New economic policy: If you haven’t got enough of this stuff, just print some more

Creating money out of thin air creates inflation. Even Bernanke admitted – questioned by Ron Paul – that inflation is a tax. So the government and the banksters want to tax you without you knowing it. They just want to keep the system afloat until ‘they are ready’ to let it fail. They are about to create the worst depression ever.

Putting more money into the system - or ‘quantitative easing' - is a move that may be adopted by central banks across the world
Putting more money into the system – or ‘quantitative easing’ – is a move that may be adopted by central banks across the world

KEEP up at the back. The new big thing to save the world economy is “quantitative easing”. Not an upmarket euphemism for a massage, but the latest and most desperate measure yet by central banks to stop a severe recession turning into depression. And it may soon be adopted in the UK.

Quantitative easing is the elegant, sanitised term for the process by which a central bank fends off the threat of deflation by effectively printing new money, or increasing its supply.

A simple model would work like this: the government issues bonds and sells them, directly or otherwise, to the central bank. The bank creates new money for this purpose and pays the government for those bonds. The money is then used by the government to stimulate the economy through public works and infrastructure projects.

Magic new money: have we really walked into this Last Chance Saloon? Yes, we have.

In an extraordinary statement on Tuesday evening, Ben Bernanke, chairman of the US Federal Reserve, announced he was cutting the Federal Funds rate, the bank’s key interest rate tool, to a record low of between zero and 0.25 per cent. That’s zero, as in nothing. Not even in the Great Depression were interest rates in the United States brought so low.

Related articles:
Rev up the helicopter
Why such drastic action? The Fed is utterly petrified
Fed Cuts Rate to as Low as Zero, Shifts Policy Focus

However, it was the accompanying statement that let the move to “quantitative easing” out of the bag. He said the Fed “will employ all available tools” and would buy “large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets”. (“Agency debt” is a bond, issued by a US government-sponsored agency, such as the Federal National Mortgage Association, or Fannie Mae.)

He also let fall that the Fed would consider buying “longer term Treasury securities” – the government’s own debt. This would enable the Fed to bring down the long-term cost of money, thus bringing down US mortgage rates, to put more money into circulation and, not least, to bail out the government by soaking up some of its exploding deficit.

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Russia provides 10 MiG fighter jets to Lebanon for free

Russian MIG-29 fighters
(Yuri Kadobnov/AFP/Getty Images)

Russia gave Lebanon ten MiG fighter jets yesterday in a deal to boost defence cooperation.

The MiG29 Fulcrum fighters would be provided free to Lebanon under an agreement on military-technical assistance, the head of Russia’s defence cooperation service said. Mikhail Dmitryev said that the jets would come from Russia’s existing stock.

He said that Moscow was also in talks to supply Beirut with heavy armour, adding that supplies of such weaponry were “now possible after the situation in this nation has stabilised”.

He said: “We view the Lebanese army as the main guarantor of this nation’s stability, therefore the armed forces of this country must be strengthened.” The deal followed a meeting in Moscow between Anatoly Serdyukov, the Defence Minister, and Elias Murrhis, his Lebanese counterpart. Mr Serdyukov said that Russia had received a detailed list of armaments sought by Lebanon.

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American commandos get UN go-ahead to hunt down Somali pirates

Pirates operating from safe havens along the Somali coast could become the target of hot-pursuit missions by American commandos for the first time, after approval was given by the United Nations Security Council to launch land and air attacks on pirate bases.

The Americans had sought a new robust mandate to attack the pirates at source to ensure that there was legal backing for chasing those who escaped confrontations at sea and headed for the safety of lawless Somalia.

Many of the most successful pirates are rich home-owners, living along the coast in a strip of expensive houses bought with the ransoms paid by shipping companies for the release of hijacked vessels.

Yesterday, in another example of the more aggressive stance taken by the international community against the pirates, the Chinese crew of a pirate-seized vessel, later aided by helicopters from a US-led maritime coalition force, fought off the would-be hijackers.

