered into believing a politician from your

side of the aisle playing the same old game of flipping between left and right is going to

change anything. We‘ve been sold on parties just like we‘ve been sold on Coke vs.

Pepsi–they‘re the same.

Find leaders who know their neighbors, who understand the mechanics of a

republic vs. empire, who understand the power of those who control all money in our





5

system, rather than repeatedly voting for unhappy, addictive Harvard/Yale elitists who

get a rush out of ―system managing‖ the masses for the money powers. Any narcissist

who thinks one dude in a distant white house can system manage 308,000,000 people

should never come close to actually being in that white house. But that‘s who we‘ve

put in that house for the last several decades.

Luckily people are now breaking free of the PR programming. The choice isn‘t

left vs. right. It is big vs. small, republic vs. empire.

US Mortgage Applications index released by the Mortgage Bankers

Association petered out to -5.9%, compared to a 17.7% rise earlier in May. 

The

housing market indicator follows a poor 2.2% decrease in existing home sales seen on

Tuesday. The data arises concerns over the US economic recovery.

Existing Home Sales of 5.66mm (-2.2% MOM) were much worse than

expected (6.12m) in May. The inventory of existing homes increased 1.1% YOY, the

second consecutive month of YOY inventory gains.

http://finance.yahoo.com/news/New-home-sales-plunge-33-pct-apf-

1718773153.html?x=0&.v=1

There once was a recovery underway so massive, so powerful, so self-

deluding that as the government and central bank began to withdraw their support for

the underpinnings with the faux stimulus and tax incentives, a realization hit the

markets and citizenry, especially the 17% unemployed or underemployed:

The news on the housing front today aside, the perpetual lack of improvement on the

unemployment front, and the massive decline in confidence expressed by the business

community continues to indicate that the recovery being heralded by the economists

and politicians might just well be a mirage as some of us have maintained. The

inventory build is over and the retail front is indicating that the lack of consumer credit

and the diminishing available discretionary income could well be the final nail in the

theoretical improvement in general economic conditions and a warning sign that we

could experience another disaster during the holiday season. Enough generalizations

though, let‘s focus on some reality from the one market that is telling everyone that

trouble is dead ahead.

While the recall of one of the staples in America is a very disconcerting sign,

and yes, it could be a watershed moment which historians will reflect back on and

decide that ―that was the day American officially went into the crapper for good, when it

couldn‘t manufacture a decent can of pasta with bland tomato sauce,‖ that is not the

indicator I would prefer to use for the current and oncoming crisis. Today we had a

bond auction for the 2 Year Treasury that went out at an all time record low yield.At the

close of market trading today it had a 0.681% yield which is sending a message to the

world of the utmost importance about our economic situation. This graph tells the

same message of the 1-3-6 month Treasury yields and then the 2 year yield overlaid

on top of it:

This is the one chart that tells me the recovery discussion is nonsense,

especially now that the Federal Reserve‘s Quantitative easing program has ended.

The majority of the securities purchased by the Fed was in fact Mortgage Backed

Securities to help prop up not just the banking system but the GSE‖s, Fannie and

Freddie. They purchased just enough Treasuries to intimidate the shorts and keep the

vigilantes at bay in 2009 but now, what is the excuse for the low yields on the short

end of the curve? Perhaps the government and the Fed should go look in a mirror.

There is no demand FOR MONEY thus the idea of guaranteeing a return of investment

has become more important than investing or gambling on the whims of the United

States government and its ever changing policies. Way, way, way back in history I

warned that the actions involving the illegal seizures of Fannie, Freddie, Bear Stearns,





6

Wachovia, Washington Mutual, General Motors, Chrysler, etc., etc. would have a

lasting impact on the desire of investors to gamble on the viability of the United States.

Those ducks have come home to roost. There is no demand for money thus borrowing

costs are staying low. The citizens of the U.S. do not have faith in the financial system

because many of them lost 30-50% of their investments to the used car salesman on

CNBC who perpetually said ―there will never be another bear market in our lifetimes‖

and other such pearls of wisdom as they piled their retirement accounts into such

winners as ABK and WaMu. Foreign bondholders who had securities in the seized

companies and were not made whole have no reason to trust this current

administration nor the incompetent behavior of the Federal Reserve so why should

they do anything beyond storing their money in bonds and praying that the rest of the

world divorces the American nightmare so they can move their monies elsewhere and

not worry about the Banana Republic like activities of those in power.



Thus do not get excited about the recovery talk. The housing recovery talk. The auto

sales recovery talk. The consumer recovery talk. And the new ‗discipline‘ the

government swears that one day they hope to show with regards to spending. Until

there is a demand for money and thus the corresponding increase of rates imposed

by markets and not artificial Fed interference, then we can continue to expect more

credit crisis blow ups such as Municide, corporate defaults, massive bank failures,

even more foreclosures, and increasing unemployment levels of long duration. As I‘ve

stated before, when a man falls down into a 100 foot deep well and climbs up 20 feet,

that is not a recovery nor even a save. That splash your hearing is that man falling

again and preparing for the end.



The Richmond Fed manufacturing activity skid down in June. The reading

showed a 3 points decline from 26 last May against the present 23 value.
Sales

revenues in the service sector performed the worst, with the index falling in May (from

8 to 5). June data showed retail sales revenues dropping to -1 from 0 in May.



The Housing Price Index released by the Office of Federal Reserve Housing

Enterprise Oversight showed US home prices surged by 0.8% in April compared to a

revised 0.1% in March, instead of the previously noted 0.3%.

Despite Government

tax credit programs favored the increase on prices, it is a positive factor to see the

housing market picking up, which acts as a reliable indicator of the US economic

situation.



US ABC/Washington Post Consumer Confidence up to -43 from -45 in the

week of June 20.



For the first time in history, Congress will not allow an increase in the

social security COLA (cost of living adjustment).

In fact, the Henry J. Kaiser Family Foundation predicts there may not be any

COLA for the next three years. However, the per person monthly Medicare Insurance

premium will be increased from the 2009 premium of $96.40 to $104.20 in 2010 and to

$ 120.20 for the year 2011.

Let's send this to all seniors that you know--remind them not to vote for ANY

incumbent senators and congressmen in the 2010 and the 2012 elections.









7

And don't forget - CONGRESS GAVE THEMSELVES A HEFTY PAY RAISE

THIS YEAR. So who is watching out for you? Not Congress. Not Washington.



A top Democrat signaled for the first time that the party might scale back

plans to permanently extend Bush-era tax cuts for the middle class, as deficit

worries grow in Congress.

House Majority Leader Steny Hoyer said in a speech Tuesday that Democrats

would have to consider passing only a short-term extension of the middle-class tax

breaks, which expire at the end of this year. In the longer term, taxes likely will be

going up, at least for some people, he suggested.

"As the House and Senate debate what to do with the expiring Bush tax cuts in

the coming session.

The city of Maywood will lay off all city employees and begin contracting

police services with the Los Angeles County Sheriff's Department effective July 1,

officials said.

In addition to contracting with the Sheriff's Department, the Maywood City

Council voted unanimously Monday night to lay off an estimated 100 employees and

contract with neighboring Bell, which will handle other city services such as finance,

records management, parks and recreation, street maintenance and others. Maywood

will be billed about $50,833 monthly, which officials said will save $164,375 annually.

"We will become 100% a contracted city," said Angela Spaccia, Maywood's

interim city manager.

Deputies from the East Los Angeles Sheriff's Station will begin patrolling the

1.2-square-mile city by the end of the month, said Capt. Bruce Fogarty of the Sheriff's

Contract Law Enforcement Bureau. The annual cost of providing those services for the

small city is estimated at $3.6 million, Fogarty said.

At a council meeting Monday night, city leaders said they were forced to

dismantle the Police Department and lay off city workers because they lost insurance

coverage as a result of excessive police claims filed against the department. They also

blamed years of financial abuse and corruption from the previous council. "We're

limited on our choices and limited on what we can do," Councilman Felipe Aguirre told

the standing- room-only crowd.

We will have an overview on the financial reform package in the next issue. We

do know banks will continue to handle foreign exchange, interest rate, and gold and

silver swaps and to hedge their own risks. Cleared and uncleard commodities,

agricultural, energy and equities swaps and credit would have to move to an affiliate

within two years. Why were silver and gold exempted? We know why, so that the

market manipulation could be continued. Congress is telling us they completely know

the scam and are paying off the bankers and Wall Street. This they hope will continue

the charade of fiat money and it won‘t work.

The final on first quarter GDP was up 2.7%, of which 1.7% came from stimulus.

That puts the second quarter at even to minus; third quarter at minus 1% to 2% and

the fourth quarter minus 2% or more. Some recovery!

The ECRI leading indictor has collapsed to a 45 week low of minus 5.7. The

most precipitous slide in 50 years.

The Fed‘s next step over the next 2-1/2 years is to run and gun money and

credit, as inflation becomes hyperinflation.

The former stimulus and the Fed‘s purchase of $1.8 trillion in toxic assets and

$200 billion in treasuries shows a net combined increase in money and credit of $2.8

trillion last year. During this year and the next two years there will be lots more.







8

Weimar here we come. More unemployment, less income, less buying power from a

falling dollar and rising gold and silver will follow.



For all the focus on the historic federal rescue of the banking industry, it is the

government‘s decision to seize Fannie Mae and Freddie Mac in September 2008 that

reportedly is likely to cost taxpayers the most money. So far the tab stands at $145.9

billion and rising, the New York Times reports. The Congressional Budget Office has

predicted that the final bill could reach $389 billion. Some analysts even estimate the

total may reach $1 trillion, which Sean Egan, president of Egan-Jones Ratings,

recently told Bloomberg is ―a reasonable worst-case scenario." Egan told Bloomberg

that the final tally could hit $1 trillion assuming a 20 percent loss on the companies'

more than $5 trillion in loans and guarantees, similar to what other big mortgage

companies, like Countrywide Financial, suffered. The two government-sponsored

enterprises (GSEs) now own more houses than there are in Seattle and are

foreclosing on homeowners whose mortgages they guaranteed, the Times said.

Fannie and Freddie maintain the houses for a while, then resell them at a huge

loss. In many cases, they also underwrite the new mortgage for the new buyer,

generating even more bank fees taxpayers must ultimately absorb. On average, they

recoup less than 60 percent of the amount borrowers failed to pay. Costs for selling a

house generally are usually about $10,000. Fannie and Freddie hire people to clean

up the foreclosed homes inside and out, replace missing appliances and maintain the

properties until they are sold. The grass-mowing bill alone is more than $10 million per

month; All told, the GSEs spent more than $1 billion on upkeep last year. ―We may be

behind many loans on the same street, so we believe that it‘s in everyone‘s best

interest to aggressively do property maintenance,‖ said Chris Bowden, the Freddie

Mac executive in charge of foreclosure sales. Short sales are a growing alternative to

foreclosure. In the past, a short sale was an unusual alternative, one real estate

agents rarely presented to sellers, realtor Erek Gass told the York Daily Report. ―Now,

they are common because of the devaluation of the housing market,‖ Gass says.



Several Senators have learned of a possible plan by the Obama

Administration that would provide a mass Amnesty for the nation's 11-18 million

illegal aliens. Led by Sen. Chuck Grassley (R-Iowa), eight Senators addressed a letter

to the President asking for answers to questions about a plan that would allow DHS

Secretary Janet Napolitano to provide an amnesty if they can't secure enough votes

for a bill in the Senate.



The Treasury Department awarded $1.5 billion to aid homeowners in

California, Florida, and three other states with high foreclosure rates.

Under a program known as the Hardest-Hit Fund, Arizona, Michigan, and

Nevada also will receive money, which will be distributed to state housing finance

agencies, the Treasury said yesterday in a statement.

―These states have identified a number of innovative programs that will make a

real difference in the lives of many homeowners facing foreclosure,‘‘ Herbert M. Allison

Jr., the Treasury‘s assistant secretary, said in the statement.

The program is estimated to help 90,000 people having difficulty paying their

mortgages or living in homes that are worth less than the loans they secure.

