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THE INTERNATIONAL FORECASTER

SATURDAY, JUNE 6, 2009 060609(2)_IF

P. O. Box 510518, Punta Gorda, FL 33951-0518 An international financial, economic, political and social commentary.

Published and Edited by: Bob Chapman

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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 with Bob Chapman live on Short-wave 7.415Mhz M-F 4:00PM ET, Replays Tuesday thru Friday 8pm RT 7.465Mhz 3.215 MHz M-F 11PM ET and weekly archives at discountgoldandsilvertrading.net JOHN STADTMILLER – Republic Broadcasting Network www.republicbroadcasting.org – every Tues. at 5:00-7:00 pm EST GOLDSEEK RADIO – Every Thursday SAM BUSHMAN - LRT Radio http://www.libertyroundtable.com Every first and third Monday of the month 10 am to 11 am DALE WILLIAMS - Free West Radio Program – http://www.freewestradio.com - Every first Tuesday of Month JOHN BRYANT– 7 p.m. EDT - network www.firstamendmentradio.com Dr. STAN MONTEITH - Every Monday 4 p.m. & 8 p.m. PST in month of June. www.radioliberty.com, or to our shortwave broadcasts on WHRI at 5.745 MH weekdays from 3-5 pm and 8-10 pm Pacific Time 5070 and 7465. Shortwave: Daily M-F 3:00 - 4:00 PM: PST 5.070 Mhz 4:00 - 5:00 PM: PST 7.465 Mhz 8:00 - 9:00 PM: PST 5.875 & 6.110 Mhz THE MERIA HELLER SHOW –every 2nd Tuesday of the month –

THE POWER HOUR– GCN.live.com – Every Monday in June. – Mon thru Fri 8 to 11 am EST, 7490 PAT GORMAN – Sunday June 5. 20009 Stephen Lendman – June 11, 2009 ALEX JONES - GCN.live.com -Noon on shortwave 1st hour: WWCR 9.985 and 2nd & 3rd Hour: Every Friday – noon CST. WWCR 9975 - Here are some of the recent Alex Jones shows that Bob has

appeared on. Mon thru Fri Noon to 4 pm EST, 12160 http://www.youtube.com/watch?v=JIQ1Qrv_AUE

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RAYELAN ALLAN – Every first and third Wednesday in June. BUTCH PAUGH - Saturday, May 21, 2009 9 p.m. EST - Also on your computer on www.gcnlive.com <http://www.gcnlive.com/> . LIVE FM STATIONS 9:00 PM EST.-88.3 FM ROTX Campbell, TX- 92.7 FM Lexingon TN-102.9 FM in Lutz, FL-89.7 FM Nettie, WV-89.7 FM North Branch, MN-91.9 FM Kerrville, TX-97.5 FM Dallas, TX-91.1 FM Austin, TX-97.5-91.1 FM Austin, TX-91.7 FM Fredericksburg, TX-91.7 FM Johnson City, TX-90.1 FM Round Rock, TX-90.1 FM Austin, TX-96.3 FM Austin, TX-95.7 FM Dallas, TX-93.3 FM Valparaiso, IN-90.7 & 88.5 FM Cosby, TN-88.3 FM Meadsville, PA-100.3 FM Kamia, ID-89.7 FM Presque Isle ME-97.7 FM Greenville, SC-107.1 FM Oklahoma City, OK-90.1 FM Gatlinburg, TN-102.7 FM Tampa, FL-KGGM 93.5 FM Delhi, LA LIVE AM STATIONS 9:00 EST.-WIJD 1270 AM Mobile, AL, KIOU 1480 AM Shreveport, LA,WFAM 1050 AM Augusta, GA-WELP 1360 AM Greenville, SC-WCPC 940 AM Tupelo, MS-WROL 1340 Providence, RI-WITK 1550 AM in Scranton/Wilkesboro, PA-WNNY 1090 AM Pensacola, FL-WARL 1320 AM Attleboro, MA-1380 WLRM AM Chattanooga, TN-WYYC 1250 AM York, PA-WNVY 1070 AM Pensacola, FL-KGEZ 1600 AM Kalispell, MT REBROADCAST FM STATIONS- 91.9 FM Macon, GA 7:00 AM-91.9 FM Freedom radio Jones City, GA 8:00 AM Est. REBROADCAST AM STATIONS-KCKN AM 1020 Roswell, NM 10 PM Est.-KMET 1490 AM 11 AM Pst. - WASB 1590 AM Brockport, NY 5-6 PM Est.- WRSB 1310 AM Canandaigua, NY 5-6 PM Est.-WBCR 1470 AM in Alcoa, TN 7-8 AM Est.-WVOG 600 AM New Orleans, LA 5:00 PM Est. ALAN STANG: radio show, The Sting of Stang, airs from 11 a.m. to 1 p.m. Central, M-F, via Republic Broadcasting Network. Call him on the air at (800) 313-9443. To listen, go to republicbroadcasting.org and click on Listen Live. If you can't listen at that time, do so via the archives. I'll be talking about the various manifestations of the conspiracy for world government, its tactics, such as the illegal alien invasion, its purposes and its players, from Jorge W. Boosh on down.] ERSKINE: Thursday, - every 3rd Thursday – 2:00 pm CST GCN.live.com Drew Raines: - Every Thursday

Those of you interested in the latest input concerning the world financial interest and what to do during these times of financial unrest . TODAY AND EVERY THRUSDAY we have for your pleasure Mr. Bob Chapman founder/editor of "The International Forecaster" http://www.theinternationalforecaster.com 4pm-5pm Chicago time zone USA listen live www.amd.elequity.com "Clilck on "Current Show / Listen Live" this show is accessible as current show for 20 hours after production and on demand from the archive direct link and as "Archives & on Demand" any Thursday date is Mr. Bob Chapman's show. *** all shows are FREE to access & download *** 2nd Hour Colorado, Al and Drew discuss the perspective of News & Events around the world and the attacks on our Constitutional Rights to live in Liberty growing our Organic Foods and Herbs for our safety & our health also available on 11 international phone bridges around the world USA: 347-308-8047 -bridge code 48334. Drew can be reached at 501-565-1833. http://www.youtube.com/watch?v=hesYUFCe2_U GNC-LIVE FREQUENCIES: http://www.gcnlive.com/Schedule_Shortwave.html KEVIN GALLAGHER & John McGowan – Every first Friday at 9 pm EST.

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Rob Johnson – on Pappas Telecommunications’ -840 KMPH. Stockton/Modesto, CA – June 9th and June 25th. – and July 14th and July 30th. Lets Get Real With Reuben Torres " is an open forum where topics on politics, immigration, health, education, and other global issues, that affect our country and the world at large, are discussed and debated at local, national, and global levels. "Lets Get Real With Reuben Torres "airs every Tuesday evening from 9:00 pm to 10:00 pm unless otherwise noted. - Next appearance: June 23rd

Farren Shoaf –June 9th, 2009–The Real News Radio . *****

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http://www.youtube.com/watch?v=cYjLAgKfLrM For a Few Bailout's More http://www.youtube.com/watch?v=qq8-HydyftA&feature=channel_page

***** SCHEDULED ISSUES

Every Wednesday and Saturday June 2009 US MARKETS Ron Paul’s Audit the Fed bill is now up to 190 cosponsors!

A recovery is supposed to be in the works in the midst of increased savings, declining debt balances on credit cards, more bankruptcies, higher unemployment and new wave of foreclosures. Consumer participation in GDP is down from 72% to 70.4%. Bank and other financial firms’ balance sheets are what they say they are and we have a stock market bear rally built on sand just as we had in 1931. And, lest we forget, bogus government statistics calculated to confuse professionals and investors alike. What an upside down world. How do you make money when you are losing money? Wait until late July and in August when the second quarter earnings are released by financial firms. They won’t be pleasant reading. The market rally and much of the earnings are simply fraud. Wall Street and investors simply shrug their shoulders and look away. They know but they do not want to know. Ever present in the scams is the SEC, which has never seen a major firm they did not like. Acting on violations only when forced too at large firms and perpetually pursuing the small and medium sized brokers and brokerage firms and newsletter writers. Then there is the veracity of our government for which few have any respect, trust or confidence. Our treasury department woefully short of revenues has the privately owned Federal Reserve monetizing sovereign debt because they cannot sell it all, some $300 billion in Treasuries and $750 billion in Agency debt as the Fed monetizes an additional $1.5 trillion in bank owned CDOs, collateralized debt obligations, so as to remove them from bank balance sheets so they can purchase Treasuries to compete the daisy chain of fraud. Ten-year Treasury note yields as a result have traded up to 3.84% from 2.35% just five months ago. Foreigners are sellers as an avalanche of Treasuries hit the street. The demand for Treasury funds over the next few years will be colossal. If government raises taxes the economy will fall further. As we forecast earlier the Fed could monetize $2.5 and $4 trillion in Treasuries and other toxic waste by the end of the calendar year. Incidentally, there is not a remote chance that the Fed will ever be able to withdraw funds from the system and every professional has to know that. The result is a collapsing dollar and higher gold and silver prices in anticipation of higher inflation. This year the dollar could easily break 71.18 on the USDX, the dollar index, versus six major weighted currencies. That would again cause, as it did from 11/07 to 6/08, countries and foreign businesses to reject taking dollars in trade. Such an event is in our crystal ball. Propaganda and smoke and mirrors won’t work this time.

Earlier this week our Secretary of the Treasury was booed, jeered and laughed at during a speech to students at Beijing University. That is what minds outside of the box think of our monetary policy. He said trust me, they said no. Needless to say, this was little reported in the mainstream media. The people representing the money powers that control our nation are viewed as an international disgrace. Foreigners recognize the financial Mafia that runs America, but most Americans are clueless to who the real power running America is.

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We have heard much about the 40 to 60 times deposit ratios used by banks in the 2003 thru present period. Normally that ratio is 8 to 10 to one dollar on deposit. We painfully remember the subprime and ALT-A loans and the totally unqualified that received them. Then the loans that Fannie Mae and Freddie Mac should have never approved and finally the asset backed securities and collateralized debt obligation bonds foisted on professionals at AAA when they were in fact BBB.

What has not been publicized was the SEC position under pressure from the elitists on Wall Street during the easy money period and the steep yield curve to exempt brokerage houses from the net capital rule. That as well led to leverage of 40 to 60 to one. If the banks could do it they wanted to be able to do it too to compete. That decision ultimately led to five failures. Even a mitigating gold standard could not have surmounted lack of regulation. After almost 50 years in the markets and a former brokerage house owner we know financial institutions should never be allowed to self regulate. If we have financial regulation we cannot have regulators who are friend s with the people they regulate. No revolving door between Wall Street and the regulator. The same goes for the revolving door between Wall Street and banking and Washington, particularly in the Treasury Department. Real interest rates will always rise in a period of monetary and fiscal profligacy similar to what we are now experiencing as a result of unbridled leverage.

Keynesians will tell us such financial discipline is not possible in the real world, but of course it is. They just want to perpetually break the rules. There is no such thing as a self-regulating monetary policy. Distortion reigns instead of a slightly expansive classical free-market model. Markets can be far more rational then they are presently if the players are not allowed to run wild, as we have seen since 2002. In addition a privately owned Federal Reserve should never be allowed to exist never mind take on government responsibilities, such as financial regulation, which is currently contemplated. The Fed has always subordinated monetary policy to the desires of Wall Street and banking and at times has bowed to political expediency. The Fed is responsible for every recession and depression we have had since 1913. The great market distortions are all a product of Fed decisions. The Fed is now using adversity to expand its empire, taking on the responsibilities of government when it should not be allowed too. Its power to print money and credit has to be ended. No more papering over their mistakes or willful arrangements with Wall Street and banking. Who caused the dotcom boom and the housing bubble, they did.

As we predicted long end interest rates are already telling us that their policies are flawed as Treasuries fall in value and yields rise, a reflection of coming inflation, as the same time the dollar is falling and gold and silver are rising. The Fed is in a box and they cannot get out. From a fiscal perspective we have had five administrations that have created tremendous fiscal debt. The damage done by the last two administrations was horrendous. Don’t forget as interest rates rise on debt service the debt gets larger and larger. These higher rates are already limiting any housing recovery and we see rates moving higher; at least to 4% on the 10-year Treasury note. That would translate into a 30-year fixed rate mortgage of about 5-1/2%. That rate will disqualify many borrowers as unsold inventory increases via further foreclosures that will last into 2012. That means further price declines. That will further destabilize the banking system. The unsold housing inventory in lenders hands and the value of CDO and ABS bonds will fall as well.

The answer is elimination of the Fed. Its powers would be returned to the Treasury, which would have to be transparent and the revolving door between Treasury and Wall Street and banking closed. The Treasury would have to run a tight ship limiting money and credit creation to 5% and by raising interest rates. The crisis has to be

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addressed eventually and the longer it takes the worse it will be. The power to run Washington by Wall Street and banking has to end. The connection has to be broken. Treasury and Congress have to start acting responsibility and the financial service sector will have to accept lower profits, lower bonuses and a smaller industry.

