PROPHECY REVEAL AMERICAN PENTAGRAM OF BLOOD FINISHED SOON

Again, Judge for yourselves.

The War on Terror Debunked, America Tries to Raise a Dead Enemy from the Grave

The war on terror has been thoroughly debunked (see this and this).

So the military-industrial complex is trying to find another enemy sufficiently scary to justify trillions of dollars in defense spending and the continuation of the perpetual state of war.

Our former enemy – the Soviet Union – has now broken up. Russia’s economy pales in comparison to that of the former USSR. Russia is run more by billionaires and the Russian Mob than by the Communists. And Russia harbors very few imperial ambitions.

But that isn’t stopping people like Dick Cheney from trying to raise the “Red menace” from the dustbin of history.

Remember – in the 70’s – Cheney was instrumental in generating fake intelligence exaggerating the Soviet threat in order to undermine coexistence between the U.S. and Soviet Union, which conveniently justified huge amounts of cold war spending. See also this article.

Indeed, Cheney and Don Rumsfeld were probably more responsible than anyone else for the original Red scare and Cold War.

With the air quickly escaping from the whole “War on Terror” fiasco, Cheney and the boys are trying a re-run of their tried-and-true fear tactics regarding the Ruskies, even though the “Soviet menace” is dead and buried.

Remember that, according to former British Defense Secretary, Cheney called the shots in the Iraq war. And a top official at the State Department stated there was a secret “cabal” involving Cheney, and that Cheney and a handful of others had hijacked the country’s foreign policy.

URL: http://georgewashington2.blogspot.com/2008/08/war-on-terror-debunked-america-tries-to.html

Biggest Newspaper In Holland Says Dutch Intelligence Helped Prepare Imminent Attack On Iran

De Telegraaf front page says sources inside AVID helped CIA map air attack

Steve Watson
Infowars.net
Friday, August 29, 2008

The biggest Newspaper in the Netherlands today devotes its front page to news that the Dutch intelligence agency has helped the CIA prepare for an air attack on Iran which it now believes is imminent.

AVID, Holland’s military intelligence service, has pulled back from operations it was carrying out inside Iran as it believes an American led attack will go ahead within weeks according to De Telegraaf’s sources.

The headline reads:

“AIVD is calling back spy because of US plans
ATTACK ON IRAN IMMINENT”

De Telegraaf reports that the decision has already been made by the U.S.
to attack Iran using unmanned aircraft. Potential targets are said to be nuclear facilities and military installations. The latter have been mapped by the CIA with the help of the Dutch secret service.

A portion of the article reads:

Good sources have declared to the Telegraaf that the AIVD has been operating in Iran for the last few years with the purpose of the infiltration and sabotage of the weapons industry of the Iranian republic.

The operations are said to have been “very successful” but have recently been put to a halt because of american plans for an air attack. Information regarding the AIVD operation has been shared with the CIA in recent years according to the sources.

Iran is probably working towards an atomic bomb and refuses to comply to western demands to stop enriching uranium. In june Israeli vice president Shaul Mofaz made the statement that an Israeli attack is inevitable if Iran continues its quest for atomic weapons.

The full article is online here.

A roughly translated version can also be found here.

Holland is a staunch ally of the U.S. government in the “war on terror”. Dutch troops have served on the front lines in both the Afghanistan and Iraq wars.

Buffett spotlights nation’s debt crisis

Billionaire investor teams up with Wall Street luminaries to focus attention on America’s ballooning budget deficit.

OMAHA, Neb. (AP) — The catastrophe looming in the documentary “I.O.U.S.A.” isn’t romantic like the doomed young love in “Titanic,” but billionaires Warren Buffett and Pete Peterson warn it could break many more hearts.

The disaster they warn of could be bigger than any we’ve ever seen – bigger than an iceberg, bigger even than the current mortgage crisis.

If the U.S. doesn’t do something, and fast, to tame the federal government’s debts – now more than $50 trillion – the two Nebraska natives warn we will saddle coming generations with economic problems that will make this year’s financial turbulence look like a trip to the debt counselor’s office.

Premiering Thursday at 358 theaters nationwide, “I.O.U.S.A.” is part of Peterson’s campaign to give the ballooning debt a central role in the presidential campaign.

A live panel discussion after the first showings – tape delayed for moviegoers in the West – will include Buffett, Peterson and other experts. Despite ticket prices much higher than for a feature, at $11.50 to $20, Thursday’s showings had sold out at some theaters by Wednesday, organizers said.

The two prominent investors don’t share a political philosophy: Peterson endorses Republican John McCain for president while Buffett favors Democrat Barack Obama. But they say the nation’s budget and trade deficits aren’t really partisan issues.

“Our situation is a lot worse than advertised, and we need to start making some tough choices if we want our future to be better than our past,” former U.S. Comptroller David Walker, one of the movie’s stars, said Wednesday.

Best ( Fast Downloads ) Documentaries Link Ever

The original page ( www.nw0.info ) which had all those documentaries has been taken of the Internet, therefore i made a compilation based on the list there was on the site

I also added some documentaries which i thought were important, this is the improved compilation, i hope you will enjoy it:  

http://commendatori.wordpress.com/videos/

 

Megiddo The March to Armageddon

Megiddo I

“There is no salvation for civilization, or even the human race, other than the creation of a world government.” – Albert Einstein Megiddo I: The March to Armageddon explores Bible prophecy concerning the last day empire prophesied in the Old and New Testaments. This documentary features never-before-seen interviews with some of the leading researchers on the subject. Megiddo I reveals how God uses prophecy to prove His existence and to separate Himself from all others that claim His authority. This informative documentary also chronicles startling quotes from powerful men of history who have spoken of the need for world government to further the cause of peace. But what does the Bible say about “world peace” and its consequence for mankind? Seen through the lens of prophecy, What is the significance of World War I and II? Were these birth pangs to prepare the nations for World War III and Armageddon? “…the end of all things is at hand…” – 1 Peter 4:7

Megiddo II

The Lie of the Serpent is the second part of the controversial Meggiddo series, which next focuses on the highly influential New Age movement. But is the New Age really new? Or does it represent the ancient doctrine taught by the serpent to Eve in the Garden of Eden? Excellent documentary.

Part 1 The New Age

Part 2 The New Age

Part 3 The New Age

Kites could provide electricity for 100,000 homes

High-flying kites tethered to generators could supply as much as 100 megawatts of electricity, enough to power 100,000 homes, according to researchers from the Delft University of Technology in The Netherlands.

The scientists have recently demonstrated that flying a single 10-square-meter kite could produce 10 kilowatts of power, which could supply electricity for about 10 homes.

In their next experiment, the researchers plan to test a 50-kilowatt version, called Laddermill. Eventually, their goal is to build a multi-kite system that could generate a full 100 megawatts.

As project leader and professor of sustainable engineering Wubbo Ockels explains, kites generate power by pulling on their strings that are attached to generators on the ground. After reaching their maximum height, the kites are reeled back down to repeat the process.

Electricity produced by kites in the wind could be inexpensive, too. The researchers predict prices to be comparable with generating electricity using coal power, and half that of using wind turbines.

One advantage of kites is their potential height. Commercial windmills generally reach heights of around 80 meters, where the average wind speed is about 5 meters per second. At higher altitudes, such as 800 meters, the average wind speed is about 7 meters per second. Because the amount of power available from the wind is related to the cube of its speed, blades at higher altitudes could generate up to five times the amount of electricity as at lower altitudes. High-altitude wind is also generally more reliable than ground-level wind.

While building an 800-meter-tall windmill would be impractical, a kite can easily reach that height, and take advantage of the higher wind speeds. The Dutch scientists note that a high-speed jet stream makes countries such as the UK, The Netherlands, Ireland, and Denmark especially good locations for kites.

