The Real Oil Spill Effect: People Sick, Dying and Broke

The government and BP have been covering up the devastating effects of the oil spill. Listen to this poor man’s story of illness and economic desperation.-Lou

I would not eat any fish or shellfish from the Gulf, would you?

US Is ‘Practically Owned’ by China: Analyst

A bold, but true, statement indeed.-Lou

US Is ‘Practically Owned’ by China: Analyst

The US supremacy as the top world economy will end sooner than many people believe, so gold is a better investment than the dollar despite it hitting a new record, Tom Winnifrith, CEO at financial services firm Rivington Street Holdings, told Monday.

Gold [XAU=X 1313.3 4.50 (+0.34%) ] hit a new record high Monday and silver [XAG=X 22.02 0.15 (+0.69%) ] rose to another 30-year peak as investors were worried about the dollar weakening further after the Federal Reserve hinted at more quantitative easing last week.

The US trade deficit and debt continue to grow and the authorities are reluctant to address the problem, preferring to print money, Winnifrith said.

“America is practically owned by China,” he said.

He reminded of the fact that in 1900, sterling was the world’s reserve currency but by 1948, that was no longer the case as the British Empire collapsed.

“America is doing what Britain did,” Winnifrith said. “America spends much more than it can afford and it’s not addressing the issue.”

In 1832, China and India were the world’s two largest economies and by 2032, they will regain that status, he predicted.

“The 200 years when Britain and the US were the top two economies were an aberration and that will change,” Winnifrith said.


“The decline of empires has happened much faster than folks think. I believe that gold will be a far better bet in 20 years than the dollar,” he added.

A Government That Is Broken

Never has the U.S. Government been so dysfunctional as it is today. The President’s approval rating has plummeted from over 70% after the election to around 40% today due to his radical socialistic agenda. Congress’s popularity makes the president look like a rock star, with their approval rating around 15%. The Congress could not even take care of it’s basic responsibility, passing a budget for the fiscal year starting tomorrow. Fearing total defeat in November, the Democrats avoided legislation or debate on any controversial matters including extending tax cuts. Businesses and individuals move into the fourth quarter uncertain about tax policy, making it difficult to plan ahead. What a disgrace.-Lou

Congress punts tough choice until after election

WASHINGTON (AP) – A deeply unpopular Congress is bolting for the campaign trail without finishing its most basic job – approving a budget for the government year that begins on Friday. Lawmakers also are postponing a major fight over taxes, two embarrassing ethics cases and other political hot potatoes until angry and frustrated voters render their verdict in the Nov. 2 elections.

As a last necessary task before leaving, both the Senate and House passed a temporary spending measure needed to keep federal agencies operating when the new budget year starts.

As Congress moved toward a messy end to a session fraught with partisan fire, President Barack Obama campaigned for Democrats in Iowa and Virginia, accusing Republicans of being dishonest about what needs to be done to revive the economy and restore middle-class dreams.

With their House and Senate majorities on the line, Democratic leaders called off votes and even debates on all controversial matters.

“It would be one thing if you have a chance to pass something, then by all means have a vote,” Sen. Joe Lieberman, I-Conn., said Wednesday. “But it was pretty clear that it was going to be mutually assured destruction.”

One foot out the door, the House and Senate convened just long enough to vote on a “continuing resolution,” a stopgap measure to keep the government in operating funds for the next two months and avoid a pre-election federal shutdown.

The Senate late Wednesday approved the temporary spending bill 69-30. The House followed suit several hours later with a 228-194 vote, sending it to Obama early Thursday.

“We may not agree on much, but I think, with rare exception, all 100 senators want to get out of here and get back to their states,” said Senate Majority Leader Harry Reid, who is locked in a tough re-election fight against Republican Sharron Angle in Nevada.

Staying or going might seem an equally unpleasant prospect for some embattled Democrats, who are facing more than four weeks of defending unpopular votes in favor of Obama’s economic stimulus measure, health care law and uncompleted legislation for curbing global warming.

