The TRUTH Is Out There

Lies. So damn many lies. They're like a trail of bread crumbs that will, ironically, eventually lead to the truth. "What is that truth?" you may ask. Gold baby! The Truthsayer. Gold is the single best asset to not only expose the lies, but protect you from them as well.

Perceptions are changing as each day passes. Even the ignorant are becoming cognizant. The scent of discomfort is beginning to stir the flock. The sheeple sense the Shepperd may have lead them astray. Few will realize they are on the road to the financial slaughterhouse until it's too late.

Captain Ben and the rest of the crew on the Good Ship La-de-da, realizing they're struggling to keep Titanic II afloat, have now resorted to lies their bought and paid for media surrogates find difficult not to laugh at. Inflation is fast becoming THE buzzword in the media and around the office water cooler. Denying it, lying about it, and blaming the price of Oil for it will not make it moderate or disappear. Inflation is on the rise globally. There are no ifs, ands, or buts about it. It is a fact and its is escalating quicker than any one believes or can imagine.

325 basis points cut from the Fed Funds rate, liquidity injections, cash auctions, $600 rebate checks. And that's just in the US. Monetary inflation is being pumped out of central banks around the globe. Who can devalue their money fastest to protect their exports? Global inflation is becoming an epidemic. And it doesn't look like there is a cure anywhere that is close to efficacy.

The effects of the Fed's initial interest rate cuts in Sept./Oct. '07 are just now beginning to be felt...six months down the road. It will be September 2008 as the FULL effects of Shepperd Ben's detour to the financial slaughterhouse begin to be realized. Gold will be flying high on the dismal 2nd qtr earnings that are ahead of us by then, and be primed to kick in the afterburners as the nation begins to come apart at the seams in an avalanche of credit defaults.

The future is bright...if today you are a Precious Metals investor. We may be able to keep our heads above water, barely. The Summer/Fall of 2008 could make 1968 look like a walk in the park. Prepare for the worst, and hope for the best.

The Daily Reckoning

But here's some good news:

Last month, the price of gasoline went down 2%, says the Labor Department.

Wait a minute. Do you remember gasoline prices going down in April? We don't. As we recall, oil prices were soaring…and so was the price of gasoline.

We're beginning to sniff something funny in the air…a rat.

It was largely thanks to this reported drop in prices at the pump that the Consumer Price Index registered a scant 0.2% increase for the month of April.

...we check the records from NY gasoline futures trading and find the price actually rose 12% in April. How come the feds put it down as minus 2%? Turns out, they made a 'seasonal adjustment.' But turning plus 12 into minus two sounds like more than an adjustment; it sounds like either magic or major surgery…like turning a prince into a frog or a fat man into a slim woman.

http://news.goldseek.com/DailyReckoning/1210965091.php

Bob Chapman, The International Forecaster

We have entered the eye of the storm as the BLS takes this opportunity to give us another lie about inflation, which is so preposterous that they have become the laughing stock of the financial community. If you can believe that core CPI was .1% and regular CPI was .2% last month, then you probably still believe in the Easter Bunny, Santa Claus and the Tooth Fairy, and by the way, we have a bridge for sale over the East River that connects Brooklyn and Manhattan - real cheap. This latest Paul Bunyan tale comes to you from the most recent performance of the fane-stream media's acting troupe at Theatre Bizarre courtesy of the pathological liars and script writers in the BLS who are in charge of compiling our economic data, a show which is of course sponsored by the Illuminati. This so-called "information" comes to us following news that March PPI and April Import Prices (ex-oil!!!) both increased by 1.1%, which is an annualized rate of 13.2%, while our own statistics about actual inflation show 12.375% for the CPI, and our calculations for M3 top 18%, which means that actual inflation is still rising to play catchup with M3. Food is up 37% yoy (which means an average monthly increase of 2.66%) while oil has rocketed from $101.58 per barrel on March 31 to $113.46 per barrel on April 30, an increase of 11.7% in one month (over 140% annualized!!!) after peaking at $119.93 per barrel on April 28. So that means one of two possibilities. Either the government is flagrantly lying about inflation, or corporate earnings are about to explode and go down in flames to a level so negative that the resulting anomalies in analysts' predictions will give the appearance that they have all collectively turned into crack addicts. If you are absorbing a 13.2% increase in the cost of your production, and then only passing on 2.4% out of that 13.2% to your customers in the form of increased prices, may we suggest that you have a gargantuan problem with your profitability. The tellers of tall tales can't have their cake and eat it too, although the Illuminist reprobates continually try because they know how dumb the sheople can be. As you can see from our actual inflation statistics, as you might expect, very few cost increases are now being eaten by the producers and most cost increases are being passed on to consumers. To do otherwise would be financial suicide, plain and simple. And may we add that either way, Goldilocks gets eaten by the Three Bears.

