THE INTERNATIONAL FORECASTER

SATURDAY, MAY 16, 2009

051609 (5)_IF
P. O. Box 510518, Punta Gorda, FL 33951-0518
An international financial, economic, political and social commentary.

Published and Edited by: Bob Chapman

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 *****
NEXT SCHEDULED ISSUES
WEDNESDAY, MAY 20, 2009
SATURDAY, MAY 23, 2009
WEDNESDAY, MAY 27, 2009
SATURDAY, MAY 30, 2009

US MARKETS
We have come a long way from Dow 14,168 and we have just completed a
strong bear market rally based on little but hopes, dreams and the assistance of the
“Working Group on Financial Markets” under the guidance of the Treasury and the
Fed. We believe the bear market has a substantial distance to fall as the debt sector is
purged. A 50% retraction of debt, which is far above GDP has to be completed, excess
capacity has to be rung out of markets, consumer spending, which is now 70% of
GDP, has to return to the long-term average of 64.5% of GDP. Once real estate
bottoms in 2011 and 2012, we will probably be half way to the overall bottom. We have
2/3’s of the way to go before credit card debt is purged. We are just beginning to see
failure of commercial and industrial loans and that could last another 3 to 4 years.
Presently we are about 40% to the bottom. Then the question arises how long do we
bump along the bottom – probably 5 years or longer – dependent on how bad the
structural damage is, whether we still have a Federal Reserve; how many banks are
left; whether we have WWIII or whether we have revolution. America and the world are
in for a difficult time.
There are still massive imbalances in the US and world economy. Fiscal and
monetary policies in almost all countries have gone over the edge. In a panic to
subdue deflation governments and central banks have way overused fiscal and
monetary policies, which is sure to end in hyperinflation. Any natural pause or mini
recovery is doomed by the massive amount of monetary aggregates racing through
the system. Over the next year and one-quarter negative GDP of 6.3% from the last
quarter of 2008 should rise to even. That is no negative growth in the fall of 2010.
In spite of massive injections of money and credit worldwide the consumer
price index fell to its lowest level since 1955. Those of course are US Labor
Department figures. Inflation is still persistent at 9% and M3 is back to 18%
annualized. Capacity utilization is 69.3%, the lowest since 1967, which means few
businesses have profits. A reflection of that is that state and local taxes have fallen
more than 7%. Personal income taxes are off over 1% and corporate taxes more than
15%. 80% of states have had a more than 13% decline in tax receipts year on year.
Credit card balances are down more than 10%. It would be very helpful if our federal
government would stop lying about our statistics.
S&P says companies cut $77 billion in dividends in the first quarter and that is
worse than during the Great Depression. That is part of the reason we declared a
depression in February. At the end of the first quarter federal tax receipts fell $50
billion to $129 billion. Individual tax receipts fell from $57 billion to $41 billion.
Corporate tax receipts fell 90%.
It is important to note that the S&P 500 Index fell 57%, a larger decline than the
48% decline of 1973-74, or the 49% fall of 2000-2002. This time it took 17 months for
the S&P to reach those levels whereas the other two drops took 21 to 31 months.
From 1929 to 1932 the market fell 89%.
Prior to the beginning of the recent fall and that of 1929 both events occurred
after a long period of optimism. Most observers do not believe that this depression will
be accompanied by global protectionism, nor do they see ultimately a deflationary

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depression and price deflation. How can they be so near sighted? The Fed and the
Treasury cannot inflate indefinitely. The events we’ve witnessed and continue to
witness, and those that we project, can only lead to hyperinflation and then deflation.
Since 2000 these forecasts have been easy and we’ve been right, but few else have.
They are all bound up in what is financial and political correctness. We are going to
3,800 to 4,200 and we’ll be lucky if it stops there.
The massive creation of monetary aggregates, that is money and credit, is
leading us toward a Weimarite monetary policy and hyperinflation, as well as higher
interest rates. Both will lead to killing any economic or financial recovery. We hope the
“Peoples Republic of China” is listening. If they are not their losses will be grievous
and painful. This means it will be many years before housing recovers. Growing
foreclosures for another three years and massive inventories. This means no
economic recovery for years to come. Eventually deflation will take hold and then the
real misery will begin.
On the near term the Dow will return to 6600. Looking for another rally there
will be buyers, but the rally will not appear again and we’ll fall into the 5,000 to 6,000
level. Higher real interest rates will win out as will hyperinflation; at least for a time.
Consumer confidence may be somewhat ebullient now, but once further signs of
higher inflation manifest itself that confidence will fall again. The same will happen with
capital investment.
Rumor reaches us that Citigroup’s London subsidiary lost $30 billion and it is
failing. Word is the Fed has already stepped in and is covering the bad collateral.
Incidentally, Stephen Friedman recently cashiered from the NY Fed has
returned to his roost at Goldman Sachs. He was caught in a conflict of interest after
having purchased 52,600 shares of Goldman on inside information. It is now very
obvious Goldman Sachs controls our country. The only mission of the Fed is to rescue
banks, brokerage firms and insurance companies.
Notable in the inventory report, inventory fell 1%, but sales fell even faster.
Watch out below. For the fourth time Sir Alan Greenspan, who sold his soul to
the forces of darkness, says it is easy to see the financial markets and the housing
markets have bottomed. If you want to lose money just follow his advice. We cannot
believe this idiot ran the Fed for 21 years.
John Taylor, a former undersecretary of the Treasury for international affairs
slammed the Fed for risking hyperinflation and warned that government action will
caused, a prolonged and worsening of the country’s financial crisis.
He says it won’t be long before the Fed removes excess reserves. Classically
that would be the case, but this time they cannot. If they do the whole house of cards
collapses. He says the risk is systemic.
We see much more risk coming from the planned US government budget
deficits, which will place the Fed under extreme pressure to allow further inflation, in
order to diminish the Treasury’s debt burden. Of course, that process robs the dollar
holders of their buying power. It is called stealth theft.
Budget deficits should end and that would end the Fed’s extraordinary
monetary policy actions. As we all know nothing like that is going to happen.
The Fed cannot insure the soundness of the broader financial system and at
the same time ensure stable and low inflation and sustainable economic growth.
In order to avoid this we now understand a systemic risk regulator will be
ensconced at the Fed, which is more smoke and mirrors. The Fed, and the Bush
administration, is responsible for all of this and the Fed should be disbanded and their
functions turned back to a Treasury that is not run by Wall Street and bankers.

4
 Former Comptroller of the US, David Walker, says the US is at risk of losing its
AAA rating. 64.5% of the foreign exchange of all countries is in dollars, which makes
all their currencies fiat. The only real currencies in the world are gold and silver. They
deserve the AAA rating.
Retail sales fell .4% in April. That means lots less tax revenue and profits. The
powers that be figure if you lie long enough and loud enough people will believe
everything is ok. Well, it is not ok as the 19.2% unemployed increases.
The Obama administration is about to close the barn door and regulate
derivatives and exotic financial contracts, that have destroyed our financial system.
If they are going to do that their first action should be to dismantle JP Morgan
Chase’s massive derivative concentrations shorting gold and silver.
Sheikh Hamad bin Jassim bin Jaber a-Thani will invest as much as $20 billion
a year and says, “we will look at food, we will look at gold and at minerals.”
Obama administration officials are contemplating a major overhaul of the
compensation practices in the financial services industry, moving beyond banks to
include more loosely regulated hedge funds and private equity firms.
Any overhaul is likely to be tied the Obama administration’s broader efforts to
curb systemic risk to the economy. That means the new rules could apply to financial
firms like hedge funds or private equity firms that never accepted money from the
Troubled Asset Relief Program, or TARP.
Treasury officials have said new executive compensation rules could be
released shortly, with some bankers and lawmakers expecting them to be formally
released before the Memorial Day recess.
The Obama administration's behavior in the Chrysler bankruptcy is a profound
challenge to the rule of law. Secured creditors -- entitled to first priority payment under the
"absolute priority rule" -- have been browbeaten by an American president into accepting only
30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior
creditor claims, will get about 50 cents on the dollar.
The US Treasury’s effort to stabilize the banking system through the TARP
programme is a hopelessly ill-conceived policy that enriches speculators at public
expense, according to the buy-out firm supposed to be pioneering the joint public-
private bank rescues.
“The taxpayers ought to know that we are in effect receiving a subsidy. They put
in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman
of MatlinPattersonAdvisers.
The comments are likely to infuriate Tim Geithner, the US Treasury Secretary,
because MatlinPatterson took advantage of the TARP’s matching funds to buy
Flagstar Bancorp in Michigan. His confession appears to validate concerns that the
bail-out strategy is geared towards Wall Street.
Standard & Poor's said the nation's banking crisis has "merely entered a new
phase" and might not end before 2013.
John Williams notes: Obama administration Changes Rules in Order to Reduce
Reported Deficit Level. Under mounting global criticism for its fiscal excesses, and with
Treasury auctions looking like they are going to need heavier Federal Reserve
support, the Obama administration has taken some "corrective" action, by changing
the accounting rules for the reporting of federal deficit. The changes only reduce the
reported level of the federal deficit; they do not impact the Treasury’s excessive
funding needs. The "Highlight" of the (May 12th) Monthly Treasury Statement for April
30, 2009 was:
"The administration has reclassified prior month expenditures related to the
Emergency Economic Stabilization Act (EESA- also known as TARP). Consistent with