Credit default swaps have to be settled and banned and all derivatives regulated. There has to be a permanent cap on leverage at banks and brokerage houses of 10 to one and their underlying financial bases have to be changed and closely monitored. If we do not make these changes the financial system as we now see it is doomed.

Within 2-1/2 years Treasury short-term debt will be $16.6 trillion, or 110% of GDP. This is close to 1`21% of GDP attained after WWII, as Thomas Jefferson said, “Loading up the nation with debt and leaving it for the following generations to pay is morally irresponsible.” This is the kind of society we have today. This year foreigners will have to buy $862 billion treasuries, up from $724 billion. We don’t see that happening so the Fed will have to buy $1.5 trillion worth, perhaps more.

Legislation to give Congress greater oversight of the Federal Reserve has been severely watered down on the Senate floor in private negotiations between Sen. Charles Grassley (R-IO), the top ranking Republican on the Finance Committee, who wanted more oversight and Richard Shelby (R-AL).

The Grassley Amendment intended to give the Comptroller General of the Government Accountability Office power to audit any action taken by the Fed – the third undesignated paragraph of Section 13 of the Federal Reserve Act, which would be almost everything that the Fed has done on an emergency basis to address the financial crisis, encompassing its massive expansion of opaque buying and lending. Handwritten into the margins, however, is the amendment that watered it down “with respect to a single and specific partnership or corporation.” With that qualification, the Senate severely limited the scope of the oversight. Richard Shelby was fully responsible for this course of action. Actions will be limited to specific companies. This modified version does not allow the GAO to look at all taxpayer risk. It in no way threatens the Fed’s monopoly on monetary policy and their secret independence. The list of Fed actions that can be probed are listed but they still could be knocked out in committee. They are: 1. Actions related to Bear Stearns and its acquisition by JP Morgan Chase, including: a. Loan To Facilitate the Acquisition of The Bear Stearns Companies, Inc. by JPMorgan Chase & Co. (Maiden Lane I) b. Bridge Loan to The Bear Stearns Companies Inc. Through JPMorgan Chase Bank, N.A. 2. Bank of America -- Authorization to Provide Residual Financing to Bank of America Corporation Relating to a Designated Asset Pool (taken in conjunction with FDIC and Treasury) 3. Citigroup -- Authorization to Provide Residual Financing to Citigroup, Inc., for a Designated Asset Pool (taken in conjunction with FDIC and Treasury) 4. Various actions to stabilize American International Group (AIG), including a revolving line of credit provided by the Federal Reserve as well as several credit facilities (listed below). AIG has also received equity from Treasury, through the TARP, which would also be captured in amendment #1020. a. Secured Credit Facility Authorized for American International Group, Inc., on September 16, 2008 b. Restructuring of the Government's Financial Support to American International Group, Inc., on November 10, 2008 (Maiden Lane II and Maiden Lane III) c. Restructuring of the Government's Financial Support to American International Group, Inc., on March 2, 2009

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5. TALF -- finally, amendment #1020 would expand GAO's authority to oversee the TARP, including the joint Federal Reserve-Treasury Term Asset-Backed Securities Loan Facility (TALF) *Neither* Amendment #1021 nor #1020 would include short-term liquidity facilities: 1. Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility�2. (AMLF)�3. Commercial Paper Funding Facility (CPFF)�4. Money Market Investor Funding Facility (MMIFF)�5. Primary Dealer Credit Facility and Other Credit for Broker-Dealers (PDCF)�6. Term Securities Lending Facility (TSLF)

Section 404 of the Sarbanes-Oxley legislation has been a bonanza for accounting firms. It has caused a high proportion of major foreign companies to de-list themselves from the NYSE and it has erected an artificial barrier to the globalization of capital markets. Thus, it isn’t all bad as depicted by corporate America.

The size of the commercial paper market, a vital source of short-term funding for daily operations of many companies, fell $3.6 billion to $1.245 trillion, from $1.248 trillion the previous week. Asset-backed CP outstanding fell 8.3 billion to $557.4 billion after falling $8.7 billion the prior week. The top was $2.2 trillion.

Mortgage rates surged 0.38%. The 30-year fixed rate was 5.29% up from 4.91%. Sales were weaker than expected at 63% of the 30 retailers tracked by Thomson

Reuters. The S&P retailers index fell 2.5%. May same store sales fell 4.8%. The International Council of Shopping Centers forecast a 3 to 4 percent drop in

June same store sales, down from 4.6% in May. Freight traffic on railroads continued down for the week of 5/23 yoy, off some

21.5%, but up 4.9% week-on-week. Loadings were down 16.4% in the West and 28% in the East. Farm products fell 4.8% and metallic ores fell 59.7%.

Trailers or containers fell 19.1% yoy, and container volume fell 19.1% yoy, as trailer traffic fell 37.2%.

Year-to-date carloads are off 19.3% ytd and trailers and containers 16.8%. Total volume was down 18.2%.

Something that should be remembered is that in 1930 government bonds were used massively for capital safety. In 1931, investors had doubts and started switching to gold, which ran up in price forcing interest rates higher. This is what is happening today.

In 1930, there was no shortage of bank reserves and that carried into 1931. There were excess reserves and interest rates were very low.

The financial atmosphere in 1928-29 was the same as it was here in 2005 and 2006. It was a new era, nothing could possibly go wrong. The Fed refused to reign in cheap money and credit. Commercial paper rates were 1.25% and excess reserves increased four-fold. In the late summer of 1931 gold began its run. History is about to repeat itself.

Fed Chairman Ben Bernanke deliberately lied to Congress this week. The Fed and the NY fed pumped credit aggressively after the 1929 crash and for the remainder of the 1930s. The exception was 1932 when gold took its big run. Bernanke denied this and it is an historical fact. He also duplicitously told Congress the Fed will not monetize debt, but that is exactly what he is doing. Ben is part of the fascist propaganda machine. Tell a lie long enough and big enough and everyone will believe it. This can be called Fed speak. Big Brother would have been very proud of Ben and his fellow Illuminists. Dick Cheney attempted to win support for harsh interrogation of 'suspected terrorists' by controlling the information Congress would receive on the matter, a report says. In 2005, the former US vice president directed 'at least four' related briefings with Congressmen during which he would produce 'an impassioned defense' of 'enhanced interrogation techniques' -- the former administration's euphemism for torture, The

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Washington Post reported on Wednesday. "This is a really important issue for the security of the United States," one official quoted Cheney as having told the lawmakers. Officials, attending the meeting from the Central Intelligence Agency (CIA), with whom the program is associated, would also try quelling the Congressmen's concerns about the program saying the agency owed half of its information on alleged 'terrorists' to the methods. The former top gun has produced an 'overrated' account of the security gains of the former administrations 'anti-terror' campaign. He has claimed that the Bush administration's trademark 'war on terror' was likely to have saved "violent death of thousands, if not hundreds of thousands, of people" - an achievement which resembles that of World-War-II intelligence heroes. The paper quoted Sen. Lindsey O. Graham (R-S.C.) as confirming Cheney's leading role in selling the program. "His office was ground zero. It was his office you dealt with at the end of the day." Two more Iranian families accuse Blackwater, now known as Xe, of murdering their husbands and fathers in Baghdad and covering it up. Azhar Abdullah Ali, 33, a father of three, was a security guard for the Iraqi Media Network when Blackwater mercenaries killed him and two others on Feb. 7, 2007, according to the federal complaint. The family of Rahim Khalaf Sa'adoon claims drunken Blackwater mercenary Andrew Moonen killed Sa'adoon on Christmas Eve, "for no reason," as Sa'adoon guarded the vice president of Iraq. The security guard family's complaint states: "The Sabah Salman Hassoon, Azhar Abdullah Ali, and Nibrass Mohammed Dawood are but one of a staggering number of senseless deaths that directly resulted from Xe-Blackwater's misconduct," according to the complaint.�Sa'adoon left two young children and his wife.�Named as defendants are Erik Prince, Prince Group, EP Investments LLC, EP Investments LLC, Greystone, Total Intelligence, The Prince Group LLC, Xe, Blackwater Worldwide, Blackwater Lodge and Training Center, Blackwater Target Systems, Blackwater Security Consulting, and Raven Development Group.�Both families seek punitive damages for war crimes, wrongful death, assault and battery, spoliation of evidence, and negligence. They are represented by Susan Burke with Burke O'Neil of Philadelphia.

Nonmanufacturing activity lost ground at a slightly slower pace in May, amid signs the sector may be preparing for recovery.

The Institute for Supply Management, a private research group, reported Wednesday that its NMI/PMI index stood at 44.0 from 43.7 in April and 40.8 in March.

That reading was below the 45.0 expected by economists. The ISM also said that its May business activity/production index came in at 42.4, from 45.2 in April.

The ISM report, which is comprised mainly of the service sector activities that make up the bulk of U.S. economic activity, arrives at a time when economic data are suggesting the recession may no longer be getting worse.

Factory orders rose in April less than expected, a barometer of capital spending by businesses plunged, and inventories fell an eighth straight month.

Orders for manufactured goods increased 0.7%, following a downwardly revised 1.9% decline in March, the Commerce Department said Wednesday. Originally, factory orders were seen dropping by 0.9% in March.

Economists had forecast overall April factory goods orders would rise by 1.0%. The report underscored the weakness of a sector that, while showing signs of improvement, is still limping.

Non-defense capital goods orders excluding aircraft decreased 2.4% in April after sliding 1.4% in March. Those bookings are seen as a yardstick for capital spending by

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businesses. Demand for durable goods were revised down to an increase of 1.7% in April. Last week, Commerce, in an early estimate, said durables surged 1.9% in April. Durables are expensive goods made to last at least three years, such as cars. Durables fell 2.2% in March.

Non-durable goods factory orders decreased 0.1%, after falling by 1.6% in March. A sign of future factory demand fell, down for seven straight months. Unfilled orders decreased 1.2% in April, after dropping 1.7% in March.

Business spending was atrocious in the first quarter of this year. Outlays fell by 36.9% January through March, after dropping 21.7% in the fourth quarter. The economy in those six months was dreary, with gross domestic product down 6.3% in the fourth quarter and 5.7% during the first quarter. Nearly half of that 5.7% drop was caused by U.S. businesses liquidating inventories to adjust for receding demand. The factory data Wednesday showed manufacturers' inventories in April dropped 1.0%, after falling 1.2% in March.

More liquidation could be in the offing. The latest Commerce Department report on business inventories showed the inventory-to-sales ratio was a relatively high 1.44 in March. The gauge indicates how well firms are matching supply with demand. It measures how long in months a firm could sell all current inventory. A year earlier, the I/S ratio was 1.28.

The government now has an equity stake in auto lender GMAC Financial Services after providing $12.5 billion in aid to keep loans flowing to buyers of GM and Chrysler cars, the Treasury Department said Tuesday.

The Treasury holds a 35.4 percent stake in GMAC, after exchanging an $884 million loan it made to General Motors Corp. for that equity under an earlier agreement. GM filed for Chapter 11 bankruptcy protection Monday, a historic move designed to remake the automaker as a smaller and leaner company, that also made the federal government its principal owner with a 60 percent stake.

The government has a vested interest in seeing GMAC, Chrysler and GM succeed in order to recoup the billions in aid it has doled out to the companies. Analysts have suggested the federal support for GMAC will help make it a lending powerhouse that will give GM and Chrysler a big advantage over their competitors — including U.S. rival Ford Motor Co. — which hasn't taken government aid.

Mortgage rates rose sharply last week, and the volume of mortgage applications filed fell a seasonally adjusted 16.2% compared with the previous week, the Mortgage Bankers Association said Wednesday.

Applications were up an unadjusted 14.4% for the week ended May 29 from the comparable week in 2008, according to the Washington-based MBA's survey, results for which were adjusted to account for the Memorial Day holiday. The latest survey, which covers half of all U.S. retail residential mortgage applications, mirrored a similar pattern for mortgage filings seen in the week ended May 22. See full story.

Yields on Treasury notes, a key benchmark for setting mortgage rates, spiked a week ago. See Bond Report.

The most recent week-to-week drop in overall mortgage application volumes stemmed from a 24.1% decrease in refinancing activity among homeowners, the data showed. Filings seeking mortgages to purchase homes were up a seasonally adjusted 4.3%. The MBA's four-week moving average for all mortgages was down a seasonally adjusted 9.0%. Refinancings made up 62.4% of all mortgage applications last week, down from 69.3% the previous week. Applications for adjustable-rate mortgages accounted for 3% of all activity, up from 2.6%. Interest rates charged on 30-year fixed-

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rate mortgages averaged 5.25% last week, up from 4.81% the previous week -- the largest week-to-week jump since October 2008.

Points to obtain the rate averaged 1.02, down from 1.28 the week before. A point represents 1% of the total mortgage amount, charged as prepaid interest. The average rate on 15-year fixed-rate mortgages came to 4.8% last week, up from 4.44% the week before, with points decreasing to 1.10 from 1.16. And one-year ARMs averaged 6.61%, up from 6.55%, with points increasing to 0.15 from 0.12

Arthur Samberg, once the world’s biggest hedge-fund manager, said a federal insider-trading investigation is forcing him to shut Pequot Capital Management Inc. more than two decades after starting its first fund.

