Monday, July 18, 2011

Weekly Update News July 17th - July 23rd

Gold surged past $1,600 on Monday, highlighting investor's fear of fiat currencies and government bonds, with CNBC saying the precious metal could reach $1,700 by the end of year. Gas prices are also soaring, settling above $4 dollars in four states, as Obama officially vowed to veto spending cuts which the GOP congress may try to pass in a "cut, cap and balance" bill, which passed through the House Tuesday night. The White House said in a statement, that “instead of pursuing an empty political statement and unrealistic policy goals, it is necessary to move beyond politics as usual and find bipartisan common ground.” Wall Street is starting to feel jittery with the debt crisis still unresolved in Washington, the Dow falling almost 93 points on Monday, and Moody's suggesting the US eliminate the Debt Ceiling entirely to sedate bond holder anxiety. Moody's has threatened to reconsider the US's AAA rating if the limit isn't raised and suggested that the Americans consider a European style Maastricht rule which limits the government's debt from exceeding 60 percent of the GDP. The rating agency is also warning it might downgrade 5 states' debt--Maryland, New Mexico, South Carolina, Tennessee, and Virginia. The GOP in the House, for their part, have ignored the Thursday deadline which Obama set during a meeting, and forwarded the aforementioned bill Tuesday, which would "cut $111 billion in fiscal year 2012, cap spending at 18 percent of gross domestic product by 2021 and would authorize a $2.4 trillion increase in the debt limit after Congress passes a balanced budget amendment" (Bolton - The Hill). Obama is instead favoring a proposed bipartisan bill, titled the Gang of Six plan, drafted by three members of each party that would "cut the nation's debt by about $3.7 trillion over the next 10 years -- similar to the president's call for roughly $4 trillion in savings" and would "would create three tax brackets with rates from 8% to 12%, 14% to 22%, and 23% to 29%" (Silverleib, Cohen - CNN politics).

The New York Times said on Thursday that Obama and Speaker of the House Boehner are nearing a deal. The details of the negotiated package are still unknown, but they are believed to contain an adjustments to taxes and cuts to many programs (Medicare included). However, debt talks between the two broke down Friday, with Boehner deciding to end the negotiations, writing, "It has become evident that the White House is not serious about ending the spending binge that is destroying jobs and endangering our children's future. A deal was never reached, and was never really close." McConnell and Reid continue to work on a back up bill which would give the president complete power to raise the debt limit for the rest of his tenure. Obama said in a press conference that he is confident that Congress will pass a debt deal because they are not so irresponsible to inflict a wound on the economy. The two sides can't stop bickering and posturing for a minute to solve a crisis. Who will hurt the most when the dollar collapses? Not the elites who control Washington. Watch them crash the system in an cruel and unforgiveable way to get more power and money. They don't care about the Middle Class American trying to get by--they care about their purse, about the lobbyists and donors giving them money. The left and right are just a gameshow, a sports arena, to keep us entertained and ignorant towards what is really going on. I predict no bill will pass until the very end, and it will be McConnell and Reid's deal--a completely illegal powergrab by the executive branch. Meanwhile, Geithner met with Hank Paulson, his predessor, and fed officials on Friday, in preparation of the U.S.'s default on August 2nd, if a compromise cannot be made. Paulson said, “Failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy.” Geithner might have a conscience (who knows? he might, he wants to leave; maybe he's feeling guilty), but do not trust anything he does. He sold his soul a long time ago. To add further bad taste in my mouth, according to some counterterrorism experts, the debt crisis could result in an attack from al-Qaeda. Infowars reports one official saying, “So you can understand why Al Qaeda, or any other terrorist organization motivated by the jihadist ideology, would see that America is highly vulnerable right now – perhaps more than it’s ever been — to an attack or attacks the impact or direct effect [of which] would be further depression of the US’s economy.” This is coincided with the Obama administration using increasingly alarmist language, painting a picture of biblical Armageddon. Backward terrorists in caves are again being used as the chief enemy--be it battles in Washington or in the Middle East. It should be disgusting to any American that fears for their own safety, and the safety of their family, are being played with my politicians.