They also head home without what was supposed to be their closing argument of the campaign, an extension of Bush-era tax cuts for families making less than $250,000.

Republicans and a few Democrats urged Congress to preserve the tax cuts for all Americans, even the wealthiest. Democratic leaders opted to avoid the risk of being branded tax hikers and punted the matter until after the elections.

Republicans applied the label anyway, scolding Democrats for folding the tent without voting on extending former President George W. Bush’s tax cuts beyond their Dec. 31 expiration. A motion to adjourn upon completing routine business passed by a single vote, House Speaker Nancy Pelosi’s, after 39 Democrats joined Republicans in protest.

“If Democratic leaders leave town without stopping all of the tax hikes, they are turning their backs on the American people,” said House Minority Leader John Boehner.

Pelosi has vowed that the middle class tax cuts will be passed this year.

Republicans also denounced Democrats for delaying the ethics trials of Reps. Charles Rangel, D-N.Y., and Maxine Waters, D-Calif., until after the elections. Both lawmakers had said they wanted trials as soon as possible.


‘Gold-to-Go’ taps into gold fever with ATMs

Coming to an ATM near you: Gold!! Can you feel it starting to build? There is no fever like gold fever and it’s starting to spread across the globe. Gold is now a record high of $1,309 an ounce and silver is trading at 30 year highs. Please protect yourself if you have not done so already and add some precious metals to your life.-Lou

‘Gold-to-Go’ taps into gold fever with ATMs

BERLIN — A German firm that installs and manages gold vending machines aims to introduce them into the United States this year as it expands rapidly to take advantage of demand for bullion in times of economic uncertainty.

Thomas Geissler, creator of the Gold to Go brand and chief executive of Ex Oriente Lux, told Reuters on the sidelines of the London Bullion Market Association conference that the company aims to issue a “couple of hundred” machines next year.

Gold to Go launched its first ATM in Abu Dhabi’s Emirates Palace hotel in May. They are now operating in luxury hotels in Abu Dhabi, Bergamo and Madrid as well as around Germany.

“This year we will issue around 35 machines, and for next year we are looking for bigger numbers,” Geissler said on Monday, standing in front of one of the ATMS, which was colored and shaped like a giant gold ingot close to 2 meters tall.

The machines, which update the gold price every 10 minutes to match international markets, take cash or credit cards and dispense small bars — including 1 gram, 5 gram, 10 gram and 1 ounce units — as well as coins such as South African Krugerrands, Australian Kangaroos and the Canadian Maple Leaf.

The company’s plans include expansion into the United States this year, first in Florida and then in Las Vegas, Geissler said.

As for major gold consumers India and China, that will have to wait for next year, he said. “We have large interest in these countries,” he said. “This is the task for next year.” Gold’s rally this year has come largely as a product of investor unease over the economy.

This nervousness has been reflected in high sales of coins and bars from national mints, particularly last year as the world emerged from recession and this year as concerns have persisted about the risks to recovery.


States Are Poised to Be Next Credit Crisis for US: Whitney

I have been saying for over a year now that states and cities finances are deteriorating at an alarming rate and defaults and drastic cutbacks are coming. I would avoid most municipal bonds like the plague.-Lou

States Are Poised to Be Next Credit Crisis for US: Whitney

Crippling debts and deficits are about to make individual states the next casualty of the credit crisis, analyst Meredith Whitney told CNBC.

Speaking as her firm, Meredith Whitney Advisory Group, just released a lengthy report on the state of the states, the noted financial analyst compared the looming explosion to the collapse of the financial system in 2008 and 2009.

“The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically,” she said. “Municipal debt has doubled since 2000, spending has grown way faster than revenues.”

Whitney also offered another warning about banks, saying a sharp dropoff in trading revenue and a double-dip in housing would hammer at fourth-quarter earnings.

But she reserved her harshest words for the states. She said the paper released Tuesday was the culmination of two years’ work by her firm and was made even more difficult by the lack of reliable data on state spending and debt.

“It reminded me so much of the banks pre-crisis that we just kept working at it,” she said. “We couldn’t find anything that gave us a clear story, we couldn’t find any information that was transparent. So we did it ourselves.”

