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THE INTERNATIONAL FORECASTERSATURDAY, JUNE 13, 2009

061309(4)_IFP. O. Box 510518, Punta Gorda, FL 33951-0518

An international financial, economic, political and social commentary.

Published and Edited by: Bob ChapmanNOTE: NEW E-MAIL ADDRESSESFor correspondence to Bob: bob@intforecaster.com

For subscription and renewal: info@intforecaster.com

CHECK OUT OUR WEBSITEwww.theinternationalforecaster.com

1-YEAR $159.95 U.S. FundsUS AND CANADIAN SUBSCRIBERS: Make check payable to Robert Chapman (NOT International Forecaster), andmail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address.Or:We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will chargeyour card US$159.95 for a one-year subscription.

You can email us in two separate emails (1- the Credit Card Number with full name, address and yourtelephone number and (2- the Expiration date on the card.

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or info@intforecaster.com

RADIO APPEARANCES:To check out all of our radio appearances click on this link below:

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Discount Gold & Silver Trading Co.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-F4:00PM ET, Replays Tuesday thru Friday 8pm RT 7.465Mhz3.215 MHz M-F 11PM ET and weekly archives at discountgoldandsilvertrading.netJOHN STADTMILLER Republic Broadcasting Network www.republicbroadcasting.org every Tues. at5:00-7:00 pm ESTGOLDSEEK RADIO Every ThursdaySAM BUSHMAN - LRT Radio http://www.libertyroundtable.comEvery first and third Monday of the month 10 am to 11 amDALE WILLIAMS - Free West Radio Program http://www.freewestradio.com - Every first Tuesday ofMonthJOHN BRYANT 7 p.m. EDT - network www.firstamendmentradio.comDr. 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 MhzTHE 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, 7490PAT GORMAN Sunday June 5. 20009Stephen Lendman July 15, 2009ALEX 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

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http://www.youtube.com/watch?v=JIQ1Qrv_AUE RAYELAN ALLAN Every first and third Wednesday in June.BUTCH PAUGH Wednesday, June 24th, 2009 9 p.m. EST - Also on your computer on www.gcnlive.com . LIVE FM STATIONS 9:00 PM EST.-88.3 FM ROTX Campbell, TX- 92.7 FMLexingon 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 FMJohnson 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 FMPresque Isle ME-97.7 FM Greenville, SC-107.1 FM Oklahoma City, OK-90.1 FM Gatlinburg, TN-102.7 FMTampa, FL-KGGM 93.5 FM Delhi, LA LIVE AM STATIONS 9:00 EST.-WIJD 1270 AM Mobile, AL, KIOU1480 AM Shreveport, LA,WFAM 1050 AM Augusta, GA-WELP 1360 AM Greenville, SC-WCPC 940 AMTupelo, MS-WROL 1340 Providence, RI-WITK 1550 AM in Scranton/Wilkesboro, PA-WNNY 1090 AMPensacola, 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 FMMacon, GA 7:00 AM-91.9 FM Freedom radio Jones City, GA 8:00 AM Est. REBROADCAST AMSTATIONS-KCKN AM 1020 Roswell, NM 10 PM Est.-KMET 1490 AM 11 AM Pst. - WASB 1590 AMBrockport, 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 RepublicBroadcasting Network. Call him on the air at (800) 313-9443. To listen, go torepublicbroadcasting.org andclick on Listen Live. If you can't listen at that time, do so via the archives. I'll be talking about the variousmanifestations 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.comDrew Raines: - Every Thursday

Those of you interested in the latest input concerning the world financial interest and what to doduring 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.com4pm-5pm Chicago time zone USAlisten live www.amd.elequity.com"Clilck on "Current Show / Listen Live" this show is accessible as current show for 20 hours afterproduction and on demand from the archive direct link and as "Archives & on Demand" anyThursday 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 andthe attacks on our Constitutional Rights to live in Liberty growing our Organic Foods and Herbsfor our safety & our health also available on 11 international phone bridges around the worldUSA: 347-308-8047 -bridge code 48334.Drew can be reached at 501-565-1833.http://www.youtube.com/watch?v=hesYUFCe2_UGNC-LIVE FREQUENCIES:http://www.gcnlive.com/Schedule_Shortwave.htmlKEVIN GALLAGHER & John McGowan Every first Friday at 9 pm EST.Bruce McDonald - The Politics of Common Sense: 6-8 p.m. CSTbruce@kickthemallout.comRob 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 theworld at large, are discussed and debated at local, national, and global levels. "Lets GetReal With Reuben Torres "airs every Tuesday evening from 9:00 pm to 10:00 pm unlessotherwise noted. - Next appearance: June 23rdFarren Shoaf June 9th, 2009The Real News Radio.

*****

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Radio Liberty part 1 RBN Part 1 http://www.youtube.com/user/TheBobChapmanChannelhttp://www.youtube.com/watch?v=cYjLAgKfLrM

For a Few Bailout's More

http://www.youtube.com/watch?v=qq8-HydyftA&feature=channel_page

Billions more needed for financial rescuehttp://www.youtube.com/watch?v=3lLkq7P2BXM&feature=channel_page

http://www.clipser.com/profile.php?member=TheBobChapmanChannel

*****SCHEDULED ISSUES

Every Wednesday and Saturday June 2009

"The budget should be balanced, the Treasury should be refilled, publicdebt should be reduced, the arrogance of officialdom should be

tempered and controlled, and the assistance to foreign lands should becurtailed lest Rome become bankrupt. People must again learn to work,

instead of living on public assistance." - Cicero - 55 BC

US MARKETSThe big question is how long can the dollar last as the worlds reserve

currency? Needless to say, that is not an easy question to answer. We recently calledthe top on the dollar at 89.50 on the USDX. The USDX is six currencies versus thedollar on a weighted basis. More than a year ago the dollar hit a low on the USDX at71.18. A phenomenal rally ensued from that level expedited by de-leveraging and theclosing out positions within the carry trade. A good example of the carry trade waswhen a bank in NYC borrowed yen. At % interest, sold the yen for dollars and bought

dollar denominated securities.All of that is now history as the dollar comes under increasing pressure. We

believe the dollar could test 71.18 this year. We also believe the dollar could breakdown to 40 to 55 over the next few years. The collapse of the dollar is certain. TheTreasury and the Fed have committed the American taxpayer to $13.8 trillion of debtand before the dollar goes where it is ultimately going that figure could reach $30trillion.

In modern times such fiscal and monetary irresponsibility is unparalleled. Thisabdication of moral responsibility has already begun the process of dollar deteriorationand rising interest rates. The result will soon be hyperinflation.

The collapse may be disastrous for all countries, but it is going to be equallydisastrous for the corrupt who have brought us to this sad situation. Hopefully as

painful as it will be it could create many new opportunities for some. One thing we seeas certain is that the elitists will find themselves targets of civil and criminal chargesand targets of contempt and derision. The new world order they so arrogantly andconfidentially predicted with one world government will again have been a failure.

There is no question where China is headed in this currency war to dump thedollar. They continue to accumulate gold with the intention of having a gold backedcurrency - something America is, we believe, incapable of doing. Such an ongoingpressing event has to put continual downward pressure on the dollar. China is already

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by passing the dollar reserve system by settling in other currencies, using barter andthrough swap arrangements, major changes are in the process of taking place. We donot believe the yuan will be the reserve currency of the future. A better idea is to havea weighted basket of 10 major currencies as a world benchmark. China is heavilydependent on exports and as yet does not have domestic demand to relieve pressurewhen exports fall. They are also still a dictatorial, communist society in power by force.

They also still have an enormous population and wages are still dreadful even thoughthey have increased 10-fold over the past 15 years. Politically both China and the USface populations that are profoundly unhappy and if major changes are not made inboth societies, both are ripe for revolution.

Wednesdays 10-year Treasury auction wasnt all it was cracked up to be. Theyield was 3.99% with 46.8% allotted at the high bid. The bid/cover was 2.62 versus theaverage of the past ten auctions of 2.40. Indirect participation, of foreign central bankswas 34.2% versus an average of the past ten auctions of 28.23%. The only reason thesale went well was that the note had to be lifted 13 bps to 3.99% in order to attractbuyers. In addition the Fed had to buy $3.5 billion in longer term maturity bonds andprop up the auction. They cannot fool us. The system sinks into deeper trouble everyday. All we can say is you had better own gold and silver. What the Fed did was buy

18.4% of the auction with money they created out of thin air more monetization.Goldman Sachs CEO, Lloyd Blankfein says he believes the current upturn in

world markets was probably not a full recovery from crisis and said he expects afurther long recession. There is no reason to think this is it so many things have to besorted out. Why, would this be the recovery?

Nouriel Roubini says those are yellow weeds, not green shoots. He has ninereasons for pessimism. Employment is still falling sharply, which is bad news forconsumption and the size of bank losses. He said this is a crisis of solvency, not justliquidity, but true de-leveraging has not really started, because private debts ofhouseholds, financial institutions, and corporations are not being reduced, but rathersocialized. Lack of de-leveraging will limit the ability of banks to lend, households tospend and firms to invest.

In countries running current account deficits, consumers need to cut spendingand save much more for many years. Consumers have been hit by a wealth shock,that is falling house prices, stock market, rising debt-service ratios, and falling incomesand employment.