Seventy-five percent of such homes are in the five states awarded aid, said

Phyllis Caldwell, chief of the Treasury‘s Homeownership Preservation Office. Half are

in California, and Florida, Caldwell told reporters.







9

The hardest-hit fund is part of a mosaic of programs from the Obama

administration to stop the spread of foreclosures, which are expected to climb to 4.5

million this year from 2.8 million in 2009, according to RealtyTrac Inc., an Irvine, Calif.,-

based research firm.

The effort, which is funded from the $700 billion Troubled Asset Relief

Program, aims to curb foreclosures and stabilize housing prices in communities with

high concentrations of delinquent borrowers and states where much of the population

lives in regions with 12 percent or higher unemployment.

States were required to develop programs to aid homeowners and apply for

aid. Their plans include using the money to reduce the principal owed on mortgages,

help unemployed and underemployed borrowers make their payments, and pay off

second mortgages.

Government-sponsored mortgage purchaser Fannie Mae, trying to

encourage distressed homeowners to find alternatives to foreclosure, would punish

those who walk away by preventing them from getting new loans for seven years.

Troubled borrowers who do not try in good faith to work out a deal but have the

capacity to pay are targeted by the policy disclosed yesterday.

―Walking away from a mortgage is bad for borrowers and bad for communities, and our

approach is meant to deter the disturbing trend toward strategic defaulting,‘‘ said

Terence Edwards, executive vice president for credit portfolio management.

A strategic default occurs when a homeowner stops making payments on a mortgage

despite being able to do so. It has become increasingly common in communities where

housing values fell sharply and homeowners are ―underwater,‘‘ or owe more than their

houses are worth.

Fannie Mae said that in locations where the law allows, it also plans to take

legal action to recoup outstanding mortgage debt from borrowers who strategically

default. The company plans to instruct its servicers to monitor delinquent loans facing

foreclosure and recommend cases to pursue for such judgments.

A spokesman for fellow government-backed mortgage buyer Freddie Mac said its

current policy requires at least a five-year wait. Freddie Mac will ―take a close look‘‘ at

the new Fannie policy, said spokesman Brad German. ―We‘ll consider it in light of

current market conditions in order to manage our risk as effectively as possible.‘‘

Fannie and Freddie were created by Congress to buy mortgages from lenders and

package them into bonds that are sold to investors. They own or guarantee almost 31

million home loans worth about $5.5 trillion, about half of all mortgages.

The wave of foreclosures affecting Fannie and Freddie loans has caused a

major problem for the US government, which effectively guarantees the loans.

The government seized control of Freddie and Fannie in September 2008, a rescue

that has cost taxpayers $145 billion so far. The two companies show no signs of

becoming self-sufficient.

In announcing the new policy, Fannie Mae said homeowners who make a good

faith effort to resolve their situation with their mortgage companies, and those who

have extenuating circumstances, will be eligible for new loans in a shorter time period.

The company did not detail how long the wait might be.



The Census Bureau released the weekly payroll data for the week ending

June 12th this morning (ht Bob_in_MA). If we subtract the number of temporary 2010

Census workers in the week containing the 12th of the month, from the same week for

the previous month - this provides a close estimate for the impact of the Census hiring

on payroll employment. The Census Bureau releases the actual number with the

employment report.





10

The number of Census workers paid each week. The red labels are the weeks

of the BLS payroll survey. The Census payroll decreased from 573,779 for the week

ending May 15th to 330,737 for the week ending June 12th. So my estimate for the

impact of the Census on June payroll employment is minus 243 thousand (this will be

close). The employment report will be released on July 2nd, and the headline number

for June - including Census numbers - will almost certainly be negative. But a key

number will be the hiring ex-Census (so we will add back the Census workers this

month).



―Goldman Sachs wasn‘t alone either in its astute ―foreknowledge‖ of the

collapse of BP‘s stock value due to the Gulf disaster as BP‘s own chief executive,

Tony Hayward, sold about one-third of his shares weeks before this catastrophe began

unfolding too.

But according to this FSB report the largest seller of BP stock in the weeks

before this disaster occurred was the American investment company known as

Vanguard who through two of their financial arms (Vanguard Windsor II Investor and

Vanguard Windsor Investor) unloaded over 1.5 million shares of BP stock saving their

investors hundreds of millions of dollars, chief among them President Obama.

For though little known by the American people, their President Obama holds all of

his wealth in just two Vanguard funds, Vanguard 500 Index Fund where he has 3

accounts and the Vanguard FTSE Social Index Fund where he holds another 3

accounts, all six of which the FSB estimates will earn Obama nearly $8.5 million a year

and which over 10 years will equal the staggering sum of $85 million.

The FSB further estimates in this report that through Obama‘s 3 accounts in

the Vanguard 500 Index Fund he stands to make another $100 million over the next 10

years as their largest stock holding is in the energy giant Exxon Mobil they believe will

eventually acquire BP and all of their assets for what will be essentially a ―rock bottom‖

price and which very predictably BP has hired Goldman Sachs to advise them on.

Important to note is that none of this wealth Obama, Goldman Sachs, and other

American elites is acquiring would be possible without this disaster, all of whom, as the

evidence shows, ―somehow‖ knew what was going to happen before it actually did,

including the US energy giant Halliburton who 2 weeks prior to this disaster just

happened to purchase the World‘s largest oil disaster service company Boots &

Coots‖.

U.S. intelligence community debates China's bond holdings

"In doing that, what options does the Federal Reserve have; what options does the

Treasury have?" said Markowski, a China expert. "If China were to be a large, large

seller, then they would have to do something more significant." [Solons would then put

their heads between their knees and kiss.]



German and UK austerity measures are strengthening their currencies.

Suddenly, instead of beggar they neighbor, competitive currency debasement to boost

exports, some nations have decided it is more important to arrest debt formation,

which will strengthen their currencies.



How HFT Quote Stuffing Caused The Market Crash Of May 6, And

Threatens To Destroy The Entire Market At Any Moment

On the subject of HFT systems, we were shocked to find cases where one exchange

was sending an extremely high number of quotes for one stock in a single second -- as

high as 5,000 quotes in 1 second! During May 6, there were hundreds of times that

a single stock had over 1,000 quotes from one exchange in a single second. Even





11

more disturbing, there doesn't seem to be any economic justification for this. In many

of the cases, the bid/offer is well outside the National Best Bid/Offer (NBBO). We

decided to analyze a handful of these cases in detail and graphed the sequential

bid/offers to better understand them. What we discovered was even more bizarre and

can only be evidence of either faulty programming, a virus or a manipulative device

aimed at overloading the quotation system.

Americans are more pessimistic about the state of the country and less

confident in President Barack Obama's leadership than at any point since Mr. Obama

entered the White House, according to a new Wall Street Journal/NBC News poll.

Sixty-two percent of adults in the survey feel the country is on the wrong track,

the highest level since before the 2008 election. Just one-third think the economy will

get better over the next year, a 7-point drop from a month ago and the low point of Mr.

Obama's tenure.

Support for Mr. Obama and his party is declining among centrist, independent

voters. But, more ominous for the president, some in his base also are souring, with

17% of Democrats disapproving of Mr. Obama's job performance, the highest level of

his presidency.

In his latest column, the Daily Telegraph's A. Evans-Pritchard does a good job of

recapping all the various reasons why Bernanke has now completely cornered himself,

and facing a newly collapsing economy, is left with just one recourse: the printing of

more, more, more paper. This should not come as a surprise to anyone who has read

even a few posts on Zero Hedge - the only response the Fed is left with as deflation

accelerates, and as the Fed and the banking cabal refuse to do an orderly

reorganization whereby financial firms grow into their balance sheets via a debt

restructuring (and equity wipe out), is the spewage of more, inflation-stimulating, fiat.

Ironically, as this newly printed and rapidly diluted monetary representation (because it

increasingly is not equivalent to money) makes its way only and almost exclusively to

those with direct discount window access, i.e., the mega banks (and for some ungodly

reason, the clearinghouses soon), the assets that will be bid up are all tangible

commodities, while secondary assets, which are contingent on a properly functioning

reserve banking (money multiplier) system, collapse in a deflated heap of liquidations.

Yet one notable section in AEP's post draw our attention:

"Key members of the five-man Board are quietly mulling a fresh burst of asset

purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6

trillion) to uncharted levels of $5 trillion." We are very curious where the DT's reporter

has found this information, since if it comes from a credible source this is a massive

game changer, and while many have speculated this will happen sooner or later, to

know for a fact that QE is definitely coming is major news, and, if true, we are stunned

the WSJ's Jon Hilsenrath, who recently has had his ear "very close" to the Fed's

internal process, has not reported on this yet.

Incidentally, the $5 trillion number was referenced previously on Zero Hedge in a

post by RBS economist, and uber-realist, Bob Janjuah, as follows:

All that's now left, as I have said before, is for the Fed to shift to a USD5trn or so

new QE program, likely in co-ordination with a bunch of other central banks, which in

total may give us USD10trn or more of new QE. But this isn't happening until much

much later this year or, more likely, next year.

We agree with Bob: the next QE phase will most certainly not occur before the

midterms, which as the recent abdication of a national budget demonstrated, are a

critical priority for the administration, over and above the telegraphing of the country's

catastrophic state to the general population, which is precisely what a nuclear

monetary blast would be (let alone a new fiscal one - it is no incident that today, for the





12

first time, a new $35 billion unemployment stimulus bill crashed in the Congress after it

could not muster enough votes). Therefore, we are confident that the Fed has its

hands tied well until December, although we anticipate a January lift off date for QE

version 2 and final, which, as Bob Janjuah notes, will likely come in collaboration with

every single central bank in the world, in one last (failed) re-flation attempt: the final

spasm for the Keynesian religion.



U.S. consumer sentiment was the most optimistic in more than two years

in June, but remained far below normal levels, according to a survey released Friday

by Reuters and the University of Michigan. The University of Michigan Index rose to

76.0 in late June, up from 73.6 in May and 75.5 in mid-June. The average level of the

index is around 87. Economists were expecting the UMich index to come in at 75.5.

Consumers expect a very slow pace of economic growth, the survey said. The current

conditions index improved to 85.6 from 81.0, while the expectations index rose to 69.8

from 68.8.



At a salary of $180,000 a year, former Police Chief Hurtt, who favors

"sanctuary" policies for illegal aliens, has been hired as the director for coordination

between State and local government and ICE [Immigration and Customs

Enforcement].



Sanctuary policies, which mandate cities to provide cover and assistance to

illegal alien invaders, are an explicit violation of the US Code on immigration law. This

means that a supporter of law-breaking has been hired to do a law enforcement job.



By its own actions, centralized Government is breaking down.



Harold Hurtt, a former police chief in Houston and Phoenix, has been

hired as the director for the U.S. Immigration and Customs Enforcement's

Office of State and Local Coordination.



Drug cartel activity along the Mexican border presents serious security

threats to the area's water supply system, particularly on federally-owned lands in

southern Texas, a U.S. lawmaker says.

Members of the House Natural Resources Subcommittee on Water and Power

held a hearing Thursday on H.R. 4719, a bill that would create a Southwest Border

Region Water Task Force to monitor and assess the water supply needs of the area.

Rep. Tom McClintock, R-Calif., ranking member of the House subcommittee, told

FoxNews.com that the situation needs immediate attention, particularly in light of

reports that a Mexican drug cartel -- the Los Zetas -- unsuccessfully plotted to blow up

the Falcon Dam along the Rio Grande last month.

"If the plot against Falcon Dam had succeeded, it would have affected more

than 4 million residential customers," McClintock said Monday. "We need to focus our

attention on securing these border water systems from attack by Mexican drug cartels,

but also their use as a conduit for the illegal importation of drugs and people."

McClintock said he will seek to amend H.R. 4719 to alter its focus toward

border security issues. As it currently stands, the legislation would establish a task

force that would submit a report on the region's water supplies to Congress and would

be comprised of representatives from the Department of Agriculture, the Army Corps

of Engineers, the Southwest Border Regional Commission and others.