One of the few honest politicians left in Washington, Ron Paul (R-Tx.), said that America will default "because the debt is unsustainable," and won't "be because we don't send out the checks. We will send out the checks. It will be defaulted on because people will get their money back, or they will get their Social Security checks and it won't buy anything," and that the debt talks are essentially rearranging chairs on the titanic. China, the largest holder of U.S. debt, urged the government to ease bond holder anxiety and pass a debt deal, with an official saying, "We hope the U.S. government will take responsible policies and measures to boost global financial market confidence and respect and protect the interests of investors," when prompted whether China would lower its investment in US bonds if the rating agencies cut its credit rating. Latin America has taken on both an air of boastfulness and fear at the U.S. and European's problems, with Brazil owning the fourth largest amount of the U.S.'s debt. However, after years of being lectured to by the self-righteous North Americans about their own debt, the South is celebrating. Argentina's President Cristina Fernandez raved, "When did the American dream become a nightmare?" after Washington's lackadaisical boredom towards her country's default in 2001. It was revealed by the Treasury Department Thursday that U.S. taxpayers lost $1.3 billion in Chrysler's bailout. It is yet to be seen whether the benefits will outweigh the costs in these huge money dumps; however, Reuters reported that factories were more active in July in the Mid-Atlantic, but jobless claims remained at the high of 421,250, which is 15 straight weeks of being over the 400k mark. In Europe, leaders met in Brussels to discuss a new bailout fund for Greece, lifting stocks around the world on Thursday, which also coincided with a debt deal looking likely in the U.S. However, with the markets still jittery in Europe on Friday and the breakdown of negotiations in the U.S., things could turn very badly indeed for the world economy. Thieves in Sacramento are stealing storm drain grates off of streets in a hopeful bid to sell them to copper recyclers, and elsewhere in California, farm commodities such as grapes, and even bees are being taken from farms. In Texas, ambulances have been subjected to robbers right outside the hospital doors. Times are getting tough across the nation. McDonalds' net income, which always does well during recessions, rose 15% in the second quarter of 2011. This is not a good sign. It shows people are sticking to cheap food and not feeling confident enough to eat out at more expensive restaurants.

Iran officials announced that the country would be installing new, more advanced centrifuges in a uranium enrichment plant Tuesday, angering Western upper brass. This move is seen as an acceleration of its nuclear program, with Tehrain claiming that the procedure could triple the rate of enrichment. The Islamic country has clearly been learning from its mistakes and set backs. After the Stuxnet attacks last year, Debka reports, the Persians decided to completely scrap the old machines, and replace them with new ones while the Arab Spring distracted the West. Now things appear to be heating up again, with the Iranian media outlet, Fars, claiming an American drone had been shot down over the Fordo nuclear plant in Qom on Wednesday. Lawmaker Ali Aqazadeh Dafsari said that this was only one "several" which have been brought down over the past seven years from Israel, Britain, and the U.S. doing reconnaissance missions on Iran's nuclear capabilities. On Saturday yet another Iranian nuclear scientist was assassinated in front of his house. As usual, this will probably get blamed on the Israeli Mossad, and rightly so. Robert Baer, an Ex-CIA officer who has worked in the Middle East for 21 years, warns that the war-hawk prime minister of Israel, Netanyahu, is gearing up for war against Iran in September before the vote on the Palestinian state takes place and wants to draw the U.S. into the conflict. The article by Tyler Durden of Zero Hedge, claims, "The Israeli air force would attack 'Natanz and other nuclear facilities to degrade their capabilities. The Iranians will strike back where they can: Basra, Baghdad', [Baer] said, and even Afghanistan. Then the United States would jump into the fight with attacks on Iranian targets. 'Our special forces are already looking at Iranian targets in Iraq and across the border [in Iran] which we would strike. What we’re facing here is an escalation, rather than a planned out-and-out war. It’s a nightmare scenario. We don’t have enough troops in the Middle East to fight a war like that.' Baer added, 'I think we are looking into the abyss'." These reports would make sense in light of Iran's recent threats of shutting down the Strait of Hormuz and shooting a missile into the Indian Ocean. Currently, the LHD 5 Bataan amphibian ship is anchored outside Tripoli, and the USS George H.W. Bush is moving into the Persian Gulf. DebkaFILE, an Israeli military voice piece, reported a few weeks back on Obama and Sarkozy's plan to settle the Palestinian-Israeli conflict by September after the Libya ground war, but it appears that the Libya conflict may get called off with Gaddafi expressing that he may exit if certain guarantees are met.

The attack on Iran may be diverted because the Israeli PM is quickly losing support, with only 4 of the 18 security chiefs (Mossad and Shin Bet) still independently support him. Tyler Durden laments that the Iranians also need an "external enemy" with their worsening economy and would welcome an attack by the Zionists now that the Americans plan to leave. It is important to remember that just five years ago Israel was embroiled in a proxy war with Hizbullah-controlled Lebanon. At the end of the 34 day skirmish, Hizbullah was not destroyed, and according to Caroline Glick's article "The Path to the Next Lebanon War", "Hezbollah has not merely refilled its depleted missile arsenals. It has tripled the size of its missile arsenals. In 2006, IAF strikes in the first 24 hours of the war knocked out all of Hezbollah’s long-range missiles. Today, not only have those stocks been replenished, Hezbollah’s arsenal includes missiles with ranges covering all of Israel, with larger payloads and many with guidance systems" (FSM). If Israel was to go to war again, Hizbullah will have gotten much stronger.