The financial system has been severely damaged, so the credit crunch will notease quickly.

Profitable, owing to high debts and default risk, low economic and revenuegrowth and persistent deflationary pressure on companies margins businesses, willcontinue to be constrained from willingness to produce, hire workers, and invest.

Rising government debt ratios will eventually lead to increases in real interestrates that may crowd out government spending and even lead to sovereign refinancingrisk.

The monetization of fiscal deficits is not inflationary in the short run slackproduction and labor markets imply massive deflationary forces. If banks do not find aclear exit strategy from policies that double or triple the monetary base, eventuallyeither goods price inflation or another dangerous asset and credit bubble, or both, willensue.

Well interject here that we disagree with Mr. Roubini. That monetizationcauses inflation immediately, which later becomes hyperinflation. The central banks,the Fed in our case, have no clear exit strategy. What they have done and are doinghas no fallback or battle orders for withdrawal.

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Some emerging market economies with weaker economic fundamentals maynot be able to avoid a severe financial crisis, despite massive IMF support.

Our comment is no one is going to escape. Decoupling is a myth and wevehad that proven already.

At the beginning of the year the yield on the 10-year T-note was 2.35%. Wefigured it would go to 3.50%. Thus far it has gained to 4.00%. That is 1.65% in less

than six months. The yield has risen 135 points since the Fed announced in March thatit was going to buy Treasuries, some $300 billion worth for starters.

Rates are up due to $2.2 trillion in monetization, that they are alreadycommitted to, and that is just the beginning. Commodity prices in many instances havedoubled, inflation expectations are high, equity prices are up 30% plus and gold andsilver have remained strong so it is no wonder rates in the real market have movedsubstantially higher.

Massive new issuance will be high for sometime to come.Retail gasoline prices have moved up more than 40 days in a row as gas rose

$1.00 from its lows. That displaces $130 billion in discressionary spending.The high rates have also caused a 60% fall in mortgage refinancing.Subprime problems may generally be over but we have another year of ALT-A

loans and three more years of Option-ARM, pick-and-pay loans to get through. In thefirst quarter due to rising unemployment 50% of foreclosures were concentrated inprime mortgages where the default rate is now 2.40%, more than double 1.10% yoy.Over the next few years this problem will worsen.

Home mortgage debt outstanding was 73% of GDP last year, the 3rd highestreading on record, after the 75% plus bubble years of 2006 and 2007. In order toreturn this debt to the average of the 1990s at 46%, Americans would have to cutmargin debt to $6.6 trillion from $10.5 trillion. The solution to reduce such debt is torebuild sayings and for banks to boost capital. We see little chance of eitherhappening, hence the inevitable result.

As we know with the result of down payments, mortgage defaults proliferated.In a desperate attempt to buoy the housing market our government has brought back

those same loans. This is monetizing an $8,000 tax credit. The FHA steers funds tocover closing costs directly in some cases even offsetting the 3.5% minimum downpayment FHA loans require. That is enough to cover most or all of the down paymentand fees for homes up to the median price, now about $169,000. As you can see thegovernment anxious to move foreclosed properties for the banks are breaking therules and creating another subprime crisis. The NAHB says this will add 160,000original sales. The FHA doesnt care. Fifty percent will default. If they run out of moneytheyll get another $500 billion from Congress, so that minorities can buy homes.

Special interests are still alive and well in Washington buying legislation orarranging for legislation to never see the light of day. Our president signed theHelping Families Save their Homes Act, but it was missing its centerpiece: a changein bankruptcy laws he once championed that would have given judges the power to

lower the amount owed on a home loan - Mr. Obama forgot to mention that in the bill-signing ceremony. It had been stripped out as Senators heeled to their masters, thebanks. The same banks that US taxpayers are bailing out. This shows you thestranglehold banks have on Congress. They simply own them. Well see as Ron PaulsHR 1207 proceeds. He has 213 co-sponsors and 218 takes the legislation out ofcommittee. The banks spent millions of dollars defeating part of the Homes Act bill.Money, which the taxpayers lent to them. That part of the legislation was removedbecause our president refused to lift a finger to keep it in the bill. As you probably

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know, bankers, Wall Street and other elitists financed the presidents campaign ingreat part.

The bottom line is the issue would have cut into profits on loans the banksshould have never made in the first place. They Are the professionals, so they were90% responsible.

The solution to this is to put an end to lobbying and campaign contributions.

Have government fund elections. Everyone gets the same amount and campaigns onthe issues.

Bank nationalizations are absolutely necessary to stop them damaging thefinancial system further with more losses, said Nassim Nicholas Taleb, author of thebest-selling finance book The Black Swan.

You cannot trust the banks in taking risks, Taleb said in an interview withBloomberg Television in Davos. We have a very strange situation in which its theworst of capitalism and socialism, a situation in which profits were privatized andlosses were socialized. We taxpayers have the worst.

The global economy will slow close to a halt this year as more than $2 trillion ofbad assets in the U.S. help sink economies from there to the U.K. and Japan, theInternational Monetary Fund said yesterday. Taleb echoed comments from New York

University Professor Nouriel Roubini, who says the majority of U.S. banks areinsolvent.

You have to eventually nationalize U.S. banks, you have to take the problemby the horns, Roubini told Bloomberg Television in Davos today. In my view actuallymost of the U.S. banking system is insolvent.

Roubini, a former economist in President Bill Clintons White House, predictedthe financial crisis as early as July 2006. Last February he forecast a catastrophicmeltdown that central bankers would fail to prevent, leading to the bankruptcy of largebanks with mortgage holdings.

Rare and unforeseen events are known as black swans, after Talebs book,The Black Swan: The Impact of the Highly Improbable. It was published in May 2007,about three months before the credit crunch rocked global markets and led banks to

announce more than $1 trillion of writedowns and credit losses.We should not trust these bankers; look at their track record, Taleb said.

They know were going to bail them out. They hold us as hostages and the only wayto stop the process is for the government to own those banks, tell them what to do.

Taleb today signaled he favors curbs on the trading of some financialinstruments. House of Representatives Agriculture Committee Chairman CollinPeterson of Minnesota circulated an updated draft bill yesterday that would ban credit-default swap trading unless investors owned the underlying bonds. That might prohibitmost trading in their $29 trillion market.

I dont like credit default swaps, Taleb said. We should probably stop tradingderivatives, anything more complex than regular options because I am an optionstrader, and I dont understand options. How do you want a regulator to understand

them?As the founder of New York-based Empirica LLC, a hedge-fund firm he ran for

six years before closing it in 2004, Taleb built a strategy based on options trading tobullet-proof investors from market blowups while profiting from big rallies.

He now advises Universa Investments LP, a Santa Monica, California-basedfirm opened in 2007 by Mark Spitznagel, Talebs former trading partner, using some ofthe same strategies theyd run since 1999.

The Fed's beige book survey released Wednesday shows that economicconditions remained weak and even deteriorated in many regions of the country, with

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commercial real estate and labor markets continuing to face challenges.MetLife Inc. Chief Investment Officer Steven Kandarian said commercial

mortgage defaults will rise in the next two to three years after the economic slumpsubsides.

The worst is to come, Kandarian said in an interview today with BloombergTelevision in New York, where the biggest U.S. life insurer is baseand when the

defaults actually occur.After the Fed initially refused to comply with the committees request for

documents and e-mails in the matter, the committee took the extraordinary step ofissuing a subpoena on Tuesday to obtain material from the Fed that concerned thedeal

The Financial Times has learned that Mr Bernanke, in an e-mail, described MrLewiss threat to invoke the MAC clause as a bargaining chip, and a foolish move,before concluding that the regulators will not condone it.

The state Legislature is moving to make federal immigration issues a matter ofstate law, a change that could mean jail time for illegal immigrants.

Under a bill approved by a committee Tuesday, being in the country illegally -historically considered a federal matter - would become a state misdemeanor. A

second offense would be a felony.That would mean illegal immigrants found in Arizona could be arrested by local

police, accused by local prosecutors and be put behind bars, rather than being turnedover to U.S. officials for deportation.

On an 8-3 vote, the Senate Appropriations committee recommended SenateBill 1162 be approved. The bill originated as a measure to renew funds for MaricopaCounty Sheriff's Office anti-illegal immigration efforts, but an amendment addedTuesday would create the new state trespassing law. The provisions of the bill fitinto an overall strategy long sought by opponents of illegal immigration, who want statepenalties for what are now federal crimes.

This, they say, will make it easier for local officials to fight illegal immigrationand provide jail time for a crime they say too often goes unpunished.

Mortgage applications fell last week to the lowest level since February as a jump in borrowing costs discouraged refinancing and signaled that Federal ReserveChairman Ben S. Bernankes efforts to cap rates is stalling.

The Mortgage Bankers Associations index of applications to purchase a homeor refinance dropped 7.2 percent to 611 in the week ended June 5, from 658.7 theprior week. The refinancing gauge fell 12 percent. The purchase index gained 1.1percent.

The yield on the benchmark 10-year Treasury note rose to 3.90 percent lastweek as volatility in government bonds hit a six-month high, according to Merrill Lynch& Co.s MOVE Index of options prices. Thirty-year fixed-rate mortgages jumped to 5.45percent from as low as 4.85 percent in April, according to Bankrate.com in North PalmBeach, Florida. Costs for homebuyers are now higher than in December.