“With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business,” Samberg wrote in a letter to clients yesterday. Pequot oversees $3.47 billion, according to a May 15 regulatory filing, down from $4.3 billion in November and $15 billion in 2001, when it was the top-ranked hedge-fund firm by assets.

The U.S. Securities and Exchange Commission in January resumed a probe into whether Samberg’s funds illegally profited in 2001 by trading on inside information about Microsoft Corp., people familiar with the matter said at the time. That was about a year after the agency told Samberg and Morgan Stanley Chief Executive Officer John Mack they wouldn’t be accused of wrongdoing related to insider trading.

California is paying out so much for jobless benefits and collecting so little in payroll taxes that its unemployment insurance fund could be $17.8 billion in debt by the end of 2010, according to a new report from the state Employment Development Department.

This latest fiscal crisis won't immediately affect the 1.1 million Californians now collecting benefits because the state is using an interest-free federal loan to cover their checks. But the state is supposed to repay that loan and restore its unemployment fund to solvency by 2011 - and right now, policymakers aren't sure exactly how to do that, or at what cost. "The deficit that California looks like it is facing is staggering," said Bud Bridger, fiscal officer for the unemployment insurance program.

To rebalance the system and pay back the federal loan, lawmakers must raise payroll taxes on employers, reduce benefits for recipients, or both. In 2009 and 2010, the state expects to pay out $29 billion in benefits. It will collect just $11 billion. Counting the small positive balance that was in the fund at the end of 2008, the result is a $17.8 billion deficit at the end of 2010. Upon further review, April Factory Orders were revised lower, to -1.9% from -0.9%. Under the FASB’s new rules, companies can exclude non-temporary losses from net income. That’s on top of other things it already excludes. By the comprehensive income benchmark, S%P 500 companies had combined losses in their previous four quarters of about $200 billion. The gulf between net and comprehensive income usually isn’t as wide as it is now. General Electric CO. reported 2008 net income of $17.4 billion and a $12.8 billion comprehensive loss. Citigroup Inc.’s $48.2 billion comprehensive loss was $20.5 billion wider than the bank’s net loss. The financial-services industry is taking steps to delay an accounting rule that would force banks and others to bring some of their off-balance-sheet vehicles back onto their books next year, which could force some to raise additional capital. Citigroup disclosed that it “will seek authorization from investors to increase its outstanding common shares to as much as 60 billion, from a current limit of 15 billion.”

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The government’s approach to the bankruptcies of General Motors Corp. and Chrysler LLC illustrates how this new, unstated policy works: Bondholders are told to give up legal rights, and cash, as part of a government-mandated tradeoff that favors a politically connected special-interest group. The big threat is that this policy will extend to all bonds, including Treasury and municipal debt, not just corporate obligations. Rising yields on long-term Treasury debt is a signal that the Federal Reserve should being raising interest rates, said Thomas Hoenig, the president of the Kansas City Federal Reserve district bank on Wednesday…"I suggest strongly that we need to be alert to the markets' message and begin in earnest to bring monetary policy into better balance before inflation forces get out of hand," Hoenig said.

The number of U.S. workers filing new claims for jobless benefits fell slightly as expected last week while total claims dropped for the first time since the start of the year, a fresh signal that the worst of the labor-market downturn has passed. Still, the figures point to another sizable drop in payrolls, in excess of 500,000, when May employment data are released Friday.

Initial claims for jobless benefits fell 4,000 to 621,000 in the week ended May 30, the Labor Department said in its weekly report Thursday. The previous week's figure was revised up slightly.

Economists surveyed by Dow Jones Newswires had expected initial claims would fall by 3,000.

The four-week average of new claims, which aims to smooth volatility in the data, rose 4,000 to 631,250. Meanwhile, the tally of continuing claims - those drawn by workers for more than one week in the week ended May 23 - slid 15,000 to 6,735,000, the first decline since Jan. 3. The unemployment rate for workers with unemployment insurance was 5%, unchanged from the previous week, which was revised down.

Not adjusted to reflect seasonal fluctuations, Illinois reported the largest jump in new claims during the May 23 week, 3,881, due to layoffs in the trade, service and manufacturing sectors.

North Carolina reported the largest decrease, 3,952, due to fewer layoffs in the construction, furniture and transportation industries

Productivity grew at a solid pace last quarter despite a steep contraction in output, suggesting companies have responded quickly to the recession by shedding workers and cutting hours. Non-farm business productivity rose 1.6%, at an annual rate, in the first quarter, the Labor Department said in revised figures released Thursday. That was double the first estimate of a 0.8% rise.

Economists in a Dow Jones Newswires survey had expected the revised data to show a 1.2% increase. Productivity, which is defined as output per hour worked, slid 0.6% in the fourth quarter of 2008.

Unit labor costs - a key gauge of inflationary pressures - rose 3% last quarter, at an annual rate, largely in line with expectations. They were up just 2.2% from one year ago, an indication that wage inflation remains contained.

Over the long run, productivity is key to improved living standards by spurring rising output, employment, incomes and asset values.

There's a downside to that type of efficiency, though. Labor markets will likely remain under pressure in the near term as firms cut back on labor in response to, or anticipation of, weak demand. The May employment report, due Friday, is expected to show another monthly drop in payrolls in excess of 500,000, though that decline wouldn't be quite as severe as the first four months of the year.

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Non-farm business output tumbled 7.6% during the first quarter, at an annual rate, the Labor Department said Thursday. That was on the heels of a 8.8 plunge the previous quarter. Hours worked declined 9% last quarter, the biggest drop since 1975.

Productivity in the manufacturing sector slid 2.7% last quarter. Manufacturing output fell a record 21.7% and hours worked tumbled 19.5%, which was also a record. Hourly compensation in the nonfarm business sector increased 4.6% last quarter. Real compensation, adjusted for inflation, jumped 7.1%

The Federal Deposit Insurance Corp., unable to get U.S. banks to sell toxic loans in a government program, plans to sell hard-to-price assets seized from failed lenders using guaranteed debt financing.

A test auction of illiquid bank assets, planned this month, was delayed yesterday after lenders raised capital without needing to sell bad loans, the agency said. The FDIC will instead use debt guarantees as an incentive for buyers of assets when lenders are in receivership, the agency said.

“If the FDIC can sell bad assets of failed banks, they will be a winner and it gives opportunities for the private sector as well,” said Ralph “Chip” MacDonald, a partner specializing in financial services at law firm Jones Day in Atlanta.

The Obama administration unveiled the two-part Public- Private Investment Program on March 23 as a centerpiece of its effort to shore up the financial system by removing illiquid assets. It would be funded by $75 billion to $100 billion from the

Treasury’s Troubled Asset Relief Program. Since the program was announced, U.S. banks have raised capital through stock sales and by converting preferred shares, and as of yesterday the total reached almost $100 billion, according to data compiled by Bloomberg.

“Banks have been able to raise capital without having to sell bad assets through the LLP, which reflects renewed investor confidence in our banking system,” FDIC Chairman Sheila Bair said yesterday in a statement in Washington.

President Obama's push for healthcare reforms gets a boost today from a new study by Harvard University researchers that shows a sizable increase over six years in bankruptcies caused in part by ever-higher medical expenses.

The study found that medical bills, plus related problems such as lost wages for the ill and their caregivers, contributed to 62% of all bankruptcies filed in 2007. On the campaign trail last year and in the White House this year, Obama had cited an earlier study by the same authors showing that such expenses played a part in 55% of bankruptcies in 2001. Medical insurance isn't much help, either. About 78% of bankruptcy filers burdened by healthcare expenses were insured, according to the survey, to be published in the August issue of the American Journal of Medicine. With companies in no mood to hire, the U.S. unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years. But the pace of layoffs eased, with employers cutting 345,000 jobs, the fewest since September. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, the highest on records dating to 1994. Our calculation shows U6 to be 20.4% based on the 1980 formula which does not include the Birth/Death ratio. Even with layoffs slowing, companies will be reluctant to hire until they feel certain that economic conditions are improving and that any recovery will last. Since the recession began in December 2007, the economy has lost a net total of 6 million jobs.

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As the recession -- which is now the longest since World War II -- bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the fallout. Those include holding down workers' hours and freezing or cutting pay. The average work week in May fell to 33.1 hours, the lowest on records dating to 1964. The number of people out of work six months or longer rose to more than 3.9 million in May, triple the amount from when the recession began. Construction companies cut 59,000 jobs, down from 108,000 in April. Factories cut 156,000, on top of 154,000 in the previous month. Retailers cut 17,500 positions, compared with 36,500 in April. Financial activities cut 30,000, down from 45,000 in April. Even the government reduced employment -- by 7,000 -- after bulking up by 92,000 in April as it added workers for the 2010 Census. Education, health care, leisure and hospitality were among the industries adding jobs in May. The deepest job cuts of the recession came in January when 741,000 jobs disappeared, the most since 1949. Federal Reserve Chairman Ben Bernanke repeated his prediction this week that the recession will end this year, but again warned that any recovery will be gradual. Many economists believe the jobless rate will hit 10 percent by the end of this year. Some think it could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. The post-World War II high was 10.8 percent at the end of 1982. Ripple-effects from General Motors Corp.'s filing for bankruptcy protection -- the fourth largest in U.S. history -- could muddy the outlook, some analysts said. GM said earlier this week it will close nine factories and idle three others indefinitely as part of its restructuring. The closings, which will take place through the end of 2010, will cost up to 20,000 workers their jobs. Government auditors would be allowed to examine the Federal Reserve’s response to the financial crisis – a move many believe would threaten the Fed’s independence – under an amendment adopted by the oversight committee of the US House of Representatives. The amendment, proposed by congressman Dennis Kucinich, is subject to referral to the House financial services committee as well as approval in the Senate, and may never be law. But it highlights the growing pressure in Congress for greater scrutiny of giant Fed lending and asset purchase programmes put in place to fight the financial crisis. The possibility of greater scrutiny could deter private sector companies from participating in some Fed programmes, reducing their effectiveness. The Kucinich amendment goes far beyond legislation recently signed into law by Barack Obama, US president, which gives auditors access to Fed programmes that are blended with government bail-out funds. It would give the Government Accountability Office authority to audit the Fed’s entire activities, including its commercial paper programme, primary dealer loans, term auction facility, foreign exchange swaps and asset purchases. The Fed declined to comment on the amendment. But Ben Bernanke, Fed chairman, has told Congress’s joint economic committee he will “resist any attempt to dictate to the Federal Reserve how to make monetary policy”. Mr Bernanke has said he views the Fed’s loan and asset purchase programmes as an extension of core monetary policy in extreme circumstances – a strategy he calls “credit easing”.

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But critics, including within the US central bank, say its operations have crossed the line between fiscal and monetary policy, which is murky when interest rates are close to zero. Some current and former senior Fed officials fear these actions invited a Congressional backlash against Fed independence, which is now emerging. At the House budget committee this week, Democratic representative Lloyd Doggett told Mr Bernanke: “the Fed�.�.�.�seems to have sprung into action through the back door as a way for some to avoid another request to the Congress for public funds through the front door.” In addition to pressure for more Fed disclosure, there has been talk of a renewed effort to strip the regional Fed presidents of votes at the federal open market committee. The US Federal Reserve on Thursday damped expectations that it was preparing to prop up the market for distressed bubble-era securities backed by mortgages. Hopes that the Fed would in the coming months start providing financing to investors seeking to buy residential mortgage-backed securities (RMBS) – many of which have lost their triple A credit ratings – have pushed prices on these assets higher in recent months. William Dudley, president of the Federal Reserve Bank of New York, said on Thursday that a decision had not been made. “We have not made a final decision on whether it is doable and, if it is doable, whether it is worth the cost,” he said. Mr. Dudley, who took over from Tim Geithner in January, has overseen the implementation of the $1,000bn term “asset-backed securities loan facility” (Talf), a key plank in the US government’s efforts to plug the hole left by the collapse of the asset-backed securities markets. So far, the Talf has been used to finance the purchases of securities backed by loans to consumers, such as car and credit card loans. The Talf lends money to investors such as hedge funds on favourable terms, which encourages the purchases. This week, Talf financed 13 deals worth $16.4bn. “We’re not back yet to the $200bn annual rate of issuance [for consumer loan-backed securities] before the crisis and we don’t expect to get there, but we are making a good start,” M.r Dudley said, stressing that the “securitisation markets are still significantly impaired”. Now, the Fed is working to extend the Talf into more complex areas, such as loans backed by commercial property and also purchases of existing mortgage-backed securities, part of the pool of toxic assets that have contributed to billions of dollars of writedowns. Funding purchases of toxic assets presents huge administrative hurdles because each security has to be analysed. Mr Dudley said many of these securities were no longer rated triple A, which may make them too risky. His comments on residential mortgage-backed securities are believed to also apply to commercial mortgage-backed securities. Although most of these are rated triple A, a wave of downgrades is anticipated soon by Standard and Poor’s. It is in the commercial mortgage market – used to fund office blocks and shopping centres – that the Talf is most needed, however. The 9.4 percent May unemployment rate is based on 14.5 million Americans out of work. But that number doesn't include discouraged workers, people who gave up looking for work after four weeks. Add those 792,000 people, and the unemployment rate is 9.8 percent. --The official rate also doesn't include "marginally attached workers," or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of

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transportation. Add those 1.4 million people, and the unemployment rate would be 10.6 percent. --The official rate also doesn't include "involuntary part-time workers," or the 2.2 million people like Noel who took a part-time job because that's all they could get, plus those whose work hours dropped below the full-time level. Once those 9.1 million workers are added to the unemployment mix, the rate would be 16.4 percent. All told, nearly 25 million Americans were either unemployed, underemployed or had given up looking for a job in May. The ranks of involuntary part-timers has increased by 4.9 million in the past year, according to a May study by the Federal Reserve Bank of Cleveland. Many economists now predict unemployment won't peak until 2010. And since employers generally increase the hours of existing workers before hiring new ones, workers could be looking for full-time jobs for some time. Even so, one economist said the increase in involuntary part-timers might have a silver lining. Gary Burtless, a senior fellow in economic studies at the Brookings Institute, said employers are likely cutting back everyone's hours instead of laying off people. The Federal Reserve's latest weekly money supply report Thursday shows seasonally adjusted M1 rose by $12.2 billion to $1.602 trillion, while M2 rose $30.8 billion to $8.358 trillion.