5
statutory requirements of the Federal Credit Reform Act and EESA, TARP purchases
are now being accounted for on a net present value basis, taking into account market
risk. Accordingly, budget outlays have been reduced and direct loan financing activity
correspondingly increased by $175 billion." http://www.shadowstats.com
John also notes, “Incorporating annual revisions that knocked a percent or two
off reported sales levels of the last two years, the annual 10.1% decline in April 2009
retail sales was the worst seen in post-World II history, other than for a 10.6% decline
in December 2008.”
Anyone seeking evidence of a new world order in banking should reflect on
Bank of America’s sale of a third of its interest in China Construction Bank. Not only do
the buyers seem to be all Asian: Temasek Holdings of Singapore, China Life, and
Hopu Investment Management, a Beijing-based private equity firm. Not a single
western investment bank seems to have been involved in this low-key, $7.3bn private
placement. This is the way China would have wanted it/
China Construction Bank shares looked as if they were being flipped faster than
McDonald’s burgers in Hong Kong on Wednesday. Trading volumes, excluding the big
sale by Bank of America, were ten to 12 times typical levels. This is odd. BofA on
Tuesday offloaded a $7.3bn chunk of stock in the Chinese lender. The stressed
American bank, with an eye to its remaining $15bn CCB holding, did the right thing by
China: selling the shares to ostensibly stable investors, including China Life and
Temasek Holdings, Singapore’s investment arm. So what happened?
Conspiracy theories abound; in missed market opportunities, as in war, truth is
often the first casualty. Aggrieved fund managers believe they were elbowed out by
the China-friendly triumvirate – Hopu Investment Management, a private equity group
run by the fabulously well-connected Fang Fenglei, completes the trio. According to
this tale, sufficient institutional investors had been lined up by investment banks to buy
BofA’s 13.5bn CCB shares at a price of about HK$4.35-HK$4.60 a share, or a
premium of between 3.5 and 9.5 per cent to the price paid by the actual buyers. If true,
that would mean BofA might have left some $500m on the table. But BofA
shareholders are not the only ones potentially short-changed by the deal. Shares in
CCB fell 4 per cent on Wednesday, in spite of the fact that a big overhang was
removed the previous day.
Treasury Secretary Timothy Geithner proposed requiring increased
transparency in the over- the- counter derivatives market by making prices available
on centralized computer platforms.
If the prices of all derivatives must be listed electronically, who will calculate the
values and what models will be used to price the derivatives?
Team Obama wants all derivatives centrally cleared. The really big problem
with OTC derivatives is that they are customized and are not fungible like exchange-
listed derivatives. Ergo, there is an incalculable variety of terms. So reporting,
recording, clearing, validating and tracking are onerous and very expensive
operations. Does anyone on Team Obama realize how much time and money it will
take to employ enough people to read and categorize each customized derivatives
contract?
The proposal being floated with members of Congress is another indication of
President Barack Obama's struggles to establish his counter-terrorism policies,
balancing security concerns against attempts to alter Bush-administration practices he
has harshly criticized.
Businesses reduced inventories in March less than expected, and a key gauge
of supply buildup remained relatively high, suggesting companies will liquidate
stockpiles further this spring.

6
 Inventories decreased by 1.0% to a seasonally adjusted $1.401 trillion, the
Commerce Department said Wednesday. Inventories in February dropped by 1.4%,
which was a revision from a previously reported 1.3% decrease.
Prices paid to U.S. producers rose in April as food costs surged, pushing back
risks that extended price declines may take root in the economy.
The 0.3 percent increase was more than forecast and followed a drop of 1.2
percent in March, the Labor Department said today in Washington. Excluding fuel and
food, so-called core prices climbed 0.1 percent, as anticipated.
More Americans than forecast filed first-time claims for unemployment
insurance last week, mainly reflecting a jump in applications related to the Chrysler
LLC bankruptcy.
Initial jobless claims rose by 32,000 to 637,000 in the week ended May 9, from
a revised 605,000 the prior week, the Labor Department said today in Washington. A
“good part” of the jump was from states reporting an increase in auto-related claims, a
Labor spokesman said without providing a more precise estimate.
The total number of people collecting unemployment insurance surged in the
prior week to 6.56 million, setting a record for the 15th straight week, and indicating
companies are still not hiring. The lack of jobs threatens to restrain consumer
spending, the biggest part of the economy, and delay a return to growth that
economists project for later this year.
California Treasurer Bill Lockyer on Wednesday formally requested federal
help to backstop a wave of short-term borrowing the cash-strapped state will need to
undertake this summer.
In a letter to U.S. Treasury Secretary Timothy F. Geithner, Lockyer asked the
government to in effect guarantee the state's debt against default, so that investors
would be willing to provide the financing at reasonable interest rates.
A Treasury spokesman in Washington said the department had no immediate
comment on Lockyer's request.
California will be forced to borrow at least $13 billion, and possibly much more,
beginning in July to bridge the gap between the state's current cash needs and future
tax revenue.
Former Countrywide Financial Corp. boss Angelo R. Mozilo, whose embrace of
exotic loans helped fuel the mortgage boom and meltdown, will face Securities and
Exchange Commission fraud charges unless his lawyers prevail in an eleventh-hour
appeal, people familiar with the SEC's investigation said Wednesday.
Mozilo is among several former executives of the Calabasas company who the
SEC staff wants to charge in a civil case, one of these people said. He would face
accusations of insider trading and failing to disclose to shareholders the risks the
company was running unless the SEC's five commissioners overturn their
investigators' recommendation.
Mozilo made Countrywide the No. 1 home lender by pursuing all segments of
the mortgage business, only to become a lightning rod for critics, not least because of
his outsized compensation. His stepped-up sales of millions of Countrywide shares as
the subprime lending frenzy peaked and the stock's price tumbled are one of the areas
the SEC has scrutinized, one of the people familiar with the probe said.
His attorney, David Siegel of Irell & Manella, defended the stock sales as
"properly prepared and approved."
"We do not believe there is any fair basis for allegations to be made against Mr.
Mozilo," Siegel said in a statement issued late Wednesday.

7
 An SEC lawsuit would pit the federal government against the most visible
symbol of the aggressive lending that put millions of Americans in unaffordable loans --
an executive who appeared to cash out just before the crash.
Countrywide "had a very clear strategy of churning through mortgages to sell
the most esoteric kind of products it could," said Richard Ferlauto, director of corporate
governance at the American Federation of State, County and Municipal Employees.
"It was only by the most optimistic and some would say more-than-optimistic
projections" that such lending was justified, Ferlauto said. "And Angelo Mozilo
understood this and took the money and ran."
The SEC cannot put Mozilo in jail, but a separate federal criminal probe of
Countrywide, begun last year, is continuing, one of the people familiar with the SEC
case said.
General Motors Corp and Chrysler aim to drop as many as 3,000 U.S. dealers
and are expected to begin sending notifications as early as Thursday, three people
briefed on the still developing plans said.
GM, facing a U.S. government-imposed deadline of June 1 to restructure or file
for bankruptcy, is expected to send termination notices to up to 2,000 dealers -- a third
of its roughly 6,000 U.S. dealers, the sources told Reuters.
Chrysler, which filed for bankruptcy on April 30, will also tell up to 1,000 of its
3,189 U.S. dealers it is terminating their franchise agreements, according to the
sources who asked not to be identified because the controversial closure plans have
not been yet announced.
Shoe and apparel company Nike Inc. said Thursday that it will cut about 1,750
jobs worldwide, or 5 percent of its global work force.
Insurers get preliminary OK for Treasury funds.
Treasury confirms The Hartford, Prudential, Lincoln Financial get preliminary
OK for funds
.....The Hartford Financial Services Group Inc. said separately Thursday it was
approved for a $3.4 billion Treasury investment.
"These life insurers met the requirements for the Capital Purchase Program
because of their bank holding company status and each applied for CPP capital
investments by the deadline of Nov. 14, 2008," Williams said in an e-mail to The
Associated Press
......Shares of The Hartford rose $2.19, or 17.4 percent, to close Thursday at
$14.75. The stock was up another $1.45, or 9.8 percent to $16.20 in aftermarket
electronic trading.
Philadelphia-based Lincoln National was up 85 cents, or 5.2 percent, to $17.09
after hours following 13 percent jump in the regular session. Newark, N.J.-based
Prudential Financial tacked on $1.31, or 3.3 percent, to $40.68 after the market's
close, after rising $40.68.
.....Life insurers own 18 percent of all corporate bonds so aiding them is
consistent with the bailout program's goal of unclogging credit markets. The industry's
major financial challenges include balance sheets clogged by illiquid assets and
escalating liabilities to policy holders who bought in to this decade's explosion in the
variable annuities market.
Variable annuities pay out according to market performance, but often include
guarantees of minimum payouts. That means declining stock markets can put a cash
pinch on insurance companies that wrote too many of the policies.
YRC Worldwide Inc., one of the nation's largest trucking companies, will seek
$1 billion in federal bailout money to help relieve pension obligations, the chief
executive said Thursday,