The mortgage bankers refinancing gauge issued today fell to 2,605.7, thelowest level since November, from 2,953.6 the previous week, todays report showed.The purchase index rose to 270.7 last week from 267.7.

The share of applicants seeking to refinance loans fell to 59.4 percent of totalapplications last week from 62.4 percent.The average rate on a 30-year fixed-rate loan surged to 5.57 percent, the highestsince November, from 5.25 percent the prior week.

Casino-resort developer Fontainebleau Las Vegas LLC said Tuesday it hasfiled for Chapter 11 bankruptcy protection after failing to get certain lenders to provide

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about $800 million in construction funding to complete the company's $2.9 billionproperty on the Las Vegas Strip.

Fontainebleau Las Vegas had filed a $3 billion lawsuit in April against Bank ofAmerica, JPMorgan Chase Bank, Deutsche Bank Trust Company Americas and eightother lenders in an effort to access the prearranged financing to pay its 3,000construction workers and finish the project, which is 70 percent complete and had

eyed an October opening.The complaint alleged that the lenders terminated their agreement to provide

an $800 million revolver loan due to one or more unspecified ''events of default'' byFontainebleau. But the developers said they didn't default on any part of theiragreement. Bank of America spokeswoman Shirley Norton told The Associated Pressin April that the bank was discussing ''restructured financing'' with the company.

The lawsuit was amended last month to charge that one of the lenders,Deutsche Bank, purposely interfered with contracts because the bank owns a rivalresort also being built on the Strip, which is projected to open in 2010. The company isdemanding additional damages from the bank.

''It is unfortunate that our lenders forced us to take this step. By reneging on therevolving credit facility, they effectively shut down the project and put thousands of

people out of work,'' said Howard Karawan, chief restructuring officer of FontainebleauLas Vegas. ''Our goal now is to secure funding to complete this world-class project andrestructure our existing debt.''

Fontainebleau Las Vegas said its other lenders have agreed to let the companyuse cash during its bankruptcy case, and the company is in talks to obtain financing torestart construction at the 3,900-room resort. The Chapter 11 filing includes affiliatesFontainebleau Las Vegas Holdings LLC and Fontainebleau Las Vegas Capital Corp.

Oakland California has serious budget troubles. In a closed door city councilsession, Oakland Mulls Bankruptcy."We have asked the (bankruptcy) question because we wanted to know the impact,"said District 5 council member Ignacio De La Fuente. "In closed session, the questionhas been asked, and an answer was given." He would not elaborate. "It's a possibility,"

he acknowledged. "Things are that bad."Foreclosure filings dipped 6 percent in the month but increased 18 percent

from May 2008, marking the third highest month on record."There were almost one million foreclosure filings in a three-month period, and

that's simply unprecedented," Rick Sharga, senior vice president at RealtyTrac inIrvine, California, said in an interview.

Temporary freezes on foreclosure activity ended in March. Failures of manyseriously delinquent loans that were put on hold during those moratoria have beenthrust back into the foreclosure cycle.

One in every 398 households with loans got a foreclosure filing in May. Filings,which include notices of default and auctions, were reported on 321,480 properties lastmonth.

Stemming foreclosures is seen critical to bolstering home prices, consumerconfidence and the recessionary U.S. economy.Bank repossessions, known as real-estate owned or REOs, rose in May and shouldspike in coming months because the moratoria ended, RealtyTrac said.

Schools across the Valley are measuring the depth of Arizona's downturn inthe cafeteria lunch line: A rising number of students has applied for free lunches, andmore parents are failing to pay what they owe on the lunch bill.

The percentage of students who received free lunches at Arizona schools jumped by 11.3 percent from February 2008 to February 2009, the latest month with

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data verified by the federal government, a USA Today analysis reported. Arizona,which had 394,977 students receiving free lunches, was one of only five states toexperience double-digit increases. Three more states are nearly at 10 percent.

Areas within some states, particularly in Michigan and other rust-belt states,have experienced double-digit increases in the past, but it's unusual to see such big

jumps for entire states, said Erik Peterson, director of public awareness for the School

Nutrition Association.Retail Sales rose 0.5 percent, as forecast, after a 0.2 percent drop in April, the

Commerce Department said in Washington. Sales also increased 0.5 percentexcluding autos, led by gasoline as prices jumped last month. A separate reportshowed claims for jobless benefits fell last week.

Fewer Americans filed claims for unemployment benefits last week, indicatingthe deepest job cuts may be subsiding even as companies hold off on hiring.

Initial jobless claims fell by 24,000 to 601,000 in the week ended June 6, fewerthan forecast and the lowest level since January, from a revised 625,000 the priorweek, Labor Department figures showed today in Washington. The number of peoplecollecting benefits rose for a 19th straight time to a record 6.82 million in the priorweek.

U.S. foreclosure filings surpassed 300,000 for the third straight month in Mayand may hit a record 1.8 million by the first half of the year, RealtyTrac Inc. said.A total of 321,480 properties received a default or auction notice or were repossessedlast month, up 18 percent from a year earlier, the Irvine, California-based seller ofdefault data said today in a statement. One in 398 U.S. households received a filinglast month.

The Federal Reserve lost $5.25 billion in the first quarter on the securities itacquired with last year's bailouts of Bear Stearns and insurer American InternationalGroup Inc., according to a report issued Wednesday.

The loss on the holdings, which include mortgage-backed securities, reflecteda decline in their value as the recession carried over into the first three months of thisyear. The cumulative loss of the Bear and AIG holdings come to $16.46 billion since

they were taken over last year.The Fed is hoping that if it holds onto the securities long enough, they will

eventually rise in value once the economy returns to full health again, the housingmarket heals and the financial and credit crises are past.

The Fed's new report, which will be issued monthly, comes as lawmakers havedemanded more information about the bailouts, and a slew of other programs intendedspur lending and stabilize the banking system.

The monthly report provides some details beyond the Fed's weekly snapshot ofloan and debt-buying programs on its balance sheet. Those details include collateralpledged by borrowers, ratings on collateral, and the number of borrowers for someprograms.

However, the Fed did not budge on lawmakers requests that it identify

borrowers for emergency as well as other loans. Fed Chairman Ben Bernanke hasrepeatedly argued that doing so would risk a run on a bank or other financialinstitution, undermining the purpose of the program.

As lender of last resort, the Fed's programs are intended to bolster the financialsystem, a key ingredient to lifting the country out of recession.

The monthly report showed that the Fed's commercial paper program reportednet income of $2.14 billion in the first quarter. Commercial paper is the crucial short-term debt that companies use to pay everyday expenses. The Fed began buying

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commercial paper last year when that market virtually came to a halt after creditproblems intensified last fall.

It also reported net earnings of $1.2 billion in the first quarter on other loanprograms, including emergency borrowing to banks and investment firms. The Fedreported $4.57 billion in earnings under its regular transactions involving Treasurysecurities.

Investors in bonds that packaged $62 billion of debt for U.S. offices, hotels andshopping malls are bracing for more loan defaults through 2010 as Bank of AmericaMerrill Lynch says landlords monthly payments may jump 20 percent or more.

Principal is coming due on the so-called partial interest- only loans as an 18-month-old recession saps demand for commercial real estate. About $179 billion ofsuch loans were written between 2005 and 2007 and bundled into bonds, according todata from Bank of America Merrill Lynch.

With soaring vacancies and falling rents, some cash- strapped borrowers willfail to cover the higher costs, said Andy Day, a commercial mortgage-backedsecurities analyst at Morgan Stanley in New York. About 87 percent of mortgages soldas securities in 2007 allowed owners to put off paying principal for several years oruntil maturity, compared with 48 percent in 2004, Morgan Stanley data show.

The worst is yet to come, MetLife Inc. Chief Investment Officer StevenKandarian said yesterday in a Bloomberg Television interview. Typically theres a lagbetween when the economy softens and when the defaults actually occur.

Investors have already seen prices on top-rated senior debt drop below 70cents on the dollar from 95 cents a year ago, according to Aaron Bryson, a commercialmortgage-backed securities analyst at Barclays Capital in New York.

Congressman Ron Pauls Federal Reserve Transparency Act, HR 1207, hasreached and surpassed the level of 218 cosponsors in the House of Representatives,which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has sincereceived its 222nd cosponsor.

The tremendous grass-roots and bipartisan support in Congress for HR 1207

is an indicator of how mainstream America is fed up with Fed secrecy, saidCongressman Paul. I look forward to this issue receiving greater public

exposure.Hearings on Federal Reserve transparency are expected within the next month, aspart of the Financial Services Committees series of hearings on regulatory reform.

A US Supreme Court justice refused to order bail for Conrad Black, formerHollinger Inc. chairman, during the high court's review of his conviction for mail fraudand obstruction of justice.

Black, 64, can refile his bail request with a federal trial judge in Chicago,Justice John Paul Stevens said in a one-sentence order released yesterday inWashington. The order is at least a temporary victory for the Obama administration,which argued against bail.