http://news.goldseek.com/InternationalForecaster/1211148360.php

The Myth of Lower Oil Prices

Pinocchio’s spin meisters are working overtime as the most recent CPI, GDP and retail sales data were such a joke that even the main stream financial media were embarrassed to hang their hats on them. In the private sector this would be labeled PREMEDITATED fraud and you and I would be charged with disseminating false and misleading information to investors.
- Ty Andros

http://news.goldseek.com/GoldSeek/1210945701.php

Why Inflation Is Going To Hurt This Time
Let us look, briefly at the oil market. When the US invaded Iraq, we were told that $10 oil was right around the corner. Then, as the war went from triumph to tribulation…the oil price rose. Still, the war’s backers believed they had done good. Higher oil prices couldn’t last, they said. The National Review said oil was a “bubble” in ’04, when it was at $50 a barrel. Then, Steve Forbes said it was a “bubble” at $70 a barrel in ’05. Now…a Goldman expert says it will go to $200 a barrel.

Success leads to excess. Sooner or later oil really will be in a bubble…and sooner or later the bubble will pop. But when? At what price? China is doubling its use of the slick liquid every seven years. In the US, there are 480 cars per 1,000 people. In China, there are only 10. And China could be the world’s largest automaker in just a matter of months. Our advice to Americans: fill up your tanks.
http://www.dailyreckoning.co.uk/Economic-Forecasts/inflation-hurt-00144.aspx

When the illusion that the crisis is under control fades away…

Indeed, contrary to what they say (and maybe to what they really believe), there is no bottom to the pit that can stop the fall; or rather, there might be a bottom but its getting deeper day after day (11). Ironically, those who in the past years used to say that there was no limit to profit and benefit increases, are now trapped in a process where the bottom gets always deeper, where losses keep increasing endlessly as reference asset prices fall always lower, and where the only things that go always higher are energy and food prices. But isn't irony one of the only identifiable features of History?
http://www.leap2020.eu/GEAB-N-25-is-available!-June-July-2008-New-tipping-point-in-the-global-systemic-crisis-When-the-illusion-that-the-crisis_a1691.html

Correction in Gold Near End

By: Jim Willie CB

Sadly, the insolvent US$-based economic and financial system has a long way to go before any recovery can be claimed. The four primary pillars of the federal budget deficit, the trade and current account deficit, the bank insolvency, and the rising tide of negative equity homeowners, these scream of ongoing need for remedy. All forms of remedy involve monetary inflation. The current approach has been careful and directed. The next steps will be much more broad and systemic in the face of desperation to avert collapse. Beware of civil disobedience toward mortgages. Beware of civil disturbances. Beware of open scuffles at gasoline stations. Beware of possibly food riots in poor neighborhoods. Being the newest Thrid World nation, the Untied States will see food riots similar elsewhere in the world. The system inside the US is moving toward chaos. An inflationary recession does that. Job loss and rising prices make for a nasty cauldron for emotions. The only known plan will be to produce enough inflation to keep the system running. The implemented cure will plant seeds for further crisis one year from now, and guarantee a severe change via disruption. The only safe place to be will be commodity investments that oppose the Great Paper Chase in dissolution, in particular precious metals and energy. My favorite remains silver, for many reasons.

http://news.goldseek.com/GoldenJackass/1210873874.php

Perceptions Change Like The Weather

Until today, there has been a pervasive "perception" that the credit crisis is waning, and that the US Dollar had bottomed and is in the midst of a "rally". Folks, this is a bubble of bullshit that is about to burst. Wishful thinking, daydreaming, d-e-l-u-s-i-o-n...call it what you will. POP! Pffft! ...and it's back to reality.