Using computer models, researchers can determine how to configure kites so that they get the most out of the wind. Ockels´ system used figure-eight flying patterns developed by Allister Furey of the University of Sussex, an arrangement that increases the speed of the air flowing over the kites. He´s also investigating a yo-yo configuration, where one kites goes up as another falls from the sky like a glider.

“Pretty much anywhere in the UK you could run a kite plant economically, but you couldn´t run a wind turbine economically,” said Furey.

Several other scientists are investigating the use of kites to harness energy from the wind – which some researchers estimate provides more than 100 times the amount required to power the entire planet. In 2007, Google´s philanthropic arm invested about $10 million in a US kite company called Makani. An Italian company called Kitegen has a multi-kite scheme that could generate a gigawatt of power, as much as a standard coal plant.

Disney: Satanism, Spiritualism Inc.

Judge for yourself

106 mpg ‘air car’ creates buzz, questions

(CNN) — You’ve heard of hybrids, electric cars and vehicles that can run on vegetable oil. But of all the contenders in the quest to produce the ultimate fuel-efficient car, this could be the first one to let you say, “Fill it up with air.”

hat’s the idea behind the compressed air car, a vehicle its backers say could achieve a fuel economy of 106 miles per gallon.

Plenty of skepticism exists, but with many Americans trying to escape sticker shock at the gas pump, the concept is generating buzz.

The technology has been the focus of MDI, a European company founded in 1991 by a French inventor and former race car engineer.

New York-based Zero Pollution Motors is the first firm to obtain a license from MDI to produce the cars in the United States, pledging to deliver the first models in 2010 at a price tag of less than $18,000.

The concept is similar to how a locomotive works, except that compressed air — not steam — moves the engine’s pistons, said Shiva Vencat, vice president of MDI and CEO of Zero Pollution Motors.

Gas still plays a role

The six-seater planned for the U.S. market would be able to reach speeds of more than 90 mph and have a range of more than 800 miles thanks to a dual energy engine, Vencat said.

The design calls for one or more tanks of compressed air under the car’s floor, as well as a separate tank holding at least 8 gallons of fuel.

Whether the engine uses just air or both air and fuel would depend on how fast the car is going. It would run purely on compressed air when driven at speeds less than 35 mph, Vencat said.

Since the car could only go a short distance when using just air, fuel is needed to get the full range, he explained.

“Above 35 mph, there is an external combustion system which is basically a heater that uses a little bit of gasoline or biofuel or ethanol or vegetable oil that will heat the air,” Vencat said.

“Heating the air increases its volume, and by increasing its volume it increases [the car's] range. That’s why with one gallon of gasoline or its equivalent we are able to make over 100 mpg.”

Vencat said an on-board compressor would refill the air tank while the car is running, or owners could refill it by plugging it into a power outlet for four hours.

Is it for real?

Experts aren’t sure Americans will be zipping around in air cars and getting 106 mpg, or more than twice the fuel economy of hybrid-electric vehicles such as the Toyota Prius.

It is possible to power a car with compressed air, but the mileage claim is “at the edge of possibility,” said John Callister, director of the Harvey Kinzelberg Entrepreneurship in Engineering program at Cornell University’s College of Engineering.

Dutch town tests ‘air-purifying’ concrete

Experts from the University of Twente developed and tested the concrete paving stones which contain a titanium dioxide-based additive.

In laboratory conditions, the additive — under the influence of sunlight — binds the nitrogen oxide particles emitted by car exhausts and turns them into harmless nitrates.

“With one rain shower everything is washed clean,” the institution said in a statement.

Nitrogen oxides, produced by industry and motor vehicles, are among the main air pollutants that lead to acid rain and smog.

Developed from a Japanese invention, the bricks are now being put to the test in Hengelo in the eastern Dutch province of Overijssel.

One half of a road under reconstruction is being paved with the new, green bricks, and the other half with the ordinary variety.

“By measuring the air quality in both areas, we will be able to show the efficacy of the bricks,” said the statement.

Apart for their ability to clean the air and repel dirt from the road surface, there was no other difference between these new bricks and the old ones, the university said.

“The province of Overijssel sees an opportunity in these bricks to improve air quality,” it added. “This trial project is of great significance for the entire country.”

The road was expected to be finished by year-end.

The first air measurements will be taken early next year, with the first results expected next summer.

Nouriel Roubini – “a 12 to 18 month recession”

Part 1

Part 2

Part 3

Hundreds of banks will fail, Roubini tells Barron’s

NEW YORK, Aug 3 (Reuters) – The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron’s in Sunday’s edition.

Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said — at least $1 trillion and more likely $2 trillion.

The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron’s reported.

He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too.

U.S. consumers, meanwhile, are “shopped out” and saving less, while the Federal Reserve’s performance in handling the crisis has been poor, Roubini said, because it failed to see that the problem extended beyond subprime mortgage debt.

Now, Roubini told Barron’s, the government is overregulating, bailing out troubled participants and intervening in every market.

“The regulators should investigate themselves for bailing out Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the creditors of Bear Stearns and the financial system with new lending facilities. They have swapped U.S. Treasury bonds for toxic securities,” he told Barron’s. “It is privatizing the gains and profits, and socializing the losses as usual. This is socialism for Wall Street and the rich.”

He said that sometimes it is necessary to use public money to rescue institutions, but in a way that does not bail out the people who made the mistakes. “In each one of these episodes, the government bailed out the shareholders, the bondholders, and to some degree, management,” Roubini told Barron’s.

As for the banks that will go bankrupt, they will include community banks that finance homes, stores, downtown areas, commercial real estate and other mainstays of U.S. towns and cities, Roubini said.

“Of three dozen or so medium-sized regional banks, a good third are in distress,” he told Barron’s, saying half of the group could go bankrupt. Some big banks could wind up insolvent, he added, but said they might be deemed too big to fail.

Nouriel stressed that he is “quite bullish” about the state of the global economy and that he is positive about the medium and long term.

Article URL: http://www.reuters.com/article/newsOne/idUSN0344130720080803

Hydrogen Technology Applications, Inc.

Who We Are

Hydrogen Technology Applications, Inc. is a research and development company on our way to changing the world without having to change the world’s infrastructure. Our Aquygen™ is a novel gas produced inexpensively from water. It is a superior replacement for oxyacetylene in most brazing, soldering, and cutting applications but can be used with standard equipment. Used as a supplement to automotive fuels, Aquygen™ increases fuel economy while decreasing emissions, dramatically improving the efficiency and cleanliness of transportation within the existing fueling infrastructure.

Why We Are Here

“I always believed that water held the solution to the world’s energy problems. I have made it my life’s work and our company’s mission to solve that problem.”

– Dennis Klein, Founder & Chairman Emeritus shown with Tony Klein, left, and the H₂O 1500 Aquygen™ Gas Generator

Revealed: How health chiefs plan to put fluoride in half our water supply to “halt tooth decay”

Nearly half our drinking water could have fluoride added to it under a ’secret’ Government plan.

Dental health chiefs want to add the chemical to 40 per cent of England’s water supply to combat high levels of tooth decay.

But critics said the ‘mass medication’ of water without the population’s consent was an invasion of their human rights.

They also accused dentists of being in denial about the dangers of fluoride, which has been linked to diseases including brittle bones and cancer.

Dental experts, however, said there is overwhelming evidence that adding fluoride to water helps reduce tooth decay, with children the biggest beneficiaries.

Fluoride, which is tasteless and odourless, occurs naturally but is also found in drinking water supplies  -  usually at levels too low to affect dental health.

At present, only 10 per cent of tap water has fluoride added  -  in the West Midlands and the North East.

Although plans to add the chemical to more of the nation’s water supply were first announced by Health Secretary Alan Johnson in February, the scale of the Government’s intentions has remained under wraps until now. 

In an interview with Dental Tribune magazine, chief dental officer Barry Cockcroft said: ‘We only need to fluoridate 40 per cent of the country. Greater Manchester is currently considering it and there are many other areas that are looking at it.’