8
 The move comes as the trucking giant struggles to shore up its finances. The
company's ability to weather the recession will have significant implications for the
trucking industry and large customers across the country.
Chief Executive William Zollars said the company will seek the money to help
cover the cost of its estimated $2 billion pension obligation over the next four years.
Under a complicated system that Mr. Zollars labeled unfair, roughly half of YRC's
contributions to a multi-employer union pension fund cover the costs of retirees who
never worked for the Overland Park, Kan., company.
By applying to the U.S. Treasury for money under the Troubled Asset Relief
Program, Mr. Zollars said he hopes to "get the conversation started" with federal
authorities about reducing the company's pension obligations. He said YRC will submit
an application to the Treasury Department as early as Friday.
Industrial production in the U.S. fell in April at the slowest pace in six months, signaling
manufacturing may be stabilizing.
Output at factories, mines and utilities decreased 0.5 percent last month, less
than forecast, after falling a revised 1.7 percent in March, according to a report from
the Federal Reserve today in Washington. The amount of industrial capacity in use
dropped to a record-low 69.1 percent.
General Motors Corp. is sending termination notices today to 1,100 U.S.
dealers with about $2.5 billion in unsold vehicles as the automaker starts shrinking its
retail network, a person familiar with the matter said.
The dealers hold about 120,000 GM vehicles of various brands, said the
person, who asked not to be identified because Detroit-based GM hasn’t announced
details yet. The company scheduled a conference call for reporters with Mark LaNeve,
GM’s North American sales chief, at noon New York time.
GM is working to pare U.S. dealers by 42 percent, to 3,600, by the end of next
year as it faces a probable bankruptcy by a June 1 government-set deadline. With
competition reduced among retail outlets, the remaining dealers each may be able to
sell more cars at higher prices, boosting profit, the person said.
GM is hoping for an orderly wind-down of the affected dealers over the next
year or so, the person said, meaning they will close when their inventories are gone.
The next wave of dealer terminations will take place as some dealers decide
whether they wish to remain, leaving the automaker to choose who it wants to keep,
the person said.
Peter Ternes, a GM spokesman, declined to comment about the company’s
plans.
The cost of living in the U.S. was unchanged in April as decreases in food and
energy costs offset increases in medical care, autos and a second straight jump in
tobacco prices.
The consumer price index was flat after decreasing 0.1 percent in March, the
Labor Department said today in Washington. Excluding food and fuel, costs climbed a
greater-than-forecast 0.3 percent, almost half of which reflected an increase in excise
taxes on cigarettes, according to Labor.
Manufacturing in the New York region this month contracted the least since
August and the six-month outlook improved for a third straight month, indicating the
decline in factory production may be slowing.
The Federal Reserve Bank of New York’s general economic index rose to minus 4.6,
better than forecast, from minus 14.7 the prior month, the bank said today. Readings
below zero for the Empire State index signal manufacturing activity is shrinking.
The Carlyle Group, one of the largest and most politically connected private
equity firms, will pay $20 million and make broad changes to its practices to end an

9
inquiry by New York’s state attorney general, Andrew M. Cuomo, into its pension
business.
Under the deal, Carlyle will no longer use intermediaries, known as placement
agents, to gain investment business from public pension funds nationwide, and it will
curtail its campaign contributions to elected officials who oversee pension funds.
Carlyle executives and the firm will not face any further action, including
criminal prosecution, by Mr. Cuomo’s office. Mr. Cuomo hopes to use the settlement
as a model for an industrywide overhaul of how hedge funds and private equity firms
interact with public pension funds.
Again we see a two-tiered justice system - one for the elitist rich and another
for us. Instead of being criminally prosecuted these crooks were able to pay a fine,
which to them is chump change, and go on to do it again. That is your current state of
American jurisprudence.
US Consumer sentiment jumped to its highest level since September 2008 as
of the middle of May.
The Reuters/University of Michigan preliminary consumer sentiment index for
May came in at 67.9, after standing at 65.1 in April. It had been expected to come in at
67.5.
In the report, the preliminary current conditions index was 66.2, versus 63.3 the
prior month, while the expectations index was 69.0, the highest since October 2007,
from April's 63.1.
The one-year inflation outlook was at 2.6%, from 2.8% in April, while the five-
year inflation outlook stood at 2.8%, from 2.8% the month before.
However the core CPI, which excludes food and energy prices, jumped 0.3%
last month, the largest increase since June 2008 and well above economist
expectations for a 0.1% increase. A 9.3% rise in tobacco prices generated about 40%
of the core CPI increase as a federal excise tax kicked in. It was the second-straight
month that tobacco lifted the core index.
The Federal Reserve's latest weekly money supply report Thursday shows
seasonally adjusted M1 rose by $31.5 billion to $1.608 trillion, while M2 rose $18.9
billion to $8.304 trillion.
Net foreign purchases of long-maturity U.S. securities totaled $36.9 billion in
March, following purchases of $5.4 billion the month before, according to a U.S.
Treasury Department report released Friday.
Two US Securities and Exchange Commission employees are under
investigation by federal criminal authorities for allegedly using insider information to
trade stocks, a source familiar with the matter said on Thursday.
A report by the SEC's internal watchdog alleges that the two SEC lawyers traded in
stock of a large financial services company despite being told by another SEC
employee of ongoing investigations of that company, CBS News reported.
The SEC inspector general report said one SEC attorney under investigation works in
the Office of the SEC's Chief Counsel and has access to a tremendous amount of
nonpublic information, CBS News said.
The National Institute of Alcohol Abuse and Alcoholism (NIAA), a part of the
National Institutes of Health (NIH), will pay $2.6 million in U.S. tax dollars to train
Chinese prostitutes to drink responsibly on the job.

Dr. Xiaoming Li, the researcher conducting the program, is director of the Prevention
Research Center at Wayne State University School of Medicine in Detroit.
The grant, made last November, refers to prostitutes as "female sex workers"--
or FSW--and their handlers as "gatekeepers."

10
 The U.S. House Appropriations Committee on Thursday approved a $96.7
billion measure to fund the wars in Iraq and Afghanistan as well as boost aid to the
struggling Pakistan government, a close U.S. ally.
The legislation will fund the war costs through September 30 and provide $1.4
billion in economic and security aid to Pakistan which is trying to fight off a militant
Taliban insurgency that is spilling over the border from Afghanistan. Newsletter
writer Richard Russell is now convinced that, “As far as the Fed and the Treasury are
concerned, this is an all-out war. They’ve put the viability of the US at risk through
creating trillions of dollars of debt. I believe this government will stop at nothing in their
furious battle against the bear market and deflation, and if manipulation helps, they’ll
do it.”
“For decades I’ve heard stories and rumors about manipulation. I’ve always
brushed those rumors aside. But, this is a different world, and the nation is literally
fighting for its life. People ask me do you really believe the government would really
manipulate the markets? My answer you bet I do, they’re willing to do absolutely
anything in their struggle to get the US economy back to normal again.”
McClatchy reports 17 of 19 banks would face combined derivative losses of
$568 billion in the event of an economic catastrophe, a sharper downturn that the
stress tests imposed.
S&P says the banking crisis may last until 2013.
Nouriel Roubini is the designated change agent and front man for the
Illuminists on the bear side of the market. The tip off is he ignores gold.
Former Treasury Secretary Paulson demanded banks take TARP money
whether they wanted it or needed it and if they didn’t do so they’d be forced to take it.
Many have filed FOIA requests of Treasury and Fed discussions, only to be refused or
given redacted information. This is all about the consolidation of banking and the
brokerage industries within a few firms. This and the looting of the Treasury is what is
behind all this as we explained more then two years ago. We saw this coming long
ago. The greatest financial heist in history. As we said long ago there will be a planned
devaluation of all currencies. All will default; a world currency will be introduced via a
new world bank. That is the goal. This is why the Fed won’t divulge what they are
doing with money. The Fed’s balance sheet has to be way out of whack. That is why
we need to destroy the Fed ASAP. That is why Rep. Ron Paul’s HR1207 is so
important. If we are to save America we have to get it passed. We suspect the Fed has
printed and secretly given away trillions to Illuminist banks worldwide.
In addition, we have the White House threatening all kinds of people. It is our
opinion that the Madoff deal not only was run by the CIA and Mossad, but it was
orchestrated by the NY Fed. That is why Stephen Freidman and the rogue Eliot Spitzer
will soon be suicided. Why do you think little of the $100 billion can be found?
Investigations have gone nowhere.
Chrysler LLC asked court permission to cancel 789 car dealership agreements,
many in the suburbs of major U.S. cities, a step it called critical to its future.
The company wants to break contracts with about a quarter of its estimated 3,188
retail outlets, including seven dealers with AutoNation Inc., two with Lithia Motors Inc.
and the Atlanta unit of Asbury Automotive Group Inc., it said today in a filing in U.S.
Bankruptcy Court in New York. Chrysler called the move essential to its viability and
sale to Fiat SpA.
We are asked frequently what legacy assets are. The answer is assets, which
are less productive or outdated, and assets that will fit that category in the future,
things that are outdated and are or will be obsolete.