13

According to the Houston Chronicle, Mexican and U.S. authorities were

"secretly scrambling" last month to thwart a plot by the Zeta cartel to blow up Falcon

Dam and unleash billions of gallons of water.

The Zeta cartel planned the attack to get back at its rival, the Gulf cartel, which

controls smuggling routes from the Falcon Dam to the Gulf of Mexico, Sigifredo

Gonzalez, sheriff of Texas' Zapata County, told the newspaper.

Although the Gulf Cartel was the alleged target, about 4 million residents and

massive amounts of agricultural land would have been affected in the resulting

massive flood, the paper reported.

Sources told the Chronicle that U.S. officials learned of the plot through

"serious and reliable sources," the seizure of small amounts of dynamite near the dam

and the discovery of an alert from the Zeta cartel warning Mexican residents to

evacuate the area ahead of the blast.

The Mexican military then stepped up its presence in the area based in part on

the U.S. intelligence, sources told the Chronicle.

McClintock said escalating violence along the Mexican border is a result of

restricted access by U.S. Customs and Border Patrol agents to federal lands due to

environmental regulations enforced by the Department of Interior.

"It certainly has the potential to be a serious security risk," McClintock said.

"The plot by the Zeta drug cartel to blow up the Falcon Dam appeared to be quite

credible. And as we have found over the years, before there is a successful attack, it is

preceded by several unsuccessful attempts that clearly indicate intent. It would be

utterly foolish to ignore."

The Department of Homeland Security did not immediately respond to requests

for comment regarding last week's hearing.

Joan Neuhaus Schaan, fellow for homeland security and terrorism at the

James A. Baker III Institute for Public Policy at Rice University, told the panel that the

water flow and system of dams operated by the International Boundary & Water

Commission (IBWC) are critically important to Texas agriculture along the Rio Grande.

"Water rights along the border have been the basis for contentious and

sometimes violent disagreements for centuries, though for the last 60 years the IBWC

has provided a framework for management," Schaan said in prepared remarks. "This

critical water infrastructure, however, is vulnerable to attack."

Schaan also cited reports of the alleged plot targeting the 5-mile-long Falcon

Dam.

"Destroying a dam requires access, means, knowledge and motivation,"

Schaan's testimony continued. "Organized crime in the region has demonstrated a

facility for the first three elements. The question remains as to whether these same

organizations might be motivated to carry out an attack. The scenario is not

inconceivable."



The Gross Domestic Product figures for the 1st quarter, released by the

US Bureau of Economic Analysis, continued its downward bias after a 2.7% estimate

growth as opposed to an expected 3%. The previous estimated number in May settled

at 3%, and a 3.2% in April..

The US GDP price index stood at 1.7%, after a 1.2% increase compared to the

previous release. Analyst had expected a 1% rise. Meanwhile, the personal consumer

expenditure rose by 3% in the first trimester of the year, although a 3.5% climb was the

agreed forecast amongst analyst.

GDP revised to 2.7% in the Q1 from 3.0% previous estimation







14

Durable goods orders edged down to -1.1%, ending a 5 month winning

streak. Analyst anticipated a 1% rise instead of the poor numbers released. Last report

showed a 2.8% increase.

Meanwhile, US durable goods orders excluding transportation, displayed

positive numbers, yet the final figures could not satisfy analysts forecast. Civilian

aircraft weighed on an improved report compared to April's data. Core US durable

goods rose to 0.90% compared to a weaker -1% last April. Analysts were expecting a

1.1% climb.



The Whirlpool Corp. plant in Evansville that has been the site of protests

over its closure is producing its final refrigerators.

The plant's production line is shutting down today, meaning the loss of some 600 jobs.

About 450 other workers were laid off in March when Whirlpool ended its second

production shift.

Company human resources director Tom Webster says a contractor will then

begin removing equipment and furniture from the plant. He says the plant's future

hasn't been decided.

The company announced last year that it would shut down the factory and

move production to Mexico.

Some 1,500 people joined the AFL-CIO national president for an Evansville

march in February protesting the decision by Benton Harbor-based Whirlpool.



COMMODITIES

EIA reports natural gas inventories up 81 bcf.



GOLD, SILVER, PLATINUM AND PALLADIUM

On Wednesday gold fell $5.80 to $1,234.10, as August fell $2.50. Spot silver

fell $0.41 to $18.48, as July fell $0.31. Malcolm Maguire pointed out that before every

gold option expiration and silver exploration, JPMorgan Chase and HSBC pound them

both so very few of the options end up in the money. It‘s been six months since

massive first person evidence was given, as to what was going to happen and when –

it happened and the CFTC has not done a thing about it except begin an investigation,

which might be concluded 3 to 5 years from now. Gold open interest rose 1,536

contracts to 602,411 just below its all-time high. Silver OI fell 2,043 to 139, 019.

JPMorgan chase expects a new stimulus program and more quantitative easing, which

they say would push gold higher. Tell us what markets, Morgan, Goldman, Cit and

Deutsche Bank do not manipulate? Thirty percent of central bank reserve managers,

institutions and sovereign wealth funds see gold as the best performer for the

remainder of the year says a UBS survey.

Year-on-Year foreclosures increased 44% in May and increased in every state.

All homes with mortgages are now worth less than the mortgage note. Total inventory,

including shadow inventory, is now one year and some are calling for eight years

based on the 12-month trailing sales rate. Sales of new homes fell 32.7% to the lowest

level in more than 40 years. We see inventory overhang in 2012 of three years.

The Fed has blamed Europe for the economy not improving.

We coached soccer for 35 years and we are experts. There is no question

everything that can be done by officiating is being done to make sure the US doesn‘t

win anything. In spite of that they will reach the 2nd level. It is despicable for the

Europeans and the FIFA to do such a thing. These young men are not responsible for

what the US government and Illuminists do.





15

Next week the treasury expects to sell $162 billion worth of securities. This is

raising money at a $2 trillion annual rate.

Erste Group in Vienna, Austria, a strong gold advocate has published a report

on the future of gold, and it includes a large section on gold manipulation. It explains

the massive fraud.

The Dow rose 5 to 10,298 and should open 50-points lower in the morning.

S&P fell 29 and Nasdaq fell 45 Dow points. The yen rose .0084 to $.8970; the euro

rose .0056 to $1.2329; the pound rose .0151 to $1.4963; the Swiss franc rose .0016 to

$1.1039; the Canadian dollar fell .0093 to $.9622 and the USDX fell .29 to 85.81.

Oil fell $1.95 to $75.90; gas fell $0.06 to $2.08 and natural gas rose $0.05 to

$4.80. Copper fell $0.05 to $2.94; platinum fell $24.40 to $1,568.60 and palladium fell

$17.40 to $472.55. The CRB Index fell 2.96 to 259.72.

On Thursday spot gold rose $11.00 to $1,245.10, as August rose $7.70. The

Comex option writers in gold and silver got clobbered today and that makes us very

happy. Spot silver rose $0.25 to $18.73, as July rose $0.20. Gold got as low as $1,227

early on, but it rallied back strongly, as major bullion buyers challenged the US

government and those who control our government. Silver got down to $18.18, but

rallied back strongly. Gold open interest fell 9,179 contracts to 593,232, as silver OI fell

1,874 to 137,146. The XAU lost 1.49 to 179.72 and the HUI fell 2.82 to 476.29. Our

sources tell us the class action lawsuit against JPMorgan Chase for manipulating the

silver market is now 3 to 4 weeks away.

The Dow fell 145 to 10,152; S&P fell 164 and Nasdaq fell 221 Dow points. The

yen rose .0040 to $.8938; the euro rose .0005 to $1.2334; the pound was unchanged

at $1.4923; the Swiss franc rose .0007 to $1.1008; the Canadian dollar fell .0041 to

$.9581 and the USDX rose 2 to 85.76.

Oil was unchanged at $76.35, gas rose $0.01 to $2.10 and natural gas fell

$0.04 to $4.76. Copper rose $0.07 to $3.02; platinum fell $2.20 to $1,564.80 and

palladium fell $0.90 to $473.45. The CRB rose 1.90 to 261.62.

On Friday spot gold rose $10.50 to $1,255.80, as August rose $10.70. Spot

silver rose $0.38 to $19.11, as July rose $0.33. Gold open interest rose 6,228

contracts to 599,460, just 4,000 short of an all-time high. Silver OI fell 1,511 to

135,634. The XAU rose 6.25 to 184.92 and the HUI gained 16.62 to 492.93. Five

hundred will be left far behind next week. AEM rose 2.17%, or $1.33 to $62.70. It

traded $1.00 higher as the shorts attacked again. GG rose 2.74%, or $1.21 to $45.42;

SSRI rose 2.76%, or $0.50 to $18.60 and MFN rose 4.26%, or $0.38 to $9.29. When

AEM breaks out over $64.00 it should run to $83.50 and the others listed here will

follow. Shortly silver will break out and Morgan and HSBC will have to do some fierce

short covering. We are not far away from LBMA, Comex, GLD and SLV delivery

defaults. That Morgan silver class action is on the way. June gold deliveries could wipe

out 80% of dealer inventory and the same could happen to silver. In gold, June on the

Comex has 20,545 contracts for delivery, unless some opt for cash with a 25%

premium to go away or to accept GLD shares. The weekly COT report from

commercials on Comex shows a net increase of 9,972 contracts. We‘ll have net gross

figures on Wednesday, but should be a net short gold position of about 295,000

contracts. In silver they increased net shorts by 1,800. They have to be suicidal. In

addition the shortage of silver is so dire, and the naked shorts so large, that Comex

has stolen allocated silver to meet physical demand. Wait until the owners find out.

They will, of course, withdraw their holdings. Of course, the CFTC knows all this and

looks the other way, as does the SEC. The public has no protection from the criminals.









16

Gold is being removed from central banks by private owners and placed in

private storage. That is why these enormous facilities are being built in Hong Kong and

Singapore.

All the facilities are outside the EU and US. The big hitters now realize that

central banks and exchanges are selling gold that doesn‘t exist.

The Dow fell 9 to 10,413; S&P rose 33 and Nasdaq 36 Dow points. The yen

rose .0018 to $.8927; the euro rose .0055 to $1.2393; the pound rose .0104 to

$1.59038; the Swiss franc rose .0072 to $1.0922; the Canadian dollar rose .0061 to

$.9650 and the USDX fell .42 to 85.31. If it falls below 85 it could go to 80 quickly.

Oil rose $2.65 to $79.17, gas rose $0.07 to $2.17 and natural gas rose $0.11 to

$4.86. Copper rose $0.08 to $3.10; platinum rose $8.90 to $1,570.40 and palladium

rose $8.05 to $478.05. The CRB rose 3.99 to 265.61.



Tim Levene of Augmentum Capital, a fund backed by Lord Rothschild's RIT

Capital Partners, said the investment was not a bet on the gold price but on "the future

growth of the BullionVault platform", which stores physical gold for private clients in

London, New York and Zurich. RIT currently has 9pc of its assets in physical gold.

Investment demand for the metal has risen on concerns that sovereign debt

problems could spread and the value of currencies plunge. The gold price hit a new

nominal all-time high above $1,260 on Friday and analysts expect the price will

continue to rise.

In return for the £12.5m investment, the World Gold Council and Augmentum

will receive an equity stake in BullionVault.

Marcus Grubb, managing director of investment at the World Gold Council,

said taking the BullionVault stake was part of the Council's strategy of "increasing its

portfolio of successful platforms for gold investment". Mr. Levine and Mr. Grubb will

join BullionVault's board. BullionVault has about $800m (£540m) of gold under

management for 20,000 customers from more than 90 countries. The average holding

is around £30,000.

The World Gold Council's previous investment vehicle, a gold exchange-traded

fund, now has 1,306 tonnes of the metal under management, worth $52.3bn. This

makes it the world's second-largest exchange-traded fund. If the fund was a central

bank, it would be sixth largest in the league table of gold holders. [We are very

disturbed with the equity participation of Illuminists in BullionVault. If we had an

investment in BullionVault we would move it elsewhere to an entity, which is not in bed

with the enemy.]