There were some bright spots: Texas, Virginia and Nebraska were among states that have done a good job of controlling their finances over the years and aren’t threatened as much.

But other states, such as California and Michigan, will burden the entire country should the federal government decide to step in with a bailout. States are required to balance their budgets, but massive debt-service payments could prevent that from happening in many states and necessitate the federal government to step in.


John Paulson’s Scary Speech: Double Digit Inflation By 2012, Gold At $4,000

John Paulson is a smart man who made billions shorting sub-prime mortgage debt. He runs a large hedge fund as you can tell by his speech he is very bullish on tangible assets, including housing.-Lou

John Paulson’s Scary Speech: Double Digit Inflation By 2012, Gold At $4,000

John Paulson scared the pants off of a packed audience at New York’s University Club recently as he warned them of huge changes in the economic environment in the years to come.

Forbes’ Bob Lenzer reports Paulson’s saying:

“If you don’t own a home buy one.”

”If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”

Paulson has been bullish on housing for a while now (he runs a housing recovery fund), but this is him hitting super-bull territory. His reasoning is that home prices are great, the bond market is dead, and commodities like gold, which he also has a big prediction for, are on the rise.

According to InfoWars, he told the audience that he thinks the price of gold will hit $2400-$4000. And a whopping 80% of his assets are in gold.

Given his expectation for further money printing by the Fed – and that in 1980 the gold price rose by 100% more than the correlation implied – Paulson noted that the price of gold could hit $2,400 based only on monetary expansion, and as high as $4,000 per ounce based on a projected overshoot.

Lastly, he noted that 80% of his assets are denominated in gold.

We rarely get to hear Paulson’s opinion on the market unless it’s filtered through his stiffer research reports. As a result, he has never been so extreme in his predictions as he seems to be now.

Here’s what Paulson sees coming:

  • Low double-digit inflation by 2012, killing the bond market, and restoring strength to equities and gold.
  • 2% GDP growth for 2011 and 2012
  • Gold hitting $2,400 to $4,000

It’s worth noting that if gold goes to $4,000, Paulson will be a top contender for the richest man in the world.


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Marc Faber: The Fed Is Creating Dangerous Bubbles Around The World, And Stocks Will Tank In October

It seems that the markets are  being levitated until the election for the obvious reasons. Let’s see if Marc Faber is correct about October.-Lou

Marc Faber: The Fed Is Creating Dangerous Bubbles Around The World, And Stocks Will Tank In October

The original merchant of doom Marc Faber has a good, wide-ranging interview with the Economic Times of India.

For US investors, he argues that bullishness has come on too fast, and that the pain we haven’t felt in September has merely been delayed until October and November.

And he also warns that the ramifications of Fed printing will be felt in unexpected ways around the world:

Says Faber:

Now what happens if so much money flows to emerging economies is that you get bubbles over time – currency bubbles, stock market bubbles, real estate bubbles. The question is then how do these emerging economies’ central banks react to that. The Brazilian Finance Minister has just said we are in the midst of a currency war, a foreign exchange war and the central banks of emerging economies have a choice to do nothing – then they have high domestic inflationary pressures with accompanying bubbles – or they tighten monetary policies and their currency becomes even stronger and you have a speculative bubble in the currency. So the Fed has put them actually in a very difficult position and I believe we are going to end up with bubbles in precious metals and to some extent in emerging economies’ real estate and equity markets and every bubble eventually bursts. It does not have to happen tomorrow. It could last another year, but the Fed is actually endangering emerging economies at the present time.

And on the Fed:

The whole world is now optimistic and positioned to take advantage of forever expansionary monetary policies by buying assets, precious metals, real estate, equities, and everybody believes that the central banks in the world will print and print and print and print. That is correct, they will do that, but they printed, printed and printed and we still saw a financial crisis in 2008. So I can print and print and print, and you can still have big corrections in the market. But I believe that if the S&P in the US drops 15-20% to around 900-950, the Fed would come out not with this quantitative easing No. 2, but with quantitative easing No. 2, 3, 4, 5, 6, 7, 8, 9, 10 until the asset markets go up again. They are going to print and print and print.