In fundamentals alone, this "perception" lacks a single dose of reality. Just today, in a speech, Fed Chairman Bernanke said the credit crisis continued to confound the economy. "Events continue to unfold," he said, adding that "the financial stress we continue to experience" stemmed from a separation of lending and distribution of credit to investors. Hmm, sounds like a credit crisis in full swing to me. The Dollar "rally" ended today with news from the ECB that growth in the Euro Zone is robust and inflation is steady. Understand that the perceived Dollar "rally" is based solely on current [and continued] weakness in the Euro, and not a single straw of fundamental reality.

This evening we see news that Japanese GDP is up:

TOKYO (Thomson Financial) - The Japanese economy grew at a faster-than-expected pace in the first quarter as brisk exports to emerging markets like China offset slower demand in the United States, government data showed on Friday.

The Cabinet Office said gross domestic product grew 0.8 percent in real terms in the

January-March quarter and at an annualized rate of 3.3 percent.

With Japanese inflation running hot in a country that imports ALL of it's Oil, could we soon hear talk of a rise in Japanese interest rates and a rising Yen? Can you Dollar Bulls say, "DOINK!"

Europe and Japan are on the verge of putting the US economy in their rear view mirrors. The biggest of all fears in these two economic partners is that a slowdown in the US economy would drag their economy's down, and that their strong currencies would weigh heavily on their respective export sales. The World Economy is moving forward in spite of the US economic slowdown.

The interesting thing about perceptions is that they're just like the weather, they change. As it becomes ever clearer that the ECB is not going to be cutting interest rates soon, if at all, and that the Bank Of Japan may soon have the "strength" to raise interest rates, the US Dollar will begin to be perceived for what it really is...burnt toast.

This morning, the Precious Metals caught the sent of soon to be changing perceptions. A mid day dip in Oil prices the only thing holding Gold back today from a long awaited breakout from it's oppressive two month consolidation. The most amusing aspect of today's dip in Oil prices were the market headlines touting it's effect on stock prices: Stocks advance after retreat in oil prices. The media is so misleading [as if that needed to be said]. Oil prices had completely retraced their entire dip by the 4PM close of markets in New York and stood at 124.51, +0.29 at 5:15PMest.

...the Philadelphia Federal Reserve said regional manufacturing activity is contracting in May at a much slower pace than in April...

Guys, it's slowing. The pace that it is slowing is irrelevant.

...the Fed said nationwide industrial output sank for the second straight month in April by 0.7 percent, due to big cutbacks in the automotive and other manufacturing industries. The drop was more than double analysts' average prediction.

Perhaps if industrial production was just "slowing" instead of "sinking"...

The Labor Department said the number of laid off-workers applying for jobless benefits rose last week by 6,000 to 371,000 -- near the average analyst forecast, and suggesting that the labor market remains weak but in check.

The labor market is substantially weaker than the Labor Department would ever allow you to believe...

The media cannot get the inflation story straight:

On Wednesday:

Stocks advance after lower inflation reading

Wall Street advances after better-than-expected consumer price report eases inflation concerns
NEW YORK (AP) -- Wall Street advanced Wednesday after a better-than-expected report on consumer prices tempered some of the market's concerns about inflation.

http://biz.yahoo.com/ap/080514/wall_street.html

On Thursday:

Gold, Silver Futures Rebound on Demand for Inflation Hedge

May 15 (Bloomberg) -- Gold rose for the first time this week on speculation higher energy costs and a weaker dollar will boost demand for the precious metal as a hedge against inflation. Silver also gained.

http://www.bloomberg.com/apps/news?pid=20601012&sid=aIoc2CSt9rcA&refer=commodities

And today's most shocking headline:

Government Inflation data at Odds with Reality

In an age where governments of every political stripe distort economic data to promote their own self-interests, it’s hardly surprising that they present inflation statistics that are wildly at odds with the reality faced by consumers and businesses, and regarded with utter disbelief. In the latest US government report on inflation for instance, there was a glaring “seasonal adjustment,” for energy prices that cast great doubt as to the accuracy of the findings.