11
 The March net TIC flow was $23.2 billion versus $91.1 billion in February. Net
long-term TIC flows are $55.8 billion.
The closing of 2,000 GM-Chrysler dealerships will cause 38,000 to go
unemployed and is deflationary. That means the creation of money and credit will
skyrocket, as will hyperinflation. It is already underway.
A Beverly Hills hedge fund manager was arrested Friday on a charge he bilked
investors out of $44.3 million, including $5 million he lost playing poker, the U.S.
attorney's office said.
Bradley L. Ruderman, 46, surrendered to FBI agents after being named in a
wire fraud complaint. He was due in court later Friday.
The government alleges he spent at least $8.7 million of investor money on
personal expenses including a summer rental of a Malibu beach home and two
Porsches. He admitted in an FBI interview that he lost $5.2 million of investor money in
poker games held in a Beverly Hills luxury hotel suite, the U.S. attorney's office said in
a statement.
*****
It's 165 co-sponsors now!!
From: "Campaign for Liberty" <no-reply@campaignforliberty.com>
Date: May 15, 2009 12:48:07 PM CDT
Subject: Audit the Fed Needs Your Help Now!
Reply-To: no-reply@campaignforliberty.com

From the Desk of John F. Tate

President, Campaign for Liberty
Dear Friend of Liberty:
I recently wrote you to update you on the momentum HR 1207, Ron Paul's Audit the
Fed Bill, has gained in the House. The bill now has 165 cosponsors, and things are
happening very quickly.
If you haven't already, please read the message below about Campaign for Liberty's
plan to pressure House leadership to Audit the Fed, and how you can help in this
effort.
Also, be sure to sign your petition to Nancy Pelosi urging her to schedule debate and a
roll call vote on Ron Paul's Audit the Fed bill.
In Liberty,
John F. Tate

Dear Friend of Liberty,

You and I both know the Federal Reserve is out of control.
And now, thanks to your efforts, more and more Americans understand this too.
But, now that we’ve started to get their attention, you and I must turn up the heat
EVEN MORE.
That’s why it’s vital you submit your petition to House Speaker Nancy Pelosi right
away. I'll link you to the petition in just a moment, but first I want you to understand
how far we've come.
You see, when I last wrote you, Congressman Paul’s Audit the Fed bill (H.R. 1207)
had just been introduced, and frankly, it wasn’t clear how fast you and I could make
our fight against an out of control FED start moving forward.
But thanks to you and other friends of Liberty, we’re moving forward faster than I had
ever imagined.

12
You see, as it stands right now, there are already 165 cosponsors of Ron Paul’s
AUDIT THE FED Bill -- and the companion Senate Bill (S. 604) has also been
introduced.
In fact, hearings in the House could take place any day, as Chairman Frank of the
Financial Services Committee has publicly promised to move the bill that far.
But after that, it will be up to you, me and the tidal wave of pressure we put on
Congress. So you see, you and I have to TURN UP THE PRESSURE on Capitol Hill
even more as our battle moves forward!
As we continue our fight, win or lose this year, you and I will finally be able to show the
American people and Congress that the Federal Reserve System leads to:

*** Constant economic crises -- the housing crisis and the resulting chaos is just one
example of an economic bubble created by centrally-planned interest rates and money
manipulation;
*** The destruction of the middle class -- as fuel, food, housing, medical care and
education costs soar, everyone who is NOT on the government dole is forced to make
do with less as the value of their money slowly decreases;
*** Currency destruction -- history shows us that riots, violence and full-scale police
states can result when people finally realize fiat money isn’t worth the paper it’s printed
on and REFUSE to accept it.
That’s why you and I must do everything we can to ultimately END the Federal
Reserve System.
The truth is -- if you and I don’t help lead this fight, our country could look much
different in just a few years.
You see, just in the past several months, the Fed and US Treasury have put $12.8
TRILLION on the line in stimulus packages, bailouts, TARP programs and the rest of
their taxpayer-crushing schemes.
That amount nearly equals the Gross Domestic Product for the ENTIRE US economy!
It seems like it just keeps piling up . . .
More taxes. More spending. More worthless money being printed at the expense of
our children’s futures.
Of course, the dirty little secret in all this is that our “leaders” will have the Federal
Reserve pay for it all with fiat money -- money printed right out of thin air.
Until?
Until the dollar completely collapses.
Or -- as Treasury Secretary Tim Geithner admitted recently to his buddies at the
Council on Foreign Relations (CFR) – until we “evolve” into a global currency under
the control of a global central bank.
Of course, there’s another option: To fight back against the global elites trying to
destroy our economy.
To put an END to fiat money!
To expose the out of control FED!
You and I must take a wrecking ball to the very foundation of the international bankers’
and domestic ruling elites’ power source -- the Federal Reserve.
And we must start by fully exposing their schemes and making sure they see the light
of day.
The truth is, in a free society, there is no excuse for ANY organization controlling our
nation’s currency to maintain the kind of secrecy the Fed gets away with . . .
. . . and there’s no excuse for saying “it’s none of your business” when taxpayers
demand to know where exactly those trillions the Fed spent ended up.
So let’s audit them.

13
It’s plain to see -- the American people are getting FED up.
Things are moving fast, and (dare I say it) Ron Paul’s AUDIT THE FED Bill actually
has a chance of passing -- if you and I keep turning up the pressure on Congress.
And if we can FORCE Nancy Pelosi and the leadership in Congress to hold a vote,
you and I will have a win/win situation on our hands no matter which way the vote
goes.
Either the bill passes, or . . .
. . . well, can you imagine the political bloodbath at the ballot box in 2010 when you
and I tell the American people their Congressman somehow lost trillions of taxpayer
dollars and voted against even looking for the money?
Politicians of both parties need to be put on notice now – either take action to rein in
an out of control FED, or face the wrath of angry Patriots.
So please agree to submit your petition urging House Speaker Nancy Pelosi to
schedule debate and a roll call vote on Ron Paul’s AUDIT THE FED Bill!
Our battle has come a long way in just a few months, but there’s still more work to be
done. Right now, Campaign for Liberty is busy getting millions of Americans to contact
their Congressman and Senators to urge them to AUDIT THE FED.
But we need to expand our numbers and mobilize friends of Liberty from across
America for this battle!
So to expand these efforts -- and to continue to build support for finally ending the
Federal Reserve System once and for all -- can I count on you for a contribution to
Campaign for Liberty today??
A year ago, could you have imagined that Ron Paul would have a firestorm of support
for his bill to AUDIT THE FED?
Now, you and I MUST take advantage of this opportunity.
So, in addition to submitting your petition, I also hope you’ll agree to make a
contribution of $100, $50 or $25-- to Campaign for Liberty.
I know that’s a lot -- but we have a chance to make a real, historical impact
TODAY! Ron Paul isn’t letting these opportunities slip by. You and I can’t afford to
either.
In Liberty,
John F. Tate
President
P.S. Please submit your petition DEMANDING the House Leadership schedule a roll
call vote on Ron Paul’s AUDIT THE FED Bill TODAY! And please ask your family,
friends and neighbors to join our fight as well!
You and I have a REAL chance to make a REAL IMPACT toward finally ending the
Federal Reserve System! Let’s not let it go to waste.
So along with submitting your petition, please contribute to Campaign for
Liberty. Whether you can donate as much as $100, $50, $25 or some other amount,
please do what you can.