The 30 crew members of the Chinese-owned vessel, the Zhenhua 4, sailing in the Gulf of Aden, foiled the pirates by locking themselves in their cabins and radioing for help. A warship from Combined Task Force 150, an American-led naval group operating around the Horn of Africa, sent two helicopters which fired on the pirates. CTF 150, based in Bahrain, is a coalition of 20 nations, including Britain.

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First U.S. Face Transplant Described

Dr. Maria Siemionow, center, led a Cleveland Clinic team including Dr. Risal Djohan, left, and Dr. Daniel Alam in an operation replacing most of a patient’s face. Cleveland Clinic, via Associated Press

CLEVELAND – Only the forehead, upper eyelids, lower lip, lower teeth and jaw are hers.

The rest of her face comes from a cadaver.

In a 23-hour operation, transplant surgeons have given nearly an entire new face to a woman with facial damage so severe that she could not eat on her own or breathe without a hole in her windpipe, doctors at the Cleveland Clinic said here on Wednesday.

The highly experimental procedure, performed within the last two weeks, was the world’s fourth partial face transplant, the country’s first, and the most extensive and complicated such operation to date. Dr. Maria Siemionow led the surgical team, which took turns at the operating table so the doctors could rest, sleep and share expertise.

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Honda Falls After Slashing Earnings Forecast by 62%

Takeo Fukui, president of Honda Motor Co., speaks during a news conference in Tokyo on Nov. 17, 2008. Photographer: Tomohiro Ohsumi/Bloomberg News

Dec. 18 (Bloomberg) — Honda Motor Co., Japan’s second- largest automaker, fell 3.5 percent after cutting its profit goal as the yen rose to a 13-year high against the dollar and sales in North America and Europe dropped.

Honda declined 66 yen to 1,825 yen at the 3 p.m. close on the Tokyo Stock Exchange. Toyota Motor Corp., the country’s largest automaker, fell 2.3 percent, while Nissan Motor Co., the No. 3 carmaker in Japan, added 0.7 percent.

Honda cut its full-year forecast 62 percent yesterday as the global recession cripples sales in the U.S., Japan and Europe. The yen’s 28 percent gain against the dollar and 31 percent rise against the euro this year has hammered Honda’s profit, forcing it to cut jobs, lower management pay and withdraw from Formula One motor racing.

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‘I was still holding my grandson’s hand – the rest was gone’

In the second of our series of dispatches from the ravaged country, Afghans explain how mounting civilian casualties are aiding Taliban recruiting

Clancy Chassay on Afghanistan‘s civilian casualties Link to this video

It was 7.30 on a hot July morning when the plane came swooping low over the remote ravine. Below, a bridal party was making its way to the groom’s village in an area called Kamala, in the eastern province of Nangarhar, to prepare for the celebrations later that day.

The first bomb hit a large group of children who had run on ahead of the main procession. It killed most of them instantly.

A few minutes later, the plane returned and dropped another bomb, right in the centre of the group. This time the victims were almost all women. Somehow the bride and two girls survived but as they scrambled down the hillside, desperately trying to get away from the plane, a third bomb caught them. Hajj Khan was one of four elderly men escorting the bride’s party that day.

“We were walking, I was holding my grandson’s hand, then there was a loud noise and everything went white. When I opened my eyes, everybody was screaming. I was lying metres from where I had been, I was still holding my grandson’s hand but the rest of him was gone. I looked around and saw pieces of bodies everywhere. I couldn’t make out which part was which.”

Relatives from the groom’s village said it was impossible to identify the remains. They buried the 47 victims in 28 graves.

Stories like this are relatively common in today’s Afghanistan. More than 600 civilians have died in Nato and US air strikes this year. The number of innocents killed this way has almost doubled from last year, and tripled from the year before that. These attacks are weakening support for the Afghan government and turning more and more people against the foreign occupation of the country.

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Career Army officer sues Rumsfeld, Cheney, saying no evacuation order given on 9/11

A career Army officer who survived the attacks of Sept. 11, 2001, claims that no evacuation was ordered inside the Pentagon, despite flight controllers calling in warnings of approaching hijacked aircraft nearly 20 minutes before the building was struck.