Black, convicted in 2007 for his role in the theft of $6.1 million from Hollinger,has been serving his 6 1/2-year prison sentence at a US prison in Coleman, Fla., sinceMarch 3, 2008. A codefendant in the case, John Boultbee, was released on bail earlierthis month.

The Supreme Court in May agreed to hear arguments from Black, Boultbee,and Mark S. Kipnis, former Hollinger corporate counsel. Their appeal contends thatthey couldn't be convicted under the so-called honest services provision of the mailfraud law because the firm wasn't at risk of losing money.

A federal appeals court upheld the conviction.

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We were the first to break this sorry in 2001 but the SEC wasnt interested. It isseldom that an Illuminists is jailed. But arrogance brought him this sentence.

Prices of goods imported into the U.S. rose in May for the third straight month,reflecting the increasing cost of oil that threatens to undermine the economy just as itstruggles to pull out of the recession.

The 1.3 percent gain in the import-price index, the largest since July last year,

was in line with forecasts and followed a revised 1.1 percent increase the prior month,the Labor Department said today in Washington. Prices excluding fuels climbed 0.2percent, while being down by 5.8 percent on an annual basis -- the biggest drop sincerecords began in 1985.

Rising commodity costs may worsen the erosion of corporate profits becausethe deepest economic slump in half a century means businesses have little power topass on expenses to customers.

American households lost $1.33 trillion of their wealth in the first three monthsof the year as the recession took a bite out of stock portfolios and dragged down homeprices.

The Federal Reserve reported Thursday that household net worth fell to $50.38trillion in the January-March quarter, the lowest level since the third quarter of 2004.

The first-quarter figure marked a decline of 2.6 percent, or $1.33 trillion, from the finalquarter of 2008.

Net worth represents total assets such as homes and checking accounts,minus liabilities like mortgages and credit card debt.

The damage to wealth in the first quarter came from the sinking stock market.The value of Americans' stock holdings dropped 5.8 percent from the final quarter oflast year.

The stock market began to rally from 12-year lows in early March afterCitigroup Inc. reported it was profitable in the first two months of the year. Sincepeaking in October 2007, it had been the worst bear market since the aftermath of thecrash of 1929.

Another hit came from falling house prices. The value of household real-estate

holdings fell 2.4 percent, according to the Fed report. Collectively, homeowners hadonly 41.4 percent equity in their homes in the first quarter. That was down from 42.9percent in the fourth quarter and was the lowest on records dating to 1945.

The Case-Shiller national home price index, a closely watched barometer, lastmonth estimated that house prices dropped 7.5 percent during the first quarter. Priceshave fallen 32.2 percent since peaking in the second quarter of 2006.

The latest snapshot of Americans' balance sheets was contained in the Fed'squarterly report called the flow of funds.

Despite the drop, the speed at which net worth shrunk slowed at the start of theyear. During the recession's deepest point in the October-December period,Americans' net worth fell a record 8.6 percent, according to revised figures. That wasthe largest drop on records dating to 1951.

With wealth declining and unemployment rising, there are questions about howconsumers - the lifeblood of the economy - will behave in the coming months.

Hartford Financial Services Group Inc. said it would accept as much as $3.4billion in government bailout funds, capping a seven-month push to extend the U.S.financial-company rescue program to money-losing insurers.

Hartford also will sell as much as $750 million in common stock, the company,based in the Connecticut city of the same name, said today in a statement. The fundsmay be used to repurchase outstanding debt, the firm said.

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Outgoing Chief Executive Officer Ramani Ayer, 62, turned to the government inNovember after asset declines depleted capital and a sagging stock price deterredprivate investors. The insurer is welcoming an investment from Treasurys TroubledAsset Relief Program and the pay curbs that may come with it, even as banks led byJPMorgan Chase & Co. and Goldman Sachs Group Inc. raise capital to exit thegovernment initiative.

Consumer sentiment has shown a slight improvement in June, as theReuters/U. Michigan preliminary Index edged up to 69.0 in June from 68.7 in May.Dollar remains steady at intra-day highs against Euro and Pound.

U.S. import prices rose for a third-straight time last month, suggesting thatrising oil prices and a lower U.S. dollar have dramatically reduced the risk of deflation.

Still, with sharply rising unemployment making it harder for workers tocommand higher wages and for businesses to make price increases stick, inflation isunlikely to spike higher as it did one year ago.

Import prices rose 1.3% last month from April, the Labor Department saidFriday, the biggest monthly rise since July 2008. Economists in a Dow JonesNewswires survey had expected a 1.5% increase.

Still, import prices were down 17.6% compared to May 2008, the largest one-

year drop since the index was first published in 1982. And while petroleum importprices rose 8.3% in May from April, they were down 51.4% on the year.

Excluding petroleum, import prices were up 0.2% from April, the first increasein 10 months.

The online social network is preparing to lay off as many as 500 of its 1,600workers, the TechCrunch blog reported on Wednesday, as it cuts costs while trying tostay ahead of growing competition from rival Facebook.

We now hear commentary regarding the Fed raising interest rates. Some dontsee that until next year. We dont see it happening at all. The Fed has to keep interestrates at current levels and continue to increase money and credit. If they do thisinterest rates will rise, bond will fall, as will the dollar as gold and silver rise. If theyraise interest rates, stocks will fall, bonds will rise as will the dollar, but inflation will not

decline because its already in the systems, thus, gold and silver will rise. There willalso continue to be more shocks to the market that will push gold and silver higher.

Commercial paper outstanding fell $14.8 billion in the week ended 6/10 versusa $3.6 billion fall the prior week, asset backed CP fell $32.5 billion versus an $8.3billion. ABCP outstanding was $524.9 billion versus $557.4 billion. Unsecured financialCP issuance rose $15.9 billion versus a $3.3 billion fall.

Brazil is looking to buy $10 billion in IMF bonds joining China and Russia.China is buying $50 billion worth and Brazil and Russia $10 billion each. This is $70billion of monetization.

John Williams: Annual Retail Sales Plunge Worst of Post-World War II Era -May "Core" Monthly Retail Sales Gained 0.15% versus 0.46% Total - CorrectedMerchandise Trade Data Added $20 Billion to 2008 Deficit

http://www.shadowstats.com/Lower grain supplies could mean higher food prices; U.S. corn and soybean

reserves have been depleted by exports and by domestic demand for fuels such asethanol and biodiesel. This year's crops aren't expected to replenish the grain bins.

A Daring Trade Has Wall Street Seething, which underscores a huge problem inthe investment and trading world manipulating underlying vehicles to profit onderivatives.

The trade, by Amherst Holdings of Austin, Texas, was particularly galling to thebig banks because it turned what they believed was a sure-fire profit into a loss. The

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burned banks include J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLCand Bank of America Corp. Some banks have reached out to two industry tradegroups about Amherst's actions, and the groups are reviewing the transaction,according to people familiar with their thinking. "It's all-out warfare" between the banksand Amherst, said a senior banker at one firm that lost money. At issue is a move byAmherst to boost the price of bonds to avoid paying out on credit-default swaps it had

sold. Banks are questioning whether Amherst set them up by selling credit-defaultswaps and then rendering them worthless.

In 2007, a group of hedge funds led by Paulson & Co. suspected Bear Stearns ofplotting to boost the value of subprime-mortgage securities. At the time, Bear (whichwas later bought by J.P. Morgan) denied planning to engage in such transactions.

So far the latest dust-up has been all words, in part, bankers say, because theyare wary of attracting more regulatory scrutiny at a time when lawmakers are planningmajor reforms in the largely unregulated derivatives markets, long lucrative for banks.

On April 28 representatives of banks including J.P. Morgan, Goldman SachsGroup Inc. and UBS AG's UBS Securities held a conference call to discuss the tradebut didn't come to any conclusion, according to people familiar with the matter. [Is thiscollusion?]

Since the mortgage securities were valued at just $3 million or so in the market,well below the $27 million they were redeemed for, traders believe Amherst enteredinto an uneconomic transaction to profit from its swap positions.

California nears financial "meltdown" as revs tumble California's governmentrisks a financial "meltdown" within 50 days in light of its weakening May revenuesunless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billionbudget gap, the state's controller said on Wednesday.

61% of Americans say the government should not regulate the company'sexecutive pay and bonuses.

The seemingly contradictory actions by the brass at Wells Fargo & Co. regardingthe federal bailout have put the San Francisco company under a microscope. Wellswas notably absent this week from the list of the 10 major banking companies repaying

Troubled Asset Relief Program funds. It is still raising more capital and has notannounced when it plans to repay its $25 billion of aid.

Two words sum up the reason Wells is not in a hurry to repay the money:Wachovia Corp. Wells inherited much of the Charlotte company's option adjustable-rate mortgages and other problem assets after buying it in December. Now Wells ispreoccupied with working through those issues as it absorbs Wachovia's operations.

Universa Investments LP, which has links to Black Swan author and NewYork University professor Nassim Nicholas Taleb, is starting a hedge fund to bet thatefforts by governments and central banks to end the global recession will lead tohyperinflation, the Wall Street Journal reported, citing Taleb. The fund will invest incommodities and options on oil and gold stocks.

A hedge fund firm that reaped huge rewards betting against the market last

year is about to open a fund premised on another wager: that the massive stimulusefforts of global governments will lead to hyperinflation.