Rumor has it that JPMorgan Chase has big loan problems in the Middle East. Russian President Dmitry Medvedev says Russia and China should consider

switching to domestic currencies without using the US dollar, as China has done with Brazil and Belarus, using currency swaps. Russian – Chinese trade in 2008 was $50 billion.

Yes, there were 345,000 jobs lost in May, but the Birth/Death ratio added 220,000 jobs out of thin air. The true number of jobs lost was 565,000.

Payrolls in construction fell 59,000 versus a fall of 108,000 in April as the government stimulus package takes hold. Services lost 120,000 and manufacturing 156,000 versus 154,000 in April.

The Economic Cycle Research Institute’s US Future Inflation Gauge designed to anticipate cyclical swings in the rate of inflation, rose to 79.8

in May from 78.1 in April. This is exactly as we predicted, the affect of monetization. The annualized growth rate climbed to a minus 26.9% from 33.8%. As long as China continues to both run a trade surplus and manipulate its

currency it has little choice but to put the proceeds in the Treasury market. The Fed has hired lobbyist Linda Robertson as it seeks to counter skepticism in

Congress about the Fed’s growing power over the US financial system. She previously headed the Washington lobbying office for Enron. She was also an adviser to all three of Clinton’s administration’s Treasury Secretaries.

The Fed is in deep trouble and we hope we were responsible for part of it. On Thursday, the Fed reported holding 1.114 trillion in securities: held outright of

which only $18 billion were T-bills, $540 billion were T-notes, $80 billion were Agency securities and $437 billion were mortgage backed bonds. The worse the Treasury market performs the longer the Fed becomes. The Fed is in deep trouble because as time goes on at least $2.5 trillion more will be added; perhaps by the end of the year. Benefit spending soars to new high: The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher. Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports.

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That's the highest percentage since the government began compiling records in 1929. [More than 30s] In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. The Treasury said it will sell $127B of bills, notes and bonds next week - $35B in 3s, $19B in 10s and $11B of 30s, $31B in three-month bills and $31B in six-month bills. South Korea’s National Pension Service, the country’s largest investor, said it will maintain its U.S. government bond holdings even as it cuts the percentage they comprise. “We are planning to reduce the weightings of American Treasuries, but that doesn’t mean we will be selling Treasuries because our fund size is growing,” National Pension said in a statement in response to questions from Bloomberg News. “We don’t have a specific plan to sell Treasuries.” The Fed monetized $7.49B of 2s and 3s on Thursday. After abstaining for about a week, the Fed has conducted back-to-back monetizations. While most key economic indicators are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments. The absolute dollar value of inventories has fallen, but sales have decreased as much or more, which means that inventories are still too high for the current level of sales. Until this correction is complete, freight will be tough for motor carriers. NYSE data released yesterday shows that Goldman Sachs again is dominating program trading. For the week of May 26 to 29, Government Sachs traded 741.7m shares for its own account, 13.5m for customer facilitation, and 115.4m as agent. This is approximately 7–1 proprietary to customer. California is paying out so much for jobless benefits and collecting so little in payroll taxes that its unemployment insurance fund could be $17.8 billion in debt by the end of 2010, according to a new report from the state Employment Development Department. Unemployment insurance is funded primarily by a payroll tax that costs employers up to $434 per employee, per year. That formula hasn't been changed since 1985. The decision, which would make it hard for Americans in London to open bank accounts and trade shares, is being discussed by executives at Britain’s banks and brokers who say it could become too expensive to service American clients. The proposals, which were unveiled as part of the president’s first budget, are designed to clamp-down on American tax evaders abroad. However bank bosses say they are being asked to take on the task of collecting American taxes at a cost and legal liability that are inexpedient. A decision by Falls Police to use a Taser to obtain a DNA sample from a suspect in an armed robbery, shooting and kidnapping is not unconstitutional. Ron Paul’s audit the Fed bill is now up to 186 cosponsors! That means over 40% of the entire House of Representatives is currently signed onto HR 1207. And thanks to your hard work, Representative Steve Scalise is one of the 186 proud cosponsors. Not only has over forty percent of the House cosponsored HR 1207, but Barney Frank has even promised Ron Paul that he will hold hearings in the House Financial Services Committee. When these hearings occur in a few months, Ron wants to have a majority of House members on board . . . so there will be no stopping Audit the Fed.

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It is amazing what we’ve been able to accomplish in the House on the back of tireless grassroots efforts. But now it is time to start thinking about the next step. Pretty soon we will be turning our attention to the Senate, where we are certain to face a more difficult fight. There, corporate lobbyists and Beltway insiders wield even more powerful influence. Many Senators are already bought and sold by Wall Street bankers and their Federal Reserve flunkies. And the Banking Lobby is already pumping piles of cash into Senate campaign coffers in a preemptive stand against Federal Reserve transparency. Fortunately, Campaign for Liberty has been developing a grassroots program and a massive marketing campaign to counter the banksters’ efforts. And we’re almost ready to launch. But it won’t be cheap, and we can’t afford to run out of gas before the job is done and Audit the Fed is passed. Can you chip in $25 to help counter the millions of Wall Street dollars and corporate contributions ? If you can afford more, every extra dollar will be poured into our campaign to pass Audit the Fed in the Senate. As we close in on 50% support for Audit the Fed in the House of Representatives, the time is nearing to officially unleash the Ron Paul R3volution on the Senate. If you can, please click here to make a contribution to help Campaign for Liberty launch our Audit the Fed program in the Senate. In Liberty, John Tate President P.S. Unlike the Federal Reserve, Campaign for Liberty cannot just print money out of thin air. Can you chip in $20 today to help us restore sound money by Auditing the Fed? US lenders are raising at least $100.2 billion to fill capital gaps found by government stress tests and clear the way for repaying the Treasury bailout fun. The banks have until June 8 to develop a capital-raising plan and Nov. 9 to implement it. The global default rate on speculative-grade corporate bonds rose to 9.2% last month, from 8.3% in April, Moody’s said. Twenty-nine issuers worldwide failed to meet their debt obligations. R.H. Donnelley Corp., the Yellow Pages publisher that defaulted on a total of $10 billion, led the 23 U.S. defaulters, Moody’s said. The four-week flood of money into developing-nation stock funds that drove the MSCI Emerging Markets Index to an eight-month high is sending the strongest sell signal since equities peaked in October 2007. Inflows totaled $12 billion, the most since the 22-country benchmark hit its record high 19 months ago.

*****

Obama Administration Targets Environmental and Animal Rights Activists as Eco-Terrorists by Stephen Lendman http://sjlendman.blogspot.com/

***** Tiananmen Square Is None of Your Business, Congress By Ron Paul

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http://www.24hgold.com/english/news-gold-silver-tiananmen-square-is-none-of-your-business-congress.aspx?article=2098351440G10020&redirect=false&contributor=Ron+Paul ***** Ron Paul: No End To Secret Prisons!? Ignoring Habeas Corpus!? No Penalty For Torture!? http://www.youtube.com/watch?v=acLJ-P9GbQI&eurl=http%3A%2F%2Fwhatreallyhappened%2Ecom%2F&feature=player_embedded ***** Halliburton & Nigeria’s missing millions http://www.businessdayonline.com/index.php?option=com_content&view=article&id=2862:halliburton-a-nigerias-missing-millions-&catid=117:news&Itemid=349 ***** Bankruptcy filings rise to 6,000 a day as job losses take toll http://www.usatoday.com/money/economy/2009-06-03-bankruptcy-filings-unemployment_N.htm?csp=34 ***** Case-Shiller and CAR Housing Declines Since Peak – May Report http://www.24hgold.com/english/news-gold-silver-case-shiller-and-car-housing-declines-since-peak--may-report.aspx?article=2096824512G10020&redirect=false&contributor=Mish ***** Texas cop uses Taser on 72-year-old great grandmother http://carlosmiller.com/2009/06/02/texas-deputy-uses-taser-on-72-year-old-great-grandmother/ ***** Tillman's mother says general lied again about his death http://www.cnn.com/2009/POLITICS/06/02/tillman.mcchrystal.hearing/index.html ***** It’s increasingly evident that Obama should resign http://www.infowars.com/its-increasingly-evident-that-obama-should-resign/ ***** Gross Says Diversify From Dollar as Deficits Surge http://www.bloomberg.com/apps/news?pid=20601087&sid=ajzmRUMx8Hoo ***** Signs of a new financial storm for September coming from Dubai and Saudi Arabia http://www.asianews.it/index.php?l=en&art=15402&size=A *****

Watching Obama Morph Into Dick Cheney

by Paul Craig Roberts http://www.globalresearch.ca/index.php?context=va&aid=13841\ *****

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Economic Policymakers Have Created A Perfect Storm By Paul Craig Roberts http://www.vdare.com/roberts/090603_storm.htm ***** Handwritten Notes Show Fed Oversight Bill Neutered On Senate Floor http://www.huffingtonpost.com/2009/05/08/handwritten-notes-show-fe_n_200515.html *****

Pilot claims Air France Flight 447 was blown out of the sky by terrorists

Peter Allen, Ian Sparks and David Williams

Mail Online June 3, 2009 http://www.infowars.com/pilot-claims-air-france-flight-447-was-blown-out-of-the-sky-by-terrorists/ ***** Fail, Fail, Fail, Fail http://lewrockwell.com/rockwell/fail-fail-fail.1.2.1.html ***** War With Iran: Has It Already Begun? http://lewrockwell.com/raimondo/raimondo55.html ***** Bond Market Blowout By MIKE WHITNEY http://www.counterpunch.org/whitney06042009.html ***** Four years ago when this got passed we said it was a scam to bring money in to boost share prices. As you can see that is exactly what happened. The $350 billion was supposed to help create jobs, now they have another program that want to get passed to bring $700 billion back into the country. Last time the tax instead of being 35% was 5-1/4%, perhaps this time there will be no tax at all so you get to pay for it. Bob Tax Break for Profits Went Awry http://www.nytimes.com/2009/06/05/business/05norris.html?_r=1&ref=business ***** Credit tightens; small companies scramble http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/05/BU6C1815AM.DTL&type=business **** Bank Profits From Accounting Rules Masking Looming Loan Losses http://www.bloomberg.com/apps/news?pid=20601103&sid=alC3LxSjomZ8&refer=us ***** Less Bad is not Good Enough http://www.comstockfunds.com/default.aspx?act=Newsletter.aspx&category=Market+Commentary&newsletterid=1461&menugroup=Home&AspxAutoDetectCookieSupport=1 *****

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Ron Paul on Government Economic Madness http://www.lewrockwell.com/blog/lewrw/archives/027075.html ***** How the Vatican sold its soul A new book by the journalist Gianluigi Nuzzi lays bare a history of political bribes being paid through the Vatican's central bank http://www.guardian.co.uk/commentisfree/belief/2009/jun/03/vatican-central-bank ***** Crisis at the VA as Benefits Claims Backlog Nearly Tops One Million http://www.truthout.org/060509A During the past four months, the Department of Veterans Affairs backlog of unfinished disability claims grew by more than 100,000, adding to an already mountainous backlog that is now close to topping one million." ***** From a Fellow Subscriber: Hi Bob: I wanted to respond to the subscriber that suggested scenarios for liquidating retirement accounts to physical metals. First, as you ALWAYS say own only metal and shares. Shares give the leverage. As proof I will give a glimpse of my portfolio. I am self employed and allowed to contribute much more than a traditional account as you know. As this meltdown began I was studying Austrian economics. I pulled $72k from an SEP and put it with Peter Schiff thinking he surely knew how to keep it safe as I agree and you do with most of what he says. Well, that 72k promptly collapsed to $31k. I continued to read and learn particularly from you and realized metals were the only safe investment. As examples, the $31k I removed from Peter's company and bought all mining shares has gone from $31k to $51k since March 9, 2009. Another SEP account I opened in Dec. 08 with $35k is now at $93k, again 100% miners. Another non-retirement opened in December 08 and funded some in January 09 with $15k is now at $43k. Another, opened in Nov. 08 with $29k is at $70k. Clearly, I am no stock picking guru, yet my returns from all miners has been pretty good I'd say. Of course I have bought physical throughout as well. When gold and silver take off, as they will eventually, I believe you are right when you say AEM may be $500 per share. Many others may reach what seemingly are ridiculous prices. It happened in 75 to 80 and it may even be greater this time. The main point I wanted to impart is that the shares give leverage, which after they have shot up 10 to 50 fold I will pull out of retirement accounts and buy physical regardless of the price and or the penalties. The gains over several years will be once in a lifetime profits. If I pay penalties to liquidate to physical for retirement accounts now I miss the tremendous leverage shares will dole out. Of course, primary is to have physical first. With some research it is not very difficult to study the miners and terms etc. It's much like law, once you learn the language reading reports and prospects become easy. My view is All retirement accounts in shares now. If I can have returns like this when metals haven't taken off yet then anyone can. Don't miss this opportunity. I suspect you will agree having been in this business so long. If not please share your thoughts. Keep up the great work. Take care and God Bless, ***** From an Interested Reader:

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Don't know where this came from (who) but it came to me via another retired army friend...worth heeding...we already know the Homama administration considers vets to be 'radical threats'. So for God's sake....don't EVER tell them you feel STRESSED. :) READ AND HEED This came from a good friend who works for the feds - to be forewarned is a good thing. Subject: Concealed Carry Permit & VETERANS - PLEASE READ This one is for US Veterans. I have never heard of this before, but thought it was important enough to pass along. From a good friend . . . "I had a doctors appointment at the local VA clinic yesterday and found out something very interesting I would like to pass along. While going through triage before seeing the doctor, I was asked at the end of the exam, three questions. (1. Did I feel stressed?) (2. Did I feel threatened?) (3. Did I feel like doing harm to someone?) The nurse then informed me, if I had answered 'yes' to any of the questions, I would have lost my concealed carry permit as it would have gone into my medical records and the VA would have reported it to Homeland Security. Looks like the Fed is going after us now." Be forewarned and be aware. The Obama administration has gone on record stating that they consider US veterans and gun owners as potential terrorists. If you are a veteran, you've been warned. If you know veterans, please pass this on to them. ***** From an Interested Reader: Bob -- If a CARBON tax becomes law it will affect all costs related to petroleum, including heating fuel, aviation fuel, propane and natural gas. Not only will plane fares be more expensive but fertilizers will also cost more. We can expect US exports to become even more uncompetive with correspondingly greater deficits in balance of payments. Carbon as CO2 should be listed as a fertilizer. If there were no Carbon Dioxide there would be no plants and hence no animals including humans on the face of the earth. This carbon ignorance is typical environmental non-sense. The climate of the earth is controlled by the Sun including the absence of sunspots and not by man's insignificant activities. Maybe with luck the average electrical bill will increase over $100 a month and the environmental non-sense will be seen for what it is -- not only a way to control people and civilizations but a very selfish and provincial approach as to what may be beneficial to a very limited number of people, primarily environmentalists and politicians. Windmill and solar installations require a large capital investment for a very small amount of variable and undependible amount of power. That is the reason why it can not stand on its own. The exorbitant costs for windmill and solar are covered up by submersing these activities in a larger, typical utility, where the rates will not fully reflect the costs of the so called "green" energy sources. The "green" should refer to the costs of this very expensive and unreliable power. As long as Carbon, with its four valence electrons for oxidation, exists, it will control and be supreme over all other forms of energy including nuclear, solar, wind and ocean current. i have been a practicing Chemical Engineer for over 40 years with a knowledge of fluids, both mechanical and chemical thermodynamics and electrical power generation. A Carbon Tax is just insane. Obama and the communist congress

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doing another stupid thing that WILL not work.

***** From a Interested Reader: Cessna I heard that the severance checks being issued by Cessna are bouncing. ***** From a Fellow subscriber: American Gear Axle / GM Mr. Chapman, 5 years ago a friend Skeeter worked at A G A in Mi,we ( myself and John Ridgeway below) tried to tell him that the Union was being bought off...his dad was big in the union our conversations were diluted...IE from daddy "don't talk with them, they are the Militia" . The plant double tiered with temps, tried to buy him off, fired some, retired some, union slobs got big new GM Ecalades....the Masons in the plant came around in beret black hats with the pyramid and the all seeing eye, told him to join, or the "ALL SEEING EYE WILL GET YOU"! I told Skeeter to tell his daddy to tune up his car, because he will need it when the workers catch on....a few weeks later daddy was being yelled at during a union town hall meeting, daddy the mason- he is now retired...and moving. Skeeter is done....plant moving to Mexico, after all the give aways.......he got nothing. My Dad retired from GM, he is 86, with us here, my family- many worked for GM, I tried to tell years ago....but the "ALL SEEING EYE GOT THEM"! Retirement, 401k, no planning for this at all. ***** From a Fellow subscriber: Thought you might like to see this article about insiders now selling 27:1 over buying. The latest data on insider selling shows little relief in the relentless unloading of company stock by corporate insiders. In the last two weeks insiders sold over $335MM in stock vs. listed insider purchases of just over $12MM. As has been the trend over the course of the last few weeks the list of insider selling has been long and the amounts have been staggering. The buy side, on the other hand, is represented by low rated, low priced stocks whose insiders rarely purchase over $500K. One might think that with all of these “green shoots” the insiders at major U.S. corporations would begin buying up their own shares voraciously. Especially after a nice little run like we’ve seen lately. After all, with stocks still 35% off their highs and a full blown economic recovery (supposedly) on the horizon it would make nothing but sense than to buy your own shares, right? http://pragcap.com/despite-green-shoots-insider-selling-picks-up ***** From an Interested Reader: GM's Stewardship From a US Citizen, Proud American car owner since early '70's Bob, you have our permission to add this to your future newsletter. Keep up the good work, GOD Bless You and Yours. Hello Mr. Clark, since GM insists on running their company as they see fit with a total disregard to the consumers, I dumped my 2000 GMC pickup and bought a top quality 2009 Toyota Tundra. I have watched over the past

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8-9 years at how GM and Chrysler were running their businesses and this did not surprise me in the least as to today outcome for the companies. Your quality of workmanship over the years has gone to hell in a hand basket. So much of the vehicles manufactured by your company and Chrysler are manufactured overseas or south of our borders and you only assemble in the states, how much of the bailout money that given to your company went south of our borders or across the pond to cheap China??? I now own a massive amount of your company as a taxpayer and it's a damn good thing I can't make the sole decision on this matter. I would demand you reduce the price of your vehicles by 50% and I would also put a tariff on all parts coming into the US from foreign countries. This would require you to bring the parts manufacturing back into the US where it belongs. There isn't one vehicle that GM or Chrysler produces that is worth over $12K at the maximum. Oh, but you say I bought a foreign vehicle, yes I did, 90% of all the parts going into my vehicle were made in the US and the vehicle was also assembled in the US by US people. Besides, the quality of the product and the workmanship of the product by far outweighs any US manufactured vehicle today. You people made your bed, so now sleep in it. If it were entirely up to me I would let you all go bankrupt. MM Oklahoma, USA (GM's canned response as we can see the “Just give us another Chance” remark will get you a 'personal' human reply.) Your GM Team wrote: Dear .........................., First off, I'd like to thank you for being a GM customer. Your current and future business means a lot to us. Given all of the recent media coverage about GM, I am writing you today to address some questions you may have, and to assure you that we are here to stay and ready to serve you. As you may know, GM is using an expedited, court-supervised process to accelerate the reinvention of our company. At the core of that reinvention is a commitment that we will put the customer first in all that we do starting with great cars, trucks and crossovers, and the best sales and service experience possible. We want to earn your trust in several ways, including: Your GM Dealers. “They are very much open for business and ready to meet your sales and service needs. And even though we are seeking buyers for our Saturn and Saab brands, have just announced the selection of a buyer for the HUMMER brand, and have decided to eventually phase out Pontiac, those dealerships also remain open and ready for service. The bottom line is service for your vehicle will always be available through authorized GM retail and service facilities by GM-trained Goodwrench experts, with Genuine GM Parts on hand. Your Next GM Vehicle.” At this, the most important moment in the history of our company, our dedication to high-quality, fuel-efficient and outstanding-value vehicles has never been greater. Purchase a new GM product, and we stand behind it with a U.S. government-backed, 1 comprehensive 100,000-Mile 5-Year Powertrain Limited Warranty. 2 Combined with Roadside Assistance and Courtesy Transportation Programs, it is the Best Coverage in America. As I said before, our GM dealerships are very much open for business, and banks and credit unions are lending and continue to offer some of the best rates available to qualified buyers. To find information about GM dealerships in your area, please visit GM.com/vehicles/dealer. For over 100 years, GM has fueled America's passion for the automobile. Propelled by the spirit and commitment of our people, we will become the New GM, a company that makes Americans proud, and one that can compete successfully with anyone in the world. All of us at GM are confident that we will emerge a leaner, stronger company for you, offering the most compelling vehicles possible from our Chevrolet, Buick, GMC and Cadillac brands. I invite you to stay up to date on our promising new future by visiting GMreinvention.com. As I said at the outset, we are genuinely grateful for your business, and we hope that you'll stay with us. If you are considering buying a new vehicle, please review a special offer for our owners. Then, visit GM.com/owner to see how this can be

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combined with other current incentives. “It’s our way of saying Thank You” for your ongoing support. Sincerely, Troy A. Clarke Group Vice-President, GM North America 1) Government-backed warranty for GM vehicles purchased from March 30. July 31, 2009 2) whichever comes first. See dealer for limited warranty details. Excludes Saab. If you prefer not to receive any unsolicited marketing emails regarding GM vehicles, click here. ***** COMMODITIES

DOE reports crude oil inventories rose 2.87 m/b, gas fell 215,000 barrels and distillates rose 1.66 m/b.

EIA reports natural gas inventories up 124 bcf. Gold ended the week down 2.4% to $955 (up 8.3% y-t-d). Silver declined 2.2% to $15.27 (up 35.2% y-t-d). July Crude gained another $2.05 (3-wk gain of $11.36) to $68.36 (up 53% y-t-d). July Gasoline rose 3.2% (up 84% y-t-d), and June Natural Gas increased 1.2% (down 31% y-t-d). Copper rallied 3.3% (up 61% y-t-d). July Wheat declined 2.2% (up 2% y-t-d), while July Corn increased 1.8% (up 9.1% y-t-d). The CRB index recovered 1.9% (up 12.4% y-t-d). The Goldman Sachs Commodities Index (GSCI) rallied 2.8% (up 30.5% y-t-d).

GOLD, SILVER, PLATINUM AND PALLADIUM

On Wednesday our government did its thing again. The Dow was down 150 and just before the close it rallied to minus -66 to 8675. The S&P fell 117 and Nasdaq 65 Dow points. Many major corporations, particularly financials are selling secondary offerings in the hundreds of billions of dollars, thus, government is holding the market up.

They trashed the currencies. The yen fell .0021 to $.9583; the euro fell .0186 to $1.4135; the pound fell .0296 to $1.6276; the Swiss franc fell .0092 to $1.0712; the Canadian dollar fell .0266 to $.9026 and the USDX rose 1.00 to 79.41. Our criminals at work.

They trashed commodities as well. Oil fell $2.47 to $66.07; gas fell $0.03 to $1.89 and natural gas fell a large $0.35 to $3.77. Platinum fell $4.50 to $1,238; palladium fell $8.75 to $241.70 and copper fell $0.07 to $2.22. the CRB index was smashed off 7.16 to 253.05.

The 2-year was 0.91% and the 10’s 3.54%. The HUI fell 24.20 to 373.90 and the XAU fell 8.67 to 152.51. the HUI held its uptrend. AEM fell 5.37%, or $3.31 to $58.30; GG fell 6.20%, or $2.41 to $36.49; SSRI fell 6.61%, or $1.63 to $23.04 and MFN fell 6.80%, or $0.63 to $8.64. Spot gold fell $19.80 to $963.40 and silver fell $0.62 to $15.33.

The Illuminist cartel knew gold was going to attack $1,000 today so they attacked early and strongly. We remind you to tell your Senators and Congressmen that you know the markets are rigged and that you want it stopped. That you know all about the “Working Group on Financial Markets” and you want what they are doing stopped. This is your tax money they are losing by keeping prices down and the market and bonds up.

Gold open interest rose 2,463 contracts to 391,057, as silver OI gained 1,487 to 391,986.

The ECB says gold and gold receivables - 6 million euros - or 0.27 tons were sold last week. One central bank sold and another bought.

No wonder some central banks are buyers when students laugh at and jeer our Treasury Secretary. There is nothing stable about our debt position. The media forgot to

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cover that. American debt and the dollar are not safe. Laughter is far worse than derision.

At 3:30 am Thursday the Dow was up 40 to 8709; S&P rose 43, Nasdaq rose 38 and the FTSE fell 21 Dow points. The Nikkei fell 73 to 9669; the CAC rose 21 and the DAX was up 52. The 10-year was 3.58% and the 2’s 0.93%. Oil was $67.31, up $1.18; gas rose $0.02 to $1.93 and natural gas rose $0.07 to $3.82. Gold was up $2.70 to $968.30, silver fell $0.03 to $15.28 and copper was $2.23, up $0.02.