*****
Billions Withdrawn Before Madoff Arrest
By DIANA B. HENRIQUES and ZACHERY KOUWE
http://www.nytimes.com/2009/05/13/business/13madoff.html?_r=2&ref=business
*****
Osama bin Laden was US operator: President Asif Ali Zardari
By Arun Kumar
http://informationclearinghouse.info/article22594.htm

14
 *****
Breathing Easier After Bank Stress Tests? You Shouldn't
http://www.truthout.org/051409L?n
*****
The Nature of the Current Financial Crisis: The System is designed to exert Total
Control over the Lives of Individuals
The Report from Iron Mountain Revisited
by Richard C. Cook
http://www.globalresearch.ca/index.php?context=va&aid=13551
*****

Boy Scouts Train to Become Homeland Gestapo

Kurt Nimmo
http://www.infowars.com/boy-scouts-train-to-become-homeland-gestapo/
*****
Scouts Train to Fight Terrorists, and More
http://www.nytimes.com/2009/05/14/us/14explorers.html?_r=2&amp;hp
*****
The real story behind AIG bailout
http://www.jonchristianryter.com/2009/090322.html
*****
Contra Costa decides it can afford to prosecute criminals:
http://www.contracostatimes.com/search/ci_12339319?IADID=Search-
www.contracostatimes.com-www.contracostatimes.com
*****
When PTSD Comes Marching Home
http://www.truthout.org/051309R?n
*****
Obama Will Seek to Delay Photos' Release
http://www.truthout.org/051309S?n

Why Isn't Obama Turning to the Credit Unions?

http://www.truthout.org/051309T?n
*****
States to feds: Stay in D.C.!
$11 trillion 'micromanaging' price sparks explosion in sovereignty movement
http://www.wnd.com/index.php?fa=PAGE.printable&pageId=97898
*****
Paulson Told Bankers to Take U.S. Taxpayer Aid or Be ‘Exposed’
http://www.bloomberg.com/apps/news?pid=20601087&sid=auLCYdFyUm5Y&ref
er=home
*****

Who Runs America?

The Impotent President
By PAUL CRAIG ROBERTS
http://www.counterpunch.org/roberts05142009.html
*****
Reviewing Ellen Brown's "Web of Debt:" Part V

15
by Stephen Lendman
http://sjlendman.blogspot.com/
*****
Ex-pension chief violated rules, report says. We warned of this almost 3 years
ago, but nobody was listening.
http://www.boston.com/news/nation/washington/articles/2009/05/15/ex_pension_
chief_violated_rules_report_says/
*****
GPS and Privacy Rights
http://www.nytimes.com/2009/05/15/opinion/15fri3.html?th&emc=th
*****
Trade Wars Brewing In Economic Malaise - This could be the first shot in a
trade war and that is what America needs.
Outrage in Canada as U.S. Firms Sever Ties To Obey Stimulus Rules
http://www.washingtonpost.com/wp-
dyn/content/article/2009/05/14/AR2009051404241_pf.html
*****
Is It Time to Stress-Test the Federal Reserve?
http://lewrockwell.com/spl/stress-test-the-fed.html
*****
Beware of Your GPS Keep Your House Safe
http://lewrockwell.com/spl/beware-of-gps.html
*****
ANOTHER FRAUDULENT FORECLOSURE?????
foreclosure fraud pt 1
http://www.youtube.com/watch?v=jHAecDGb_7o&feature=player_embedded
*****
Students sue for tuition parity with California illegals
http://www.washingtontimes.com/news/2005/dec/14/20051214-115702-9460r/
*****
Ron Paul on Fox Business “Runaway Inflation”
http://revolutionarypolitics.com/?p=572
*****
IMMIGRATION: 36 CHICAGO STUDENTS KILLED SETS RECORD
By Frosty Wooldridge
http://www.newswithviews.com/Wooldridge/frosty467.htm
*****
Grandma Gets Raided for Paying Off Her Mortgage in Full p2/2
http://www.youtube.com/watch?v=E1rfMOUH0tU
*****
Ford's most advanced assembly plant operates in rural Brazil
http://www.youtube.com/watch?v=E1rfMOUH0tU
*****
Melting ice could cause gravity shift
http://www.independent.co.uk/environment/climate-change/melting-ice-could-cause-
gravity-shift-1685201.html
*****
This is what we have been warning you about. These companies are on the brink
of insolvency, why else would they need these handouts from the taxpayers?
Those of you with cash value, life insurance policies and annuities should be

16
seriously considering changes because most of their investments are in the
stock market and bond market. We expect both to correct in the future.
Six Insurers Named to Get U.S. Taxpayer Aid
http://www.nytimes.com/2009/05/15/business/economy/15insure.html?th&emc=th
*****
From a Fellow Subscriber:
Dear Mr. Chapman,
http://www.truthout.org/041809F

April 22nd's IF cited true military-industrial propaganda pretending that mercenaries

are no different than a normal civilian worker hired by our military, such that they also
should be entitled to taxpayer-subsidized medical insurance plans, such as those run
by AIG. Yet the reporters' own words state that they were working for profit-making
corporations such as DynCorp, and not the military. Thus they should have no
entitlement to such plans, since they are in no way identical to the military's civilian
workers. It insinuates that an injustice has been perpetrated upon all mercenaries
classified by unethical employers as self-employed contract workers, because they are
thereby without any taxpayer subsidized medical benefits at all, despite having jobs as
dangerous as any soldier's. Well cry me a river that they've become so well off from
those jobs that they no longer qualify for any need-based public assistance programs!
If they were at all the 'equals' of the average grunt - earning only a fraction of their
salaries - they'd now be eligible for Medicaid, welfare and food stamps, as well as SSI
had they become disabled; and if not they'd still be entitled to solicit passing cars, as
many an able-bodied veteran with a modicum of pride, that they 'will work for food'.
Next, we'll be told they deserve the same entitlements at public expense as any
veteran, if only for Congress to further enlarge corporate welfare rolls, rather than to
prosecute the handout junkies that lobby them.

Of course the article further failed to investigate whether all employer taxes were being
paid. Somebody should at least have been paying the Medicare & Social Security
contributions, given that both parties were private-sector, yet whenever one side
makes tax status claims such that the other is liable for the employer taxes, the only
sure thing is that those taxes weren't being paid.

*****
From a Fellow Subscriber:
Bob - A video from 1992 that subscribers might be interested in. It shows how the
green movement was run by the Rothschilds and consorts.
Greetings

http://video.google.com/videoplay?docid=-6642758020554799808
http://www.textfiles.com/conspiracy/owgart1.003

*****
From a Fellow Subscriber:

Hi Bob—in your most recent Wed’s issue of the IF you published a letter from a fellow
subscriber who gave the rest of the subscriber base a “heads up” regarding censorship
of “patriot” type videos on youtube—rumor has it that this censorship can easily be
circumvented using “PEER 2 PEER” file transfer programs that can be downloaded
from the net for free—so instead of there being an information pyramid that is

17
controlled by the people behind youtube—where you have a single point hub—multi-
point viewer file transfer system—if we all use a “PEER 2 PEER” software program’s
to share these “patriot “ videos among ourselves—then we have a multi-point 2 multi-
point distribution system between ourselves—like an “ANT COLONY”—where both
the sources and the receivers of the files are “anonymous” and we are all downloading
and uploading files to each other simultaneously—and you have the videos on your
hard drive and view them inside your media player instead of watching them inside
your internet browser—a popular P2P program that the subscriber base can download
for free is “LIMEWIRE” which is all over the net—it is extremely user friendly and has a
very robust search capability—you just type in the name of the video file you want to
download —it finds you some sources then you just click on a source and your
download begins—IT GOES-DIRECT PC 2 PC—THERE IS NO CENSORING “GATE
KEEPER”—there are occasionally bogus files that are viruses in disguise that if you
download one you could crash your hard drive—so keep that in mind—also the
subscriber base can check out thepiratebay.org—for countless video’s of every kind—
the co-founders of which were very recently jailed in Sweden for one year each in a
copyright infringement case—IT IS ALMOST IMPOSSIBLE TO GO TO JAIL IN
SWEDEN FOR ANYTHING AS PER YOUR REPORTING IN THE IF AND ON THE
RADIO-SO THE US GOVT REALLY LEANED ON THE SWEDISH GOVT—the so
called “copyright infringement” of media files is only possible because the owners of
the copyrights are “COLLUSIVE” in their own victimization—they are “PLAYING
DUMB”—because the “encryption technology exists”—to make their victimization
impossible but they will not spend the money they would need to spend to “encrypt”
their media files—”FILE BY FILE”— which would make —“UNAUTHORIZED”—
copying of the files impossible—each file could have a separate key or pin number like
it’s “DNA IDENTITY” that could be on the inside covers of the jewel cases that DVD’s
and music videos are sold in and when you place them in a DVD player a nag screen
would pop up asking you for the serial number—without which playing the media
would be impossible—but they don’t want to spend the money on that because it’s
much cheaper to litigate people in the courts—but since now DVD burners cost as low
$30 each retail—and that a spindle of 100 blanc DVD’s cost’s as low as $20 retail they
are fighting a loosing battle—the whole thing comes down to “greed”—it costs them
“BUBKUS” to knock of copies of their “OWN” movies for “DVD RELEASE” for maybe
10 cents each and then sell them retail for $25 each—what kind of business pays out
on profit margins like that,
ps—rumor has it that Bill Gates father was a “big” lawyer that was connected to the
very top of the IBM food chain—and that the return address of both “dos” and
“windows” was IBM—who for some reason did not want it to be known under the IBM
brand—and instead did it via “BOY GENIUS” nominees which is standard Rothschild
illuminist business practice going back 100’s of years—all the windows logos are all
Masonic illuminist symbol—a “window” is very similar to a “gate”—and it goes on and
on.
*****