The firm Universa Investments LP is known for its ties to investor NassimNicholas Taleb, author of the 2007 bestseller, the Black Swan, which describes theimpact of extreme events on the world and financial markets.

Funds run by Universa, which is managed and owned by Mr. Talebs long-timecollaborator Mark Spitznagel, last year gained more than 100% thanks to its bearishbets. Universa now runs about $6 billion, up from the $300 million it began with inJanuary 2007. Earlier this year, Mr. Spitznagel closed several funds to new investors.

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Unlike last years sudden market implosion, inflation isnt an unimaginableevent that few currently anticipate. In fact, many fear inflation right now amidgovernment efforts to goose the economy. Universas bet, however, is that inflation willreach levels few expect.

By opening the inflation fund, Universa is trying to capitalize on a wave ofinvestor demand for its products, which when theyre right can protect investors from

extreme market moves.The new strategy, designed by Mr. Spitznagel, aims to post big gains if inflation

and interest rates take off as they did in the 1970s. Universa will invest in options tiedto commodities such as corn, crude oil and copper, as well as options on stocks suchas oil drillers and gold miners.

We think these things are going to see massive volatility, Mr. Taleb said in aninterview.

The fund will also bet against Treasury bonds, which tend to weaken ininflationary environments. Last week, Treasury yields shot to their highest level sinceNovember as prices fell on inflation concerns. Oil topped $66 a barrel. Gold is creepingnearing $1,000 an ounce.

The minimum investment in the firms other funds has been $25 million, though

it rarely accepted investments less than $100 million, a person familiar with the fundsays. Similar standards will likely apply to the new fund, called the black SwanProtection Protocol-Inflation, according to the person.

Mr. Taleb doesnt have an ownership interest in the Santa Monica, Calif., firm,but he has significant investments in it and helps shape its strategies.

The term black swan, which has become a market catchphrase in the last fewyears, alludes to the once-widespread belief in the West that all swans are white. Thenotion was proven false when European explorers discovered black swans inAustralia. A black-swan event, according to Mr. Taleb, is something that is extremeand highly unexpected.

Mr. Taleb said any deflation would be matched by an aggressive move bygovernments to stimulate their economies, leading inevitably to an uncontrollable

surge in prices.The Treasury and Fed elitists were very concerned with the yields at the

long end of the bond market. They dragged out Japanese Finance Minister Yasanowho said his government was confident about the outlook for Treasuries.

A WSJ article said the Fed claims that they are unlikely to announce a majorincrease in Treasury purchases at the June meeting. That probably means they aregoing to in Fed-Speak. This past week the Fed increased holdings by $19 billion. Overthe past five weeks and they have reported purchasing $144 billion of Treasuries,Agency and mortgage-backed securities. They also held marketable securities, held incustody for foreign officials and international accounts. They have increased in fiveweeks from $17.9 billion to $89 billion. We assume this is foreign trade surplus that theFed is secretly using to buy Treasuries. Over the past five weeks the Fed has

purchased $233 billion in securities - so much for winding down monetization of debt.At the Council on Foreign Relations, White House National Economic Council

Director Larry Summers said the US will act in markets as needed.At the end of the first quarter, six out of every ten banks were less than

prepared to withstand their potential loan losses then they had been at the end of2008. Bad loans were up 22%. Twenty percent of banks lost money. Four large bankslost $5 billion.

Remember in the early 20s in just three years the Reichmark dropped 95% andin the 21 following months the Reichmark became worthless.

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This past week the Dow rose 0.4%; S&P rose 0.7%; the Russell 200 fell 0.7%and Nasdaq fell 0.2%. Consumers rose 0.5%; transports rose 0.3%; banks rose 4.2%;broker/dealers added 0.2%; high tech was up 2.1%; semis rose 1.5%; Internets rose0.1% and biotechs increased 0.7%. Gold billion fell $16.00 and the HUI fell 5%.

Two-year T-bills gained 1 bps to 1.18%; the 10s fell 4 bps to 3.79% and the10-year German bund fell 9 bps to 3.63%.

Freddie Mac 30-year fixed rate mortgages surged 30 bps to 5.59%, which sentthe Fed to the bond market where they knocked down the 10-year note from 4.00% to3.79% in two days. The 15s rose 27 bps to 5.06% and the one-year ARMs rose 23bps to 5.04%. Jumbos were up 11 bps to 6.675.

Fed credit fell $40.5 billion. Fed foreign holdings of Treasuries and Agency debtsurged $17.9 billion to a new record $2.750 trillion. Custody holdings for foreign centralbanks are up 21.9% ytd and 19.5% yoy.

Bank credit jumped $29.6 billion. Securities credit rose $33.6 billion; loans andleases fell $4 billion; C&I loans fell $17.3 billion; real estate loans expanded $14.5billion; consumer loans fell $6.5 billion and securities loans rose $7.2 billion. Otherloans fell $2 billion.

M2 narrow money supply fell $7.5 billion.

Total money market fund assets fell $16.3 billion to $3.747 trillion, up 8.9% yoy.The dollar index, the USDX, fell 0.6%.

*****The House bill will pass we must now deluge every member of the Senate on this bill.It is imperative that the Fed is abolished.Senate Bill S604: The Federal Reserve Sunshine Act of 2009http://janeqrepublican.wordpress.com/2009/05/15/senate-bill-s604-the-federal-reserve-sunshine-act-of-2009/

*****Audit of Federal Reserve nearing critical mass

Rep. Paul plan has 213 co-sponsors in 435-member U.S. Househttp://www.wnd.com/index.php?fa=PAGE.view&pageId=100727

*****Bring on Ron Paul's Audit of the Fedby James Granthttp://www.lewrockwell.com/orig8/grant4.html

*****Ron Paul Support Surges For His Audit the Fed Billhttp://www.lewrockwell.com/paul/paul538.html

*****

US House to debate Ron Pauls Audit the Fed billhttp://rawstory.com/08/news/2009/06/11/us-house-to-debate-ron-pauls-audit-the-fed-bill/

*****Israeli War Crimes Against Children During Operation Cast Leadby Stephen Lendmanhttp://sjlendman.blogspot.com/

*****

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Government Demands Inventory of All VFW WeaponsKurt Nimmohttp://www.prisonplanet.com/government-demands-inventory-of-all-vfw-weapons.html

*****

US ATTEMPTS TO RE-DEFINE SWITCHBLADES WOULD MAKE MOSTPOCKET KNIVES ILLEGALhttp://www.kniferights.org/index.php?option=com_content&task=view&id=76&Itemid=150

*****Option ARMs Threaten U.S. Housing Rebound as 2011 Resets Peakhttp://bloomberg.com/apps/news?pid=20601109&sid=aQ_ZgC75Zfyw

*****AMERICA LOSING ITS LANGUAGE AND CULTURE WITHOUT A WHIMPERBy Frosty Wooldridge June 11, 2009 NewsWithViews.com

http://www.newswithviews.com/Wooldridge/frosty473.htm*****

US Towns Challenge Feds on Military RecruitingThursday 11 June 2009http://www.truthout.org/061109EDA

*****

From a Fellow subscriber:Bob: please watch the interview with Illinois Congressman Mark Kirk andmention it in IF. It is a must view.Here is the link on U-tubehttp://www.usagold.com/cpmforum/

*****

AUDIT THE FEDERAL RESERVEBy Marilyn M. Barnewall June 10, 2009 NewsWithViews.com As of Last Wednesday there were 209 co-sponsors.http://www.newswithviews.com/Barnewall/marilyn107.htm

*****

Federal Agent Sacked for Reporting Illegal Cougar Killshttp://www.truthout.org/061209N

*****Mortgage Foreclosures May Undermine Economy

http://www.comstockfunds.com/default.aspx?MenuItemID=29&MenuGroup=Home&&AspxAutoDetectCookieSupport=1

*****

Danville police shoot, kill growling miniature dachshundhttp://www.timesdispatch.com/rtd/news/state_regional/article/DOGGAT11_20090611-071201/273228/

*****

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From a Fellow Subscriber:I don't know what is more interesting... the CNBC article itself or all the editorialcomments of people passing these emails around. FYI...

Allrightee then, so let me get this straight....1776: revolutionary war takes place. We

establish a US Constitution. The Constitution reads that "US Government will be onlyentity to pay all debts in gold and silver" (not in paper) and will issue governmentcurrency in silver and gold coin. All is well for for about 137 years. No inflation. If yourgreat grandfather put $100 in silver coins away in a can in 1795 you could buy $100worth of the same goods in 1995. No inflation. A penny saved is a penny earned, theold adage used to say, and for good reason.There was no such thing as "inflation".Then in 1913 a private corporation comes along and swindled a congressman to getcongress to pass a bill that gives a the private bank corporation (who decide to callthemselves "The Federal Reserve") the authority to issue and print our money. Thenthey passed a bill (which incidentally was never ratified) that authorized a "Federalincome tax" so the people can now pay a tax on their labor as "interest payments" tothis private bank for the money they print up and lend to our government. Now, 96

years alter, after a ponzi scheme of using paper for money, and 96% inflation ($1 in1913 is now worth $0.04 in purchase power as of Sept 2008), this private corporationknown as the Fed is bankrupt. Yes fold, bankrupt and officially insolvent. OK, so inclassic Madoff style...that means all US dollar paper, or "federal reserve notes" as theyare officially called are just plain worthless. That's just so sweet. And what in God'sname do you think the consequences of this all will be??? When people discover whathas been done to them, they will go absolutely MENTAL _________OK..dudes and dudettes....so I listened to this radio interview clip below you peoplesent me, and low and behold...FRONT PAGE OF CNBC this morning reads:Fed Would Be Shut Down If It Were Audited, Expert SaysCan you spell 'D-O-L-L-A-R C-O-L-L-A-P-S-E!!!!!