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7842235/Lord-

Rothschild-fund-joins-World-Gold-Council-to-put-12.5m-into-BullionVault.html



GLD claims to have added another 3 tons of gold to a fresh new all time

record of 1,316.18 tons as of close of business today. In the meantime the fixing price

of gold is back to near record levels... which is where it was on May 11, when GLD

held over 124 tons of gold less. In other words, the world's biggest real time acquirer of

the precious metal has added more than all central banks purchased in Q1.





DISCOUNT GOLD & SILVER TRADING

www.discountgoldandsilvertrading.net

1800 375 4188

For the best in pricing and service for gold and silver coins, call Melody Cedarstrom at

1-800-375-4188.







17

Be sure to listen to Financial Survival with Bob Chapman live on Short-wave 7.415Mhz

M-F 4:00PM ET, Rebroadcast Monday thru Friday 8pm 3.240 Mhz

3.215 MHz M-F 11PM ET and weekly archives at discountgoldandsilvertrading.net



―Gee, What A Coincidence!‖ or ―Those Who Cannot Learn From History . . . .‖?



George Santayana first observed that, ―Those who cannot learn from history,

are doomed to repeat it.‖ This article is intended to present some recent history

from which we might—or might not—learn.

Wikipedia published an article entitled ―History of the Soviet Union (1985–1991)

which described the causes and events surrounding the A.D. 1991 collapse of

the former USSR. The article is remarkable in that so many of the events and

causes for the Soviet collapse seem to be occurring again, right here, in the

USA.

For example,

―The Soviet Union‘s dissolution into independent nations in 1991 began in

1985.‖

The USSR‘s collapse didn‘t happen ―overnight‖. It was a process that occurred

over a period of several years. Thus, those who had sufficient insight and

courage to objectively confront the facts (the ―history‖ as it unfolded) could‘ve

seen what was coming and prepared accordingly.

Likewise, in this country, those who have sufficient insight and courage to

objectively confront our current facts (unfolding ―history‖) might also be able to

―see‖ what‘s coming and prepare. There is time to prepare, but is there an

ability to ―learn‖ why we should prepare?

―After years of Soviet military buildup at the expense of domestic development,

economic growth was at a standstill. Failed attempts at reform, a stagnant

economy, and the war in Afghanistan led to a general feeling of discontent.‖

Have you noticed that here in the USA—much like the USSR in its final years—

the US military and governmental power has been built up over the last decade

while civilian jobs have been shipped overseas? Have you noticed that US

―economic growth is at a standstill‖? Did you observe that today, like the

former Soviet Union we are also mired in a ―war in Afghanistan‖? Do our Tea

Parties‖ manifest our ―general feelings of discontent‖ similar those previously

seen in the former USSR?

Have you learned from that history?

―The USSR's trade gap progressively emptied its treasury, leading to eventual

bankruptcy.‖

Our American trade gap is also massive and will probably never be repaid. Do

you suppose that our trade gap will also lead to our ―eventual bankruptcy‖?

―The war in Afghanistan led to increased public dissatisfaction with the

Communist regime in Moscow.‖

American adventures in Iraq and Afghanistan are now the longest running wars

in American history. Are the American people ―dissatisfied‖ by the ―endless‖

(and pointless) mid-east wars? Not so much. But Americans are very

dissatisfied by high unemployment.

―Reform in the USSR became more and more powerful between 1969 and 1987.‖

The excesses and arrogance of the Bush administration and middle-east wars

contributed to a public desire for ―change you can believe in‖ in our A.D. 2008

election. But is that ―change‖ (like the ―reform‖ movement in the former USSR)

too little, too late, or too socialist?





18

―The Chernobyl nuclear power plant disaster of 1986 added impetus to

Gorbachev's glasnost and perestroika reforms, which eventually spiraled out of

control and caused the Soviet system to collapse. At Chernobyl, a reactor

vessel rupture caused the reactor‘s graphite moderator components to ignite;

the resulting fire sent a plume of radioactive fallout into the atmosphere and

over large parts of the western USSR and Europe. Large areas in the Ukraine,

Belarus, and Russia had to be evacuated, with over 336,000 people resettled.‖

The Soviets had Chernobyl and we have the Gulf Oil Disaster. The ―plume‖ of

Chernobyl‘s radioactive waste caused 336,000 to be evacuated. Some suspect

that the ―plume‖ from the BP Oil Disaster may cause a similar number of

Americans to eventually be evacuated from the Gulf-coast.

When Chernobyl occurred, we in the West laughed at those ―dumb commies‖

who couldn‘t master the technology of running a nuclear power plant. I suspect

the Soviet people were likewise humiliated by Chernobyl and lost confidence in

their technology, government, political system and themselves. Without public

confidence, an economy can‘t be sustained.

Today, America‘s Gulf Oil Disaster has inspired of similar sense of humiliation

and national self-doubt. Have we finally ―gone too far‖? Facing the Gulf

disaster at the same time we face our other economic and political crises, we

know that something is not merely wrong, but fundamentally wrong with our

―system‖. That knowledge saps the confidence that every economist knows is

necessary to maintaining an economy.

Is there a lesson here to be learned?

―When President Ronald Regan increased US military spending to 7% of the US

GDP, the USSR tried to keep pace by increasing its own military spending to

27% of its GDP and freezing production of civilian goods at 1980 levels, causing

a sharp economic decline in the already failing Soviet economy. The USSR

collapsed under the economic costs of superpower status—the military, space

program, subsidies to client states—that were out of proportion to the Soviet

economy.‖

Osama bin Laden reportedly bragged that he would drag the US into a series of

endless wars in the middle-east, and cause so much strain on the US economy

that the US would be crippled or destroyed. Thus, bin Laden sought to pull a

―Reagan‖ on the American people. And here we are, after seven years of war,

mildly exhausted—just like the former USSR. Another coincidence? Or are we

seeing some ―history‖ from which we might learn something?

As in the failing Soviet Union, today‘s American production (rather than

consumption) of civilian goods has been radically diminished over the past

decade by moving our factory jobs to third-world nations. Americans‘ average,

inflation-adjusted standard of living hasn‘t increased since the 1970s. Most of

our apparent standard of living is based on an illusion of credit, unsustainable

borrowing from foreign countries and rising government employment. I.e., if it

weren‘t for the past decade‘s easy credit and overpaid (non-productive)

government jobs, today‘s standard of living might be closer to that of the 1950s

than the 1970s. Do you see lesson here?

On June 22nd, 11 US warships reportedly passed through the Suez Canal—

perhaps en route to a war with Iran. Do you suppose that attacking a third

middle-east country will stimulate our economy or cause a ―sharp economic

decline in the already failing [US] economy‖?

―Thousands of political prisoners and many dissidents were also released.‖





19

The US financial crisis has caused judges to sentence fewer persons to prison

and caused many prisoners to be released early.

―Soviet state archives became more accessible, and some social statistics that

had been kept secret became open for research and publication on sensitive

subjects such as income disparities, crime, suicide, abortion, and infant

mortality.‖

The inequalities of American society are increasingly reported. For example,

Americans are increasingly aware that the entire, nation-wide mortgage and

foreclosure process has been based on systemic and institutionalized fraud.

(People are losing their homes to bankers who have previously sold off the note

or mortgage and thus have no standing to foreclose.) That can‘t be good for

generating the ―confidence‖ required to sustain the economy.

―Relaxation under glasnost resulted in the Communist Party losing its absolute

grip on the media. The freed Russian media began to expose severe social and

economic problems . . . that the Soviet government had long denied and actively

concealed.‖

The US government still maintains great influence over the mainstream media.

However, thanks to the internet, control of the mainstream media is increasingly

irrelevant as real control of the news is no longer in government‘s hands.

―In all, the positive view of Soviet life long presented to the public by the official

media was rapidly fading, and the negative aspects of life in the Soviet Union

were brought into the spotlight. This undermined the faith of the public in the

Soviet system and eroded the Communist Party's social power base, threatening

the identity and integrity of the Soviet Union itself.‖

How many American still believe in the historical image of America? So long as

we jail a higher proportion of our people than any other country, who still

believes in the ―land of the free‖? With bailouts for bankers and lipservice for

the middle and lower classes, who believes in justice? With a government that

refuses to secure our borders and protect America from an invasion by illegal

aliens, who doubts that government is anything more than a pack of treasonous

whores bent on destroying this nation? As American confidence in America

wanes, what power remains for government to marshal our obedience or

support?

―Several Soviet Republics began to resist central control, and increasing

democratization led to a weakening of the central government.‖

Arizona is defying federal authority by trying to defend its own borders from an

invasion by illegal aliens. A majority of state governors are exploring

―nullification‖ strategies to avoid the burdens of Obamacare. Southern

California is threatening to break loose and become part of Mexico. State

secession movement are small but growing.

Just as the USSR began to fragment years before it collapsed, we are starting to

see similar hairline cracks in our former national integrity.

―In elections within the regional assemblies of the USSR, nationalists as well as

radical reformers swept the board.‖

In this country, the calls for restoration of tariffs, border security, and reduction

in our international ―empire‖ are rising. These isolationist tendencies are all

manifestations of growing ―nationalism‖. Is this a coincidence or a lesson?

―The rise of nationalism under freedom of speech soon reawakened simmering

ethnic tensions in various Soviet republics, further discrediting the ideal of a

unified Soviet people.‖







20

Can you say ―illegal aliens‖ boys ‗n girls? Can you say ―Aztlan‖ or ―radical

Islam‖? Have you seen tens of thousands of illegals marching down American

streets under the guise of ―freedom of speech‖? What reason remains to

suppose that illegal aliens will not eventually precipitate violent reaction? How

long before Mosques preaching revolution find themselves bombed? More

coincidence, or lessons?

―By 1990 the Soviet government had lost control over economic conditions.‖

Who believes that the US government still ―controls‖ our economy? The elusive

―recovery‖ that‘s been predicted for most of a year, but despite the best efforts

of all the government‘s horses and all the government‘s men, that recovery

remains unseen. Government‘s economic influence remains significant but the

illusion of ―control‖ over the economy is gone.



―Government spending increased sharply as an increasing number of

unprofitable enterprises required state support and consumer price subsidies to

continue.‖

The Soviet Union also had entities that were ―too big to fail‖. As a result of

supporting those entities, the Soviet Union itself failed.

America also has financial institutions that are ―too big to fail‖. But is the US

government, unlike the former USSR, also ―too big to fail‖?

―After the Soviet Union finally collapsed in 1991, Boris Yeltsin seized power.

Within days of the collapse, Yeltsin implemented a ―shock program‖ which

caused the subsidies to money-losing farms and industries to be cut and price

controls abolished.‖

How long before China stops providing credit to our government? How long

before the US government can no longer subsidize unemployment with

unemployment insurance or make promised So-So Security payments? How

long before our government is forced to implement its own ―shock program‖ to

cut the multitude of government subsidies? (It‘s already happening at the state

level.) Given that roughly one-third of Americans are dependent on gov-co for

their support, what happens when government finally admits that ―what can‘t be

paid, won‘t be paid‖?

The lessons of the history of the former USSR offer us a clue.

―Yeltsin and Russian market economists believed that the dismantling of the

administrative command system in Russia would raise GDP and living

standards by allocating resources more efficiently. They also thought the

collapse would create new production possibilities by eliminating central

planning, substituting a decentralized market system, eliminating huge

macroeconomic and structural distortions through liberalization, and providing

incentives through privatization.‖

In the long run, those economists were probably correct. But, as I‘ve argued

repeatedly, an economy is not a mere ―machine‖ to be fine-tuned and then

turned on or off at will. An economy is a reflection of the morale and

psychology of its people. If they are ―depressed‖ by the failure of their former

system, they will not instantly spring to support whatever new-and-improved

system replaces the old. Once public confidence is lost, it could take a decade

or more for it to be regained.

Here in the USA, public confidence in our ―system‖ is waning. Once lost, that

confidence will not be quickly restored especially in an economy that is

intrinsically weakened from the weight of debts that can never be fully repaid.