Thursday was turnaround day. All the government manipulation of Wednesday was neutralized. Spot gold rose $16.30 to $980.80, as silver rose $0.56 to $15.87. AEM rose 3.69%, or $2.15 to $60.45; GG rose 3.48%, $1.27 to $37.76; SSRI rose 4.04%, or $0.93 to $23.97 and MFN rose 3.94%, or $0.34 to $8.98. Silver was again more impressive than gold, having been banged down to $15.12 from which it came storming back. Gold open interest rose 4,866 contracts to 395,923, as silver OI gained 1,187 to 106,173. The HUI rose 12.31 to 387.00 and the XAU rose 6.74 to 259.79.

The yen fell .0112 to $.9687; the euro rose .0043 to $1.4176; the pound fell .0086 to $1.6190; the Swiss franc rose .0016 to $1.0694 and the Canadian dollar rose .0091 to $.917 and the USDX fell .04 to 79.36.

Oil rose $2.63 to $68.74; gas rose $0.06 to $1.96 and natural gas rose $0.01 to $3.84. Copper rose $0.10 to $2.31; platinum rose $55.10 to $1,299 and palladium rose $12.65 to $254.40. The CRB index rose 56.74 to 259.79.

The Dow defied gravity and rose 75 to 8750, as S&P rose along with Nasdaq. The 10’s closed at 3.72%.

On Friday early it was obvious the PPT was busy overnight, but with limited success thus far. The Dow was up 36 at 8763, S&P rose 38, Nasdaq gained 20 and the FTSE was up 58 Dow points. The Nikkei rose 99; the CAC gained 28 and the DAX 15. The yen was off .0017, the euro lost .0007 and the pound fell .0079. The 2-year was 0.97% and the 10’s were 3.73%. Oil fell $0.28, gas lost $0.03 and natural gas rose $0.03. Gold fell $5.50 to $976.80; silver fell $0.22 to $15.67 and copper fell $0.01. Gold could start playing a more important role in Russia's reserves due to the influence of regional currencies, a Kremlin aide said on Friday. Addressing the St. Petersburg International Economic Forum, Russian President Dmitry Medvedev earlier said the structure of the global currency system would inevitably change with the increasing role of regional reserve currencies, and called for a reassessment of the potential role of gold in the global currency system. "I do not think it [gold] will replace everything else - it would be naive and unjustified, but the growing role of gold amid the crisis could be a topic of discussions in the near future," Arkady Dvorkovich told the TV channel Vesti. He ruled out a return to the gold standard monetary system.

Friday was another wild day. Just after the unemployment figures were released gold jumped $5.00, and was immediately hit and fell straight away $28.00. As that happened the USDX fell 50 bps. Spot gold finished off $19.80 at $961.00 and the June month was off $8.00 more. Spot silver fell $0.41 to $15.40 and July was off $0.21 more. The USDX rose .67 to 80.88. This is your government at work. Contact them and raise heck. Spot gold got as low as $953.64 and silver $15.15. Gold open interest rose 5,776 to 401,700 probably on some short covering. Silver OI rose 3,100 to 109,272. Comex commercial shorts increased net gold shorts for the previous week to Tuesday by a large 17,385. The XAU fell 6.75 to 150.67 and the HUI lost 19.20 to 367.82. AEM fell 5.11%, or $3.09 to $57.36; GG fell 4.40%, or $1.66 to $36.10; SSRI fell 6.72%, or $1.61 to $22.36 and MFN fell 3.67%, or $0.33 to $8.66.

The Dow rose 13 to 8763; S&P fell 21 and Nasdaq fell 4 Dow points. The 2-year T-bill yield jumped a giant 37 bps from 0.93 to 1.30%. The 10- year notes rose 25 bps

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from 3.57% to 3.84%. If they hold the 30-year fixed rate mortgage it will be 5-1/2% and you can expect a second housing collapse.

The yen fell .0155 to $.9834; the euro fell .0215 to $1.3961; the pound fell .0214 to $1.5976; the Swiss franc fell .0144 to $1.0861; the Canadian dollar fell .0176 to $.8940.

Oil fell $0.36 to $68.48; gas was unchanged at $1.96 and natural gas rose $0.07 to $3.88. Copper fell $0.03 to $2.27; platinum fell $23.30 to $1,270 and palladium rose $4.60 to $259.05. The CRB fell 1.87 to 257.92.

The Kremlin says gold could start paying a more important role in Russia’s reserves. Russia wants a gold backed reserve currency.

For 3-1/2 years there has only been two times when the commercials short/long ratio was as high as the 3.81 level it reached last Tuesday. The first time was in April 2006, after which gold fell from $690 to $570 and for two weeks in October 2007 after which gold rocketed from $730 to $1,015 as the commercials covered. ***** LIBERTY DOLLAR ALERT: June 2009 Vol. 11 No. 06-A http://www.libertydollar.org/ld/pr_nl/06_04_2009.htm *****

Securitization: The Biggest Rip-off Ever

Financial Deregulation has Opened Up A Pandora's box by Mike Whitney http://www.globalresearch.ca/index.php?context=va&aid=13863 *****

DISCOUNT GOLD & SILVER TRADING

1800 375 4188

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 with Bob Chapman live on Short-wave

7.415Mhz M-F 4:00PM ET, Replays Tuesday thru Friday 8pm RT 7.465Mhz 3.215 MHz M-F 11PM ET and weekly archives at discountgoldandsilvertrading.net

Gold Stocks or Gold Coins? Choosing a type of vehicle (stocks, bonds, gold, etc.) in which you can invest your capital is always as much art as science. But making an investment choice in “normal” times—when the overall economy is running at a stable and predictable level—is far less complicated than choosing an investment when (as now) the economy is in a state of flux and uncertainty.

Today, no one knows even generally what’s going to happen to our economy, and therefore no one knows generally what will happen to the prices of stock, bonds or commodities. Without reliable knowledge of where the economy is heading, every investment choice necessarily involves increased risk.

Under normal circumstances—a strong, stable economy—your wisest “generic” investment choice might be conventional stocks. Under a very worst case scenario,

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your best investment choice might be gold bullion. But where do you invest if the economy seems somewhere in between a best and worst case?

Everyone agrees that our current economy is not “normal” and may even be in great jeopardy. Officials in the Obama administration have repeatedly described our current economic and financial circumstances as “unprecedented”. One report indicates that in order to shore up our economy, our government has borrowed more money in the past six months than it did in the previous 30 years. Current events in California illustrate that significant portions of our government or society could collapse into chaos over the next months or years. Some people believe the entire nation could disintegrate as was last seen with the former Soviet Union. However unlikely these beliefs may be, they are not impossible.

As a result of growing awareness of the potential risks we currently face, individuals and even governments around the world are increasingly moving away for stocks and “paper” investments and into physical gold. As the demand for physical gold increases, the prices for stocks in gold mining or gold producing companies necessarily rise, too—often at rates that exceed the rate of increase in the price of gold. I.e., if the price of gold rises 20%, the price of at least some gold stocks might rise 50% or more.

As a result, investors who recognize the existing economic and financial risk and are drawn to the security of physical gold but are also tempted by what may be an even greater profit potential in gold stocks.

However, despite the profit potential in gold stocks, they are still stocks. That is, gold stocks are not payments (as are gold coins), but are merely debt instruments and therefore “paper promises to pay”.

The danger in all paper debt instruments is the looming and apparently unpayable total American debt. According to John Williams (Shadowstats.com), USA Today (April, A.D. 2008) and John Walker (former U.S Comptroller under the G.W. Bush administration), the total national debt owed by our federal government is now at least $55 trillion. Add in the debts owed by state and local governments and private parties (mortgages, auto, credit cards, etc.), the total American debt is believed to be at least $75 trillion. (Some estimated that total American debt may even be over $125 trillion).

If we divide that $75 trillion debt by our population (300 million), we find that each American’s “fair share” of the total debt is $250,000 for every man, woman and child. For example, the “fair share” of the total American debt for a family of four would be about $1 million. It seems virtually impossible that the average American has $250,000 in assets, or that the average family of four has $1 million in assets. Instead, I’d guesstimate that that the average American has, perhaps, $50,000 in assets. If you owe $250,000 but have only $50,000 in assets, how can you pay the remaining $200,000? Assuming those figures are roughly correct, it appears impossible to ever repay the total American debt. Instead, those figures suggest that at least 80% of the existing American debt can’t be paid and therefore won’t be paid.

There’s no way to tell if the 80% guesstimate is accurate. Perhaps 90% of the total debt can’t be paid, or maybe just 50% of the debt can’t be paid. But it seems undeniable that some significant portion of the total American debt can’t ever be repaid.

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How’s that relevant to investing in stocks in general—and even investing in gold stocks?

The relevance is risk. Every paper debt instrument (including stocks, bonds, bank account passbooks, pension funds, etc.) is not a real asset but only a promise to pay. If you hold a piece of paper in your hands (like a stock or bond) that reads $100,000, you might claim to have a $100,000 asset (payment), but what you really have is a $100,000 promise to pay. It’s not a payment; it’s an I.O.U..

But we live in a world where somewhere between 50% and 90% of the existing debts (promises to pay) can’t be ever repaid . . . and therefore won’t be paid. That suggests that, on average, somewhere between 50% and 90% of the value of all paper debt instruments (promises to pay) will be repudiated over the next several years. This repudiation might take place by means of inflation or it might take place by means of bankruptcy. But the total American debt is so enormous that it seems certain that the total debt can’t be paid, won’t be paid and must therefore, somehow, be repudiated.

If so, those who invest their wealth in paper promises to pay (like stocks, bonds, etc.), may on average, lose 50% to 90% of the purchasing power of their investment. This conclusion does not mean that all paper debt instruments will lose 50% to 90% of their purchasing power—that’s only a guesstimated average. Some paper debt instruments (like gold stocks) may hold every dime’s worth of investment value. Other paper debt instruments may suffer a 100% loss.

My point is that there appears to be a general and significant risk associated with any paper debt instruments—including gold stocks.

This appearance is not mere conjecture. If you’ve watched the plight of General Motors bondholders over the past two months, you’ve seen a perfect illustration of the maxim that “what can’t be paid, won’t be paid”. Based on various pretexts, and compelled by the federal government, these bond holders have probably lost 80% to 90% of the value of their investments in GM bonds (paper promises to pay; debt instruments)—and bonds should be among the safest forms of investment.

Will the same magnitude of loss be suffered by other bondholders, stockholders, pension-holders and even those who invest in gold stocks? Who can say? Those who invest in gold stocks will probably retain their investment in direct proportion to the extent that our economy holds together. On the other hand, in the event of a real financial and economic collapse, those holding paper promises to pay (including gold stocks) may lose most of their assets.

On the other hand, those holding physical gold (a payment, not a promise to pay), should find their capital secure even in a worst case scenario. Given the appreciation potential for gold bullion and even greater potential for appreciation in numismatic coins, those who invest in gold should profit significantly. No one knows what price gold may rise to in the near future, but everyone has heard plausible predictions ranging from $2,000 an ounce to even $10,000 an ounce.

It’s certain that the profit potential for some gold stocks is greater than the profit potential for gold bullion and gold numismatic coins—but so is the risk. If you have physical gold in your possession, there is almost no risk of losing the value of your investment to

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inflation or bankruptcy. If you have paper gold stocks in your possession, there is some risk that your paper promise to pay may turn out to be unpayable and therefore largely worthless.

Don’t forget that while “all physical gold is good gold,” not “all gold stocks are good gold stocks”. Undoubtedly some gold-producing corporations will profit handsomely in the coming years and their stocks may rise spectacularly. But some gold-producing corporations may be mismanaged, over-leveraged or just unlucky and wind up following in the footsteps of General Motors. Choosing to invest in particular gold coins is an easier and safer “science” than choosing to invest in particular gold-producing corporations.

So—should you invest strictly in gold coins, strictly in gold stocks, or should you invest in a mix of gold coins and gold stocks? The choice is yours. That choice should depend on what’s going to happen to our economy—and also what’s going to happen any particular gold-producing corporation.

In general, your investment choice can probably be made based on your answers to the following questions:

1. How do you assess the economic future?

Will the economy Prosper? Stagnate? Decline? Collapse? If your assessment is “Prosper,” then avoid gold and invest in stocks. If your assessment is “Collapse,” “bet the farm” on physical gold. Given that most economic predictions seem to lie near the Decline or Collapse end of the economic spectrum, investing in almost any form of gold seems wise. If your assessment of the economy is somewhere in between extremes of “Prosper” and “Collapse,” (say, at the Stagnate or Decline phases), then select a “proportional” investment mix of gold coins and gold stocks.

2. How much of your total investment capital can you afford to lose?

If your assessment of our economic future is in the Decline/Collapse range of the economic spectrum, then paper investment risks are high. If—in a relatively high-risk economy—you can afford to lose one-third of your investment, then you can afford to invest one-third of your capital in gold stocks. If you can afford to lose one-half of your capital, then you can afford to invest one-half in gold stocks.