*****

From a Fellow Subscriber:The article written by Matt Taibbi of Rolling Stone is excellent, and right on,perhaps they are of use to you for your forecaster as a link. But both articlesare very detailed, and right on target.

I read these some time ago when the big takeover article came out, andnearly blew a gasket. If everyone read these articles, everyone would be ready for revolt. Even so called liberals, that dont know why they are liberal. Andthat is being kind by using the word revolt.

Best regards,Rollingstone.comThe Big Takeoverhttp://www.wnd.com/index.php?fa=PAGE.view&pageId=100727

The Endby Michael Lewishttp://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-

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Wall-Streets-Boom?print=true*****

From a Fellow Subscriber:Hi, Bob,Given the coming wave of inflation, I'm concerned about the affect on contracting.

Say we have outstanding contracts worth $100m for various projects. Wheninflation takes off, I can see a real bloodbath coming for those caught withproviding completion of those jobs. When Katrina hit New Orleans, PVC pipeprices escalated sharply and we were hit with subcontractors screaming forcemajeure. They refused to honor their original bid price saying that the supplierswouldn't honor their commitments; no forward pricing or price holds. Materialwas priced when it hit the job on delivery.

My concern is the contracts we have with government agencies typically don'tallow us to recover for material price escalations. When steel skyrocketed inprice a few years ago, I know of one company that had a government contract

to provide one building with an option for a second building that got caught bythe price increase. They are now out of business. Also, prevailing wage laborerscould really get stung because their hourly pay is based upon a set determination.I could see laborers walking off jobs and demanding their pay increase to keep upwith inflation. Since states, like California, are already hurting severely, I don't seethem having the ability to complete projects if contractors walk.Estimating future projects would be nearly impossible unless there was a priceescalation clause developed to accommodate cost increases.

If we get into a hyperinflation mode, I suppose contracting will come to a completehalt.I don't like what I see on the horizon.

*****

From a Fellow Subscriber:Hi Bobin case you have not seen it yetthe illuminist criminals in congress cannotpass the hate crime bill as stand alone legislationso the Senate is set to pass thehate crimes bill as an amendmentWITH ZERO DEBATEwhich Barky will rubberstamp a nano second after it passes by the illuminist criminalsthis will be the end ofpatriot truth radio as you have done by the 1000s of broadcastsafter the hate billpasses anyone in the USA that is either a host or guest on such truth telling radiobroad castsswat teams can break down your doors24-7-and take you away forindefinite detentionand the only ones reporting any of the above is a homosexualand lesbian internet newspaperas a fortuitous co-incidence PAEDOPHILES

will be excluded from the hate crimes billlink is below.http://www.washblade.com/thelatest/thelatest.cfm?blog_id=25698

*****

From a Fellow Subscriber:YIPPEE!!! Another new Govt-appointed CZAR to rule over us.

http://www.truthout.org/061109J

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Wow, why don't they just station thug mercenaries right outside each of our doors.Oh, wait, that's next month.

http://www.fema.gov/media/fact_sheets/nle09.shtm*****

From a Fellow Subscriber:Bob, I just feel compelled to thank you for all you do for so many.Your dedication to telling people the truth and opening their eyes is a wonderful thingto behold. As you may recall, I learned Austrian economics precisely at the time of thecollapse last year. I moved my SEP to Peter thinking it would be safe because heknew the problems of Keynes, etc.

I recalled hearing you on Dr. Stan's show and began to read everything on Goldseekand anything else I could get my eyes on. I quickly realized you spoke the truthregardless of the consequences. That is how I learned ONLY gold and silver relatedassets!!! I subscribed to several newsletters to narrow the search and continue to

research companies for hours each day. As well as listen to every program whereinyou are a guest, and read all the days news events from the Internet such as new withviews, Alex etc., hour upon hour, day upon day.

My accounts are all mining share companies. The status of your truth is provable bythe following list of accounts where all are in mining = shares. Its unbelievable, andproves the truth of what you attempt to convey to people daily. Tell me if these arenormal returns. Account 1 funded Dec. 08 $35k closed today $117k, account 2funded Oct. - Dec. 08 $29k close today $106k, Account 3 funded DEC. 08 $15Kclosed today $41k, Account 4 funded March 09 taken from Peter Schiff after startingwith $72k, I only had $31.5k closed today $63k, account 5 funded 3 weeks ago with$20k closed today $29.3k.

Bob, those to me are just unbelievable returns. Like the kind from above. I thank youso much for your determination in persisting with the truth. Regardless of who isoffended by it. Had I not been guided to you from above I would never have known100% mining as well as all the other things learned from you. Not to say money isanything. After all it is the root of all evil. But to watch God and truth apply to this worldand the wickedness to enslave humanity through their deceit, be exposed by you, hasbeen the greatest blessing. Further, to use that wisdom and warn others and watchthem learn and no longer be capable of tolerating the lies on television any longer is soawesome. Paul said we were not ignorant of his devices and God has used you toopen my and so many others we won't know until we meet the Lord. It must be sohumbling. I cannot imagine you. I am so humbled by what He has shown me and done

for me financially, particularly with the serious health issues (crohn's disease) I havehad for 24 years. It is nearly impossible physically for me to work a normal day. I amblessed to work from my home most days. Which in turn allows me to learn from youand spread knowledge to others. The mercy and humility to be used of Him isoverwhelming.

Please keep that foremost in your mind. You are so blessed with wisdom that comesfrom God only. It is so clear for me to see. I read so many people daily. Hours andhours and none have THAT WISDOM only he gives. You are so blessed to have that

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and the health on top that so many take for granted. l don't have health yet it is ablessing because it makes me appreciate and realize even more how much Heblesses me daily. The mercy and grace He pours upon me is incredible. And then Iam allowed to learn from people He works through like you and I am privileged to passthat on to others. Stop and be thankful for all He allows us to do. The multitudes oflives He allows you to touch should humble you tremendously. I'm not trying to

diminish your efforts and talent. But No flesh shall glory in His presence. You are sofortunate to be used of him to reach others. Its so awesome to watch him use peopleand often they don't realize it. Never forget Bob to just continue to thank Him forallowing Him to work through you and protect you as well. He is GOD, and so merciful.Faith is all he looks for to be pleased. Thank him for the gifts of wisdom andknowledge he has blessed you with. What an awesome life he has given you. And meand everyone, if they would just realize it is all given by Him. Sorry for the ramble butHis Spirit overwhelms me at times as I see him work supernaturally through people likeyou. Thanks Take care and God Bless.

*****

COMODITIES

The DOE reports crude oil inventors off 5.96 m/b, gas up 27,000 barrels anddistillates up 19,000 barrels.

EIA natural gas inventories rose 106 bcf.Gold ended the week down 1.7% to $939 (up 6.5% y-t-d). Silver fell 3.7% to

$14.83 (up 31.3% y-t-d). July Crude inflated another $3.76 (4-wk gain of $15.20) to$72.20 (up 62% y-t-d). July Gasoline jumped 5.1% (up 93.4% y-t-d), and June NaturalGas increased 0.6% (down 1.4% y-t-d). September Copper rose 4.2% (up 70% y-t-d).July Wheat fell 6.1% (down 4.3% y-t-d), and July Corn dropped 4.2% (up 4.5% y-t-d).The CRB index rose 1.7% (up 14.3% y-t-d). The Goldman Sachs Commodities Index(GSCI) surged 3.7% (up 35.3% y-t-d).

*****

World Oil Reserves Fell for First Time in 10 Years, BP SaysBy Rachel Graham and Alexander Kwiatkowskihttp://www.bloomberg.com/apps/news?pid=20601087&sid=a6.7NWiQ5wGw

*****GOLD, SILVER, PLATINUM AND PALLADIUM

As we get closer to June Comex delivery there is great concern that golddelivery of physical contracts cannot be met due to what can be called naked shorting.

Commercials have sold gold they cannot deliver. It looks like the USgovernment, which is behind these positions, will again have to call in help for deliverylike they did recently from the ECB and Deutsche Bank. All of this, of course, is illegal,but your government has its own set of rules. What could end in a classic debacle are

the June gold options if enough are in the money and are called for delivery. It is ourguess that if this happens and the government doesnt come up with the gold again,that the gold pit could collapse. What we will witness over the next two weeks could bea gold explosion, especially if gold were to breakout above $1,000. Massive demandsfor delivery could take place. The forces of darkness again attacked gold last week aswell as the shares and both have rebounded. The elitists are unable to keep the goldprice down for any period of time. If the Comex collapse doesnt come this month itmost certainly will come in September. This is why we use a long-term buy and holdstrategy and buying each time there is a dip in prices. Government is terrified and has

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put up every roadblock imaginable to inhibit and retard delivery. In the course of all thisthe elitists who have a revolving door between Wall Street, Washington and the Fedrefuse to fix the system and they continue to add massive debt to the system, whichonly makes the situation worse. The system has to be restructured purged viabankruptcy and an exchange of equity for debt. We know the elitists wont do that. Ifthey do their power will be broken. This is why those who understand the problem are

taking delivery of gold and in the case of most small investors taking delivery of coinsand bullion and buying gold and silver shares.