21

Barring the onset of some spectacular good fortune, the US (like the former

USSR) is, at least, headed for an economic depression and our own ―lost

decade‖. In the past, we‘ve faced daunting problems and overcome them all.

But this time, we are facing 20 million illegal aliens, a debt burden that can‘t

possibly be paid, an ecological disaster that may be too great to overcome, and

a national government that is working to destroy this nation. We are left to

wonder if we‘ve finally ―gone too far‖ and in the midst of that self-doubt, our

confidence and national morale are reduced. The degree and consequences of

that reduction remain to be seen but they can‘t be good.

Clearly, our current state of affairs is eerily similar to that of the former Soviet

Union just a few years before it collapsed. We are once again reminded that

―Those who cannot learn from history, are doomed to repeat it.‖ Are the

similarities between the Soviet collapse and our own current conditions merely

an interesting coincidence? Or are they evidence of the hard lessons of history

which we can ignore only at our own peril?

I read the ―lessons of history‖ imperfectly. My reading could be wrong. Nevertheless,

my reading tells me that the US economy will slide further into a depression. The

economic and political impact of the coming American depression on the American

people will be more than ―severe‖. It will be shocking. Devastating for some. We

may or may not go through hyper-inflation before we ―officially‖ admit we‘re in a

depression. Whether that depression precipitates a national dissolution remains to be

seen. But one way or another, my reading of ―history‖ says there‘s no coincidence,

here—we are headed for an economic depression and significant political upheaval.

If your reading agrees with mine, you‘d best buckle up.



For the best in pricing and service for gold and silver coins, call Melody at 1-800-375-4188. Be

sure to listen to DGSTC live on Short-wave 7.415Mhz M-F 4:00PM ET, and 3.215 MHz M-F

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CANADA

Retail sales have dropped beyond expectations in April, to post the largest

decline in 16 months, with consumption declining in all sectors according to figures by

Statistics Canada. Canadian retail sales have dropped 2.0% in April, offsetting a 2.1%

increase on March, beyond the 0.4% decline forecasted by market analysts. Excluding

autos and automobile parts, sales of all other products declined 1.2% after a 1.7%

increase in April and against the market consensus, which called for a flat

performance.

The yearly Consumer Price Index released by the Statistics Canada stood at

1.4%, a 0.4% decrease from previous reading at 1.8% a month ago. The inflation

range continue to navigate within an equilibrium range between 1%-3%. With regards

to the monthly CPI, the Canadian economy showed a 0.3% rise in May, matching the







22

same growth seen in April. The data surpasses by 0.3% analysts expectations on a

0% change.



EUROPE

Italian tax police uncovered 22.2 billion euros in undeclared income in the

first five months of the year, the Finance Guard said on Tuesday in its first report for

2010.

The first five months of the year also saw the Finance Guard identify 3.1 billion

euros in unpaid value added tax (VAT) as well as 3,790 tax evaders who never filed

tax declarations and thus hide earnings of 7.9 billion euros.

A crackdown in international tax evasion pinpointed another 4.3 billion euros,

most from people or business, which had false residences abroad r sought to export

capital to foreign tax havens.

The first five months of the year also saw the Finance Guard identify 12,927

people working under the table, 8,937 of whom were illegally in Italy, and 3,477

employers offering them work.

Tuesday's report was issued to mark the 236th anniversary fo the creation of

the Finance Guard.

EU Flash Manufacturing PMI down to 55.6 in Jun vs. 55.8 in May.

EU Flash PMI Services decreases to 55.4 in Jun vs. 56.2 in May.

The Manufacturing Purchasing Managers Index (PMI) released by the

Markit economics indicated that Business conditions in the manufacturing sector

worsened by 0.3 points to 58.1 compared to May's previous reading at 58.4. The

Services PMI offered a similar picture, although the distance with its forecast number

was tighter. The release of a 54.6 assessment in the status of sales and employment

by Germans executives diverged barely 0.1 points from a 54.7 expected. Looking at

last month's data, the new figure was down by 0.2 points.

The European Commission released its monthly consumer confidence

index, showing an upward revision at -17.3 compared to a previous reading of -17.8 in

May. Despite there is no relevant change on the level of consumer confidence, the

data indicates the recent austerity measures implemented in most European

economies may have improved the economic outlook.

German Jun PMI Services declines to 54.6 in June.

German July Gfk Consumer Confidence Index remains steady at 3.5

The EU current account (sa) outstripped worst expectations to succumb at

€-5.1B deficit compared to a €1.5B increase earlier in March. Meanwhile, the EU

current account (nsa) dropped its value to €-6.9B as opposed to €1.3B positive reading

back in March. Both indicators show a worrying decline in the net flow of current

transactions, from a basket of key goods an services flowing in and out the Euro Zone.

In European markets, the data went barely unnoticed as key crosses remain timid to

make major moves against the Euro.

Germany IFO - Expectations down to 102.4 in Jun from 103.7

The difference in value between imported and exported goods released by the

Swiss Federal Customs Administration in May declined surprisingly. Switzerland's

balance of trade surplus stood at 0.82Billion CHF, far from the estimated number at

1.97Billion CHF. The previous April reading settled at 2.02 Billion CHF. The Trade

Balance is a measure of balance amount between import and export. A positive value

shows a trade surplus while a negative value shows a trade deficit. Any variation in the

figures influences the domestic economy. Generally speaking, if a steady demand in

exchange for Swiss exports is seen, that would turn into a positive growth in the trade

balance, and that should be positive for the CHF.





23

Germany's budget savings policy risks destroying the European project

and a collapse of the euro cannot be ruled out, billionaire investor George Soros said

in a newspaper interview released on Wednesday.

"German policy is a danger for Europe, it could destroy the European project,"

he told German weekly Die Zeit.

Soros, who earned $1 billion in 1992 by betting against the British pound,

added that he "could not rule out a collapse of the euro."

"If the Germans don't change their policy, their exit from the currency union

would be helpful for the rest of Europe," he said.

Chancellor AngelaMerkel unveiled plans earlier this month for 80 billion euros

($107 billion) in budget cuts over the next four years -- a package she hopes will bring

Germany's structural deficit within European Union limits by 2013.

"Right now the Germans are dragging their neighbors into deflation, which

threatens a long phase of stagnation. And that leads to nationalism, social unrest and

xenophobia. Democracy itself could be at risk," he said.

"Germany is globally isolated. Why don't they let their salaries rise? That would

help other EU states to pick up."

Merkel on Monday defended her budget cut plans after U.S. President Barack

Obama preached patience in clamping down on public spending. A German

government official said on Tuesday Berlin did not expect to come under pressure at a

G20 summit in Toronto this weekend to provide fresh stimulus measures. [Needless

to say, we disagree, we agree with the cuts, but with them taxes should be lowered not

increased. Germany should get ready to leave the euro and expect major losses on

the bonds of the five PIIGS and accept the fact that Deutsche Bank and Hypo Bank

will collapse.]

Earlier, we pointed out the abysmal results of the most recent 5 Year

Portuguese auction, which came in at a whopping 4.657%, nearly 1% higher than the

last such auction from just a month ago, which then closed at 3.7%. Alas, the

deteriorating funding environment in Portugal is not a fluke - according to the Bank of

Portugal, bank borrowings from the ECB surged in the past month, and doubled from

€17.7 billion to €35.8 billion in May. As Steven Major from HSBC said, quoted by the

FT. "These yields are approaching that magic number of 5 per cent that is likely to be

charged by the European stability fund. If the yields keep going up at this rate, then

they will be paying much more than 5 per cent next month, which is arguably

unsustainable." And confirming the non rose-colored glasses reality was another

banker who said: "These yields are not sustainable. Portugal will have to access the

emergency stability fund if they continue to rise at this rate." Elsewhere, Greece

continues to be bankrupt. As you can see the ECB is doing the exact same thing as

the Fed did with TARP funds. The Fed claims now that they have received 50% of

those funds back, but they fail to tell you how much money the recipients made with

those funds from taxpayers. The ECB is going to be left with the same problem that

the Fed has, and that is it has not changed the insolvency of the countries and the

banks involved.

Bank of England policy maker Andrew Sentance made the first push for

an interest-rate increase in almost two years this month, opening a split among

officials on the strength of the economic recovery.

The Monetary Policy Committee voted 7-1 to keep the benchmark interest rate

at 0.5 percent, according to minutes of the June 10 decision released in London today.

Sentance favored an increase to 0.75 percent, arguing that inflation was proving to be

―resilient‖ after the recession.







24

The budget calls for Britain‘s deepest fiscal retrenchment since the early

years of Margaret Thatcher‘s rule.

The cuts and tax increases, including average budget reductions of 25 percent

for almost all government departments over the next five years, will make Britain a

leader among European countries, including Ireland, Greece and Spain, competing to

show they can slash spending and appease investors worried about surging debt. But

the sharp reductions defy conventional economic wisdom, which holds that

governments should increase spending to stimulate growth when the private sector is

weak.

German and UK austerity measures are strengthening their currencies.

Suddenly, instead of beggar they neighbor, competitive currency debasement to boost

exports, some nations have decided it is more important to arrest debt formation,

which will strengthen their currencies.

Ideal Standard, Villeroy & Boch AG, Sanitec Oyj and 14 other bathroom

fittings companies were fined a total of 622 million euros ($767 million) by the

European Commission for colluding on prices for toilets, tubs and taps.

Ideal Standard, owned by U.S. private equity company Bain Capital LLC,

received the single biggest fine of 326 million euros the commission said in an e-

mailed statement. Villeroy & Boch was fined 71 million euros.

The commission in November 2004 raided the offices of Grohe, American

Standard and other bathroom-products makers in five European countries and in

March 2007 sent official objections to a number of the companies, including Grohe and

American Standard.

―It was a really well organized cartel,‖ Joaquin Almunia, the EU‘s antitrust

commissioner, said in Brussels today. ―I can think of no better illustration for the need

for strong competition enforcement.‖

A week ago we highlighted [1] that Hungary, in addition to liquidity problems,

is now back to experiencing solvency issues, after suffering a bond auction failure.

Today, Hungary had its second failed auction in a row, after it was unable to raise

enough money as had been initially planned. "The state debt management agency

sold 40 billion forint ($174 million) of bills, 10 billion forint less than planned, at a yield

of 5.41 percent compared with 5.35 percent on June 10." The domino effect in Europe

(contrary to the lies by G-Pap) is now in full force and nothing can stop it. Country by

country will now need to be bailed out (for a few months - recall that Greece is

supposedly solvent, yet its CDS are now wider than ever) or be forced to default.

Which brings us to our second point: in a note to clients (attached), Citi's Willem Buiter

goes so far as to say that Europe's current €860 billion bail out facility is insufficient by

more than half, and a new rescue package will promptly need to be created to the tune

of €2 trillion or more. He also slams the ongoing stress tests for the vile, malicious joke

(which just so happens is squarely on Europe's middle class) they are.

In a last ditch attempt to save its country from a sovereign debt

nightmare, Greece has put some of its islands up for sale. A portion of the famous

island of Mykonos is for sale, according to The Guardian. Several other full islands are

for sale at prices ranging from €2 million ($2.46 million) to €15 million ($18.5 million).

The €15 million island is that of Nafsika, which is 1,235 acres in size.

Following the attacks on the Freedom Flotilla in which 9 Turkish citizens

were killed, Turkey has decided to continue severing ties with Israel by canceling the

agreement it signed in 2000 to supply Israel with water for a 20 year period.

The Israel National Newspaper asserted that the annulment of the agreement comes

as a punishment to the Israeli entity for refusing to apologise, conduct an international

investigation or compensate the martyrs ofthe Freedom Flotilla's families.





25

According to the agreement Turkey would sell approximately 1.75 billion cubic

feet of water per year.

The newspaper also maintained that ―The cancelled water project is not the

first sign of Turkey's anger over the Gaza boats incident" adding Turkey has also

recalled its ambassador, and has frozen a plan to supply Israel with natural gas from

Russia using an underwater pipeline‖.