According to a time-line of the attacks, the Federal Aviation Administration notified NORAD that American Airlines Flight 77 had been hijacked at 9:24 a.m. The Pentagon was not struck until 9:43 a.m.

On behalf of retired Army officer April Gallop, California attorney William Veale has filed a civil suit against former Secretary of Defense Donald Rumsfeld, Vice President Dick Cheney and former US Air Force General Richard Myers, who was acting chairman of the joint chiefs on 9/11. It alleges they engaged in conspiracy to facilitate the terrorist attacks and purposefully failed to warn those inside the Pentagon, contributing to injuries she and her two-month-old son incurred.

Related article: Government Insider: Bush Authorized 9/11 Attacks

“The ex-G.I. plaintiff alleges she has been denied government support since then, because she raised ‘painful questions’ about the inexplicable failure of military defenses at the Pentagon that day, and especially the failure of officials to warn and evacuate the occupants of the building when they knew the attack was imminent” said Veale in a media advisory.

Gallop also says she heard two loud explosions, and does not believe that a Boeing 757 hit the building. Her son sustained a serious brain injury, and Gallop herself was knocked unconscious after the roof collapsed onto her office.

The suit also named additional, unknown persons who had foreknowledge of the attacks.

“What they don’t want is for this to go into discovery,” said Gallop’s attorney, Mr. Veale, speaking to RAW STORY. “If we can make it past their initial motion to dismiss these claims, and we get the power of subpoena, then we’ve got a real shot at getting to the bottom of this. We’ve got the law on our side.”

The lawsuit’s full text follows.

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U.S. Stocks Fall on Concern Fed Is Running Out of Ammunition

Traders work on the floor of the New York Stock Exchange in New York, Dec. 15, 2008. Photographer: Daniel Acker/Bloomberg News

Dec. 17 (Bloomberg) — U.S. stocks fell and the Standard & Poor’s 500 Index retreated from a five-week high on concern the Federal Reserve has few tools left to combat the recession after cutting its benchmark interest rate to a record low.

Newell Rubbermaid Inc., the maker of Calphalon cookware, tumbled the most in at least 28 years as the shrinking economy forced it to reduce its 2008 profit forecast. Apple Inc. slid 6.6 percent after the maker of the iPhone said Chief Executive Officer Steve Jobs won’t speak at the Macworld Expo, spurring concern the leader’s health is deteriorating. Macy’s Inc. rallied 18 percent, helping trim the market’s losses, after lenders relaxed terms on a $2 billion credit line.

“The economic environment isn’t going to change a lot,” said Warren Koontz, who oversees $2.5 billion as chief investment officer for large-company value stocks at Loomis Sayles & Co. in Boston. Loomis manages $105 billion. “We do have to pay penance for the over-living of the past decade.”

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One-third of Boulder’s deer infected with chronic wasting disease

A new study shows one out of three mule deer in south Boulder suffers from chronic wasting disease – and those results mean the traditional approach of killing infected animals to fight the disease probably won’t work, researchers say.

Chronic Wasting Disease Study Results (PDF)

“Everything that’s been tried to control chronic wasting disease really fails in the face of that kind of infection rate,” said Heather Swanson, a wildlife ecologist for Boulder’s Open Space and Mountain Parks Department.

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Analysts say Federal Reserve has fired all shots in its armoury

Shares soared on Wall Street last night, but the dollar tumbled after the US Federal Reserve’s shock decision effectively to cut American official interest rates to zero.

The Dow Jones industrial average jumped by more than 359.61 points, or 4.2 per cent, as markets hailed the US central bank’s landmark move to cut its key Fed Funds rate from a previous record low of 1 per cent to a target range of zero to 0.25 per cent.

The broader-based S&P 500 index of US blue chip shares also surged by more than 5 per cent as investors cheered the Fed’s decision to combine last night’s historic cut in rates with a raft of other ground-breaking steps to combat the economic slump.