US Labor Dept apparatchiks said consumer prices rose a smaller than expected 0.2% in April, tamed by energy prices, which were unchanged last month. Utilizing an obscure “seasonal adjustment,” Labor figured that gasoline prices actually fell 2% in April, which doesn’t reflect the reality of what consumers were paying at the pump. Furthermore, the IMF’s global food price index rose 43% over the last 12-months, but the US consumer price index for food is only 5.1% higher.

Wall Street cheered the tame inflation rate, reckoning it gives the Federal Reserve more time to peg the fed funds rate at 2%, to jig-up the stock market with massive money injections. But the folks who aren’t fooled by the government’s propaganda on inflation are the American people, whose dollars buy less with each passing month. The inflation tax is the great thief of the middle class.

For the 12-months through April, prices for US imports were 15.4% higher. Yet Wall Street economists massaged the data, and explained that wholesalers and retailers are absorbing the higher costs out of reluctance to increasing prices and driving away customers. Should we trust the inflation statistics conjured-up by government apparatchiks, or rather, place greater faith in the depreciating dollars and cents that flow through the commodity markets each business-day?

http://news.goldseek.com/GoldSeek/1210872600.php

Five weeks ago I "boldly" predicted Gold and Silver would see new highs by Memorial Day. Obviously, that looks highly unlikely. Am I sorry I made that prediction? In a word, NO. All things being equal, I think we could all agree that both Gold and Silver would have made substantial new highs by Memorial Day. I have made every effort in the past five weeks to keep before you the fundamental reasons to be invested in Gold and Silver. These fundamental reasons for owning Precious Metals are only stronger today than they were just five weeks ago. If this is your first correction/consolidation in the Precious Metals markets, consider yourself now a veteran. If the past two months have been "nothing new", I'm certain you know what lies ahead. On that note I will now boldly predict that in the next up leg of this secular Bull Market in Precious Metals, percentage gains in Silver will nearly double those of Gold.

As the threat of inflation grows each day... As the mention of inflation begins to dominate the headlines... A rising tsunami of investment in Gold and Silver is sure to follow.

Bad News For The Buck

Following yesterdays fabricated inflation numbers in the US, today we receive inflation AND GDP numbers from the Euro Zone. Looks like there won't be any interest rate cuts from the ECB anytime soon. The ECB has it going on!

Death to the Dollar...

Euro Zone inflation eases somewhat in April, yet well above the 2.0% Y/Y (FXstreet.com)Thu, May 15 2008, 09:12 GMT

EU Advanced Gross Domestic Product s.a. up 0.7% in 1Q; 2.2% up y-o-y (FXstreet.com)Thu, May 15 2008, 09:01 GMT

The dollar wilted against the euro this morning as the single currency soared on news that Germany, Europe's largest economy, had posted its highest quarterly GDP in 12 years.

To see all of this mornings early bird economic data, please follow this link to the FXstreet.com Economic Calendar: http://www.fxstreet.com/fundamental/economic-calendar/ Click on the orange exclamation points to get the news stories for each data point.

The Fed Is Dead

If I could go to the highest mountain in the land, and scream at the top of my lungs...this is what I'd bellow:

"THE US FED IS NOT GOING TO RAISE INTEREST RATES!!!"

OK, now that I've got that off my chest... Look, the Fed can "pause", "talk tough", or dance of the head of pin. It is impossible for the Fed to raise interest rates. Why would they have cut them AGAIN last month if they were going to raise them next month. Why is it impossible for the Fed to raise interest rates? If the Fed raises interest rates it will cause our now fragile economy to implode and go down swiftly in flames. Rising interest rates would destroy the already beaten down housing markets. Rising interest rates would make it too expensive for business to borrow money that is near impossible to get now at today's fires sale rates. Rising interest rates would force uncountable defaults on credit card debt from coast to coast.

For the Fed to even have a glimmer of hope in stopping inflation they would have to raise interest rates to levels ABOVE the rate of inflation. And since we ALL know that inflation is substantially higher than the 4% the Fed leads us to believe, interest rate increases would have to be gargantuan. Shadowstats.com pegs real inflation at 12%. Do you really think the Fed is going to raise interest rates back to 5% let alone 13%? Not a freaking chance! As a matter of fact, the Fed has lost complete control of interest rates.