But he dismissed the ‘ scaremongering that says it causes cancer’.

‘A total of 170million people in America drink fluoridated water and it is the most litigious country in the world,’ he said.

But Peter Mansfield, a Lincolnshire-based GP and expert on the effects of fluoride, said: ‘It does work a little bit, but nothing like as much as dentists say it does, and it causes as much damage as it does good.

‘You are robbing Peter to pay Paul. It is a very flawed science.’

Caroline Lucas, of the Green Party, said the European Convention on Human Rights states individuals have the right not to be medicated without their consent.

The party is taking legal advice on a possible challenge.

She said: ‘Putting fluoride in everyone’s water amounts to mass medication, which would contravene human rights and medical ethics.’

The Government,which has earmarked £42million to pay for the scheme, has agreed to pick up the costs of any legal claims.

The Department of Health said water companies would only start fluoridating water following consultation with local people.

Scientific Study Finds Fluoride Horror Stories Factual

Industrial by-product consumed by millions of Americans lowers IQ, causes cancer

The establishment media will have to find a new tactic with which to ridicule those who oppose the fluoridation of water after a major new Scientific American report concluded that “Scientific attitudes toward fluoridation may be starting to shift” as new evidence emerges of the poison’s link to disorders affecting teeth, bones, the brain and the thyroid gland, as well as lowering IQ.

“Today almost 60 percent of the U.S. population drinks fluoridated water, including residents of 46 of the nation’s 50 largest cities,” reports Scientific American’s Dan Fagin.

Fagin is an award-wining environmental reporter and Director of New York University’s Science, Health and Environmental Reporting Program.

“Outside the U.S., fluoridation has spread to Canada, the U.K., Australia, New Zealand and a few other countries. Critics of the practice have generally been dismissed as gadflies or zealots by mainstream researchers and public health agencies in those countries as well as the U.S. (In other nations, however, water fluoridation is rare and controversial.)”

Indeed, the zeitgeist for scoffing at those who spoke of the dangers of mass medicating the public against their will with fluoride was the deranged and paranoid character of General Ripper in the hit 1964 Peter Selllers movie Dr. Strangelove.

But that stereotype is quickly fading as serious scientific research uncovers proof that all the horror stories about sodium fluoride told down the decades are essentially true.

The Scientific American study “Concluded that fluoride can subtly alter endocrine function, especially in the thyroid — the gland that produces hormones regulating growth and metabolism.”

The report also notes that “a series of epidemiological studies in China have associated high fluoride exposures with lower IQ.”

“Epidemiological studies and tests on lab animals suggest that high fluoride exposure increases the risk of bone fracture, especially in vulnerable populations such as the elderly and diabetics,” writes Fagin.

Fagin interviewed Steven Levy, director of the Iowa Fluoride Study which tracked about 700 Iowa children for sixteen years. Nine-year-old “Iowa children who lived in communities where the water was fluoridated were 50 percent more likely to have mild fluorosis… than [nine-year-old] children living in nonfluoridated areas of the state,” writes Fagin.

The study adds to a growing literature of shocking scientific studies proving fluoride’s link with all manner of health defects, even as governments in the west, including recently the UK, make plans to mass medicate the population against their will with this deadly toxin.

In 2005, a study conducted at the Harvard School of Dental Health found that fluoride in tap water directly contributes to causing bone cancer in young boys.

Airport threat to your laptop

Airport threat to your laptop: U.S. also gets power to seize iPods and mobiles in new anti-terror measure

Travellers to the U.S. could have their laptops and other electronic devices seized at the airport under new anti-terror measures.

Federal agents have been granted powers to take such devices and hold them as long as they like.

The Department of Homeland Security said the policies applied to anyone entering the country by land, sea or air, including U.S. citizens.

The extent of the new powers, which have been secretly in place for some time, was revealed yesterday in the Washington Post.

They cover hard drives, flash drives, mobile phones, iPods, pagers, beepers, and video and audio tapes, as well as books, pamphlets and other written materials, the report said.

Federal agents must take measures to protect business information and lawyer-client privileged material.

Copies of data must be destroyed when a review is completed and no probable cause exists to keep the information.

But agents are allowed to share the contents of seized computers with other agencies and private entities for data decryption and ‘other reasons’.

Copies sent to non-federal entities must be returned to the DHS, but there is no limitation on authorities keeping written notes or reports about the materials.

The new powers came to light under pressure from civil liberties and business travel groups after increasing numbers of travellers reported that they had laptops, phones and other digital devices removed and examined.

The development was described as ‘truly alarming’ by Wisconsin Democrat Senator-Russell Feingold, who is investigating U.S. border search practices.

He said he intends to introduce legislation that would require reasonable suspicion for border searches, as well as prohibit profiling on race, religion or national origin.

DHS officials insisted the policies were reasonable and necessary to prevent terrorism.

They said they had been disclosed only because of public interest.

But Greg Nojeim, senior counsel at the Center for Democracy and Technology, said it was alarming that the policies ‘don’t establish any criteria for whose computer can be searched.’

He added: ‘They are saying that they can rifle through all the information contained in a traveller’s laptop without having even a smidgeon of evidence that the traveller is breaking the law.’

Homeland Security Secretary Michael Chertoff said last month that ‘the most dangerous contraband is often contained in laptop computers or other electronic devices’.

Searches had uncovered ‘violent jihadist materials’ as well as images of child pornography.

In an article for U.S.A Today, Chertoff wrote that ‘as a practical matter, travellers only go to secondary [a more thorough examination] when there is some level of suspicion.’

He said legislation setting a particular standard for searches would have a ‘dangerous, chilling effect’ because it could contradict assessments by officers, often made in a split second.

In April, the U.S. Court of Appeals in San Francisco upheld the government’s power to conduct searches of an international traveller’s laptop without suspicion of wrongdoing.

The Rockefeller File

The Rockefeller File

by Gary Allen

Table of Contents

1 – The Multi-Billion Dollar Myth

2 – The Saintly Sinner

3 – The Family That Preys Together

4 – Profit x Philanthropy = Power

5 – Yes, Virginia, There Is An Establishment

6 – The Rockefeller Mediacracy

7 – Surrender By Consent

8 – Surrender By Conquest

9 – Building The Big Red Machine

10 – The People Planners

11 – The Great Energy Swindle

12 – The Eternal Power Behind The Throne

13 – Was Nixon Watergated?

Epilogue

The Real State of the US Economy – Henry Paulson has lost the control over US finance

When Henry Paulson agreed to leave his job as chairman of the powerful Wall Street investment bank, Goldman Sachs to go to Washington as Treasury Secretary in 2006 he demanded extraordinary powers as de facto economic czar. He got it. Paulson is also head of the President’s Working Group on Financial Markets — the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Working Group is the financial world’s equivalent of the Pentagon war room. Paulson, not Fed chairman Bernanke, is the person running the Administration’s crisis management. And his recent actions indicate he has lost control as the snowballing problems from the semi-government mortgage companies Freddie Mac and Fannie Mae to the collapse of the multi-trillion dollar market in Asset Backed Securities (ABS) to the real economy are compounding into the worst crisis since the 1930’s Great Depression.

‘The US banking system is sound…’

In an eerie echo of President Herbert Hoover in 1930, during a Presidential campaign against Roosevelt, following the stock market crash and collapse of numerous smaller banks, Paulson recently appeared on national TV to declare “our banking system is a safe and sound one.” He added that the list of “troubled” banks “is a very manageable situation.” In fact what he did not say was that the US bank deposit insurance fund, the Federal Deposit Insurance Corporation (FDIC) has a list of problem banks that numbers 90. Not included on that list are banks such as Citigroup, until recently the largest bank in the world.