5 Reasons To Ignore Collection Agencies

I agree with the basic premises of this article.-Lou

5 Reasons to IGNORE Collection Agencies, The Henchmen of the Banking Mafia

John Galt
Activist Post

451324_f260I wrote an article a while back titled 5 Reasons NOT to Pay Your Credit Cards. Understandably, many e-mails came in asking, “But what happens if I don’t pay?”

Just as the Mafia has their collections department, so do the banks. A Mafia enforcer might employ a pipe to the knee, threats to your family, or other nefarious means of collecting debts for the boss. Much the same, collections agencies use guilt, the credit rating system, threats of legal action, and many tools of harassment and deceit from their bag of tricks.

If you are one of the many who have fallen into the hands of the enforcement division of the banking cartel, there is good news: they are not the true Mafia. There is not much they can do to you or your family that their boss the credit card companies haven’t already done. The best suggestion is to ignore them until you plan a proper strategy to defend yourself.

Here are 5 reasons to ignore collection agencies:

  1. Realize that you are not defined by your credit rating: Americans have become accustomed to revealing their credit rating practically by way of introduction.  Realize that this is a number, and not your identity: the higher the number the more virtuous, honorable, hard-working, and moral you are supposed to be.  Rather, it is has produced a type of caste system where a bad credit score can render one untouchable by potential employers. This system encourages class distinction based on economic viability and should not be encouraged by submitting to it.
  2. Their bankster bosses manufactured the economic collapse: Never forget who created this problem to begin with.  And they haven’t suffered a bit — thanks to we the taxpayers. Big banks already have seen the return of pre-credit-crisis profits. But they are still not happy; now they want more, even from those who have paid on time.  While small and mid-size banks struggle, or are eliminated, the large banks that benefitted most from the taxpayer bailouts continue to consolidate wealth with record profits, as the rest of the nation suffers.
  3. Understand that unsecured debts carry no obligation: This gets into the realm of rather complex contractual law, so one should do their own research and receive legal advice where necessary.  In the most basic sense, collection efforts are regulated under the Fair Debt Collections Practices Act. Under this Act, the collection agency must obtain the consent of the debtor to accept the obligation to pay this third party that has provided no services or products.  Essentially, the moment your debts are turned over to collections, your true obligation to pay the original debts has been released. This is probably why thiszombie debt is sold to collection agencies for as low as three cents on the dollar. But you are expected to pay back the full amount, of course.
  4. These agencies often use fear and harassment: We all desire a way to feed our families, but the collection agency business truly is a racket, and anyone making their living this way is supportive of a criminal endeavor on many levels.  Their tactics only reinforce the criminal element, as they have been documented to utilize unethical, unprofessional, and even illegal means to force cooperation.  By law, they are not supposed to contact family members, friends, or employers, but this practice has become almost routine. Many reports have been issued about the verbal abuse that often ensues, including profanity. They have been known to lie, citing their “right” to seize your property for non-payment. The last resort is the threat of legal action. These people have no power other than their words. You shouldn’t even be on the phone long enough to hear their threats and abuse.
  5. You might not be free even if you pay them: There are countless forums describing countless collection agency horror stories. One forum I found addresses one of the more notorious agencies, NCB. I was able to obtain the company’s Pennsylvania office phone number, which led to a more specific thread documenting first-hand experiences. This company is known to be one of the worst, and even has allegedly been tied to identity theft. Additionally, a fair amount of people have reported that they still were hounded for payment even after paying their debt.  Because of the increased competition in debt collections — and so many new agencies coming and going — there are many abuses of the FDCP. Please read the thread and judge for yourself.


Is Gold in a Bubble?

Gold yesterday hit a record $1,300 an ounce before the usual suspects pounded it down to prevent a close below the psychological important level. Here is a great article by Greg Hunter on why gold may go much higher.-Lou

Is Gold In A Bubble?