The bond markets are going to determine where interest rates go now. And the Fed is not going to like it one bit, and they will continue to buy Treasuries in an attempt to continue to keep a floor under the long bonds. This will prove to be, in the end, the Fed's ultimate boo-boo. You see, the interest rate the Fed loves to monkey around with is the rate that banks charge each other for money. The Fed Funds rate has little real impact on the consumer. The rates consumers pay are tied to the 10 year and 30 year long bonds. Ever wonder why mortgage interest rates have barely budged to the downside since the Fed began cutting interest rates last Fall? The Fed claims to be confounded by it as well. They know exactly why mortgage interest rates have not fallen. The Fed has been buying long bonds to monetize the nations debt and keep interest rates low. Where do you think they get all the treasuries they trade for the investment banks toxic waste at the bi-weekly auctions? Rising interest rates are the biggest threat to the band-aids the Fed has, to date, applied to the sucking chest wound we have all come to know as "the sub-prime crisis". Rising interest rates threaten an unraveling of the credit derivatives that continue to hang over the world financial system. Rising interest rates will detonate this thermonuclear financial time bomb if they are allowed to rise. Rising interest rates are absolutely the last thing the Fed wants to see happen. Unfortunately they may be powerless to stop it.

The 10-year T-bill closed today with a yield of 3.90%. With "official" inflation running at 4%, investors are not making ANY money holding them. But with "unofficial" inflation running at 12%, investors are LOSING 8% by holding them. With inflation of the verge of exploding much higher, how much longer do you think investors will continue to hold their LOSING investment? Long bonds "should be" yielding in excess of inflation, so that investors get a "real return" on their investment. As inflation escalates, investors are going to run for the exits in the bond markets. This in turn will cause interest rates to rise, and chase inflation. Falling bond prices result in rising yields, or as we know them, rising interest rates. Investors will take the money from their bond sales and park it in the one place that has historically been the best hedge against rising inflation: The Precious Metals. Gold and Silver are going nowhere until investors flee bonds, and race to the Precious Metals and commodities.

So you see, no matter how much hot air the Fed Heads blow about rising inflation, they are powerless to use the one tool they have at their disposal to keep it in check. Heck, the truth of the matter is they have all but abandoned the idea of lowering interest rates because not only has this ploy completely failed to resolve the "credit crisis", it has in fact lit the fuse to an inflationary explosion. The Fed has really F'd things up folks. The Fed could sit still on interest rates for months, it wouldn't matter in the least when it comes to controlling inflation. And it will matter even less towards shoring up the US Dollar. The Fed has sacrificed the Dollar, and the rest of the world better wake up soon to the fact that the Fed and the US Government have NO wish to see the Dollar go up. You can't pay off this nations mountain of debt with a rising Dollar.

And this nations debt is really the NUMBER ONE reason the Fed cannot tolerate rising interest rates. It costs the US Government $3 BILLION A DAY to service this country's $9 TRILLION debt. And that is at today's minuscule interest rates. Imagine the costs to the government with each one percent increase in interest rates. You think homeowners with adjustable rate mortgage resets are in trouble. OOOOOOOoooo momma, do you see the corner the Fed has painted themselves and the American Taxpayer into? Do you begin to understand why it is imperative that you have Gold and Silver investments. It's the DEBT stoopid! This country's DEBT will ultimately be its undoing.

Don't be deceived by the talking heads in the financial media, or the talking heads at the Fed. The Fed has absolutely NO interest in controlling inflation. Say what? Here's some Fed induced inflationary news that has slipped through the cracks:

Fed seeks approval to pay interest on reserves

WASHINGTON (Reuters) - The U.S. Federal Reserve has decided to seek authority from Congress to begin paying interest on commercial bank reserves this year, a tool that could help it thaw frozen credit markets, a person familiar with the issue said on Wednesday.

Paying interest on the reserves banks are required to hold at the Fed to balance customers' deposits would make it easier for the central bank to move more funds into financial markets seized in the grip of a credit crunch without driving down benchmark interest rates.

"It's particularly relevant now because the Fed would like to put a bunch of cash in the market, and it can do that beyond what the market will take at the given (benchmark interest) rate only by increasing the demand (for reserves)," said Douglas Elmendorf, a former Fed staffer now at the Brookings Institution. Paying interest should spark that demand.