The statement is hardly reassuring. The California savings bank, IndyMac Bank which was declared insolvent a month ago was not on the FDIC list a week before it collapsed. The reality is the crisis created by “securitizing” millions of home mortgages into new financial instruments and selling the packages to pension funds and investors is unfolding like a snowball rolling down the Swiss Alps.

Indication of the lack of control is the statement just weeks ago by Paulson that “financial institutions must be allowed to fail.” That was two weeks before Paulson went to Congress to ask for “Congressional authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac.” As I noted in my recent piece, Financial Tsunami: The Next Big Wave is Breaking: Fannie Mae Freddie Mac and US Mortgage Debt , those two private companies insured some $6 trillion worth of home mortgages, half the entire US mortgage debt. Paulson defended the request by calling Freddie Mac and Fannie Mae “the only functioning part of the home loan market.”

That comes back to the statement about a “sound banking system”. Can we have a sound banking system where the only functioning part is literally insolvent—its debts greater than its assets?

An Acid-Tongued Maverick Keeps Bankers on the Edge of Their Seats

Lutz, Fla., is on no one’s list of world financial capitals. But from his home there on Tiffany Lane, 1,100 miles from Wall Street, Richard X. Bove can rattle the mighty of American banking.

Lately some of his pronouncements have caused a few headaches for the nation’s banks — and for Mr. Bove, one of the most outspoken stock analysts tracking them.

After a big bank in California collapsed in mid-July, Mr. Bove (pronounced Bo-VAY) rushed out a report with a provocative title: “Who’s Next?” What followed was a list of 107 banks, ranked according to two measures of their financial strength. The share prices of some of the banks promptly collapsed.

But No. 10 on the first list, BankAtlantic Bancorp of Fort Lauderdale, fired back. The bank said Mr. Bove’s numbers were wrong — and sued him and his employer, a small brokerage firm called Ladenburg Thalmann, for defamation. Mr. Bove would not comment on the suit. A lawyer for BankAtlantic said the bank planned to ask the judge to expedite the case.

The dispute over Mr. Bove’s call is a big switch from the usual charge leveled at analysts, which is that most of them are not bearish enough. After the dot-com bubble burst in 2000, Wall Street was criticized for promoting stocks to win lucrative investment-banking work. Even now, amid the housing meltdown and gloomy talk of a recession, “sell” recommendations are relatively rare.

But controversy is nothing new for Mr. Bove, 67, who has analyzed banking stocks for 26 years and become a familiar face on business news television. He has been fired twice during his career, once, from Dean Witter Reynolds, for advising investors to buy every bank stock they could (he was right — after he was fired, bank stocks soared). By his own account, his worst call was telling people to dump banks in the 1990s, during the Bosnian war, only to watch the shares rise.

THE MATRIX – film analysis by Rob Ager

Part 1

Part 2

Article URL: http://www.collativelearning.com/the%20matrix%20review.html

Lou Dobbs, The Last American Hero

The NAFTA Superhighway

North American Union

North American Union by 2010

The Amero – North American Currency

North American Union will end the United States

CFR sets up North American Union BREAKING NEWS

The Shock Doctrine

In THE SHOCK DOCTRINE, Naomi Klein explodes the myth that the global free market triumphed democratically. Exposing the thinking, the money trail and the puppet strings behind the world-changing crises and wars of the last four decades, The Shock Doctrine is the gripping story of how America’s “free market” policies have come to dominate the world– through the exploitation of disaster-shocked people and countries.

At the most chaotic juncture in Iraq’s civil war, a new law is unveiled that would allow Shell and BP to claim the country’s vast oil reserves…. Immediately following September 11, the Bush Administration quietly out-sources the running of the “War on Terror” to Halliburton and Blackwater…. After a tsunami wipes out the coasts of Southeast Asia, the pristine beaches are auctioned off to tourist resorts…. New Orleans’s residents, scattered from Hurricane Katrina, discover that their public housing, hospitals and schools will never be reopened…. These events are examples of “the shock doctrine”: using the public’s disorientation following massive collective shocks – wars, terrorist attacks, or natural disasters — to achieve control by imposing economic shock therapy. Sometimes, when the first two shocks don’t succeed in wiping out resistance, a third shock is employed: the electrode in the prison cell or the Taser gun on the streets.

Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine vividly shows how disaster capitalism – the rapid-fire corporate reengineering of societies still reeling from shock – did not begin with September 11, 2001. The book traces its origins back fifty years, to the University of Chicago under Milton Friedman, which produced many of the leading neo-conservative and neo-liberal thinkers whose influence is still profound in Washington today. New, surprising connections are drawn between economic policy, “shock and awe” warfare and covert CIA-funded experiments in electroshock and sensory deprivation in the 1950s, research that helped write the torture manuals used today in Guantanamo Bay.

The Shock Doctrine follows the application of these ideas though our contemporary history, showing in riveting detail how well-known events of the recent past have been deliberate, active theatres for the shock doctrine, among them: Pinochet’s coup in Chile in 1973, the Falklands War in 1982, the Tiananmen Square Massacre in 1989, the collapse of the Soviet Union in 1991, the Asian Financial crisis in 1997 and Hurricane Mitch in 1998.

They Sold Their Souls for Rock and Roll Part 1 – 4

In this mind-blowing expose, Pastor Joe Schimmel reveals just how Satan has been effectively using popular music to undermine God’s plan for the family and ultimately heralding the coming of the Antichrist and his kingdom on earth.

Part 1

Part 2

Part 3

Part 4

Aaron Russo exposes IRS fraud while meeting w/ Sheldon Cohen ( Must Watch!!! )

2.3 Trillion Dollars missing at the Pentagon

This information was announced on 9/10/2001, one day prior to 9/11, no comment. Also, the Pentagon was hit on 9/11 in the Accounting wing of it’s building. Again, how convenient, that those “terrorists” hit the day after the announcement, and they hit the wing where all the accountting computers were. This must be a coincidence/blessing for the Pentagon and Rumsfeld/Dick Cheney.

“Once is happenstance. Twice is coincidence. Three times is enemy action.”

I have no idea why this video is not showing up, so here is the link http://www.youtube.com/watch?v=OlnQTcLHaMM

Confessions of an Economic Hit Man

Confessions of an Economic Hit Man – Part I

Confessions of an Economic Hit Man – Part II

In this shocking memoir, Confessions of an Economic Hit Man, John Perkins tells of his own inner journey from willing servant of empire to impassioned advocate for the rights of oppressed people. Covertly recruited by the United States National Security Agency and on the payroll of an international consulting firm, he traveled the world—to Indonesia, Panama, Ecuador, Colombia, Saudi Arabia, Iran and other strategically important countries. His job was to implement policies that promoted the interests of the U.S. corporatocracy (a coalition of government, banks, and corporations) while professing to alleviate poverty—policies that alienated many nations and ultimately led to September 11 and growing anti-Americanism. Within a few weeks of its release , Confessions of an Economic Hit Man landed onThe New York Times Bestseller List, then 19 other bestseller lists including the Los Angeles Times, San Francisco Chronicle, USA Today, Wall Street Journal, and Washington Post. The author has been interviewed repeatedly on national radio and television shows, including Amy Goodman’s Democracy Now, CSPAN’s Book TV, and PBS’ Now with David Brancaccio. And now the book is being published in 9 languages around the world. According to John Perkins, “It is accomplishing an important objective in inspiring people to think and talk and to know that we can change the world.”

Codex Alimentarius – 89 min

Having spent the past twelve months investigating Codex Alimentarius, I am deeply disturbed by the almost total lack of awareness (or even interest) with regard to the implications of this pernicious global Commission, particularly amongst those most affected by the excesses of this restrictive legislation. In the words of the National Health Federation[i], the aims and objectives of Codex Alimentarius are as follows: * Only low-potency, “me too” supplements available that will do nothing for your health. * All or most foods genetically-modified. * Beneficial supplements unavailable or sold by prescription only. For many people, this agenda is so outrageous, they cannot believe such goals are achievable; yet this may well be the reality as soon as 31st December 2009, if the Codex Alimentarius Commission continues to disregard input from those who offer a counter perspective to the combined forces of Big Farmer & Big Pharma.