Related article: Fed throws out the rulebook

The Fed fulfilled predictions that it would announce extraordinary moves to bolster America’s economy through so-called “quantitative easing”. It confirmed that it will buy up “large quantities” of mortgage-backed securities to try to ease the flow of lending to a slumping US housing market.

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Scott Ritter: Dick Cheney’s fantasy world

Despite the facts, the vice-president still insists that Saddam Hussein could have produced weapons of mass destruction

Scott Ritter was a UN weapons inspector in Iraq from 1991-1998 and is the author of Iraq Confidential.

In yet another attempt at revisionist history by the outgoing Bush administration, vice-president Dick Cheney, in an exclusive interview with ABC News, took exception to former presidential adviser Karl Rove’s contention that the US would not have gone to war if available intelligence before the invasion had shown Iraq not to possess weapons of mass destruction. Cheney noted that the only thing the US got wrong on Iraq was that there were no stockpiles of WMD at the time of the 2003 invasion. “What they found was that Saddam Hussein still had the capability to produce weapons of mass destruction. He had the technology, he had the people, he had the basic feed stock.”

Related article: ‘I think we’ve done pretty well.’ Dick Cheney has no regrets about eight years in office

The vice-president should re-check both his history and his facts. Just prior to President Bush’s decision to invade Iraq, the UN had teams of weapons inspectors operating inside Iraq, blanketing the totality of Iraq’s industrial infrastructure. They found no evidence of either retained WMD, or efforts undertaken by Iraq to reconstitute a WMD manufacturing capability. Whatever dual-use industrial capability that did exist (so-called because the industrial processes involved to produce legitimate civilian or military items could, if modified, be used to produce materials associated with WMD) had been so degraded as a result of economic sanctions and war that any meaningful WMD production was almost moot. To say that Saddam had the capability or the technology to produce WMD at the time of the US invasion is a gross misrepresentation of the facts.

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SEC ignored Madoff warnings for 10 years

The world’s biggest fraud could have been averted if the Securities and Exchange Commission (SEC) had acted on numerous warnings about Bernard Madoff’s financial impropriety years ago, the regulator’s chairman admitted last night.

Christopher Cox, the chairman of the SEC, effectively admitted mea culpa over the scandal after conceding that tip-offs were repeatedly made to the investors’ watchdog but never resulted in any investigation.

Related article: SEC Official Married into Madoff Family

Mr Cox said that in less than a week of checks made into the regulator’s oversight of investment businesses run by Bernard Madoff, he had found that “credible and specific allegations” had been “repeatedly” brought to the attention of the SEC but that no recommendations had ever been made to investigate the accusations.

The admission comes a week after Bernard Madoff, a 70 year old financier, admitted to his two sons that he was “finished” and that his investment firm was nothing more than a giant Ponzi scheme.


He also admitted to his sons, who worked for him, that he believed that losses arising from his financial wrong-doing amounted to around $50 billion, representing the biggest fraud in history.

Related article:
Madoff put under house arrest – in $7m apartment (That is called justice.)

His investment firm, which has since been forced into liquidation, has triggered billions of dollars worth of losses among the world’s biggest financial institutions, charities, state pension schemes, and personal savings.

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NASA: A Giant Breach in Earth’s Magnetic Field

Dec. 16, 2008: NASA’s five THEMIS spacecraft have discovered a breach in Earth’s magnetic field ten times larger than anything previously thought to exist. Solar wind can flow in through the opening to “load up” the magnetosphere for powerful geomagnetic storms. But the breach itself is not the biggest surprise. Researchers are even more amazed at the strange and unexpected way it forms, overturning long-held ideas of space physics.

“At first I didn’t believe it,” says THEMIS project scientist David Sibeck of the Goddard Space Flight Center. “This finding fundamentally alters our understanding of the solar wind-magnetosphere interaction.”

The magnetosphere is a bubble of magnetism that surrounds Earth and protects us from solar wind. Exploring the bubble is a key goal of the THEMIS mission, launched in February 2007.