Paying interest on reserves would boost demand for reserves and could help the Fed pump liquidity into markets without lowering benchmark rates.

http://www.reuters.com/article/telecomm/idUSN0716842120080508?pageNumber=1&virtualBrandChannel=0

Bernanke Wants Fed to Pay Interest on Bank Reserves

May 7 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke, seeking ways to stabilize money markets, will ask Congress for authority to pay interest on commercial-bank reserves this year, a person familiar with the discussions said.

``It would have the effect of putting a floor under the federal funds rate,'' said Walker Todd, a research fellow at the American Institute for Economic Research in Great Barrington, Massachusetts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRRpOKIGIgr0&refer=home

So it would appear then that the Fed has NO intention of stifling inflation with a "pause", only accelerating it by directly increasing the money supply with an end run around the more obvious inflationary interest rate cuts. These guys make the Great and all Powerful Oz look like a Crackerjack salesman. Talk about deceit!

Bernanke Says Fed to Boost Loans to Banks as Needed

May 13 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said financial markets remain unsettled and the central bank will increase its auctions of cash to banks as needed.

While markets have improved, they remain ``far from normal,'' Bernanke said today in a speech to an Atlanta Fed conference at Sea Island, Georgia. ``We stand ready to increase the size of the auctions if further warranted by financial developments.''

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a1epxg3i.6YM

European govt bonds track Treasuries sharply lower after solid U.S. data

LONDON (Thomson Financial) - European government bonds were tracking their U.S. counterparts sharply lower after solid data from the world's largest economy reinforced views that the Federal Reserve will not cut interest rates at its meeting in June.

Although retail sales showed the headline figure fell by 0.2 percent in April, market players chose to ignore this and focused on retail sales excluding autos, which rose by 0.5 percent, beating expectations for a smaller 0.3 percent rise.

'A better than expected ex-auto print and relatively firm underlying details were a big negative for Treasuries,' said Meny Grauman, economist at CIBC World Markets.

'Markets are impressed by the ability of American shoppers to continue to spend, and this result will only help strengthen the view that the Fed will pause at its next rate setting meeting,' said Grauman.

Bond prices were also pressured by concerns about imported inflationary pressures, following news that import prices rose by 1.8 percent in April. Although this is below March's 2.9 percent rise, analysts had forecast a smaller rise of 1.7 percent, and March's reading was revised up.

'Inflation concerns are also supporting the expectations of a more hawkish Federal Reserve with import prices rising... more than expected,' said Rhonda Staskow, an analyst at Thomson IFR Markets.

http://www.forbes.com/markets/feeds/afx/2008/05/13/afx5002970.html

So the perception now is that with "rising inflation" in the headlines the Fed will now lean towards raising interest rates. Case in point today's bump in the Dollar. I think we made it clear above, that is not going to happen. Rising interest rates in the long bonds are the result of the bonds being sold. Don't be misled. This is NOT Dollar positive. Falling bond prices will cost investors Trillions of Dollars as the capital investment tied to these bonds begins to evaporate. The worst fear of the Fed and US Government is that foreign investors will begin to dump their US Treasuries as the Great 20th Century Bond Bubble begins to burst. And damn well they should be scared to death of this reaction in the bond markets. It will spell certain doom for the American economy, and all the investors foolish enough to hold onto these USA, Inc I.O.U.s. The exits from the bond market could get crowded in a hurry. Don't even consider for a minute that the Fed could buy all the Treasuries that will be sold. Not even the Fed could print that much money. And if they could, could you imagine the inflationary result?

And as quickly as the exits to the bond markets jam up, the lines outside the Precious Metals markets will become blocks long. Yes, Gold can rise in a rising interest rate environment, and it will be soon enough.

Living The Lie

Liar Liar Pants On Fire

Edward Lazear, White House economist

Thu, May 8 2008, 09:38 GMT
Thomson Financial News -

"The data are pretty clear that we are not in recession."

Henry Paulson, U.S. Treasury Secretary

Wed, May 7 2008, 10:54 GMT
Thomson Financial News -

"The worst is likely to be behind us."

How do these jackasses sleep at night. Telling lies in public will only come back to haunt you. In the Spring of 2009 look for these two to be on the run from lynch mobs. We are clearly in a recession, and the worst is yet to come. Of course when you believe your own lies...it's easy to tell more of the same. The talking heads in this government have been lying to us repeatedly about the financial crisis America and the World has found themselves entangled in. How many times were we told the "sub-prime crisis" would be contained and that it would not effect the broader economy? When will the lies end?