A Cleaner, Cheaper Route to Titanium

An MIT startup is hoping to make titanium much more affordable. The benefit: lighter, more fuel-efficient planes.

Titanium is as strong as steel, but weighs only about 60 percent as much. It’s also highly resistant to corrosion, and handles temperature extremes well. So, not surprisingly, the aerospace industry wants to use much more of it in the next generation of planes, making them lighter and reducing fuel costs.

But there’s a hitch: at around $40 per pound today, titanium is expensive — and the price keeps going up.

Now a startup, Avanti Metal, using technology developed at MIT, hopes to commercialize a process that drastically reduces the cost of producing titanium, making more of it available for large, lighter-weight airplanes. The process, developed by MIT chemist Donald Sadoway, applies an environmentally benign, direct electrolysis method to make the metal.

Titanium is naturally abundant. But processing titanium oxide found in the ground to make a usable metal is slow and produces toxic waste. “The price of titanium has gone through the roof,” says Corby Anderson, director of the Center for Advanced Mineral and Metallurgical Processing at the University of Montana. “It’s double what it was this time last year — and last year it was pretty high.”

Jeffrey Sabados, president of the four-person Avanti, estimates that, based on production plans published by Boeing and Airbus, there’ll be a 30,000-ton shortage of titanium by 2010. He claims that Avanti’s process for refining titanium could slash costs to about $3 per pound. Then, if the metal then sells for even $25 per pound, an estimate he calls conservative, it’s a huge potential profit.

Since the early 1950s, titanium has been produced through the Kroll process. Manufacturers first make titanium chloride, which gets processed into titanium tetrachloride, and then mixed with magnesium, which draws out the titanium and produces chlorine gas. The result is a porous material, contaminated with magnesium salts, which requires further processing to remove the salts and make it usable for manufacturing. The process is so toxic that it’s difficult to get the permits needed to build a new plant in order to expand production.

Sadoway says their process is much greener. They mix titanium oxide with other oxides, such as magnesium oxide or calcium oxide; then they heat the mixture to about 1,700 degrees Celsius. This produces a bath of molten oxides, through which an electric current can be run. The electricity produces electrolysis, breaking the bond between the titanium and oxygen atoms, and the heavier titanium sinks. The result is a pool of liquid titanium at the bottom and oxygen bubbling out the top. The other molten oxides remain in place, acting as the electrolyte when more titanium oxide is added. “You just keep making more and more and more metal,” Sadoway says.

So far, though, Sadoway and colleagues have made only a few grams with an experimental reactor cell. It’s hard for the small, ceramic device to sustain the high temperature needed. Avanti is hoping to raise enough money from investors to build a larger prototype to actually produce a pool of liquid titanium. Sadoway hopes to begin putting together a team of scientists by August and to build working titanium smelters by August 2008.

Nabil Elkouh, president of Erigo Technologies, a consulting firm that puts together deals between researchers and investors, and who’s an advisor to Avanti, cautions that their projection of producing titanium at one-tenth of the current cost, may be optimistic at this point. “They may have something great, but it may take four years,” he says. “It may not ever be one-tenth the cost — but what if it were half the cost? That’d still be great.”

Anderson says plenty of people, from university researchers to companies like DuPont, are working on better ways to produce titanium. He hopes to visit MIT this summer to look at Sadoway’s process and see how well it works.

Article URL : http://www.technologyreview.com/read_article.aspx?id=16963&ch=biztech&sc=&pg=2

Nearly Waterless Washing Machine to Debut in 2009

A new washing machine that uses just a cup of water, a pinch of detergent, and about 1,000 small plastic chips to clean clothes may be available for consumers in the UK next year.

Researchers at Leeds University designed the machine, which will be marketed by a spin-off company called Xeros Ltd (which means “dry” in Greek). Company founder Stephen Burkinshaw, a professor of textile chemistry, explains that the machine will reduce both water and energy consumption.

Currently, washing machine use accounts for 13 percent of daily household water consumption in the UK, or about 21 liters (5.5 gallons) of water per day, according to the UK organization Waterwise. Besides saving water, the Xeros machine uses just 2% of the energy of a conventional washing machine. And since clothes come out nearly dry, they don´t require the use of a dryer.

“We have shown that it can remove all sorts of everyday stains, including coffee and lipstick, while using a tiny fraction of the water used by conventional washing machines,” Burkinshaw said.

When doing a load of wash, users throw their clothes in like a normal washing machine. Then a cartridge in the back of the machine adds plastic chips – about 45 pounds (20 kg) of them – to the load. Next, a cup of water containing the detergent is added. After the water dissolves the dirt, the chips absorb the water, without the need for a rinse or spin cycle. When finished, a grill at the bottom of the machine opens to collect the chips.

According to Xeros, the chips can last for about 100 loads of laundry, or about six months for an average family. The company has not yet provided details on what the chips are made of, or how easily and safely the chips can be disposed of or recycled.

Working with Leeds University´s commercialization partner IP Group, Xeros has secured an investment of almost 500,000 pounds ($984,400) for the project. The price of the Xeros washing machines for consumers is “not expected to be dramatically different from (conventional) washing machines,” according to the company.

More information: www.XerosLtd.com

Foreclosure Crisis: The Real Culprit is the Federal Reserve

The Federal Reserve holds the primary blame for the housing bubble – and the resulting explosion in foreclosures around the country.

Intervention in the economy by the Fed, through the manipulation of interest rates and the expansion of the money supply, caused an artificial boom in mortgage lending.

Since the early 1990’s, the Federal Reserve has increased the amount of US dollars and credit in circulation by nearly 300%. Because of this, borrowing money became cheap – and easy – which caused a massive increase in demand for homes, and thus – a dramatic rise in home prices. But, this kind of boom never lasts. Eventually the markets go through a “correction” which is nothing more than a collapse. The longer and greater the boom period, the harder and deeper the crash. Unfortunately, it doesn’t look like there’s going to be a quick turnaround.

In order to truly get out of this mess and prevent it from happening again in the future, we need to understand the cause of the problem. Spending time and energy on anything but the root of the problem will only ensure that we see this cycle repeated.

Thus, calls for legislation against lenders, while often driven by good intentions, are really missing the mark. Some lenders clearly made unethical or even fraudulent loans, and they must be held accountable, but attacking the entire industry is hardly the right answer.

It must be recognized that everyone really does play a part in this – the mortgage companies made bad loans to reckless applications, and people may not have been so eager to borrow (many times beyond their means), if the interest rates weren’t so low. And, the only reason they were low is because the Federal Reserve forced them to be that way.

The subprime lending madness we’ve seen is nothing more than a symptom of the housing bubble (caused by the policies of the Fed), and not the cause of it.

When the Federal Reserve makes credit artificially cheap, it drives lenders to loan more recklessly – often times to people who normally wouldn’t qualify. On top of this, people tend to borrow more with low interest rates, and they don’t expect rates to go back up anytime soon.

Why is the Fed to blame for the housing bubble? In short, because it is a bubble. That means the boom was false, and the wealth that people thought was being created through inflated home prices was really just an illusion. Who or what has the power to create illusory wealth? The Federal Reserve – through the artificial lowering of interest rates – which results in loads of credit and an increase of the money supply. (and rising prices, too)

The only way to ensure a stable economy for our future is to stop the Federal Reserve from artificially inflating the money supply and creating periods of false growth that can never be sustained. It’s time to end this “boom and bust” cycle that has plagued us for far too long.