From a Fellow Subscriber:

Bob:
When I read about Villaraigosa's (mayor of LA) nattering about needing to
declare a "fiscal emergency," I wrote to Walter Moore, the upstanding
gentleman who ran against him last election, and asked him what he'd do if he
had been elected mayor, he wrote me back with the following answer. I'm

18
sending it to you Bob, cuz I thought you might be interested in it, since you used
to live in CA.
On Thu, 5/14/09, Walter Moore <waltermoore@mac.com> wrote:
I've written about all the fat in the budget at my website, WalterMooreSays.com

I could save $680 million per year in a heartbeat by shutting down the CRA, the
agency through which Villaraigosa gives our tax dollars to his billionaire developer
supporters and other cronies. There's also plenty of other waste, e.g., he's sending
another $500,000 to a book fair in Mexico again this year.
The reason he wants the City Council to declare an emergency is so that he can
blame the Council. Under our charter, there's no such thing as a "fiscal emergency."
He's the chief executive. He can fire people right now, without action by the council.
This is all an act to set us up for more rip-off tax hikes, and to justify his selling our
public assets to his buddies. Watch and see.
Thanks for writing.

On Thursday, May 14, 2009, at 11:49AM,

Villaraigosa wants to declare an Emergency in LA because they are 529 Billion in the
hole. He says he needs this power to lay off/furlough city workers. Getting rid of
bureaucrats is a GOOD thing; he must be desperate to even suggest that, being the
Socialist he is.
How would you have handled this had the people of LA wised up in time and elected
you as Mayor?
Still a Supporter, from AZ.
*****
**Please circulate widely on the internet and to social networking sites**
Bush's 'Smoking Gun' Witness Found Dead
IndictBushNow files Freedom of Information Act lawsuit to get to bottom of
story.
The cover-up of Bush-era crimes is taking a shocking but not unexpected turn.
A fateful move has been made and it is certain to backfire.
Colin Powell used al-Libi's tortured and knowingly fabricated testimony to tell
the United Nations that Saddam Hussein's government was helping al-Qaeda develop
weapons of mass destruction to kill Americans. It was all a lie.
IndictBushNow.org is joining with the Partnership for Civil Justice Fund and the
ANSWER Coalition to demand that the truth be told. We have filed a Freedom of
Information Act Request (FOIA) with the CIA, Department of Defense, Department of
State and other agencies to reveal information in their possession about Libi’s
imprisonment, torture, false testimony on Iraq and the circumstances of his death. To
read a copy of the FOIA,
A prisoner who was horribly tortured in 2002 until he agreed - at the demand of
Bush torturers - to say that al-Qaeda was linked to Saddam Hussein is suddenly dead.
Several weeks ago, Human Rights Watch investigators discovered the missing inmate
and talked to him. He had been secretly transferred by the administration to a prison in
Libya after having been held by the CIA both in secret “black hole prisons” and in
Egypt.
Under conditions of extreme torture, the prisoner, Ibn al-Sheikh al-Libi, agreed
in 2002 to supply the Bush-ordered interrogators what they sought as a political cover
for Bush’s marketing of the pending war of aggression against Iraq. Mr. Libi agreed to
tell them whatever they wanted in exchange for an end to the torture. The now famous

19
Torture Memos providing legal cover for the torture were written at the same time
starting in the summer of 2002.
Libi’s tortured and knowingly fabricated testimony was the source of
information used by Bush to sell the war to the U.S. Senate, and the source for Colin
Powell’s bogus and lying presentation to the United Nations in 2003.
Bush, Cheney, Rumsfeld and Rice are now running around saying that the torture
regime “protected the country from terrorist attack.” But the torture was used for the
personal political goals of Bush and Cheney: namely, to sell their Iraq invasion to a
very skeptical and disbelieving country.
Having been discovered by human rights investigators two weeks ago, Mr.
Libi’s story coincided with the release of the Torture Memos and the growing clamor
for criminal prosecutions of Bush officials.
His testimony is the smoking gun that would reveal that the torture regime was
not for “national security” but for the personal political aims of Bush and Cheney.
He was Exhibit A in the indictment that alleges that tortured confessions and
the contrived legal justifications of torture set up by Justice Department lawyers in
July/August 2002 were central to the launch of the war against Iraq.
Hundreds of thousands of Iraqis have died and tens of thousands of U.S.
service members have either been killed or badly wounded in a war that was based on
lies fortified and promoted by the most sadistic torture.
Mr. Libi is suddenly dead. A Libyan “newspaper source” says that his death is
an apparent suicide. His friends don’t believe that.
We are building a movement for the appointment of a Special Prosecutor. This
is not a political choice. It is a legal imperative. Mr. Libi’s death must be the first
business of the investigation. When other prisoners who had been kept at secret sites
were sent to Guantanamo, the Bush administration and the CIA intentionally kept Mr.
Libi from being part of that transfer. Mr. Libi was publicly stating that the Iraq-al-Qaeda
links attributed to him from his torture sessions were not true.
“Who was the beneficiary” from his death? Why was he spirited away by the
Bush administration to hidden foreign prisons after he recanted his tortured testimony
and revealed that he was forced to make false statements about Iraq under torture?
IndictBushNow.org is joining with the Partnership for Civil Justice Fund and the
ANSWER Coalition to demand that the truth be told. We have filed a Freedom of
Information Act Request (FOIA) with the CIA, Department of Defense, Department of
State and other agencies to reveal information in their possession about Libi’s
imprisonment, torture, false testimony on Iraq and the circumstances of his death. To
read a copy of the FOIA.

*****
From an Interested Reader:
Subject: The Auto Industry. Mr. Chapman, I've been following your broadcasts and
website for years and I truly appreciate your wisdom and acumen concerning the
economy and the world scene. I work for a wholesale distributor for Ford and GM
automobile parts in the DC and Maryland area. I\'m the guy that pulls the parts off the
warehouse shelf and delivers them to the mom and pop garages and Ford and GM
dealerships in the area. I always make a mental note to look at the location of
manufacture of the parts I pull from the shelves. A couple of years ago between 80%
to 90% of the parts were made overseas, now it\'s between 85% and 95%. Bob (if I
may call you Bob), people are fooling themselves if they think they are buying an
American car if they buy a Ford or GM product. Also in the past four of five years
we've had seven or eight car dealerships go out of business in the DC area. Not only

20
are most of the parts made overseas but many of the models are assembled overseas
as well from the Ford Focus in Mexico to many of the GM trucks in Canada. Where do
you think the domestic automobile industry is headed in this country? Will the big three
offshore virtually all construction overseas? Will Chrysler, GM, and eventually Ford
become wards of the state; like AMTRAK where they are dependent on a constant
stream of government handouts making fewer and fewer cars for a dwindling customer
base? Will GM move its corporate headquarters out of Detroit? I heard that the price of
GM shares had fallen briefly to 1933 lows of roughly $1.15. What is $1.15 from 1933 in
today\'s dollars? Isn't it funny how the mainstream media doesn't frame that fact in
today's prices? With all the outsourcing and overseas construction of American car
plants in Mexico, Brazil, Red China, et al, don\'t you expect a backlash from the
American consumer? The big three can't bloody well play the patriotism card to cajole
Americans to buy their cars if they're made overseas now can they? Anyway, keep up
the good work. We need more people like you who have the courage and insight to let
us know what is really going on. Thank you very much.