Barrack Bin Laden, the now self ordained Democratic candidate for President of this doomed nation has repeatedly preached his "vision for change" in America. Though he gives few specifics, and offers only "buzz words", Mr Obama best be careful what he wishes for. I doubt the change this country has in store for it is going to be to anybody's liking. And if he's sitting in the big chair, he's going to be the one taking the blame for it.

Why anybody would want to be President of this sinking nation escapes me. Perhaps that explains the dearth of qualified candidates. [Ron Paul being the exception] Do any of these shills offer a thread of leadership with their candidacy? And if there is ONE thing this country lacks right now, it is leadership. I doubt any of these three rah-rahs could lead a cheer, let alone a nation destined for the scrapheap of history.

Quickly shiftying gears... I was getting cramps today from laughing as the headlines on Yahoo repeatedly suggested that stocks were higher because of "strength" in the Dollar and lower Oil prices. Yes, the Dollar was higher overnight in Asia, as it often is on Mondays...particularly if the close on the previous Friday was weak. By 10AM est the Dollar had given up it's .25 gain and had reversed itself into a .16 loss, a .41 reversal from it's morning high. Yet repeatedly as the day progressed, higher stock prices were attributed to a higher Dollar. The Dollar was in the RED for all but the first 40 minutes of trading on Wall Street today damn it! Oil prices were said to be down on a strong Dollar, yet the Dollar wasn't stronger at all. Do you think maybe they are taking this "strong Dollar" BS a bit to far in the press?

Oil is clearly overbought at these levels, and a reaction lower should be expected. Gold was weak today ONLY because Oil prices were soft. Will Gold prices slide if Oil prices slide? The Plunge Protection Team hopes so. Unfortunately that exact scenario my not occur. Gold appears poised to move higher in spite of any reaction in Oil prices. Besides, it's unlikely Oil prices fall very far. I am of the belief that the recent Goldman Sachs call for Oil to rise to 150-200 in the next two years was a contrary warning that a top in Oil prices is near, and Goldman Sachs has some futures contract they'd like to unload. The profits they make in Oil will quickly be moved into the Precious Metals as this months inflation's numbers arrive this week and shock the investment world. This weeks shocking inflation revelation may also set off a collapse in the Treasury markets as US Government Bonds are likely to be the next bubble to actually burst. And in doing so, throw ice water on the talking heads suggesting that it was the commodities bubble that was bursting. Far from it. The next leg up in commodities is now on our doorstep.

The Ticking Credit Card Time Bomb

Peter Schiff, Euro Pacific Capital, Inc.

It should be painfully obvious that expanded consumer credit is not evidence of improvement, but simply, deterioration. Unfortunately, when it comes to understanding the economy, there is little common sense on display. By going even deeper into debt just to make ends meet, American consumers are digging themselves, and our entire economy, into an even greater economic hole and laying the foundation for the next major credit debacle.

Soon, as credit card delinquencies rise and losses on pools of securitized credit card debt mount, those supplying the credit will finally get wise to the fact they will never get their money back. As a result the market for such debt will dry up even more quickly than did the market for subprime mortgages. Cards will therefore be much harder to come by and will have much lower limits then they do today. Limited to only the cash in their wallets, Americans will finally be forced to dramatically curtail their spending, and the recession will finally gather serious momentum.
http://news.goldseek.com/EuroCapital/1210358816.php