Article URL : http://www.populistamerica.com/blog/view/46717/foreclosure_crisis__the_real_culprit_is_the_federal_reserve

Stressed banks borrow record amount from Fed

By John Parry

NEW YORK (Reuters) – Banks borrowed a record amount of funds from the Federal Reserve in the latest week as the year old credit crisis took a persistent toll, while the commercial paper market continued to contract, signaling tough conditions for short term borrowers.

Banks’ primary credit borrowings averaged $17.45 billion per day in the latest week, the second straight week this had hit a record and up from $16.38 billion the previous week, Fed data showed on Thursday.

“It shows there’s a shortage of liquidity in the system,” said Christopher Low, chief economist at FTN Financial in New York.

Secondary credit the Fed extended, which is usually taken out by banks in need of emergency cash, rose to $89 million in the latest week, from $34 million the week before. Although these numbers are still very small compared with primary credit, “What that tells you is that there’s an increasing number of banks that the Fed is classifying as ‘unsound’ or inadequately capitalized,” Low said.

Analysts may watch the trend of secondary credit closely, given the travails of U.S. regional and smaller banks and the likelihood that a continued decline in house prices and rise in foreclosures and bad loans will deepen the difficulties of the banking sector for many months or years.

Some analysts ascribed the overall rise in demand to use the Fed’s short term discount window borrowing facilities to a mix of factors.

“I am sure there are troubled banks trying to tap the window,” said Michael Feroli, U.S. economist with JPMorgan in New York. But he added: “more and more banks are trying to take advantage of the pure economic advantage of borrowing at a cheap rate and you are seeing a gradual fading away of the stigma of using the discount window.”

The Fed’s main discount rate is 2.25 percent. Meanwhile, the U.S. commercial paper market, a vital source of short-term funding for daily operations at many companies, fell $16.0 billion to $1.728 trillion, the lowest level outstanding in two years, from $1.744 trillion the previous week, Federal Reserve data showed on Thursday.

“The panic of last year is over. It’s more orderly now, but the financial stresses remain and there will be more difficulties to come,” said John Canavan, market analyst at research company Stone & McCarthy in Princeton, New Jersey.

Part of the overall decline was attributable to asset-backed commercial paper, a subsector that has been eroded by the slide of housing and mortgage-related securities.

U.S. asset-backed commercial paper outstanding fell by $6.1 billion after rising $4.7 billion the previous week. U.S. asset-backed commercial paper outstanding declined to a total $743.9 billion in the latest week from $750.0 billion the previous week.

“The asset-backed outstanding continues to creep a little lower,” Canavan said. “No one is willing to touch the asset-backed commercial paper because people are concerned about the intrinsic value of the underlying issues, mortgage-related securities.”

Foreign central banks, who own over a quarter of marketable Treasuries, were net buyers of U.S. government bonds in the latest week, but were net sellers of agency securities, Federal Reserve data showed on Thursday.

Foreign institutions sold securities from government-sponsored agencies like Fannie Mae and Freddie Mac, subtracting $2.39 billion from those holdings, which now stand at $981.69 billion.

The breakdown showed overseas central banks bought $17.89 billion in Treasury debt, bringing the total to $1.395 trillion.

The interbank cost of borrowing three-month dollar funds posted its biggest fall in a month on Thursday, according to the British Bankers’ Association, a day after central banks announced more liquidity boosting measures.

The London 3-month dollar-denominated interbank offered rate was fixed at 2.79125 percent <USD3MFSR=> versus 2.80063 percent the previous session.

U.S. primary dealers borrowed a modest $3 million from the U.S. central bank’s Primary Dealer Credit Facility in the latest week, versus an average of zero per day the week before.

Dealers took $28.1 billion in Treasuries of the $50 billion the Federal Reserve offered at its weekly Term Securities Lending Facility auction on Thursday, not covering the total amount on offer, but still a sign of hefty demand.

Cash strapped financial institutions can convert the Treasuries temporarily into short term cash loans in the repurchase market in order to shore up balance sheets depleted by the credit crisis.

Article URL : http://www.reuters.com/article/businessNews/idUSN3163777720080731?feedType=RSS&feedName=businessNews

Risks of Rising Consumer Debt

Over the past decade we’ve seen lower interest rates, a robust housing market, and virtually unlimited options when it comes to personal loans. The end result is that Americans are borrowing money at a record pace – consumer debt is on the rise. Still the question remains – What are the real versus perceived risks of rising consumer debt?

In this article we’re going to discuss the role debt plays in fueling the economy. To do that we’re first going to talk about concepts such as the money multiplier and how this economic concept is related to consumer debt. From there we’ll be able to explain both the positive and negative effect that debt can have in America and on consumers.

Consumer Debt in America

In order to understand whether or not rising debt is a problem in America we first need to understand some simple economic rules. For example, when we buy something the money we spend doesn’t simply stop at that store.

In fact many sources typically state that around 70% of our gross domestic product (a common measure of economic growth) is derived from consumer spending. This means that even relatively small changes in consumer spending habits can have fairly large effects on the health of the US economy.

Debt and the Economy

Perhaps the best way to understand debt’s effect on the economy is through the use of an example. Let’s say a consumer decides they want to buy a new car or truck. To buy the truck the consumer is going to increase their debt load – they’re going to borrow money.

When the purchase is finalized, the money doesn’t stop there – it just keeps going. The salesperson collects a commission and the dealership buys another car from the factory. The salesperson now has some extra money as does the factory worker helping produce more trucks.

Money Multiplier

Granted the salesperson and the factory worker need to pay income taxes and they may decide to save some money, but the example has served its purpose. By borrowing money the original consumer has transferred wealth to others. So that original loan has resulted in a multiplier effect – and the economic boom continues.

This money multiplier is often associated with Keynesian economic theory and has been the rationale for using increased government spending or tax cuts to stimulate the US economy. This concept follows the example we gave earlier:

Increased consumer spending is followed by an increase in business revenues. Those revenues result in more jobs which once again result in more spending – and so the cycle continues.

Debt and Interest Rates

The reason we’ve taken the time to talk about the money multiplier is because the availability of personal loans – consumer debt – can have a large effect on the economy. When the government is trying to jump start a sluggish economy one of the many tools they can use is to lower interest rates.

Low interest rates make borrowing easier for consumers and that means more money flows into and through the economy. After all most consumers are merely concerned with how large their monthly payments are and less concerned about how much they’re borrowing. Lower interest rates translate into an increased ability for consumers to handle more debt load

Is Debt Good or Bad?

All of this discussion brings us to this point where we’re trying to figure out if debt is good or bad. On the one hand increased debt helps economic growth while on the other hand many experts question how much further can we expect personal debt to expand.

Debt and Wealth

While personal debt has been on the rise, the vast majority of that debt load increase is associated with home mortgages. And as consumers have borrowed more money to buy bigger homes that mortgage debt has been used to purchase an appreciating asset. As home values increased this translates into increased consumer wealth.

This was a good combination – rising debt followed by rising wealth. Increased wealth means lower chances of default on a loan. After all homeowners with large mortgages were quickly building significant amounts of equity in their homes. If they got into trouble paying back their loans they could always pull some of the equity out of their home or even sell their homes at a profit to pay off their loans.

Collapse of the Housing Market

In fact, this was a good situation until recently when the housing market seemed to slow down. This housing slowdown resulted in a crisis in the sub-prime mortgage market. Borrowers with weaker credit histories, lower household income, and relatively few assets could no longer support their outstanding loans. This resulted in a quick rise in foreclosures and bankruptcies.

Debt Service in the US

One of the more interesting statistics published by the Federal Reserve is the Debt Service Ratio or DSR. The household debt service ratio (DSR) is an estimate of the ratio of monthly debt payments to disposable personal income. Debt payments included in this ratio consist of the estimated required payments on outstanding mortgage and consumer debt.

What the DSR tells us is the how much debt Americans are carrying relative to their disposable income. The higher the debt ratio, the larger the debt burden carried by the consumer. And as of the fourth quarter of 2006 this measure stood at 14.53 – which is the highest ratio in the 26 year history of the indicator.