ENGLAND

May BBA Mortgage Approvals up to 36.7K vs. revised 35.9K in April.

The UK announced its new levy yesterday and both France and Germany are

expected to follow suit before next weekend's G20 meeting commences. They are

going to have a lot to discuss. As can be seen in the FT article, many big banks are

surely going to try and move some of their assets to more tax-friendly locations with

Japan and Switzerland being mentioned.



LATIN AMERICA

The results of Argentina‘s debt swap offer exceeded the government‘s

expectations and will help close a chapter on the country‘s record $95 billion default in

2001, Economy Minister Amado Boudou said.

Ecuador faces a ―growth problem‖ and economic expansion won‘t meet the

government‘s 6.8 percent estimate this year because of lower-than-forecast public

spending, central bank President Diego Borja said.



JAPAN

The National Consumer Price Index fell over the year to May 0.9%

compared to a decrease of 1.2% over the year to April and slightly above expectations

around a decrease of 1.1%. National CPI Ex Food, Energy also fell 1.4% for the same

period.

Price figures for Tokyo, over the year to June are, the Consumer Price Index

fell 1.0%, Tokyo CPI ex Food, Energy dropped 1.6% and Tokyo CPI ex Fresh Food is

down 1.2%. Tokyo Consumer Price Index (YoY) increase to -0.9% in Jun from -1.4%,

Japanese economy: CPI -1.2% YoY

May Merchandise Trade Balance Total decreases to ¥324.2B vs ¥740.5B.



AUSTRALIA AND NEW ZEALAND

The balance for the New Zealand's current account resulted into a surplus of

NZD 176 million for the March quarter 2010, Statistics New Zealand said today.

"Rising exports and a fall in the investment income deficit helped reduce New

Zealand's seasonally adjusted current account balance by $1.6 billion in the March

2010 quarter. The deficit is now $1.3 billion." This result exceeded the expectations

that were around a 320 million deficit of current account. This is the first positive result

since Q2 2009.

The Credit Card Spending grew 3.4% in May reaching 229.6 Billion, against

a 0.7% rise the previous month. Domestic cards spending reached 209.7 Billion, while

overseas card spending was around 199 Million. The Credit Card Spending released

by the Reserve Bank of New Zealand measures the total credit card expenditure by

individuals. The level of credit card spending can be used as an indicator of consumer

optimism and is also considered as a measure of economic growth. Normally, a high

reading is positive (or Bullish) for the NZD, while a low reading is negative (or bearish).









26

Australia got its first female prime minister today after the ruling party dumped

Kevin Rudd and installed his deputy as leader.

Julia Gillard will lead the government to elections due within months.

She was unopposed in a vote of the Labor Party‘s 112 lawmakers at a meeting

today, hours after a revolt against Rudd.

―I feel very honored,‘‘ she told reporters.

Rudd did not even stand for reappointment in the vote a signal that he knew his

support had collapsed.

The industry group representing the for-profit superannuation industry has said

it will campaign for an increased goods and services tax.

The Investment and Financial Services Association identified the GST, a

need for population growth, improved regulation and an increased workforce

participation rate among elderly as policy areas a rebranded association would pursue.

Chief executive John Brogden announced the name change from IFSA to

Financial Services Council at a lunch in Sydney today.

"The Financial Services Council will put the GST back on the tax reform

agenda in Australia - it should be increased and/or broadened," Mr Brogden said.

"It is an imperative to replace discretionary and inefficient state taxes."

The value of exports in New Zealand boosted 4.2 billion while imports

reached 3.4 billion resulting into a trade balance surplus of NZD 0.81 billion in May.

"The trade balance was a surplus of $814 million, or 19.4 percent of the value of

exports, in May 2010. This compares with an average May trade surplus of 9.3 percent

of exports for the previous 10 years", Statistics New Zealand said today.



The Conference Board Leading Economic Index (LEI) for Australia

increased 0.1% from a 0.3% increase the previous month. The Conference Board

Coincident Economic Index (CEI) also increased 0.1% in April.

"The Conference Board LEI for Australia increased slightly again in April, but

the strengths among the leading indicators were somewhat less widespread than the

weaknesses this month. Despite the increase in April, the six-month growth in the

leading economic index continued to moderate, to 1.8 percent (a 3.6 percent annual

rate) between October 2009 and April 2010, down from 2.4 percent (a 4.9 percent

annual rate) for the previous six months", the Conference Board said today.



The New Zealand Gross Domestic Product grew by 0.6% in the March

quarter 2010 from a 0.8% increase the previous quarter. The rise succeeds

expectations around a 0.5% increase. Over the year to March 2010, the GDP grew

1.9% slightly above expectations and better than the 0.4% increase over the year to

December 2009.



UNREGISTERED drivers and car thieves are being hunted down by hi-

tech police cars fitted with 360-degree cameras.

The technology is currently being rolled out in NSW and is under trial in South

Australia.

A number of NSW highway patrol vehicles have already been equipped with mobile

automated number plate recognition systems.

Fairfield police officers have used the technology to track down 6750 stolen cars since

December.

The highway patrol cars have also detected 2500 unregistered drivers, 1100 uninsured

vehicles and 240 unlicensed drivers.







27

Fairfield Highway Patrol sergeant Rob Malovic yesterday nabbed three drivers in Surry

Hills during a demonstration of how the vehicle worked.

The technology, based on a similar system in Belgium, can track stationary cars as

well as those in motion up to a speed of 200km/h.

The NSW Government allocated $6 million in this year's Budget to roll-out the

technology in 95 police vehicles over the next two years.

Eight of the camera units were trialled by police across NSW earlier this year.

During the trial, police detected 2914 suspicious vehicles including over 2800

unregistered or uninsured vehicles and more than 173 unlicensed drivers.

A spokesperson for South Australia Police today said it is currently conducting a trial of

the technology, which will finish in September.

"At the trial conclusion, findings will be evaluated and considered," she said.



Hi Bob: Good news.

KRuddy counldn‘t pass the Super Mining TAX.

The ETS (yet) or the Internet filter (yet) but I guess that‘s what Queen Ranga must do.

Oh, a Ranga is a red headed person in Australia. Anyway, tomorrow (24th) should be

interesting. I am hoping they bring down the markets so I can get I little bit more for a

little bit less.

http://wearechangewa.com/

http://stopthefilter.org/

Have a great day. Happy Days,





HEALTH

PREVENTING VISION PROBLEMS

Nutrition for eye health is all over the Internet. Antioxidants, essential fatty acids,

vitamins and herbs are often mentioned. But what do we do with all of that? One entry

said flaxseed will prevent dry eyes and protect your eyes from vision loss. Another

recommendation was to use more omega-3 fatty acids to prevent vision damage from

omega-6 fatty acids. We‘ve all heard about lutein (antioxidant) in vegetables that assist

in eye health. Then there is vitamin A & C, zinc, beta-carotenes and bioflavonoids

(more antioxidants). Don‘t forget the vitamin E to prevent cataracts and macular

degeneration. How does all this work to help our vision? Will it help the masses protect

their vision or can we expect to have over 5 million with low vision, blindness and

various age-related vision problems by the year 2020?



YOUR EYES

The technical genius that went into the creation of your eyes is a miracle. You have a

series of photoreceptors known as cones and rods that help you to see. The eye itself

is small but it contains 6 million cones to read color and bright light and 125 million

rods to read black and white and dim light. Your eyes are sophisticated enough to

handle the glare of a policeman‘s flashlight in your face and can also pick up on the

single photon of dim light from a distant star. Your vision falters when the rods and

cones fail. What causes them to fail? Science says they fail by not having enough

xanthophylls and rhodopsin (pigments). It is kind-of like having the color copier run out

of toner. The most frequent problem seen is not enough yellow lutein (loo-teen) found

in the cones along with low levels of zeaxanthin (zee-uh-san‘-thin) and

mesozeaxanthin. The rods hold a majority of the purple pigments. When we have

pigment loss or damage in any one area it results in eye problems.







28

MACULAR DEGENERATION

A lot has been reported on this particular vision problem. It affects part of the retina,

which controls sharp central vision. There seems to be two forms of this disease; wet

and dry. Dry macular degeneration is the most common involving fatty deposits under

the light-sensing cells inside the retina. The Wet macular degeneration, although less

common, is more serious to vision loss. It involves the growth of new blood vessels

under the retina that leak, distort vision and creates scar tissue. It is suspected that

this develops with a lack of antioxidants and free-radicals damage the light-sensing

retinal cells or inflame retinal cells causing them to leak and atrophy.



AGE-RELATED EYE DISEASE

We assume that as we age we can expect our vision to decline. Nearly 4% (10 million)

of our aging population will experience macular degeneration. Research from the

National Eye Institute report that zinc and antioxidants play a roll and by providing the

body with adequate nutritional support can reduce the risk by 25%. How much are the

experts recommending in these nutrients? Supplementation of 500 mg of vitamin C,

400 mg of vitamin E, 15 mg of beta-carotene, 80 mg of zinc and 2 mg of copper. In

most cases vision loss is a slow progression and cataracts, macular degeneration and

glaucoma can be slowed especially if caused by diabetic neuropathy.



GLAUCOMA

This is the most common cause for blindness and gives the victim no painful

symptoms. This allows the condition to advance just prior to peripheral vision

disappearing signaling the big red flag. You are dealing with a slow death of the optic

nerve, which carries the visual information from the eye to the brain. Just like most eye

problems it is a slow, gradual progression of disease. This means you will have

opportunity to correct it if you are alert. Don‘t wait for your eye physician to just monitor

the eye pressure to see if it gets worse – change your lifestyle right away. You can

take all the eye drops you want to reduce eye pressure or you can exercise. Research

on glaucoma patients showed that by walking briskly for 40 minutes daily will reduce

eye pressure by 2.5 millimeters within three months. Circulation is a major factor in

regards to degeneration disease. Delivery of nutrition and waste removal is essential

for eye health. Foods that also help maintain the vascular integrity of the blood vessels

are foods with anthocyanosides – a super antioxidant. You will find this level of

antioxidants bright colored berries such as bilberry and Goji berries. Scientists are also

looking into these antioxidants to ward off diabetes and cancer.



NUTRITION FOR EYE CONS AND RODS

Research is linking certain nutritional elements to improving the pigments in the eye

cons and rods. Many pigments are made from carotenes (vitamin A), which also help

protect the eye and help it react appropriately to light.



FEAST FOR THE EYES

The foods that will do the most to promote healthy eyesight will contain the nutrition to

produce the pigments the eyes need (xanthophylls and rhodopsin). You‘ll find

xanthophylls in eggs, kale, spinach, turnip greens, collard greens, romaine lettuce,

broccoli, zucchini, peas, corn and Brussels sprouts. You‘ll find rhodopsin in natural

vitamin A found in eggs yokes and (from ―real‖ butter), beef, elderberries, sweet potato

and carrot juice. Herbs rich in rhodopsin (carotene) are spirulina algae, gotu kola,







29

barley grass, peppermint leaf, senna leaf, uva ursi leaf, alfalfa, nettle leaf and

eyebright herb.



THINGS TO AVOID

Apparently the vitamin A you get in cod-liver oil is not going to promote better vision

because it is not from beta-carotene source. Synthetic vitamin A is also inferior and

should be avoided. They don‘t contain the full-spectrum of nutrition found in the natural

food sources listed above.



SHOCK YOUR EYE DOC

Convenience foods and processed food has depleted nutrition in them and over time

our vision will suffer. If you are challenged to eat right in our modern world you can

buffer yourself with organic plant nutrition and protect your vision. You will find the

super antioxidant nutrition in a handy and healthy snack – Goji Berries. You‘ll want the

wild crafted berry from the Tibet Authority is the finest grade you can buy. Call

Apothecary Herbs for 8 oz. dried Goji Berries just $15.50. Their Body Foundation Food

Mix contains several of the foods rich in xanthophylls & rhodopsin and a one-month

supply is just $36.50. Don‘t forget to ask for their Herbal Eyewash with many of the

nutrients your eyes require plus a fast way to restore circulation and balance eye

pressure. Call for your free product catalog 866-229-3663, International 704-875-8010

or order online http://www.thepowerherbs.com. Tune into Herb Talk Live radio and

learn more about herbs with Herbalist Wendy Wilson (more information on show times

and radio archives at http://www.thepowerherbs.com).