By Greg Hunter

Gold-e1285300666296With gold hitting all time nominal highs this week, the recurring question is “Is gold in a bubble?”  The yellow metal has been flirting with the $1,300 an ounce mark, and some folks are getting a little worried it has gone too far too fast.  If anything, gold has not gone far or fast enough if you compare it to the U.S. debt and future commitments.  According to Boston University economics professor Laurence Kotlikoff, the U.S. is “bankrupt.”  Kotlikoff says, “Congress has engaged in Enron accounting,” and the real deficit is “$202 trillion”—15 times worse than official government projections.  We will never be able to pay this amount in real money!  $202 trillion is more than three times the entire world GDP!!  (Click here for the complete Kotlikoff story.)

The main reason gold has been on the rise is the Federal Reserve setting the stage for another $1 trillion dollars of “Quantitative Easing” or money printing.  Here’s how expert trader Dan Norcini summed up the Fed actions this week.  He said on, “If the FED wanted to give the Dollar the kiss of death with yesterday’s FOMC release, they certainly managed to accomplish their task. It continued its descent which began as soon as the statement hit the wires yesterday and has not looked back since. . . .There were very few individual commodities that were lower today as billions more were jammed into hard assets in an attempt to shield wealth from the depredations of a currency that has broken through support levels in a manner that is frightening for its intensity.” (Click here to see the complete Norcini post.)  

Despite Fed actions that will clearly devalue the dollar, billionaire investor George Soros keeps telling the public that “nothing is safe” and gold is the “ultimate bubble.” (Click here to see the most recent Soros interview on gold.) I am puzzled why Soros says negative things about the precious metal when the biggest holding in his $25 billion hedge fund is GOLD!

Jim Willie from the “Hat Trick” newsletter said this week, “Calls of a gold bubble are shallow moronic pontifications, since the sanctioned asset bubble is the mammoth USTreasury variety. It is the last bubble before systemic failure. . . . The Gold bull will continue as long as the cost of money is negative. Investors flee the conventional paper vehicles like stocks, bonds, and housing since the system is failing and paper money in which values are denominated is fast becoming meaningless. The food prices are the big alarm bell in addition to the Gold price. Both are canaries in the coal mine. The canary is dead or dying.” (Click here for the complete Jim Willie post.)

Famed gold investor Jim Sinclair has been calling for gold to hit “$1,650 per ounce on or before January 14, 2011for several years.  Now others are making similar calls such as Deutsche Bank.  In a recent report titled “Why the Gold Price Rally Will Continue,” the mega bank said it would not consider gold to be in a bubble until it reached “$2,000” per ounce. (Click here to find the Deutsche Bank report on

According to John Williams at, in order for gold to equal its 1980 true inflation adjusted $850 price, the yellow metal would have to sell for more than $7,000 per ounce.  But don’t expect gold to go up in a straight line.  Governments, manipulators on Wall Street and market forces can knock gold down at anytime.  Price fluctuations can and will be volatile according to gold experts like Sinclair, but the overall trend is decidedly up.

A very good friend of mine recently wrote me and said, “If there is total collapse of the economy and ultimately – God forbid – the nation, then I doubt that Gold will be worth anything. Bullets and canned food will. They will be very valuable. Bullets will protect you from those who would steal your canned food.  Simple, but sadly – true.”


IRS won’t be mailing tax forms next year

It would be nice if not only were there no more tax forms, but no more taxes.-Lou


IRS won’t be mailing tax forms next year

WASHINGTON – Don’t look for tax forms and instructions in your mailbox next year. The Internal Revenue Service has decided to stop mailing them because so many people now file electronically.

The Washington Post reports on its website Monday that the IRS expects to save about $10 million a year by eliminating mailing.

More than 96 million people filed their returns through the IRS online service last year, and about 20 million filed paper returns through paid tax preparers.

The IRS says only 11.5 million people who filed paper returns received forms in the mail.

The agency says people who want to file paper returns will be able to obtain the forms from the IRS website or its offices as well as some libraries and post offices.