The big discovery came on June 3, 2007, when the five probes serendipitously flew through the breach just as it was opening. Onboard sensors recorded a torrent of solar wind particles streaming into the magnetosphere, signaling an event of unexpected size and importance.

Right: One of the THEMIS probes exploring the space around Earth, an artist’s concept. [more]

“The opening was huge-four times wider than Earth itself,” says Wenhui Li, a space physicist at the University of New Hampshire who has been analyzing the data. Li’s colleague Jimmy Raeder, also of New Hampshire, says “1027 particles per second were flowing into the magnetosphere-that’s a 1 followed by 27 zeros. This kind of influx is an order of magnitude greater than what we thought was possible.”

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Paul Craig Roberts: Are You Ready to Face the Facts About Israel?

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.

“On October 21 (1948) the Government of Israel took a decision that was to have a lasting and divisive effect on the rights and status of those Arabs who lived within its borders: the official establishment of military government in the areas where most of the inhabitants were Arabs.”
Martin Gilbert, Israel: A History

I had given up on finding an American with a moral conscience and the courage to go with it and was on the verge of retiring my keyboard when I met the Rev. Thomas L. Are.

Rev. Are is a Presbyterian pastor who used to tell his Atlanta, Georgia, congregation: “I am a Zionist.” Like most Americans, Rev. Are had been seduced by Israeli propaganda and helped to spread the propaganda among his congregation.

Around 1990 Rev. Are had an awakening for which he credits the Christian Canon of St. George’s Cathedral in Jerusalem and author Marc Ellis, co-editor of the book, Beyond Occupation.

Realizing that his ignorance of the situation on the ground had made him complicit in great crimes, Rev. Are wrote a book hoping to save others from his mistake and perhaps in part to make amends, Israeli Peace/Palestinian Justice, published in Canada in 1994.

Rev. Are researched his subject and wrote a brave book. Keep in mind that 1994 was long prior to Walt and Mearsheimer’s recent book, which exposed the power of the Israel Lobby and its ability to control the explanation Americans receive about the “Israeli-Palestinian conflict.”

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Madoff Scheme Was ‘Impossible’ to Do Alone, Says EIM’s Busson

Yes, it is impossible to do this alone. Especially because…
Unlike most hedge funds, Madoff’s business was regulated by the SEC, giving investors an added layer of protection, Busson said.

“I knew the SEC was all over this shop. As a broker-dealer, you file quarterly statements,” he said. “The main reason we got comfort is that it was SEC-regulated, and it was doing 10 percent of the volume on the New York Stock Exchange and Nasdaq.”

But here comes the next biggie: SEC failed to inspect Bernard Madoff fund (The Telegraph):
Last night Bloomberg reported that The Securities and Exchange Commission hasn’t examined the hedge fund since he registered the unit with the agency in September 2006.

So he had help. 🙂

Dec. 16 (Bloomberg) — Bernard Madoff’s alleged Ponzi scheme, which might have cost investors $50 billion, couldn’t have been carried out alone, said Arpad ‘Arki’ Busson, chairman and founder of Swiss investment firm EIM SA.

“For the amount of money and number of accounts, it’s practically impossible that he was doing this alone,” said Busson, whose $11.5 billion fund of hedge funds had about $230 million invested with Madoff. “What’s mind-boggling is the amount of assets and the amount of time he was doing it.”

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Bailout payout tops $8 trillion

US President George W. Bush made a surprise visit to Afghanistan on Monday, holding talks with President Hamid Karzai and warning of a long struggle ahead to quell insurgent violence. (AFP/Saul Loeb)

As the holiday season commences, it’s worth taking stock of the last gift that President George W. Bush and the 110th Congress have left for U.S. taxpayers.

It’s a package of about $8.7 trillion dollars’ worth of potential taxpayer commitments for loans, guarantees and other bailout goodies for businesses and distressed homeowners.

Amid the tissue paper:

• More than $1.5 trillion in Federal Deposit Insurance Corp. loan guarantees, including a $139 billion assist to the lending arm of General Electric Corp.