Current State of Debt

So for the last 25 years or so there wasn’t much to worry about when it came to consumer debt. The amount of debt was rising but much of it was going to buy larger homes. The housing market itself helped support this rising debt because home prices were appreciating and therefore helping to build consumer wealth.

More recently housing prices started reversing themselves and interest rates began to rise. Suddenly buying a larger home no longer guaranteed an abundant supply of home equity. Higher interest rates only added to this problem.

What worries some economists is that consumers can no longer depend on relatively inexpensive home equity loans to satisfy their overzealous purchasing habits. The fear is that consumers will start to depend on more risky and expensive sources of money such as credit card debt – which is unsecured debt. Many feel this type of borrowing will quickly followed by a rapid rise in bankruptcy.

Only time will tell us whether or not these “doom and gloom” predictions made by some economists will come true. Until then we’ll have to keep a close eye on leading indicators such as rising credit card debt and be thankful that we now understand the true risk of rising consumer debt.

What Inflated the Commodities Bubble?

Crude Oil has corrected over 15% from the top. Gold, Silver, Copper, Wheat and other commodities too have retreated from their respective highs. The heavy selling witnessed in last few days, has raised concerns that the air is leaking from the Commodity bubble and that a multiyear bull market might end soon. It has been pretty well established of late, that the commodity market has been exhibiting many of the characteristics of a bubble. Thus, we may be very well at the beginning of a bursting asset bubble.

Historically, price bubbles have been destined to burst under their own weight, and at a moment’s notice. No market travels in a straight line forever and what goes up inevitably comes down. And as the charts of the dot-com and housing bubbles show, the fall can be just as dramatic as the climb. Now, when the bubble in the commodity space is showing signs of cllapse, an analysis of various factors that inflated the same will make for an interesting study. Now, when the bubble in the commodity space is showing signs of collapse, an analysis of various factors that inflated the same will make for an interesting study.

The Best and Worst Investments For the NEXT 5 YEARS!

Larry Edelson writes: I often discuss what I think are the best investments out there. But this morning, I’m going to spend some time talking about what I think are the worst investments for today, tomorrow and the next five years.

Obviously, given the state of our economy and financial markets, there are a lot more lousy investments than there are good ones.

But don’t worry: It’s not all bad. By the process of elimination, we’ll get additional confirmation of what the best investments are!

Five Lousy Investments For the Next Five Years

These lousy investments are major asset classes where I believe — based on all my indicators and analysis — you will either …

Suffer massive depreciation in the purchasing power of your investment. You may get a nominal rate of return of say, 5% or 6%, but after accounting for the “real” rate of inflation, you will be losing purchasing power.

Or …

Incur the worst of both worlds: Lose in terms of purchasing power AND in terms of nominal dollars. In other words, invest $10,000 and get back $5,000 at the end of five years — but that $5,000 is only worth $2,000 in terms of purchasing power (because of the falling dollar and inflation).

Having said that, here’s my list of lousy investments for the next five years …

Lousy Investment #1: Bonds

I mean corporate, municipal, bonds of Government Sponsored Entities (GSEs) like Fannie Mae and Freddie Mac, and longer-term U.S. Treasury bonds.

The reasons are pretty simple: It’s going to take years for this country to recover from the current financial crisis and the damage it’s incurred. And all the while, there will be loads of uncertainty surrounding the bond markets.

At times, that uncertainly will come through in the form of rising interest rates, meaning the principal of the bonds will have to decline.

At other times, it will arise from the lack of liquidity now surrounding the credit markets, the falling value of the dollar, uncertainty in corporate earnings, companies going bankrupt, and more. All of these forces will negatively affect the value of most, if not all, bond markets. And cause you to incur losses.

The worst of all? Most likely the U.S. Treasury bond market. Five-year and longer-dated Treasuries. Reason: Their prices are inextricably intertwined with the value of the dollar and its perceived credit-worthiness.

But as we all know, the dollar is not what it used to be. A long time ago, it was backed by gold. Then it was backed by the full faith and credit of the U.S. government. That wasn’t so bad, until the credit crisis hit.

Today, the faith part is losing respect all over the world.

And the credit part of the equation is also crumbling, as Washington bails out one company after another, printing paper money like crazy and accepting junk bonds as collateral.

In fact, as much as 22% of the Treasury’s balance sheet is now comprised of junk bonds. That devalues the dollar and the Treasury bonds that are issued based on the dollar.

So I suggest you stay away from the bond markets. Period. Their prices are only going to fall as interest rates are forced higher by the marketplace to try and attract investors. You don’t want to be in bonds as that process unfolds.

Lousy Investment #2: Real Estate in the U.S.

While I say “in the U.S.,” most real estate in most parts of the world will also be a lousy investment for the next five years. The only exceptions: Select properties like waterfront (here and overseas), and the Asian property markets.

Real estate values in the U.S. will stabilize and even bounce back a bit over the next five years. But, just as the bursting of the tech bubble put an end to the potential gains in that sector, the real estate market in general in the U.S. will never again experience the kind of bubble gains it did over the last several years. At least not in my lifetime.

There will be some bouncing back, as I noted, but it’s highly likely that any positive returns you see in the property markets going forward will simply not keep up with inflation. To me, that makes for a lousy investment.

Lousy Investment #3: U.S. Stock Markets

The broad stock markets here in the U.S. — as defined by the major indexes like the Dow Jones Industrials, the S&P 500 and the Nasdaq — are going to destroy your money over the next several years.

Do not underestimate it. Because the dollar has lost so much purchasing power, the value of our stock markets is also getting slashed, in what I call “The Squandering of America.”

As the dollar continues to fall in value, as it most assuredly will, the losses in the broad stock market averages will widen. In fact, they will get worse, as the averages decline both in nominal terms and inflation-adjusted terms (based on gold).

That will put the U.S. stock markets amongst the worst investments you can park your money in, now, and for at least the next five years.

Ditto for …

Lousy Investment #4: European Stock Markets

Yes, the euro currency is very strong. And that will help mitigate the losses investors are experiencing, and will continue to experience, in the European stock markets.

But Europe suffers from many of the same problems the U.S. does: Overheated real estate markets that are now imploding, large derivatives exposure amongst Europe’s banks, and more.

So Europe’s stock markets will continue to lose, both in nominal terms and in terms of gold. They just might not lose as much as U.S. markets.

Either way, I suggest steering clear of Europe’s stock markets.

Lousy Investment #5: Most of Latin America

This includes both stock and bond markets south of the border. The big exception in my book is Brazil.

That’s because most Latin American economies, Mexico included, are too closely tied to the fate of the U.S. economy. Even more so than Asian economies such as China and India.

Sure, Mexico and Venezuela have oil. But the former is too dependent on the U.S, and the latter I wouldn’t touch with a 10-foot pole due to dictator Hugo Chavez.

So if you’re looking south of the border for investments, I’d look elsewhere.

Now, let’s move on to my list of what I think are the best investments for the next five years …

Best Investment #1: Gold!

There’s no doubt in my mind: If you want to preserve the purchasing power of your dollars and make some healthy profits above and beyond the rate of inflation, by far the best investment of all is pure, honest, real money that has stood the test of time for more than 6,000 years — gold!

Gold has always preserved its purchasing power. And today, more than ever before …

You need an asset that cannot be manipulated by the powers that be … that has no politician to answer to … no board of directors to dilute it by issuing stock and stock options … and no gimmicky accounting to establish its fair market value.

Also not to be ignored: Platinum, palladium and even rare metals, such as rhodium and cobalt, which I will cover in my upcoming issue of Real Wealth Report .

Best Investment #2: Energy

Not just crude oil and gas, but also alternative energy.