But are we truly in a “high-risk” economy, and if so, what is the degree of that risk? Opinions abound, but in the end, you must invest your capital based on your evaluation of the degree of risk associated with our general economy.

Conversely,

3. How much of your total investment capital must you absolutely secure?

Whatever part of your capital you feel obligated to secure suggests much you may want to invest in physical gold coins. If you can’t afford to lose one dime, you may want to invest 100% of your capital in taking possession of physical gold. If you need only preserve 30% of your capital, then you may want to invest 30% in gold coins.

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Either choice (investing in only gold coins, gold stocks or a mix) is reasonable in the current economy. Either choice should generate some significant profit in the over the next 3 to 10 years. Choosing the right gold stocks may generate the greatest profit—but should also entail the greatest risk.

There’s no such thing as a risk-free investment, but choosing to invest in gold coins at this time may be the least risky investment choice available. In today’s market, investing in gold coins is virtually certain to avoid significant loss and is virtually certain to result in significant gain.

Today, consumer confidence (and the stock market indices) are rising because our economy has seemingly stopped its freefall and is currently stagnant. Hooray—things aren’t getting any worse! However, most believe that our economy is at least headed towards further decline. I believe that however unlikely, economic collapse remains possible. For that reason, I believe your investment choices should be weighted against paper debt instrument (promises to pay) and in favor of taking possession of physical gold coins (payments).

But, again, the choice is yours. Stick with gold and you should do well. But which form? Gold coins? Gold stock? A mix of both? Because no one really knows what will happen to our economy over the next 3 to 10 years, you will have to make your own assessment of our economic future and then decide how much of your capital you’re prepared to risk. Then, choose gold coins or gold stocks accordingly.

email us at: discountgoldandsilver@yahoo.com Discount Gold & Silver Trading Co. provides all forms of precious metals including gold, silver platinum and palladium whether you are buying or selling. Our inventory includes but not limited to the American Gold, Silver, Platinum Eagle and numismatic products including rare, investment and circulated coins. Silver dollars, silver bars, rounds are on hand for the silver investor. Foreign gold is also available. Call for information regarding your precious metal gold and silver IRA. 1 800 375 4188 ***** CANADA Ivey PMI declines to 48.4 in May. April Building Permits (MoM) decline to -5.4%. Canada’s economy cut jobs for the sixth time in seven months and recorded the highest unemployment rate in 11 years in May as factories continued to fire workers amid the first recession since 1992. A net 41,800 people lost their job during the month and the unemployment rate climbed more than expected to 8.4 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg predicted employment would fall by 36,500 and the jobless rate would rise to 8.2 percent. The world’s eighth-largest economy is shrinking in the face of a global slump that has sapped orders for Canada’s lumber, automobiles and metals. Factories in the manufacturing hub of Ontario now employ the lowest number of workers since the agency’s current survey method began in 1976. The province also saw its jobless rate soar to a 15-year high of 9.4 percent.

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The Bank of Canada held its key interest rate unchanged on Thursday at 0.25 percent, as expected, but sent a shot across the bow of currency markets with unusually strong comments on the threat posed by the sharp appreciation of the Canadian dollar.

Railroad volume fell 33.5% yoy, and trailers and containers fell 18.9%. Year-to-date volume fell 23.4%, as trailers and containers fell 14.5%. EUROPE

The Irish government said Wednesday it posted a budget deficit of EUR10.6 billion for the first five months of 2009, compared with a deficit of EUR3.6 million from January to May 2008.

Tax receipts fell to EUR13.5 billion during the period from EUR17.1 billion in the same period last year, showing that public coffers continue to deteriorate, though the latest data are in line with government projections.

German new car registrations rose 39.7% on the year in May to 384,578, the federal vehicle agency said Wednesday.

For January through May, new car registrations were up 22.8% from a year earlier, to total more than 1.6 million.

Joblessness in recession-struck Lithuania jumped to 11.9% in the first quarter 2009 from 7.9% in the previous quarter, Statistics Lithuania said Wednesday.

The figure translated into 194,000 unemployed which the nation of 3.4 million last saw upon its entry into the European Union in 2004.

Joblessness rose sharply among men, a result of a plunge in the construction and industrial sectors as first quarter output in 2009 shrank by a record 13.6% year-on-year.

Unemployment declined steadily after Lithuania's 2004 E.U. entry to a low of 3.9% the third quarter 2007, but subsequently began to rise.

Euro-zone producer prices fell for the ninth consecutive month in April, while the annual measure recorded its largest decline on record, data from European Union statistics agency Eurostat showed Wednesday.

Producer prices dropped 1.0% on the month in April and declined 4.6% on the year-earlier period, the largest annual decline since records began in January 1981, Eurostat said.

In March the PPI fell 0.7% on the month and by a revised 2.9% on the year. Eurostat previously reported the year-on-year measure in March fell 3.1%.

The monthly fall in factory gate prices was a little more severe than expected, with economists surveyed by Dow Jones Newswires last week forecasting a 0.9% fall on the month and a 4.5% decline on the year.

Eurostat also reported that energy prices fell 3.0% on the month and by 11.2% on the year, which was the largest annual drop sine December 1986. Eurostat said the largest ever fall in annual energy prices was a 13.1% decline in November 1986.

The sharp year-on-year drop in energy costs led to the headline measure of core wholesale prices - which strip out energy and construction costs - falling by 0.4% on the month in April and by a record 2.4% on the year.

The annual rate of inflation across developed economies was at its lowest level for at least 38 years in April, the Organization for Economic Cooperation and Development said Wednesday.

Consumer prices in the OECD's 30 members rose by 0.6% in the 12 months to April, the lowest level since records began in 1971. The previous record low was the 0.9% rate of inflation recorded in March.

As recently as July 2008, the OECD inflation rate stood at an 11-year high of 4.8%. According to the OECD, energy prices in its 30 members fell 13.3% in the 12

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months to April, having fallen by 11.9% in the 12 months to March. Food prices rose by 3.3% in the 12 months to April, having risen by 4.5% in the 12 months to March.

EU April MoM PPI decreases to -1%, -4.6% yoy. EU May services PMI rises to 44.8 vs. 44.7. Gross domestic Product has declined 2.5% in the first quarter, unrevised from

the first estimate, according to the second preliminary GDP figures released by Eurostat. Year on year, GDP has been revised to a 4.8% decline, down from the 4.6% year on year drop previously estimated. Sharp declines on business investment and consumer spending have been pointed out as the main reasons for the largest GDP decline on record in the Euro Area. Germany Services PMI declines to 45.2 in May from 46.

European consumer spending and exports contracted the most in at least 14 years in the first quarter and investment slumped as the worst global recession in more than six decades prompted companies to cut output and jobs.

Gross domestic product shrank 2.5 percent from the fourth quarter, matching an initial estimate and the most since the data were first compiled in 1995, the European Union’s statistics office in Luxembourg said. Household consumption contracted 0.5 percent while exports dropped 8.1 percent and imports fell 7.2 percent, all the most since the series began in 1995. Investment fell 4.2 percent after a 4.3 percent drop in previous quarter that also was the sharpest since 1995. Latvia has become the first EU country to face a sovereign debt crisis after failing to sell a single bill at a $100m (£61m) treasury auction, prompting fears of a fresh storm in Eastern Europe as capital flight tests currency pegs. The failure hit the prices of other Eastern European currencies and pulled down stock prices of Swedish banks, which are heavily exposed to the Baltic region. It also boosted the U.S. dollar, which had been weakening recently against the euro and other currencies.

The European Central Bank Monetary Policy Committee has decided to leave its Refi Rate unchanged at 1.0% after its June monetary policy meeting. the Euro has dropped to test 1.4150/35 support area. EU Retail Sales MoM rise 0.2% in Apr, -2.3% YoY.

Russian gold and foreign-exchange reserves rose by $1.2 billion to $401.1 billion in the week to May 29, the central bank said Thursday.

This follows an increase of $8.6 billion in the previous week and reflects the central bank's increased purchases of foreign currencies to calm the recent appreciation of the ruble.

After reaching a record high of $597.5 billion in early August, reserves fell dramatically when the central bank spent more than $200 billion of them on propping up the struggling ruble.

The Netherlands' inflation rate dropped to 1.6% in May, from 1.8% a month earlier, the Dutch Central Bureau for Statistics said Thursday.

Food prices in May were 2% higher than in May 2008, compared with a 3% annual rise in April. In particular, a fall in the price of fresh vegetables contributed to the lower inflation figure for May.

According to the European Harmonized Index of Consumer Prices, or HICP, Dutch inflation came in at 1.5% in May, which was 0.3 percentage point lower than in April. Inflation in the euro zone dropped to 0% in May, 0.6 percentage point lower than in April and the lowest level since the introduction of the HICP. The ECB held its main interest rate at a record low of 1 percent and President Jean-Claude Trichet said this was "appropriate" for now, in line with analysts' expectations that the ECB will keep rates on hold until the end of next year.

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Swiss mom CPI rises 0.2% in May, -1% yoy. The fall in Spain's industrial production eased in April, providing new evidence of a point of inflection in the country's economic recession.

Spanish April industrial production fell 20% on the year in calendar-adjusted terms, following a 24% decline in March and a 22% fall in February, according to preliminary data Friday from Spain's National Statistics Institute, or INE.

We expect Latvia will probably devalue their currency this weekend by 40%. HSBC will have large losses in the second round of subprime CDB writeoffs.

Their portfolio looks like a garbage dump. Their portfolio will be written down to $0.40 on the dollar or less.

Sweden will part nationalize banks exposed to the economic collapse in the Baltic States. Austria is next. France’s budget deficit may exceed the record set 16 years ago as the government lifts spending and the recession erodes revenue, Budget Minister Eric Woerth said. Woerth said in an interview yesterday the 2009 shortfall could be more than 1993’s 6.4% of GDP. ‘It’s possible that we will surpass the ‘93 record,’ Woerth said tax revenue is coming in less quickly. Ireland’s budget deficit almost tripled in the five months through May. The shortfall of 10.6 billion euros ($15 billion) compared with a deficit of 3.6 billion euros in the year-earlier period, the Finance Ministry said. *****

Sarkozy’s Secret Plan for Mandatory Swine Flu Vaccination

by F. William Engdahl http://www.globalresearch.ca/index.php?context=va&aid=13835 ***** ENGLAND The U.K. may be emerging from recession earlier than other major economies, with the dominant service sector showing expansion in May for the first time in 12 months.

Research group Markit Economics Wednesday said the purchasing managers index for the service sector rose sharply to 51.7 in May from 48.7 in April, rising above the 50.0 level which indicates that the sector is expanding for the first time since May 2008.

Propelled by a sharp rise in new business and the most optimistic outlook since October 2007, the May headline reading is now at its highest level for 14 months after hitting a record low of 41.1 in November.

The size of the increase came as a surprise since economists surveyed by Dow Jones Newswires last week forecast the PMI would increase to just 49.5. April BRC Shop Price Index rises 1.3%.

House prices posted their strongest monthly gain for six and a half years in May, the latest indication that the steep slump in the residential property market may be bottoming out, data from the Halifax mortgage lender showed Thursday. House prices rose 2.6% on the month, the strongest gain since October 2002, but were still 16.3% weaker on the year, it said. In April, the Halifax, which is owned by the Lloyds Banking Group PLC (LYG), said prices fell 1.7% on the month and 17.7% on the year.

The data were significantly stronger than the market consensus estimate of a decline of 0.6% on the month and 17.2% on the year from a Dow Jones Newswires survey of economists last week.

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The shock gain in the Halifax house price indicator helped to boost the pound against the dollar and weaken gilt prices as the market waited for a Bank of England policy decision at 1100 GMT. The bank's Monetary Policy Committee is expected to leave interest rates unchanged at 0.5%.

UK May Output mom PPI up 0.4%, -0.3% yoy. UK May Input PPI mom rises 0.4%, -9.4% yoy.

***** Big Brother HAS gone too far ... and that's an ex-spy chief talking By Matthew Hickley http://www.dailymail.co.uk/news/article-1190060/Former-MI6-chief-Sir-Richard-Dearlove-warns-disturbing-surveillance-society.html ***** MPs' expenses: Departing MPs milked system to the end http://www.telegraph.co.uk/news/newstopics/mps-expenses/5432032/MPs-expenses-Departing-MPs-milked-system-to-the-end.html ***** LATIN AMERICA President Hugo Chavez has alleged that US intelligence agencies have been planning his assassination. Mr. Chavez said the supposed conspiracy had kept him from visiting El Salvador to attend the inauguration of leftist President Mauricio Funes in El Salvador on Monday. He said he cancelled because of information he had received that the intelligence organisations of the United States had been plotting with Cuban militant, Luis Posada Carriles, to murder him by firing rockets at his official plane. Posada is a former CIA employee and opponent of former Cuban president Fidel Castro. He has been accused of plotting the 1976 bombing of a Cuban plane off Barbados that killed 73 people on board. The Chavez administration in Venezuela has been trying to extradite Posada from the US, saying he had been living in Venezuela when the Barbados terror plot was carried out.