Both Germany, from the US, and Dubai from London, cannot get delivery oftheir gold. This is why Ms. Merkel, German Chancellor, spoke out on debt last week; toforce delivery of their gold, which the US cannot deliver. The same is true in London

just as it is on Comex. One day you will turn on the news in the morning and you willlearn that gold has jumped $500 to $1,000 overnight. Get ready for it because thosekinds of events are in our future.

On Wednesday, late buying again came in and the Dow, which was off 100,ended up off 24 at 8739. The S&P fell 30 and Nasdaq fell 70 Dow points. The 2-yearwas 1.35% and the 10s 3.95%.

Just before the opening of Comex gold was up over $9.00, but our government

wasnt happy with that, so they kept the price near even all day. Spot gold rose $0.20to $952.90. June was off about the same. Silver rose $0.03 to $15.15. July was up$0.03 as well.

As we pointed out in the last issue there is a major short position in gold. Whatthese commercials are doing in conjunction with our government is using bogusgovernment reports, such as the employment report or the CPI report, to push interestrates down, the dollar up and push gold down. If they can drive gold down throughtechnical points all the better. These crooks are well aware that fundamentally andtechnically gold and silver are rearing to break out. It wont be long before the righthand should neckline of the reverse head and shoulders will be broken, on gold, silverand the HUI. Gold should quickly move to $1,350 to $1,500 and silver to $30.00. Atemporary way to foil the upward moves would be to announce another monetization,

which is a good possibility. It would gain only a few days respite.The Bombay Bullion Dealers Association reported India imported 17.8 tons of

gold in May. That is 51.8 tons in 2009 versus 115 tons in 2008, almost all the buyingwas done in the past two months.

Last week the ECB reports two central banks sold $18 million euros worth ofgold or 0.81% tons. The previous weeks sales were 0.63 tons.

We believe the missing gold at the Canadian Mint was used to help the USsuppress gold prices. It will take two years to get the truth but well get it and someonewill swing for treason.

We have to laugh Kitco has halted all Royal Canadian Mint PrestigeAccounts. Oh, you fools who refused to take delivery.

Owners of pooled accounts may well lose their investments. Will Kitco fold

well see. Is this Enron all over again? Or are the Perth Mint, Canadian Mint and Kitcotaking orders from the Gestapo in Washington? We will see!.

Incidentally, two million ounces of silver went missing from Comex for fourdays. They finally added it back in. What morons!

There are now 4,100 contracts or 410,000 ounces for delivery in the Junecontract month. That is 16% of dealer inventory. There are still 2,332 open for possibledelivery.

There is a large 581 delivery notices issued in silver for June for a total of 2.9million ounces.

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The XAU fell 1.03 to 150.10 and the HUI lost 2.83 to 362.28.The yen fell .0083 to $.9820; the euro fell .0108 to $1.3969; the pound fell

.0028 to $1.6405; the Swiss franc fell .0031 to $1.0816; the Canadian dollar lost .0078to $.9013 and the USDX rose .46 to 80.24.

Oil rose $1.24 to $71.25; gas fell $0.05 to $2.01 and natural gas fell $0.02 to$3.71. Copper rose $0.01 to $2.38; platinum rose $16.90 to $1,274 and palladium fell

$3.90 to $252.55. The CRB rose .49 to 260.87.Early Thursday saw the Dow up 27 to 8726; S&P up 29; Nasdaq up 32 and the

FTSE up 31 Dow points. The Nikkei was off 10, the CAC was up 26 and the DAX wasup 5. The yen rose .0036; the euro rose .0028 and the pound was up .0088. The 2-year T-bill was 1.36%; the 10s 3.93%, the 1-month Libor was 0.32% and the 3-monthwas 0.64%. Oil rose $0.55 to $71.88; gas rose $0.01 to $2.03 and natural gas rose$0.03. Gold was unchanged at $954.70, silver fell $0.05 to $15.14 and copper rose$0.04 to $2.41.

Gold production in South Africa declined by 13% on the year in April as part ofa wider slump in mining output, official data released Thursday showed.

Total mining production for the month was 10.6% lower than a year ago, withoutput of minerals other than gold down 10.3%, Statistics South Africa said.

Mining production between February and April was 8.6% lower than the samethree months a year ago, with diamond output the main contributor to the fall, thestatistics agency's data showed.

Mineral sales for March, the most recent figure available, were down 16.2% ona year earlier at 21.7 billion rand ($2.7 billion) despite a 18.4% jump in gold sales forthe month to ZAR4.84 billion, Statistics SA said.

On Thursday spot gold rose $8.20 to $960.70, as the June contract traded$7.70 lower. Spot silver rose $0.33 to $15.48, but July was up only $0.17. Gold openinterest rose 1,193 contracts to 388,374, as silver OI rose 710 contracts to 107,157.The HUI rose .82 to 361.46 and the XAU rose .42 to 149.68.

The Dow rose 32 to 8771; S&P gained 52 and Nasdaq rose 57 Dow points.The 2-year was 1.32% and the 10s were 3.86% - that could be just a snapback from

the Fed driving rates up for the auction, more monetization, or there is some nastynews coming.

The yen rose .0070 to $.9753; the euro rose .0161 to $1.4129; the pound rose.0282 to $1.6587; the Swiss franc rose .0110 to $1.0689; the Canadian dollar rose.0098 to $.9111 and the USDX, dollar index, fell 81 to 79.51.

Oil rose $1.07 to $72.40; gas rose $0.04 to $2.06 and natural gas rose $0.02 to$3.92. Copper was really strong again, up $0.07 to $2.44; platinum fell $4.10 to $1,269and palladium fell $2.75 to $254.95. The CRB rose 5.30 to 266.17.

This week has seen an epic battle between the commercial shorts, AKA the USTreasury and the longs. The longs holding $950 and the government-shorts defending$960.00. As we mentioned earlier in the week the Working Group on FinancialMarkets knows gold is about to catapult out of the long term formation of a reverse

head and shoulders. Once it does that $1,250 will come quickly and easily. That verylarge short position held by the commercials will just feed on itself and explode. Theuse of the aftermarket access on NY Globix is so manipulated it is beyond belief. Thisis a thin institutional market inhabited mainly by those who are short, so you cantexpect any up ticks. The CFTC is will aware of what is going on and like its counterpartthe SEC, which couldnt find criminality in Madoff or Stanford, and looked the otherway, so does the CFTC, and that is because they are in on the caper. The large hedgefunds, pension funds and sovereign funds know what is going on but they wont speakout. They are terrified the government will drive them out of business. Punishment

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similar to what we have witnessed at Bank of America recently. You either do what wesay or we destroy you. This is what we have experienced for more than 40 years.

We saw this again on Thursday overnight. These crooks had gold down morethan $12.00 on very light volume. Gold had to spend the wee hours working its wayback up again. We always see the same thing on Sunday nights, into the ComexMonday opening. Our government is run by criminals. Thursday was a very bullish day

for gold and silver. The manipulators know that so they attacked Thursday night andFriday morning relentlessly. Do not lose faith, June will be an epic month that we willnot lose. There is a BRIC meeting held in Russia and it will be all about the dollar. Thetrend is our friend and we have it with us.

Early Friday was weak all around. The Dow fell 1 to 8698; S&P fell 5, Nasdaqlost 4 and the FTSE was off 10. The Nikkei rose 154; the CAC fell 1 and the DAXslipped 19. The yen was off .0074; the euro fell .0095 and the pound fell .0165, aftersuch a strong day yesterday. Your government in action. The 2-year was 1.30%; the10s 3.80% and the institutions and bond funds are furious about the Fed manipulationin the bond market. We saw two on CNBC who were extremely agitated. They arestarting to realize what we have been writing about for 21 years. The markets are allfinancially driven by our government, especially over the past 16 years. Oil was off

$1.74; gas down $0.03 and natural gas off $0.05. Copper fell $0.04; gold fell $12.00 to$950; silver fell $0.33 to $15.16 as our government continues to rape investors.Incidentally, if our figures serve us correctly of $49 billion of notes offered at theTreasury auction only $19 billion were sold. It looks lie the Fed bought $30 billion.

Just to show you how desperate the banksters are over gold you cannot forgetthe ECB had to deliver 850,000 ounces of gold to the Comex to cover DeutscheBanks 8,500-contract short position. That short belonged to our government. That wasalmost three months ago. We wonder what gold delivery demands we will see in June,perhaps some 30% of open contracts. They obviously covered other naked shorts aswell because they sold 1,141,351 ounces. This was a major bailout of the USgovernment. We wonder how the eurozone members, especially Germany like that? Itis no wonder they want delivery of their gold. Of course, while all this was going on the

CFTC was in hiding. We heard nothing from European regulators as well. It should benoted that CFTC regulations say naked shorting is illegal. The regulations require acover of 90%. What we have witnessed is fraud by the US government, but what dothey care. In their corporatist fascist government anything goes and they change therules as they go along. It also proves the commercials are not commercials, butspeculators, who are immunized from position limits. There are no longer anytransparent markets. The CFTC is just another criminal enterprise.