*****

From a Fellow Subscriber:

Hi Bob—rumor has it that Stephen Friedman knew more than 100% of everything
regarding Alan Greenspan, J.P. Morgan — the London-based office “bucket shop” of
AIG—Robert Rubin's Citibank scams— the Israel Discount Bank in New York City, —
as all being crucial DIRECT enablers Bernie Madoff’s looting of America—some of
which later ended up in CIA accounts in Pakistan—rumor has it that it was Stephen
Friedman who got Bernie Madoff his job at NASDAQ—and that lawyer criminal Greg
Craig who is “skull & bones” and lawyer criminal Obama and Mossad king pin Rahm
Emanuel —are all shilling for the Bush-Clinton crime syndicate—rumor has it that
Chris Cox and Stephen Friedman worked in seamless co-ordination with each other to
“enable” Bernie Madoff to be the superstar rip off artist that he later became—and that
there is a “paper trail” in existence that shows the exact details of all the above in
“chapter & verse” —rumor has it that Obama and Dick Cheney are also seamlessly
working together to keep their TORTURE GATE dog and pony show centre stage in
the controlled media—to misdirect away from the brazen and vicious financial
criminality based on co-religionist nepotism between the Caligula’s of Wall Street and
the Caligula’s of Washington—rumor has it that they are desperate to cover up all of
the carte blanche NSA spying on the 100% entire population of the USA—which was
partially outsourced to Israeli owned companies, Odigo and Converse—the key date
when this pre-emptive spying on America started was in— “February of 2001”—6
months prior to the 9-11 atrocity occurring—rumor has it that the Spitzer take down
involved Mossad operatives, who were involved in both Madam Palfrey's Washington,
D.C. escort service, and also former Hollywood Madam and escort service owner,
Heidi Fleiss—by fortuitous co-incidence Fleiss is a co-religionist of both Spitzer and
Madoff—Spitzer “SOME HOW” —figured out that the NY FED was working—
“DIRECTLY”— with Madoff—and that they were different ends of the exact same
looting operation— IT WAS THE DISCOVERY OF NY FED-MADOFF
CONNECTION—THAT MADE THE TOP ILLUMANISTS WORLD WIDE GO
“BALLISTIC” IN FEAR—rumor has it that lawyer criminal and closet homosexual who
is dying of aids Fred Thompson, and Washington Post CIA-MOSSAD asset David
Ignatius—who is of Turkish Jewish descent--worked together—and that “mysteriously”

21
both Thompson and Ignatius were in possession of the entire “COURT SEALED”—list
of the— “ELITE” —business—judicial—political—entertainment—
“MILLIONAIRE&BILLIONAIRE MOGUL” clientele at both Madam Palfrey's and Heidi
Fleiss' escort services—who “enlightened” NY FED Chairman Steven Friedman—that
Spitzer knew that he and Madoff are Siamese twins— who then took down Spitzer—in
a— “HONEY POT”—to prevent him from pursuing a criminal investigation of the entire
Federal Reserve System nationally—that would have led to relentless “DISCOVERY”
type of criminal and civil “FEDGATE”—type investigations of the top FED players—
PAST&PRESENT—obviously none of that could ever see the light of day—to keep the
lid on all or some of the above the controlled media is being run-serviced-pun
intended— by mostly having a ‘EXPLICIT” policy—pun intended— of hiring either
radical feminist lesbians—or in-the-closet homosexuals—and have these people be
front and centre on all the network news shows—”BABBLING”---like an endless loop of
limited hang out’s and unlimited mis-direct—say nothing about anything—and lot’s of
it——as per your reporting in the IF and on the radio both SPITZER AND FRIEDMAN
could both be DEAD MEN WALKING.”—they both know too much about Madoff and
everything else—and too many people know too much about them—AS PER YOUR
CONSTANT REPORTING IN THE IF AND ON THE RADIO FOR THE LAST 50
YEARS--THE "FED" IS A CRIMMINAL ORGANIZATION --CRIMMINAL SYNDICATE--
NOTHING ELSE--IT IS THE MOTHER OF ALL "RICO" CONSPIRACYS.

*****

COMMODITIES
The DOE crude oil inventories fell 4.63 m/b, gas fell 4.15 m/b and distillates
rose 922,000 barrels.
EIA reports natural gas inventories up 95 bcf.

*****
Pipelineistan goes Af-Pak
By Pepe Escobar
http://www.atimes.com/atimes/Central_Asia/KE14Ag01.html

GOLD, SILVER, PLATINUM AND PALLADIIUM

Wednesday saw spot gold up $2.50 at $922.50, as silver fell $0.22 to $14.00.
The outside markets were about the same. The shares were off 2-1/2%. The XAU fell
4.05 to 137.70 and the HUI lost 14.08 to 340.80. Gold open interest rose 8,694
contracts to 359,517, as silver OI gained 1,006 to 96,546.
The Dow ended at 8,285 off 184; S&P fell 220 and Nasdaq 310 Dow points.
The 2-year was 0.87%; the 10’s were 3.11%; the one-month Libor 0.34% and the 3-
month 0.88%.
The yen rose .0094 to $.9549; the euro fell .0028 to $1.3610; the pound fell
.0104 to $1.5168; the Swiss franc fell .0004 to $1.1060; the Canadian dollar fell .0093
to $.8517 and the USDX rose .26 to 85.17.
Oil fell $0.78 to $58.02; gas rose $0.01 to $1.69 and natural gas fell $0.18 to
$4.33. Copper fell $0.06 to $2.03; platinum fell $15.00 to $1,123 and palladium fell
$8.50 to $226.75. The CRB fell 2.76 to 240.82.
The action in gold and silver recently is the best of the 9-year bull market. Both
metals have broken out. The next step is a massive breakout.

22
 Fund-of-Fund investors estimates that more than 5% of hedge fund assets are
in gold related investments.
Early Monday saw the Dow off 36 at 8,258; S&P off 30; Nasdaq unchanged
and the FTSE off 2 Dow points. The Nikkei fell 247; the CAC 15 and the DAX 24. The
2’s were 0.85% and the 10’s 3.09%. Oil was off $1.19; gas off $0.02 and natural gas
off $0.09. Gold was off $2.60 at $923.00; silver fell $0.21 to $13.81 and copper fell
$0.04.
Production from South Africa's mines slumped in March, with gold output down
7.6% on the year after showing a rise of 2.7% the month before, official data released
Thursday showed.
Production of non-gold minerals was 4.1% lower than a year ago, taking total
mining output for March down 4.6% on the same month last year, Statistics South
Africa said.
Mining production for the first quarter of 2009 was 9.4% lower than a year ago,
Statistics SA said.
The value of mineral sales for February, the most recent month available, were
10.9% lower than a year ago at 19.38 billion rand ($2.28 billion) despite a 37.4% jump
in gold sales to ZAR4.67 billion, the data showed.
On Thursday spot gold rose $1.80 to $927.20, as spot silver rose #$0.05 to
$14.05. The outside markets were about the same. For the last two days the “Working
Group on Financial Markets,” have really attacked the gold and silver stocks,
particularly the members of the HUI. Overall they have been only slightly effective.
This is why it is important we get rid of the Fed. It is the nucleus of the Illuminists. That
is why you must contact every House member and ask that they get out of committee
Rep. Ron Paul’s Bill HR 1207. It has 149 co-sponsors. It is called the Federal Reserve
Transparency Act of 2009. We only need about 220 votes to pass it in the House. If it
were to become law we can then try to get rid of the Fed. That would be a big step
toward solving our problems and keeping the Fed and the Treasury out of the markets.
Gold open interest rose 1,901 contracts to 361,418, as silver OI fell 1,107. On
Wednesday ETF buying rose 1.53 tons to 1,105.62 tons. Holdings have been within
two tons of this level since 4/17. We no longer believe any of their figures. The XAU
gained 1.07 to 138.71 and the HUI rose 3.77 to 344.57.
The Dow rose 46 to 8,331; S&P rose 82 and Nasdaq 150 Dow points. The 2-
year was 0.85%; the 10’s were 3.10%; the 1-month Libor was 0.34% and the 3-month
0.85%, both of which are absolutely ridiculous.
The yen fell .0023 to $.9570; the euro rose .0011 to $1.3651; the pound rose
.0064 to $1.5232; the Swiss franc rose .0025 to $1.1030; the Canadian dollar rose
.0032 to $.8549 and the USDX fell 2 to 82.34.
Oil fell $0.50 to $58.52; gas rose $0.03 to $1.72 and natural gas fell $0.03 to
$4.29. Copper rose $0.01 to $2.04; platinum fell $6.30 to $1,116 and palladium fell
$0.75 to $226.00. The CRB Index rose .97 to 241.79.
Early Friday most everything was down. The Dow was 8,265, off 22; S&P fell
21; Nasdaq was off 38 and the FTSE 2 Dow points. The Nikkei rose 171 to 9494; the
CAC fell 8 and the DAX 6. The yen was up .0117; the euro was off .0068 and the
pound was off .0061. The 2’s were 0.85%; the 10’s 3.08%; 1-month Libor 0.34% and
3-month 0.85%. Oil fell $0.44; gas fell $0.01; natural gas fell $0.02. Gold fell $3.20 to
$925.20; silver lost $0.08 to $13.95 and copper was $1.98, off $0.04.
On Friday spot gold rose $2.90 to $930.20 and the June contract was $1.60
higher. Spot silver fell $0.06 to $13.99. Geithner and Summers were not around to
attack gold. They were both at the Bilderberger meeting in Greece, so the masters of
deceit were not around to directly affect the market. Gold is getting tougher to rig so

23
the elitists have been focusing on silver and the shares, especially the HUI shares.
Gold open interest rose 1,307 contracts to 362,725, as silver OI rose 721 contracts to
96,160. In silver the commercials increased their net shorts by 4,610. In gold they
increased net shorts by 10,735, which is large. Seeing this gold did very well this past
week.
Since 1988 GFMS has been complicit in the gold price suppression scheme on
orders from the City of London.
The HUI fell 2.73 to 341.92 and the XAU fell 2.11 to 126.60.
The Dow could not rally in the last hour and fell 63 to 8,269, as the S&P fell 92
and Nasdaq 54 Dow points. The 2’s were 0.85% and the 10’s 3.14%.
The yen rose .0071 to $.9505; the euro fell .0176 to $1.3475; the pound fell
.0075 to $1.5157; the Swiss franc fell .0160 to $1.1228; the Canadian dollar fell .0069
to $.8480 and the USDX, dollar index, rose .67 to 82.85.
Oil fell $2.19 to $56.42; gas fell $0.01 to $1.68 and natural gas fell $0.17 to
$4.12. Copper fell $0.02 to $2.01; platinum fell $7.80 to $1,109 and palladium fell
$5.55 to $236.24.