Right now, the price of crude oil is pulling back in a normal, healthy retracement. I expect oil to trade as low as $107 a barrel. But then, Phase II of its bull market will kick off, sending the price as high as $200 a barrel. A gallon of unleaded gas will ultimately hit $5, perhaps even $6.

Oil & gas companies, once the current oil pullback has run its course, will be awesome buys. Many of them are trading at price-to-earnings ratios of less than 10, when they should be trading at double that.

Alternative energy plays in solar, ocean motion, nuclear energy, and wind are also great longer-term investments. But as with oil and gas, wait for my signals!

Best Investment #3: Natural Resources

In this category I group all other natural resources including agricultural commodities, soft commodities such as coffee, cocoa and sugar, base metals such as aluminum, copper, nickel and zinc, fertilizers, and last, but not least, water.

All are assets where supplies are limited, and where demand (largely due to Asia’s growth) continues to grow at a rapid pace.

All are tangible assets with intrinsic value, and where real wealth is accumulated.

Best Investment #4: Economies that are driving demand for natural resources higher.

Reason: They are the economies that are also largely driving global economic growth these days. Countries like India and China. Indonesia and Malaysia. And more!

Best wishes,

Larry

Article URL : http://www.marketoracle.co.uk/Article5709.html

United States Abandoning Capitalism for Socialism

Over the past few decades, the United States has steadily evolved from a nation of ‘producers’ to one of ‘consumers’. The change has been celebrated by politicians and economists as proof of America’s arrival at the top of the global economic food chain. In reality, the development has depleted the nation of its hard-earned wealth, and has led us to the brink of ruin.

But rather than encouraging a return of America’s productive energy, our government is responding to the growing economic crisis by simply trying to boost consumerism at all costs. Their strategy involves socializing losses among all citizens so that the depletion can’t be easily discerned.

Now that the nation has chosen socialism as its economic salvation, it is worthwhile to examine some historic precedents. They are not encouraging. Europe, the former Soviet block and much of Africa and Asia, show vividly that socialism curbs individual freedom and enterprise, and leads inevitably toward economic decline.

America was blessed both with abundant natural resources and individual freedom, the backbone of enterprise. The combination rendered American productivity the envy of the world. Based on the strength of our industry and productivity, the American Treasury became the world’s largest.

Why would America swap a history of successful capitalism for a murky future of socialism? The Answer is politics.

When the vast majority of the country’s private sector working population is employed in the service sector, then votes tip in favor of consumerism. This is happening in America. Consumer spending now accounts for 72 percent of Gross Domestic Product (GDP), and is viewed as the engine of our continued prosperity.

Over the past decade, when recession threatened to curtail spending, the government pumped hundreds of billions of dollars into the economy. This led to two massive liquidity-driven booms; first in technology, then in housing. During these booms, greed knew few bounds and leverage became a way of life.

But when the merry-go-round stalled, politicians did not, and will not, allow the normally corrective mechanism of a recession to operate. It is trying to take the pain out of capitalism, while leaving only the pleasure. This is impossible.

In the current attempt at a market correction, the government has decided that our bloated financial companies are “too big to fail”. As a result, the government has lent billions of taxpayers’ dollars to bail out Wall Street and the mortgage industry. Some investment banks were given privileged access to the ‘Fed Window’ to borrow unlimited amounts of money, secured by ‘junk’ securities and at the lowest (negative) interest rates, well below the level of inflation. In addition, the shares of the larger financial companies were also given special ‘short-selling’ trading protections.

It is important to note that these protections were not given to other industries, and were not even extended to the entire financial industry. Those receiving the public largesse are precisely the large institutions most responsible for the mess. It was the financial and corporate fat cats who made the private profits gleaned from massive, irresponsible lending and borrowing. Yet, when it comes to rescue, the ordinary citizen pays.

Declining corporate earnings, increased government intervention and higher taxes are tell-tale symptoms of socialism. They can now be expected in America, bringing downward pressure on U.S. government paper and equities. Recession in America will likely reverberate around the world, bringing worldwide strain to economies and equities.

Let us hope that the rest of the world will not follow America’s example and head down the road toward socialism. Economies adopting a free market approach are likely to far outperform those embracing the discarded doctrines of financial failure.

Credit Losses Keep Doubling, $400bn, $800bn, $1600bn

Credit is the fuel that drives the economy. If you want to beat the market or want to learn to invest, it is important to have a good understanding of important factors that affect the economy. The large loan losses banks are experiencing are limiting their ability to provide credit to help companies grow. If companiescannot grow their business, the economy will continue to be weak.

Credit Is the Fuel of a Growing Economy

Credit provides small, medium and large companies with the necessary capital to help them grow. A local auto repair shop with a growing customer base borrows money to acquire parts, equipment and tools so he can serve his customers. Without this credit, he is unable to properly serve his customers and grow his business.

A medium sized manufacturer needs to renew her supply of components before her company can build their new products. Without credit to buy the materials, her company will not be able to produce the products it needs to sell to pay salaries and remain in business.

Credit, primarily from banks, provides the cash many business need to be able to fund their working capital and acquire equipment that make them more competitive. Without this source of funding many business must tighten up their spending and put off growth plans. As a result, the economy will feel the affects as unemployment increases, sales and profit take a hit and the markets reset their expectations.

Bank Lending Constrained

Banks are unable to lend when they are capital constrained, especially due to large loan losses. The total volume of loans a bank can generate is limited by its available capital. Bank regulators use capital ratios to control the total loan exposure of any one bank. When a bank incurs loan losses, it directly affects their capital ratios and reduces the amount of loans then can make.

About a year ago, the “analysts” estimated that the total write down of bad loans would be about $400 billion. Then by December 2007, the estimate doubled to about $800 billion. Then along comes a report from Bridgewater Associates that expects the number to double again to $1.6 trillion. Bridgewater is a very large hedge fund who is also one of the top analytical firms. Up to now, the banks have been using a ‘mark-to’model’ method of valuing the structured debt. According to Bridgewater, the models used have grossly underestimated the actual losses. They doubt the financial institutions will be able to generate enough capital to cover the losses.
According to the report, “Lenders would have to curtail loans by roughly 10-to-one to preserve their capital ratios. This would imply a further contraction of credit by up to $12,000bn [$12 trillion] worldwide unless banks could raise fresh capital.”

Not all of these losses are in the sub prime market. According to the report, more than 90% of the losses from sub prime loans have already been written off. Unfortunately, the losses form the prime and Alt-A loans could be much larger than we have already seen. The sizes of these loan portfolios are much larger than the sub prime portfolios. Further, Bridgewater expects about $500 billion in corporate losses that must be written off. This leads to the current estimate of more than $1 trillion in losses yet to be written off.

Much of the capital that banks have sold recently is to help bring the banks capital ratios into regulatory compliance. This does not mean they cannot make more loans. If they can make any new loans, the rates on these credits will be much higher. This is why the local auto repair shop cannot get new loans. Businesses across the United States are realizing that credit is either not available or the interest rates are much more expensive.

Weak Second Half 2008

With out sufficient credit to help fund businesses, investors should expect a weaker economy in the second half of 2008. Many analysts and especially the talking heads will focus on the mortgage market. However, the lack of available credit is spreading to everyone. The problem is not that these companies have poor credit. The problem is that the banks are constrained by the amount of credit they can make available due to their weak capital position. Even with the Fed Funds rate at 2.0%, the Federal Reserve cannot change the unavailability of credit. This means the economy will experience a prolonged weakness that will not end until the additional loan losses have been written off. If Bridgewater is right on the total size of the losses, we are not even half way there.

As investors, we need to adjust our strategies to expect a weak second half of 2008 and possibly into the first part of 2009. We need to employ bear market strategies that take advantage of discernable trends and higher volatility in the markets. For example, biotechnology has been outperforming the market recently. This has been a good place to have invested even in a week market. Moreover, industry and market Exchange Traded Funds (EFTs) that short the market are appropriate when this bear market reaches key resistance levels.