The crisis is only 1/3rd of the way to its solution

Bob Chapman, The International Forecaster

The credit crisis is over as Bernanke, Buffett, Paulson and Gross would have us believe. George Soros and Jamie Dimon say it is not over yet. We guess the bottom line is who’s solvent and who isn’t. The crisis is only 1/3rd of the way to its solution. If it’s over, why did the Fed, lower interest rates again and at the same time increase the amount of funds available to financial institutions? It is obvious Bernanke, Buffett, Paulson and Gross are lying. The situation is worse now than it was nine months ago. It was that banks would borrow short from central banks, but now it is up to 28 days for the Fed and we expect that to move to 90 days soon, and the ECB is lending short-term for a year and that is renewable for three years. You can bet these are permanent capital infusions. The banks will end up keeping the money or Treasuries and the central banks will keep the toxic waste that you will get to pay for. The banks and other financial institutions that are at the discount window and at the auctions secretly getting funds are insolvent. Not all of them, but at least half of them. Once it becomes known who is solvent and who’s not, the Illuminists will decide who is going under and who is not. The Illuminist banks will selectively be the only ones who attract capital. That is how they’ll cover up what they are doing. In July and August we will start to hear rumors of who is going under and who isn’t. All small and medium-sized banks, which are insolvent, will start to go under. That is why the FDIC called back 35 retirees to handle the 150 to 300 banks that are going down. The big question mark is will the public panic? We do not know, but there is a good chance they will whether its in Chicago or Frankfurt. Our advise is do not hold over $100,000 in any bank account, have $5,000 to $10,000 in small bills in cash in your safe at home. If you have and need liquidity for business or otherwise buy Swiss Franc government bonds. Own and take delivery of gold and silver coins, get out of your credit card and revolving debt, have freeze dry and dehydrated foods and a method of defending your family at your disposal. This could get very nasty if not now, later. The price of gold and silver will go exponential as will the coins and shares.

http://news.goldseek.com/InternationalForecaster/1210539967.php

Opportunity on a Silver Platter

By Jim Willie CB

The bull market in commodities is not over. At best it will take a breather. My contention is that major US banks are speculating in the energy market in order to repair their broken balance sheets. Certainly Goldman Sachs is. The entire story line of the worst over for the USDollar and for the USEconomy is patently false. Just one more chapter of plain propaganda by the Wall Street community, the US Federal Reserve, and the USGovt. They are collectively worried to death, sweating bullets, even as precious capital blood has spilled in massive quantities. The entire US financial system has tragically turned insolvent. Inflation remains the only option left as an option, yet they cannot destroy the last standing asset group in USTreasury Bonds.

The most egregious backfire of banking flatulence has been the rise in long-term interest rates. This is precisely what the USFed does not want, since it provides substantial headwinds for the housing & mortgage market, via higher mortgage rates. The bond market, via USFed rebalancing, has properly priced the higher asset risk erosion from price inflation, as it should. Some have called this effect the next Bond Conundrum. Sure it is! In fact, the USTreasury complex is a maze of not just conundrums. It serves as a stark living breathing example of Goebbels (Nazi Information Minister) and Orwell (author of 1984) joined in a nightmarish marriage of deceit and fraud. The problem is that long-term bond yields should be over 10% since price inflation is even higher than that. Talk about an overvalued asset!!! The last buble to burst is not crude oil and gold with the supporting cast of commodities. It is the USTBond complex. Its prices are way way way out of whack. Sure, the USFed is trying to stimulate with lower rates. But why would any sane thinking person buy a USTreasury Bond when the real return is minus 7% to minus 8%?

http://www.kitco.com/ind/willie/may082008.html

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In corporate news, FedEx Corp. rose 63 cents to $91 after lowering its fiscal fourth-quarter earnings forecast, citing rising fuel costs.

MBIA Inc. posted a $2.41 billion first-quarter loss, as the struggling bond insurer took heavy charges to write down the value of liabilities amid continued deterioration in the credit markets. The stock rose 72 cents, or 7.6 percent, to $10.15 following comments from the company on the strength of its balance sheet.

First-quarter losses at wireless carrier Sprint Nextel more than doubled to $505 million, as it lost more monthly subscribers.

Mortgage lender IndyMac Bancorp swung to a first-quarter loss as credit markets continue to deteriorate.

Obviously, despite the losses, this was all fabulous news, as the stock indexes all rose today. Please, explain to me how a company at the center of the sub-prime mortgage crisis can post a $13 a share LOSS, and their stock can go up? Please, explain to me why stock indexes rise when the price of Oil is rising 25% in 4 weeks, and then attribute today's gains on a feeble pullback in the price of Oil from $126 to $124.50? And please explain to me these headlines that keep insisting that the Dollar has been rising. The Dollar closed lower today at 72.96, and it was the third day in a row that the Dollar has closed lower!

Gold futures fall, pressured by dollar, crude

Stocks rally as dollar rises and oil falls

Stocks advance as oil falls, dollar advances