SAVE 15% ON NATURAL HERBAL PRODUCTS FROM APOTHECARY HERBS

If sinusitis or bronchitis is a problem, you‘ve got to check out Echinacea Deluxe herb

liquid and the Pneumonia Kit at Apothecary Herbs. At the first sign of symptoms take

this product and avoid an infection. If you already have an infection taking these

products shortens recovery time without antibiotics. Money back guarantee. Call

Apothecary Herbs 866-229-3663 or http://www.thepowerherbs.com.



ADVERTIZE YOUR BUSINESS ON NATIONAL RADIO

Take advantage of the spring discount for radio ads ($299/ mo.) on Wendy‘s show

Herb Talk Live. Go to http://www.thepowerherbs.com and click on ―Advertise Here‖ for

more information or call 866-229-3663 x 3.



THE POWER HERBS e-BOOK. By popular demand The Power Herbs e-book is

available with symptom/herb reference guide, information on organ cleansing and how

to make your own herbal tinctures plus a whole lot more. Go to

http://www.thepowerherbs.com and click on The Power Herb book cover on the right

side of the home page to order. You must have email to order and receive the e-book

download version of The Power Herb book for just $14.99. At this time, we do not offer

this title in hard copy.



RARE ORGANIC GOJI BERRIES – A small percentage of wild crafted organic Goji

Berries full of antioxidants are available form Tibet and Apothecary Herbs has them.

Great for snacks, cereal or salads. Call now and get 8 oz. for just $15.50. Apothecary

Herbs 866-229-3663, International 704-875-8010 http://www.thepowerherbs.com.









30

POWER HERB KIT – contains 13 concentrated herbal liquids for numerous uses and

is a good starter kit and comes in a portable carry case. Call Apothecary Herbs toll free

866-229-3663, International 704-875-8010 or http://www.thepowerherbs.com.



SUMMER PET CARE – Are you planning on boarding your pet this summer? Protect

your pet from kennel cough and other infections with organic Kennel Cough Kit by

Apothecary Herbs. Dog & Cat Immune Booster Formulas plus toxic-free flea and tick

collars, shampoo and spray also at Apothecary Herbs. Call now toll free 866-229-

3663, International 704-875-8010 or http://www.thepowerherbs.com.



Portuguese Sea Salt® - imported from the traditional salterns (a 2000-year tradition)

along the coast of Algarve, Portugal. Salt crystals are harvested by hand and sun-

dried. This is a true artisan sea salt providing richness as well as a smooth and elegant

flavor to food. 1/2 pound ground unrefined Portuguese Sea Salt® just $8.50 at

Apothecary Herbs 866-229-3663, International 704-875-8010

http://www.thepowerherbs.com.



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

www.freezedryguy.com.





US – LETTERS & LINKS

From a Fellow Subscriber: [What they are doing unbeknownst to most

professionals is they are stuffing bad commercial real estate into the SBA and USDA

programs, which have nothing to do with real estate. This is going to solve nothing.

Instead of the lenders taking the losses the losses are being transferred to the US

taxpayer so that the large lenders can stay in business. Another scam just like TARP.



Hi Bob:



I love your forecaster.. here is a little tidbit which might tie into what your

hearing from your other ‗patriot‘ banker friends. (yes, there are white hat

bankers)



Of interest today… OTS (office of Thrift Supervision) is basically going through

many of the regional banks making them ‗downgrade‘ all real estate assets to a

―C‘ level asset…. (as it relates to reserves and credit ratings).

This requires the bank to further reserve additional capital.. and lend less.



This seems to be a NEW push by the Obama administration via OTS to further

curtail ‗conventional‘ lending and push the loans into govt. SBA or USDA

programs.



Same goes for Fanny and Freddie … but I don‘t know the ‗govt.‘ game plan on

that will shape out given its residential.. and I don‘t do stuff like that… this is the

commercial side of lending.

The second wave is definitely coming….. I just saw the wave in my meeting

this afternoon with Credit Administration.



All the Best. Prepare for the worst.







31

From a Fellow Subscriber:

Letter to Kitco:

I AM SORRY..BUT I NEED TO WRITE TO YOU TO ASK….WHY IS JON NADLER

STILL FORECASTING FOR YOU GUYS..IS HE A RELATIVE OF THE OWNER…OR

IS HE ALLOWED 300 STRIKES BEFORE HE IS CALLED OUT..I MEAN HERE YOU

ARE ..A SUPPOSED GOLD PROPONENT COMPANY..AND YOU HAVE A

DRIBBLING FOOL IN CHARGE OF YOUR COMMENTARY…I KNOW IF THIS GUY

WAS WORKING IN MY COMPANY…HE WOULD HAVE RECEIVED A PINK SLIP

AFTER HE WAS WRONG FOR 2 STRAIGHT YEARS…..NOW IT IS HOW MANY

YEARS AND COUNTING…..AT WHAT POINT DO YOU SAY TO

YOURSELVES…HEY THIS GUY IS A MORON..WE NEED TO STOP HAVING HIM

BE THE FACE OF OUR COMPANY….UNLESS OF COURSE KITCO IS A FRONT

FOR THE WALL STREET BANKERS….PLEASE TELL ME IT AINT SO…..



Criminal Investigation of BP Staged Oil Spill Vital [this is one of the most important

links you will ever view]

http://www.youtube.com/watch?v=gNW0lkjTxAQ&feature=player_embedded



Gulf Spill: Disaster? Or a Well Organized Plan

http://theintelhub.com/2010/06/18/gulf-spill-disaster-or-a-well-organized-plan/



Obama Administration Knew About Deepwater Horizon 35,000 Feet Well Bore

http://oilprice.com/Energy/Energy-General/Obama-Administration-Knew-About-

Deepwater-Horizon-35000-Feet-Well-Bore.html



UFO Hunters Thomas Costello case

http://www.youtube.com/watch?v=Tw2kYG76Fjs&feature=email%20flai



Total Destruction of Western World

http://www.youtube.com/watch?v=5I196e-Nnc0&feature=related



BP: Gulf of Mexico is beyond a false flag.... [This is one of the most important links you

will ever read]

http://disc.yourwebapps.com/discussion.cgi?disc=149495;article=130855



High Court Injustice - by Stephen Lendman

http://sjlendman.blogspot.com/2010/06/high-court-injustice.html



Stanley Sporkin: BP's Ombudsman Fixer - by Stephen Lendman

http://sjlendman.blogspot.com/2010/06/stanley-sporkin-bps-ombudsman-fixer.html



Madoff funnelled $10bn to friends before caught

http://www.theaustralian.com.au/business/city-beat/madoff-funnelled-10bn-to-friends-

before-caught/story-fn4xq4zx-1225882598787



The Police State‘s 'Cardinal Rule': The Mundane Must Submit

http://www.lewrockwell.com/grigg/grigg-w153.html



A Brilliant Exposition on the Effectiveness of Nullification

http://www.lewrockwell.com/eddlem/eddlem41.1.html







32

House, Senate leaders finalize details of sweeping financial overhaul

http://www.washingtonpost.com/wp-

dyn/content/article/2010/06/25/AR2010062500675.html?hpid=topnews



Free Sholom Rubashkin!

http://www.lewrockwell.com/anderson/anderson290.html



Too Much Government in the Gulf

http://freerepublic.com/focus/f-news/2538809/posts



Representative Grayson: 85% of Congress funding endless US wars during US

economic crisis

http://www.examiner.com/x-18425-LA-County-Nonpartisan-Examiner~y2010m6d23



Revisiting the Pat Tillman Story, and McChrystal‘s Role

http://fifthdown.blogs.nytimes.com/2010/06/23/revisiting-the-pat-tillman-story-and-

mcchrystals-role/?emc=eta1



Jon Krakauer: McChrystal's Explanation For Pat Tillman Cover-up Is "Preposterous"

http://www.huffingtonpost.com/2009/11/01/jon-krakauer-

mcchrystals_n_341545.html?ref=email_share



Mossad assassination attempt on Erdogan

http://translate.google.com/translate?hl=en&langpair=ar%7Cen&u=http://islammemo.c

c/akhbar/arab/2010/06/23/102441.html&rurl=translate.google.com



The Meaning of "Austerity"

http://www.youtube.com/watch?v=jUmQbf1AyA8&feature=player_embedded



Too Much Government in the Gulf

http://www.lewrockwell.com/paul/paul677.html



Israel funded "terroriost" groups through BCCI

http://truthrocker.livejournal.com/384584.html



Nat Hentoff: Philadelphia man indicted for using right to free speech

https://readingeagle.com/article.aspx?id=228336



Louisiana Police Pull Over Activist at Behest of BP

http://motherjones.com/rights-stuff/2010/06/BP-louisiana-police-stop-activist



Nebraska town bars illegal immigrants from jobs and renting property

http://www.guardian.co.uk/world/2010/jun/22/immigration-nebraska-vote-banish-

illegals



Mexican Gangs Maintain Permanent Lookout Bases in Hills of Arizona

http://www.foxnews.com/us/2010/06/22/mexican-gangs-permanent-lookouts-parkland/



OIL-GATE PLOT DEEPENS IN WHITE HOUSE

http://xelanbonn.com/2742/oil-gate-plot-deepens-in-white-house/







33

Abolish unfair tax break for investment managers

http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/06/24/abo

lish_unfair_tax_break_for_investment_managers/



Could the Right to Rent Stop the Foreclosure Hurricane?

http://www.commondreams.org/headline/2010/06/24-0



Is Al Gore a ―Crazed Sex Poodle?‖

http://www.infowars.com/is-al-gore-a-crazed-sex-poodle/



Israel's sex trade booming

http://www.ynetnews.com/articles/0,7340,L-3062297,00.html



Investors Fly Into Municipal Bonds Like Moths to a Flame

http://globaleconomicanalysis.blogspot.com/2010/06/investors-fly-into-municipal-

bonds-like.html



Reports: IAF Landed at Saudi Base, US Troops near Iran Border

http://www.israelnationalnews.com/News/News.aspx/138231



CIA gives Blackwater firm new $100 million contract





Keiser Report №54: Markets! Finance! Scandal!

http://www.youtube.com/watch?v=1wHHhmj7yXU



FDIC fund's woes deepen

http://wallstreet.blogs.fortune.cnn.com/2010/06/23/fdic-funds-woes-deepen/



High court sides with ex-Enron CEO Skilling

http://www.washingtonpost.com/wp-

dyn/content/article/2010/06/24/AR2010062402720.html?hpid=topnews



Border Drones? Homeland Security To Use Unmanned Surveillance Aircraft Over U.S.