*****Cenbanks could justify sharp rise in gold holdings-WGChttp://www.forbes.com/feeds/afx/2009/06/11/afx6534033.html

*****

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Numbers without substance

The U.S. National Debt Clock (http://www.brilling.com/debt_clock) reports that as oftoday (June 12th) the Outstanding Public Debt was about $11.4 trillion. When divided

by the U.S. population, this works out to $37,000 for every American man, woman, andchild. Given that the U.S. per capita income is about $39,000 per year, the previousnational debt number is intimidating, but not completely unreasonable oroverwhelming. If the federal gov-co only owes $11.4 trillion, we can probably work ourway out of this debt over the next generationprovided the federales dont borrow anymoney.But there are a couple of problems: First, the $11.4 trillion figure is provided by gov-co; second, that $11.4 trillion figure is almost certainly fabricated, false and hugelyunderstated; and third, our governments appetite for borrowing is growing rather thanrestrained. In fact, John Williams (shadowstats.com), an April, 2008 edition of USAToday, and former U.S. Comptroller David Walker have all warned that the realnational debt is roughly $55 trillionabout 5 times the politically-correct sum reported

by gov-co.Add in another $20 trillion in debt for state and local gov-cos and private debt(mortgages, cars and credit cards) and the total American debt is now at least $75trillion (about $250,000 for every U.S. man, woman and child). If you have a family offour, your familys fair share of the debt is about $1 million. Do you have it? Howmany families do you know that have it? If not, how are we going to repay that debt?Answer? Exactly as the Chinese explained when they recently laughed at ourSecretary of the Treasury, Were not. Not ever. As a nation we are bankrupt.But its one thing to be reasonably bankrupt and another thing to be irrationally(even, fantastically) bankrupt. How did we, as a nation, run up a total debt thats notmerely enormous but virtually unimaginable? $75 trillion?! That number isnt just hardto understand, its hard to believe.But our American debt not the only fantastic number in our brave, new economy.For example, in February, the head of the Dallas Federal Reserve Bank warned thatthe federal gov-cos unfunded pension and health-care liabilities are now over $99trillion.$99 trillion?! Again, how is that even possible? The U.S. annual U.S. GDP is nowapproaching $14 trillion. In order to fund a $99 trillion shortfall in pensions and healthcare, Americans would have to surrender every dime of their incomes for seven years.If we first paid our normal taxes, mortgages and car loans, we couldnt hope to fundthe pension and health care liabilities in less than 30 yearsand that assumes gov-codidnt borrow another dime.But we all know that government is a credit addict. They are going to borrow, borrow,borrow us into oblivion. According to one source, the Obama administration hasborrowed more money in its first six months than was borrowed by gov-co over thepast 30 years. We cant pay the debt we have; how are we going to repay suchenormous additional debt?Numbers associated with the global economy are just as fantastic as those of the U.S.economy. For example, according to the Daily Reckoning, there are an estimated $1.6quadrillionworth of derivatives (debt instruments) in the world. The global populationis about 6.8 billion. So if we divide the $1.6 quadrillion global derivatives by the globalpopulation, we learn that there are $235,000 in derivative debtsfor every man, woman

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and child on the planet. How the heck is that possible? And thats in addition to the$250,000 share of the total American debt owed by every American.

How are such fantastic economic numbers possible? Well, theyre not possibleatleast not in the real, tangible world. But people in positions of enormous power (theworlds central bankers) have created an alternative reality that is not composed of

tangible wealth, but rather a wealth based on illusionprimarily accounting entriesstored as electrons on some hard drive.

The idea that the banking elite have created an alternative reality may seemabsurd, but let me show you the primary tool used to create that alternative reality:legal tenderpaper and digital dollars, euros, pesos and yuan. When the worldabandoned gold and silver as its currency, the worlds people entered into the illusoryeconomy of legal tender. Instead of having a monetary system that was measured inunits of value, we adopted a monetary system measured in units of account.Result? In todays economy, we have virtually no tangible wealth. Instead we havemere accounts and bookkeeping entries.Historically, if your wealth consisted of ten ounces of gold, you could not double your

wealth with the stroke of a pen or an accounting entry. If you wanted twenty ounces ofgold/wealth, you had to actually find another ten physical ounces.Today, when wealth is measure in units of account (rather than units of value),enormous wealth can be created or destroyed with the stroke of a pen or the keystrokeof a data entry clerk. And thats why we can have $1.6 quadrillion dollars inderivatives, and a total American debt of $75 trillion. We can have such fantastic andseemingly impossible economic numbers because the numbers do not representanything of substancethey are only accounting entries. Our current measures ofwealth are no more real than an obligation to pay $1,000 for landing your top hat iconon Boardwalk. Our current measures of wealth are no more real than the number ofspace aliens you killed in a video game.

Modern economics is all about numbers. In order to understand economics, you haveto understand what the numbers represent. Although some economic numbers(unemployment and interest) represent rates, the fundamental economic numberrepresents dollars. The Gross National Product, the National Debt, your weekly orannual income are all measured in dollars.But whats a dollar? At first, that question seems a little stupid. Everyone knowswhat a dollar isright?Wrong. The truth is that almost no one knows that a modern dollar really is. Wemore or less understand dollars function (we can take it to the grocery store and tradeit for some groceries or beer), but not one American in 1,000 understands the dollarsnature.To learn what todays dollar is, we must first go back in time to see what it used to

be. For example, in A.D. 1933, the 3rd

edition of Blacks Law Dictionaryreported thataccording to the case of Thompson v State, 90 Tex.Cr.R. 125, 234 S.W. 406, 408, adollars was The unit employed in the United States in calculating money values. It iscoined both in gold and silver, and is of the value of one hundred cents. [Emphasisadded.]If you looked up the word cents youd find A coin of the United States, the least invalue of those now minted. It is the hundredth part of a dollar. Its weight is 48 gr., andit is composed of ninety-five per centum of copper and of five per centum of tin and

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zinc in such proportions as shall be determined by the Director of the Mint. Act of Feb.12, 1873, 16. See Rev. Stat. 3515 (31 USCA 317). [Emphasis added.]Blacks4th Edition (A.D. 1957) expressly defined the dollar as a unit of value. Thus,the lawful money required at Article 1 Section 10 Clause 1 (No State shall make anyThing but gold and silver Coin a Tender in Payment of Debts) of our nationalConstitution was a measure of value expressed in a certain mass of various metals.

However, today, in Blacks 8th Edition (A.D. 2004), the word dollar is no longerdefined.If you want to discover what todays dollar is, go to the Uniform Commercial Code(UCC) at section 1-201 (general definitions) and see #24 which reads Money meansa medium of exchange currently authorized or adopted by a domestic or foreigngovernment. The term includes a monetary unit of account established by anintergovernmental organization or by agreement between two or more countries.Even the UCC doesnt define money. They dont say what modern money is theymerely say what the modern term means.But the UCC does tell us that modern money means a unit of accountnot a unit ofvalue (gold & silver coin). Modern money is merely a bookkeeping entry on anaccount. It has no tangible reality (value expressed in a fixed weight of gold, silver or

copper). Its merely an abstract number and an expression of a relationshipon anaccount between a debtor and a creditor.More, while the definition for Tender in the national Constitution (gold and silver coin)was established by We the People, the meaning of modern money is authorized oradopted by a domestic or foreign government. . . intergovernmental organizationor byagreement between two or more countries. The constitutional gold and silver dollarswere established by the Peopleand are the peoples money. However, our modernpaper and digital dollars are units of account authorized by governments,organizations and treaties between countries.Modern dollars arent the peoples moneytheyre the gov-cos moneyandtheres a difference. Without a fixed weight of gold or silver to back them, moderndollars have no tangible reality. And thats exactly why we can have national and

global debts that are so fantastically huge as to be irrational, impossible and seeminglyinsane. Because our modern dollars have no tangible reality, the total debt is asunlimited as the human imagination. Americans could be in debt for $75 billion, $75trillion or $75 quadrilliontheres no real difference between those sums other than acouple of zeros and comas.Compare a $100 bill to a $1 bill. Both pieces of paper cost about four cents to make,but one is worth 100 times as much as the other. If one piece of paper that cost fourcents can be worth one dollar and another piece of paper that cost four cents is worthone hundred dollars, its obvious that the dollar has no tangible reality. Its achameleon, an illusion, a myth.

What does this all mean? I dont know. The whole concept of the definition or

meaning of the modern dollar is so bizarre, that it truly boggles the mind. If thedollar has no tangible reality, then its as fantastic as a yardstick that has no fixedlength. How can you measure the length of a mile or how tall your 8-year old son iswith a yardstick that has no fixed length?And how do you measure your personal income, or your net worth, or our national debtwith a dollar that is only a unit of account but not a unit of value? Without somefixed value, the modern dollar and everything it measures has no fixed meaning.We pay economist