• $1.8 trillion in cash, tax breaks and loan guarantees doled out from the Treasury Department to taxpayers, financial institutions and credit companies.

• $300 billion for homeowners from the Federal Housing Authority.

• $25 billion in assistance for auto companies from a program overseen by the Energy Department, which is separate from the bailout proposal that tanked last week in the Senate.

• And $5 trillion worth of new money, loan guarantees and loosened lending requirements from the Federal Reserve Bank.

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New Rule Expands DNA Collection to All People Arrested

Civil Rights Groups Assail Change

Sen. Jon Kyl (R-Ariz.) advocates DNA collection at arrest or deportation. (2006 Photo By Melina Mara — The Washington Post)

Immigration and civil liberties groups condemned a new U.S. government policy to collect DNA samples from all noncitizens detained by authorities and all people arrested for federal crimes.

The new Justice Department rule, published Wednesday and effective Jan. 9, dramatically expands a federal law enforcement database of genetic identifiers, which is now limited to storing information about convicted criminals and arrestees from 13 states.

Congress authorized the expansion in 2005, citing the power of DNA as a tool in crime solving and prevention.

The FBI created its National DNA Index System in 1994 to store profiles of people convicted of serious violent crimes, such as rape and murder, but the system has been expanded repeatedly, first to include all convicted felons, then misdemeanants and state arrestees. The data bank contained more than 6.2 million samples as of August, and officials estimate that 61,000 cases have been solved or assisted using DNA.

The change could add as many as 1.2 million people a year to the national database, U.S. officials said. Supporters equate DNA collection to taking fingerprints or photographs at the time of booking.

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Fed Cuts Rate to as Low as Zero, Shifts Policy Focus

The Fed is creating a crisis that will be even worse than the Great Depression.

Related Interview with Peter Schiff (12/13/08).

When the dollar is starting to fail commodities will skyrocket.

Watch Gold, Silver etc. closely now.

The dollar is soon as good as toilet paper.

Ron Paul, Peter Schiff and Jim Rogers warned a million times about this.

And remember that for all the people who lose their money and their homes there is always someone who profits from that, because these assets do not just disappear into the void. So who profits?!

I am not saying like many others that Ben Bernanke and Hank Paulson do not know what they are doing. They know exactly what they are doing and they do what they are told to do by their elite masters. (Look who founded the Federal Reserve and why. You may watch Zeitgeist, The Movie, Final Edition Part III of the movie which starts at 1:14:30.)

Bush, Obama, Bernanke and Paulson are all puppets. Nothing they do is really for the people, absolutely NOTHING.

Even if they create a stimulus package and give you a check they know that that money has to be paid back with interest and that it will be the taxpayer who has to pay for it all.

All they do now is destroying the dollar, the economy and the middle class. I have studied economics and I can assure you that it can be easily proven that stimulus packages only have a short term effect and that they have very harmful effects in the long run.

If you want to look good in the short term like Mr. Obama than a stimulus package is just fine. I even seriously doubt that it will have much effect because the US are broke. The stimulus package has to be financed and there is not much confidence left that the US can pay all that debt back. So nobody will soon be willing to buy US bonds anymore and creating more money out of thin air will create another Zimbabwe.

The Federal Reserve Refuses to Disclose Recipients of $2 Trillion: Dec. 12 (Bloomberg) — The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

These people are the worst criminals on the face of the earth. The elite has planned this crisis so many years ago that you would probably not believe me. Here always comes the question: “But why would they do this?” For MONEY, POWER and CONTROL.

Source: Bloomberg

Jeffrey Vazquez looks at a television after the Federal Open Market Committee’s (FOMC) rate decision on the floor of the New York Stock Exchange in New York, on Dec. 16, 2008. Photographer: Andrew Harrer/Bloomberg News

Dec. 16 (Bloomberg) — The Federal Reserve cut the main U.S. interest rate to as low as zero for the first time and shifted its focus to the amount and type of debt it buys, seeking to revive credit and end the longest slump in a quarter- century.

The Fed “will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Federal Open Market Committee said today in a statement in Washington. “Weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.”

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