Border

http://www.huffingtonpost.com/2010/06/24/border-drones-homeland-

se_n_623713.html?ref=email_share



The Coming U.S. Real Estate Crash

http://www.blacklistednews.com/news-9415-0-13-13--.html



Occupied Palestine: Good News and Bad - by Stephen Lendman

http://sjlendman.blogspot.com/2010/06/occupied-palestine-good-news-and-bad.html



Mass. wins $102m in subprime loan case







34

http://www.boston.com/news/local/massachusetts/articles/2010/06/25/mass_wins_102

m_in_subprime_loan_case/



NJ Gov Christie Puts A Liberal Reporter In His Place!

http://www.youtube.com/watch?v=CFqUg1IMrAA&NR=1





Coburn, DeMint Discuss Secret Bills Passed in Senate

http://www.youtube.com/watch?v=-KNp4F9ttvY&feature=channel





Ben Bernanke needs fresh monetary blitz as US recover

http://www.telegraph.co.uk/finance/economics/7852945/Ben-Bernanke-needs-fresh-

monetary-blitz-as-US-recovery-falters.html



Tehran declares State of Alert on its Western Border: Iran-US-Israel Drama goes into

Act II

http://globalresearch.ca/index.php?context=va&aid=19908





The Mafia, orgies with Marilyn and the English link to JFK's assassination

http://www.dailymail.co.uk/news/article-1289077/The-Mafia-orgies-Marilyn-English-

link-JFKs-assassination.html?ito=feeds-newsxml#ixzz0rvoygQPJ



The US housing horror story is about to get even worse

http://www.moneyweek.com/investments/property/money-morning-us-property-crash-

02516.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2

BMorning



America's Ticking Debt Bomb: Like Greece, Only Worse - Michael Pento

http://www.youtube.com/watch?v=wQ0Cwigt950



Congressman Rohrabacher: Almost All House Republicans Think Iraq War Illegal,

Immoral

http://www.prisonplanet.com/congressman-rohrabacher-almost-all-house-republicans-

think-iraq-war-illegal-immoral.html





Reduced overtime stymies Border Patrol

http://www.washingtontimes.com/news/2010/jun/23/reduced-overtime-stymies-border-

patrol/



Deutsche Bank: U.S. Financial Conditions Just Collapsed Back To Crisis Levels

http://www.prisonplanet.com/deutsche-bank-u-s-financial-conditions-just-collapsed-

back-to-crisis-levels.html



Punishing Turkey

http://original.antiwar.com/giraldi/2010/06/23/punishing-turkey/



From a Fellow subscriber:

Jay Leno...







35

The economy is so bad that ...

Just a little something to make you laugh

The economy is so bad that . . .

I got a pre-declined credit card in the mail.

African television stations are now showing ' Sponsor an American Child' commercials!

I ordered a burger at McDonald' s and the kid behind the counter asked, "Can you

afford fries with that?"

CEO' s are now playing miniature golf.

Exxon-Mobil laid off 25 Congressmen.

My ATM gave me an IOU!

A stripper was killed when her audience showered her with rolls of pennies while she

danced.

I saw a Mormon polygamist with only one wife.

I bought a toaster oven and my free gift with purchase was a bank.

If the bank returns your check marked "Insufficient Funds," you call them and ask if

they meant you or them.

McDonald' s is selling the 1/4 ouncer.

Angelina Jolie adopted a child from America.

Parents in Beverly Hills fired their nannies and learned their children's names.

My cousin had an exorcism but couldn' t afford to pay for it, and they re-possessed

her!

A truckload of Americans was caught sneaking into Mexico.

Motel Six won' t leave the light on anymore.

A picture is now only worth 200 words.

They renamed Wall Street " Wal-Mart Street."

When Bill and Hillary travel together, they now have to share a room.

The Treasure Island casino in Las Vegas is now managed by Somali pirates.

Congress says they are looking into this Bernard Madoff scandal. Oh Great!! The guy

who made $50 Billion disappear is being investigated by the people who made $1.5

Trillion disappear!

And, finally...

I was so depressed last night thinking about the economy, wars, jobs, my savings,

Social Security, retirement funds, etc., I called the Suicide Hotline. I got a call center in

Pakistan, and when I told them I was suicidal, they got all excited, and asked if I could

drive a truck...



By Dylan Ratigan

They Keep Stealing - Why Keep Paying?



The dire straits of the middle class of America has made it near impossible for our

politicians to keep up the pretense that our current government truly works for the

"people." Between the multiple overt and secretive bailouts, the massive bonuses and

the circular use of our tax money to lobby for these continued handouts, you can no

longer hide from the evidence.



When Senator Durbin said "The banks... frankly own this place," you realize it was not

in jest.



Couple this with recent protections handed by the Supreme Court to corporations to

directly influence elections and it can make things seem hopeless for those not on Wall







36

Street or their chosen politicians. Favored CEOs and now even foreign countries get

all the printed money they need, leaving us paying both our bills and theirs.



And now nearly a quarter of all Americans are currently underwater in their mortgage

because of that steadfast honor.



If you are one of them, chances are you didn't do anything wrong. Almost all of you

were not subprime borrowers or speculators, but merely people buying a house that

they thought they could afford at the time. You were just unlucky in that you bought a

house during a time when an outdated Wall Street and their complicit politicians

decided to use housing to regain the income they lost due to the Schwabs and Etrades

of the internet age.



You didn't cause this mess. They did.



Now you are struggling to make the same payments on this mortgage on your now

overpriced home even in light of a crashing economy and massive deflation, all while

the government does everything in its power to help Wall St. keep the bonuses

coming.



Well, it is becoming time to take matters into your own hands... I suggest that you call

your lender and tell them if they don't lower you mortgage by at least 20%, you are

walking away. And if they don't agree, you need to consider walking away.



It probably doesn't feel right to you.

That is because you probably are a good person. But your mortgage is a business

deal, and it is not immoral to walk away from a business deal unless you went in to the

deal with the intention of defaulting.



But somehow, even though the corporations are pumped to exercise their new rights,

former bankers like Henry Paulson, current ones like Jamie Dimon and -- get this --

now even Fannie Mae execs want to keep you from exercising your rights.



But before you let them (or anyone commenting below) force you into paying that

$500k mortgage on a $300k house, ask them if they'll push Jerry Speyer into

"honoring his obligation" by breaking into his $2 billion personal piggy-bank to keep

paying for Stuyvesant Town?



Or how about asking Hank and Jamie to lecture fellow bailed-out CEO John Mack

about how "you're supposed to meet your obligations, not run from them"? Maybe

make him use some of his $50+ million for those buildings he bought in San

Francisco?



And before shaming and punishing American homeowners, did they nag Steve

Feinberg about helping "teach the American people...not to run away" by writing a

check out of his billion-dollar pocket to cover all the stiffed landlords and vendors at

Mervyn's? After all, at least you aren't single-handedly putting 1,100 employees out of

work when you walk on your mortgage.



As part of the deal for your house, your mortgage holder gets interest payments from

you and they also use the note to your house for their capital reserves. In return, they





37

take the risk of a foreclosure. In many states, you paid extra to have a non-recourse

loan where the lender just gets the house back if you stop paying -- your interest rate

would've been much lower if you were held personally liable like a student loan. But if

you still feel bad, then donate the money saved to charity instead of to their bonuses.

And when someone tries telling you why it is so wrong, here are some answers:



- Yes, it might seem selfish, but you are actually going to help fix our country the right

way, through the use of pure capitalism. There are 3 parties involved in your mortgage

-- the mortgage holders, the servicing bank and you. You probably want to stay in your

house. Most of the people who actually own your mortgage also want you to stay in

your house, preferring a mortgage reduction that you keep paying instead of the total

loss of a foreclosure. But the major banks (BofA, Wells Fargo, JP Morgan, Citi, etc.)

that underwrite and service the loans don't care about either of you. They (with the aid

of their government) just care about hiding their true financial condition for long as

possible so they can continue to bonus themselves outrageously. The credible threat

of you walking away from your mortgage en masse is the only market-based solution

that will force these banks to work with the mortgage holders on your behalf.



- No, you will not "hurt" your neighbors -- certainly not near the scale of the banksters.

Chances are someone just as nice will will move in and (unlike you) pay a fair, non-

inflated price for the house. Encourage your neighbors to fight back against the banks

and ask for their own mortgage reductions as well.



- Yes, it might make getting a loan harder for everyone. Considering the spate 0%

down NINJA loans over the past decade, that probably isn't a bad thing.



- Yes, it might hurt your credit. But with time, people bounce back from having

foreclosures on their record. Search online and then talk to a lawyer about the

repercussions, which vary by state.



- No, the banks won't necessarily pass the losses on to customers. They already make

a lot of money. If costs are passed on to every consumer without banks competing on

price, that's a sign of illegal collusion or a monopoly. Let's fix that instead of just letting

banks ruin our lives. They might, however, not all make $145 billion in bonuses next

year doing something fundamentally so easy that it is an unpaid job in Monopoly.



Meanwhile, our captured government has made it clear that they want to further

reward these banksters because there are clearly better ways to "save" the economy

without rewarding those most responsible for the damage.



Instead of claw backs for the past theft and strong financial reform for the future, they

choose to cover-up the gross misuse of our tax money, making our country worse by

helping the criminals on the backs of the most honest.



But thankfully, in this country we still have the tools to fight back and regain our

country. Our vote, our voice, our laws and what we choose to do with every penny we

have that doesn't go to taxes are the benefits of our hard-fought freedom, and in this

battle we must use them all to fight back. It's time for the citizens to once again own

this place.



GOLD – LINKS





38

A LOOK AT GIBSON'S PARADOX AND GOLD

http://richterreport.com/content.php?id=328&menu_id=15&menu_item_id=0



Architecture for a New World Financial System

http://news.goldseek.com/GoldSeek/1277238707.php



In which phase of the gold bull market are we?

http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=106818&sn=D

etail&pid=92730



World's biggest gold coin fetches over 3 million euros

http://uk.news.yahoo.com/22/20100625/ten-uk-austria-gold-coin-5fdf947.html



Now China sources newly mined gold from the USA

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=106850&sn=Detail&

pid=33



CANADA – LINKS



Gordon Campbell slams CSIS director over foreign-infiltration allegations

http://www.globaltvbc.com/world/Premier+slams+CSIS+over+foreign+infiltration+alleg

ations/3191469/story.html



Gordon Campbell no longer a recall target: Vander Zalm

http://www.globaltvbc.com/Gordon+Campbell+longer+recall+target/3191355/story.html





EUROPE – LETTERS & LINKS



From a Fellow Subscriber: [We saw the bill, and that is what it says. We don‘t know

why this has been stamped on the bill, but we do know that for years Germans have

refused to accept euros printed in other countries. They would only accept bills printed

in Germany. This may be an extension of that effort.]

Hello Bob,

I can't believe my eyes! I just went to the bank to pick up some funds and on

the 50€ Currencies there was a stamp on it on the back side written in dark

letters

"CHANGE" and then the Letter D for Germany!!!

Regards,



GORDON DUFF: ISRAELI AMBASSADOR ADMITS ROGUE OPERATIONS, SPYING

AND WORSE

http://www.veteranstoday.com/2010/06/22/gordon-duff-israeli-ambassador-admits-

rogue-operations-spying-and-worse/



French go on strike over plan to raise retirement age

http://www.boston.com/news/world/europe/articles/2010/06/25/french_go_on_strike_o

ver_plan_to_raise_retirement_age/



ENGLAND – LINKS







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Britain becomes latest to slash budget, freeze salaries

http://www.washingtonpost.com/wp-

dyn/content/article/2010/06/22/AR2010062202306.html?wpisrc=nl_cuzhead



Budget 2010: From shop floor to trading floor: the effect of VAT rise

http://www.telegraph.co.uk/finance/financetopics/budget/7850167/Budget-2010-From-

shop-floor-to-trading-floor-the-effect-of-VAT-rise.html



ASIA – LINKS

Asian millionaires' wealth rises by a third

http://www.theage.com.au/business/asian-millionaires-wealth-rises-by-a-third-

20100623-yxy2.html



CHINA

China's chief auditor warns mounting local government debt a risk to economy

http://www.telegraph.co.uk/finance/china-business/7851504/Chinas-chief-auditor-

warns-mounting-local-government-debt-a-risk-to-economy.html







AUSTRALIA – LINKS



Sonray Capital Markets collapse freezes accounts of 3000 clients

http://www.theaustralian.com.au/business/industry-sectors/broker-collapse-freezes-

accounts-of-3000-clients/story-e6frg96f-1225883309728



Julia Gillard talks to Barack Obama ahead of first cabinet meeting

http://www.theaustralian.com.au/politics/julia-gillard-talks-to-barack-obama-ahead-of-

first-cabinet-meeting/story-e6frgczf-1225884171679



HEALTH – LINKS

Genetically Modified Crops and the Contamination of America's Food Chain

US Supreme Court Lifts Partial Ban on Monsanto's GM Alfalfa

http://globalresearch.ca/index.php?context=va&aid=19860



Dr. Robert Beck‘s cure for AIDS and other infectious diseases:

http://cancertutor.com/AIDS/Bob-Beck.htm



NEXT ISSUE

Wednesday 6/30/10









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