Syria also has the potential to be a greater threat, with Naharnet Newsdesk claiming that the U.N. was briefed on the nuclear activity in Syria in a closed door meeting last month. According to the International Atomic Energy Agency (IAEA), Israel destroyed a nuclear reactor in the country in September 2007. Who knows what weapons have been supplied to Assad's regime from Iran, China, and Russia? Syria delivered another devastating strike on pro-democracy protesters in the city of Homs on Wednesday, with 16 killed in the streets from those loyal the Assad regime. Included in those dead were people marching in a funeral procession for fallen demonstrators. Some of Assad's supporters are disgusting, with one Syrian tribal leader threatening to eat the U.S. ambassador to Syria, Robert Ford, if he stepped foot in his territory, warning, "We are known for having the best mutton in the world. For the first time, Allah willing, we will be eating American mutton. Whether his flesh is bitter or not, with salt or without salt—we will eat him up." The pressure is heating up further, with Qatar, the home of the al-Jazeera news agency and a former supporter of Assad, closing its embassy in Damascus Monday, and the EU saying it might increase sanctions. Investments in Syria from the Qataris is reported to be frozen after diplomats from the country were pelted with debris. Damascus has been angry with the Gulf country since the beginning for reporting on the protests. There was a fascinating but long article in the NYT Wednesday, "Yemen on the Brink of Hell", that the small state is becoming a proxy conflict between Iran and the Saudis. The country is approaching war, with al-Qaeda in the fertile south and tribes in the desert North coalescing into a madhouse similar to Gotham's Arkham, with Saleh, the president, being in a hospital in Saudi Arabia for several weeks after being injured by an explosion. The country stands on the precipice of all out civil war with former cultural hubs like Taiz caught in between.

Near Gaza, the Israeli navy intercepted an activist yacht on Tuesday, which was filled with aid and supplies. The French ship, claiming it was headed toward Egypt after other similar missions were stopped in Greece, was bound for the Hamas-controlled Gaza strip in protest of the Zionist's treatment of the Palestinian state. There were no casualties; however, the PM of Turkey, Tayyip Erdogan, is also preparing for a potential trip to Gaza in the coming months, angering Western officials. Washinton and its allies were trying to heal ties between the Turks and the Israelis, with the Syria conflict on both their borders. Debka reports thats a "visit by Erdogan to Gaza would further sour the climate between the two countries – especially now when missiles are again being fired almost daily from the Gaza Strip against Israeli civilian locations" (Debka). The PM's frustration may have been caused from feeling snubbed by Obama in the Libya affair, according to Debka. In other Middle Eastern news, Iran started selling high-grade oil on Kish Island this week. The move threatens America's monopoly on the commodity's pricing. China has shown an interest, which is the biggest danger in Iran's endeavor to the West--especially the New York and London exchanges. They are moving away from what the "petrodollar" and are trying to become globalist independent. That goal is commendable; however, this will not stand. Watch out for the tycoons which control Washington's interests to strike back. We saw what happened when something threatened Wall Street last time. I can't imagine this will be any different. An article by John Daly titled, "Iran Opens Oil Bourse - Harbinger of Trouble for New York and London?", ends with this warning: "If the Chinese decide to start paying for their Iranian purchases strictly in yuan, expect the trickle away from the dollar in energy pricing to become a stampede. That ought to give Washington politicos an issue to think about besides gay marriage" (Daly - OilPrice.com) An article posted Saturday on the Financial Times claims that China and Iran are planning to set up an oil bartering system, where Iranian fuel is exchanged for Chinese made goods as well infrastructure projects (anyone else getting a John Perkins' sort of feel from this?). This system works around the oil sanctions placed on the Persian country--if payments are made outside the USdollar, then further deals can be made. China and Iran's economic relationship is booming, up 40% since 2009. Are we seeing yet another nascent structure of a post-Western dominated world?

Norway was rocked by two apparently connected terrorist attacks on Friday. In Oslo, a bomb exploded near a government HQ, killing 7 people, and then shortly after, a man dressed as a police officer started shooting young Labour campers on a retreat, killing at least 80. Some see this act as being linked to Norway's involvement with NATO, including Afghanistan and Libya. However, it was not immediately clear as of Friday whether it was tied to any international organizations. On Saturday, it was reported by the New York Times that the killer, Anders Behring Breivik, was a 32 year-old, blond, blue-eyed Norwegian with far right and anti-jihadist views. He faces a maximum of 21 years in jail. The PM of Scandinavian country said in a speech, "The answer to violence is even more democracy, even more humanity, but never naïveté," and rightly so. These acts are disgusting and should be condemned. Violence is never the answer. The timing of this attack is strange, however, especially with the DHS releasing a new video this week which depicts white terrorists bombing American targets. Daniel Taylor of Infowars reports that western governments will now move inward against their own citizens to root out terrorism. Always be suspicious of these attacks. Who is to gain the most? Do their stories hold up after further scrutiny? No killing is commendable, ever--not by you, not by your government. Europe is on the brink of collapse--let's see where this leads us. Away from serious talk about deficits for sure.

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