Brazil's utilization of installed industrial capacity continued its move upward in April, though accompanying industrial indicators showed a slowing recovery in the month, the country's National Confederation of Industries, or CNI, reported Thursday. The CNI, which represents manufacturers nationwide, said use of industrial capacity rose to 79.2% in April from 78.8% in March, and from 83.00% in April 2008.

The increase in use of industrial capacity was the third seen since September. Meanwhile, the CNI Thursday reported sales of industrial products fell by 1.9% in April from the previous month, and were down by 10.7% from the April 2008 level. Similarly, industrial employment fell by 1.1% from March and by 3.6% from April 2008. Brazil’s foreign currency reserves increased $4.3 billion in May from the previous month, as the central bank resumed dollars purchases. Brazil’s foreign reserves totaled $205.5 billion at the end of May. CHINA

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China is “actively” considering buying as much as $50 billion of International Monetary Fund bonds, the State Administration of Foreign Exchange said in a faxed statement. “If the terms of the bond issue meet China’s requirements in investing its foreign currency reserves in terms of security and a reasonable return, we are willing to actively consider investing up to $50 billion,” the agency, which oversees the country’s record $1.95 trillion foreign-exchange reserves, said. The IMF is seeking more cash to finance loans and aid to member countries during the worst economic slump in the fund’s 64-year history. The Washington-based lender, an agency of the United Nations that monitors the global economy and makes loans to members, has never issued bonds. China is “actively” considering buying as much as $50 billion of International Monetary Fund bonds, the State Administration of Foreign Exchange said in a faxed statement. ‘If the terms of the bond issue meet China’s requirements in investing its foreign currency reserves in terms of security and a reasonable return, we are willing to actively consider investing up to $50 billion,’ the agency, which oversees the country’s record $1.95 trillion foreign-exchange reserves, said. JAPAN Japanese companies cut spending at the fastest pace in 54 years as a slump in global demand eroded profits. Capital spending excluding software fell 25.4% in the three months ended March 31 from a year earlier -Profits tumbled a record 69%. AUSTRALIA & NEW ZEALAND Australia's average measure of gross domestic product rose 0.4% in the first quarter of 2009 from the fourth quarter 2008 and rose 0.4% from the year-earlier period, the Australian Bureau of Statistics said Wednesday.

The data were higher than expected. Economists surveyed after quarterly current account data Tuesday on average had expected that GDP rose 0.1% on a quarterly basis and fell 0.1% from a year earlier.

The bureau revised fourth quarter GDP to down 0.6% from a 0.5% decline when it originally issued the data.

The bureau said gross national expenditure fell 1.0% in the first quarter from the fourth quarter and fell 1.4% from the year-earlier quarter.

The bureau calculates GDP using an income-based measure, an expenditure measure, a production measure and the average of these figures, which is its preferred measure.

Australia's seasonally adjusted balance on trade in goods and services swung to a deficit of A$91 million in April from a surplus of A$2.3 billion in March, the Australian Bureau of Statistics said Thursday.

The April figure compares with analysts' expectations of a surplus of A$1.7 billion. Australia recorded a deficit of A$359 million in the year-earlier period.

*****

New Zealand may go bust over Global Warming http://www.canadafreepress.com/index.php/article/11534 ***** HEALTH FOODS THAT STRENGTHEN YOUR HEART

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Lately, the world and economic news is enough to give anyone a heart attack. We are going to need some support to survive our modern lifestyle. You are well aware heart disease is rampant in countries where the people eat food devoid of vital nutrition. There are over 900,000 deaths annually in American alone due to some kind of cardiovascular disease. That translates into a heart attack every 20 seconds, a death every 34 seconds and 2,500 deaths a day. PROFILING HEART DISEASE The statistics would have us think that heart disease is discriminating by attacking specific minorities and sexes. Studies suggest it all has to do with, genes, lifestyle and the amount of stress the body experiences. Women are catching up in the heart disease area but men still suffer from more heart attacks than women and they have them approximately 10 years earlier than women. Breaking down the male category, Hispanic males are 30% less likely to die from heart disease compared to Caucasian males. However, heart disease is the leading cause of death for Hispanic males. So, more white men die of heart disease than Hispanics. African American males are 40% more likely than Caucasian males to die of heart disease. Comparing white and black males; a black male that has a stroke has a 97% chance he’ll die compared to the white male. Of all the African American men nearly 34% die of heart disease. This leads to the shocking statistic that 41% of all black men over 20-years-of-age already have some form of heart disease developing. If we don’t get smart about the way we live, we may soon see about 1 million black men die every year of heart disease. CONTRIBUTING FACTTORS If you want to die of heart disease smoking will help speed up the process. Studies suggest that if you smoke you will develop atherosclerosis faster because it alters your lipids creating more bad cholesterol in the body, which leaves the walls of your arteries and veins unprotected and they loose elasticity. This causes chemical and cell dysfunction and prohibits the arteries to dilate. Smoke deprives the heart muscle of vital oxygen by at least 10%. When you smoke your body produces and releases more adrenaline, which reduces coronary artery blood flow. Smoking also magnifies angina pain and interferes with medications. Smokers also stimulate their liver to produce more fibrinogen protein in the blood, which increases the likelihood of blood clots. SIDE EFFECTS Scientific research has noted some interesting facts about heart disease patients. There are some side effects to heart disease. In white males, doctors have noticed that men develop male patterned baldness, they have more hair in their ear canals and develop a crease on the surface of their earlobes. Men suffering from depression have a higher risk of developing heart disease and having a heart attack. Patients who ate beans four times weekly have less severe heart disease by 19% compared to patients who ate beans once a week. THE POWER OF THE OLIVE When looking at the way other people live we can see some correlations of how some have cut their risk of heart disease by 50%. The people of Greece, Italy, Spain and southern France have half as many people with heart disease then America. Research seems to point to the diet. American’s are told to go on a low-fat diet, which also cuts out the healthy fat the system needs. Mediterranean diets contain little saturated animal fat are get three-fourths monounsaturated fat primarily from olives and olive oil. The

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residents of Crete will drink olive oil by the glass, which pushes up their fat calories by 40% and they rarely have any heart disease (38 people out of 10,000). SEVEN COUNTRY STUDY Dr. Ancel Keys, a professor of the University of Minnesota did a heart disease model of seven countries in 1957. He tracked heart disease for over two decades in the US, Finland, Italy, Netherlands, Yugoslavia, Greece and Japan. No surprise that the Western countries had five times more fatal heart disease compared to Japan, which had the lowest of all seven countries. The people of Japan ate 9% of their calories in fat (3% was animal fat). We all know that the classic Japanese diet is disappearing as more depart from their traditional ancestry-type diet. What does the traditional diet contain? The average day in the Japanese diet contained; 4 to 5 cups of rice, 5 to 8 ounces of fruit, 9 ounces of vegetables, 2 ounces of beans, 2 ounces of meat, 3 to 4 ounces of fish, one-half cup milk, one egg, 2 teaspoons of sugar and 1 ½ teaspoons of soy sauce. The men also had 15 ounces of beer and the women only a few ounces of beer. There you have it, a diet low in calories, fat and meat and high in fish, fruit, vegetables and rice. You could eliminate the soy sauce to reduce the sodium intake. Also, the people of the Mediterranean have very low rates of heart disease and cancer using the oily-type of fat. Dr. Keys called the olive the “longevity food.” He concluded that the high-fat diet was not a problem if it is very low in animal fat and high in olive-oil-type fat. Harvard physicians favor the Mediterranean-style diet over the restrictive American low calorie diet (Source; Dr. Frank Sacks, Harvard School of Public Health). HERBS TO STRENGTHEN HEART Garlic is a natural blood thinner and anti-clot agent, which will take stress off the heart muscle as well as protect it from viruses and infection. Hawthorn berries will protect the heart muscle from damage should blood and oxygen be temporarily blocked. Red clover detoxifies the blood and helps reduce blood fats (cholesterol). Ginger root and habanero cayenne improve circulation and balance blood pressure. Motherwort herb helps to regulate heartbeat. You can use all these herbs together for an excellent way to strengthen the heart. Apothecary Herbs has formulate Heart & Cholesterol & BP tincture $24.95 http://www.thepowerherbs.com 866-229-3663, International 704-875-8010. OTHER HERBS Celtic Sea salt is unrefined and contains minerals to support the cardiovascular system and helps give elasticity to the arteries and veins to help prevent plaque build-up. In most cases it does not cause hypertension (high blood pressure) and compared to regular table salt you will use 1/3 less salt. With regular use, the minerals in this salt help to dissolve the fat and calcium deposits of the arteries and veins. Meadowsweet herb contains salicylates (similar to aspirin), is an anti-inflammatory, pain reliever and helps to thin blood without aspirin side effects. It is recommended to take 2-4 droppers full of Meadowsweet tincture 2-3 times daily. You will find Celtic Sea salt $16.50/pound and Meadowsweet herb (in the Pain Relief Formula $17.95) at Apothecary Herbs http://www.thepowerherbs.com 866-229-3663. EXTRA HEART ATTACK PREVENTION In addition to the heart strengthening therapies above, while you have some extra prevention on hand for the onset of a heart attack. Liquid habanero cayenne in the mouth will restore circulation to the chest and head within two minutes. Liquid lobelia herb will restore oxygen by dilating the bronchial and relaxing the chest cavity. This should bring anyone out of a heart attack. If the patient is unconscious, I would still

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administer these two herbal tinctures and begin CPR until help arrives. Many heart attack patients have been saved with just these two herbs. You will find liquid habanero cayenne (Circulation Formula $17.95) and liquid lobelia inflate herb (Relaxation Formula $21.95) at Apothecary Herbs. For a combo of five potent formulas in a handy carry pack for emergencies especially when you can’t get medical attention - look for the Heart Attack Pack (just $99.00) at Apothecary Herbs http://www.thepowerherbs.com 866-229-3663, International 704-875-8010. YOUR EASY SELF-CARE PLAN As you heal and become stronger, consider the next step to better health by boosting your immunity and adding longevity by cleansing the organs of the body. Remove toxins from the organs and regenerate your body, function better and help prevent disease. Go to the experts in immune boosting and organ cleansing, go to Apothecary Herbs http://www.thepowerherbs.com 866-229-3663, International 704-875-8010. Call for a free product catalog and empower yourself. OUR VERSION OF THE ECONOMIC STIMULUS – Apothecary Herbs is offering 15% off your total order before shipping when you print off your shopping cart order online or fill out the catalog order form and mail in your order with your check or money order. Get prepared, healthy and save – what could be better than that? International orders can send an International Money Order and save 15%. Apothecary Herbs, P.O. Box 918, Huntersville, NC 28070 USA. YEAR’S SUPPLY OF HERBAL MEDICINE – Stock up with over 90 products designed to protect your immune system, cleanse the body and address what ails you. NOW SAVE 15% on this package with the STIMULUS DISCOUNT. Call Apothecary Herbs 866-229-3663, International 704-875-8010 http://www.thepowerherbs.com UPGRADED PANDEMIC KIT – Call Apothecary Herbs 866-229-3663, International 704-875-8010 or http://www.thepowerherbs.com each kit contains 8 products for 2 adults for 10-day pandemic just $175.00. ***NEW***APOTHECARY HERBS – Weight Control Kit helps you safely lose weight. Male & Female Organ Cleanse Packages – get all your important organ cleanses in one convenient package. Call now 866-229-3663, International 704-875-8010 http://www.thepowerherbs.com. “NEW” at Apothecary Herbs - 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. HERBS FOR PETS - Dog & Cat Immune Booster Formulas plus Dog & Cat Congestion Formulas plus toxic-free flea and tick collars, shampoo and spray at Apothecary Herbs. Call now toll free 866-229-3663, International 704-875-8010 or http://www.thepowerherbs.com. SURVIVAL ITEMS – STAND-UP FOOD POUCHES (NOW SAVE 15% CALL NOW) Order your convenient and compact, dehydrated food in the stand-up pouch for food emergencies or recreational camping. Light weight food pouches have a long shelf life,

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are easy to store for your rainy day food shortages and don’t cost a lot to ship. We have several meals to choose from in single and double serving sizes to avoid waste. Mix and serve in the stand-up pouch and avoid the need for extra utensils and cleanup. Order single serving or double serving meals by the case and for a hot meal, don’t forget the reusable Flameless Oven for just $13.00. Call Apothecary Herbs 866-229-3663, International 704-875-8010 or order online http://www.thepowerherbs.com. HERB TALK LIVE – with Herbalist Wendy Wilson every Tuesday & Thursday at 7:00 pm EST on AVR www.theamericanvoice.com and Thursday at 4:00 pm on WBCQ 7.415 and Saturday 7:00 am on GCN www.gcnlive.com. Free radio show archives at http://www.thepowerherbs.com #10 CANS SURVIVAL FOOD – call Freeze Dry Guy 866-404-3663 or www.freezedryguy.com. ***** Hello Dr. State by Ron Paul http://lewrockwell.com/paul/paul533.html *****

The WHO Plays with Pandemic Fire

The Continuing Saga of the Flying Pigs Pandemic Flu by F. William Engdahl http://www.globalresearch.ca/index.php?context=va&aid=13856 *****

SCHEDULED ISSUES Every Wednesday and Saturday June 2009