*****
Is U.S. Buying Back its Own Gold?
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=6691
*****

DMCC vault may store region's gold reserves

http://www.business24-
7.ae/articles/2009/5/pages/12052009/05132009_4d115a2aa5da4d69b8e7350a8875
bd9d.aspx
*****

I Love Gold because it gives financial security

http://www.24hgold.com/english/printarticle.aspx?pagedest=314896&langue=en
&viewarticle=True
*****

Discount Gold & Silver Trading

1 800 375 4188
Naked Short Selling
No, this article is not about prostitution among the “little people”. “Naked Short
Selling” is about a form of gambling (speculation) in the U.S. stock and commodity
markets which Investopedia.com defines as “The illegal practice of short selling
shares that have not been affirmatively determined to exist.”
Get that? “Naked short selling” involves the selling of stock shares that the
seller not only doesn’t own, but might not even exist. Investopedia’s definition hints at
the enormous potential in “naked short selling” for fraud and market manipulation.
However, the Investopedia definition is inaccurate in this regard: under SEC
rules, “naked short selling” is illegal for you, me and other members of the great
unwashed who merely invest in stocks—but is nevertheless legal for a handful of
major Wall Street stock brokers who “make markets” for various stocks.
The SEC’s article “Division of Market Regulation: Key Points About Regulation
SHO” (http://www.sec.gov/spotlight/keyregshoissues.htm) explains “short sales” and
“naked short selling” as follows:
“I. Short Sales

24
“A. What is a short sale?
“A short sale is generally the sale of a stock you do not own (or that you will
borrow for delivery). Short sellers believe the price of the stock will fall, or are
seeking to hedge against potential price volatility in securities that they own. If the
price of the stock drops, short sellers buy the stock at the lower price and make a
profit. If the price of the stock rises, short sellers will incur a loss. Short selling is used
for many purposes, including to profit from an expected downward price movement,
to provide liquidity in response to unanticipated buyer demand, or to hedge the risk
of a long position in the same security or a related security.
“B. Example of a short sale.
“For example, an investor believes that there will be a decline in the stock price
of Company A. Company A is trading at $60 a share, so the investor borrows shares
of Company A stock at $60 a share and immediately sells them in a short sale. Later,
Company A's stock price declines to $40 a share, and the investor buys shares back
on the open market to replace the borrowed shares. Since the price is lower, the
investor profits on the difference—in this case $20 a share . . . . However, if the price
goes up from the original price, the investor loses money. Unlike a traditional long
position—when risk is limited to the amount invested—shorting a stock leaves an
investor open to the possibility of unlimited losses, since a stock can theoretically
keep rising indefinitely.”
The threat of potentially “unlimited losses” tells us that those who engage in
“short selling” have a powerful incentive to ensure that the market price of a particular
stock falls or at least fails to rise. If “short selling” were a widespread strategy, it would
be incumbent on all “short sellers” to ensure that the entire market fell or at least didn’t
rise. If so, then faced with a suddenly rising bull market in stocks (or gold), we could
expect the “short sellers” to do everything in their power to save themselves by
causing a sudden and even dramatic fall in the markets.
How could “short sellers” cause the price of individual stocks or even the entire stock
market to fall? By “naked short selling” (fraud).
The SEC continues:
“C. How does short selling work?
“Typically, when you sell short, your brokerage firm loans you the stock. The
stock you borrow comes from either the firm's own inventory, the margin account of
other brokerage firm clients, or another lender. . . .
“D. Are short sales legal?
“Although the vast majority of short sales are legal, abusive short sale
practices are illegal. For example, it is prohibited for any person to engage in a series
of transactions in order to create actual or apparent active trading in a security or to
depress the price of a security for the purpose of inducing the purchase or sale of
the security by others. Thus, short sales effected to manipulate the price of a stock
are prohibited.”
In essence, you, I and all of humanity can legally engage in “short selling” of
stock that we don’t actually own provided that 1) the stock being sold actually exists; 2)
we can borrow that stock from some third party; and 3) we do not engage in “short
selling” for the purpose of manipulating the market price for the particular stock.
However, “naked short selling” differs from “short selling” in these regards:
“naked short selling” 1) is illegal for all—except a handful of major Wall Street
brokerages; 2) does not require that the stock being sold actually exist; 3) stock
purportedly being sold need not be borrowed by the purported seller from some third
party; and 4) can be engaged in for the purpose of manipulating stock prices and
markets.

25
The SEC explains:
“II. "Naked" Short Sales
“In a "naked" short sale, the seller does not borrow or arrange to borrow the
securities in time to make delivery to the buyer within the standard three-day
settlement period. As a result, the seller fails to deliver securities to the buyer when
delivery is due (known as a "failure to deliver" or "fail").”
The essential difference between a “short sale” and a “naked short sale” is the
time allowed to execute the sale by delivering the actual stock. I.e., with the “short
sale,” the stock sold must actually be delivered to the purchaser within “three days”.
However, with the “naked short sale,” the “naked short seller” would not be obligated to
actually deliver the stock sold within three days. Instead, the “naked short seller” might
“arrange to borrow” the stock under terms that allow him wait four days, or four weeks,
or even four months to actually deliver the stock he purportedly “sold short”.
If the “naked short seller” doesn’t take actual possession of the stock he
purports to sell for some time greater than three days after the purported sale, what do
you suppose this seller provides to the purchaser and when does he provide it? For
example, suppose I engaged in “naked short selling” by selling 1,000 shares of Ford
stock that I didn’t own or couldn’t borrow to you for, say, $10 a share ($10,000) when
the stock was trading at $15 a share and was worth $15,000 (total). I would
essentially be betting that the price of Ford stock would fall from $15 a share to $8 a
share before I had to actually buy that stock and then deliver it to you. If my bet were
correct, I could make a $2 profit on every share sold to generate a $2,000 (20%) profit
on the $10,000 transaction.
The problem is that Ford stock might not fall from $15 a share to $8 in three
days, three weeks, or even three months. But clearly the more time I (the “naked short
seller”) had before I had to purchase the Ford stock and deliver it to you (the final
purchaser), the better my chances would be that Ford stock would fall as much as I
needed to make a profit.
So let’s suppose that I engaged in “naked short selling” under terms such that I
would not need to actually deliver the 1,000 shares of stock to you for, say, six months.
Under such terms, I’d have your $10,000 for six months but you’d have . . . what?
You couldn’t have the 1,000 shares of stock until I actually purchased or
borrowed the stock and passed them on to you. So, if I didn’t have the stock to give
you, and I was waiting for six months to acquire that stock, what could I have given
you in the first place in return for your $10,000 that would induce to you sit quietly for
six months until you received the actual stock?
A: I must’ve given you some sort of paper “entitlement” or “promise to pay” the
1,000 shares of stock—but not the stock itself.
Would you take such a deal? Would you pay me $10,000 now in return for my
promise to deliver 1,000 shares of a stock in six months that are currently priced at
$15,000? I don’t think so. I don’t think that any rational person would take such a
risky deal.
But suppose I were a major Wall Street brokerage and I offered to engage in
“naked short selling” with some other “insider” institution (say, a pension fund or
maybe a big investment institution like AIG). Suppose I (broker) and the purchaser
(pension fund) had a “sweetheart deal” wherein the purchaser agreed that it would not
demand that I actually deliver the stock for, say, six months. Instead, the purchaser
might accept some paper promise whereby the brokerage house promised to provide
the stock at some later date.
What would be accomplished? Well, for one thing, by selling Ford stock
currently trading for $15 a share for $10 a share, the brokerage house (acting in

26
concert with the purchaser) would create a downward pressure on the price of Ford
stock. Result? Ford’s stock might fall from $15 to $13 based on a purported sale that
had not even actually taken place and might not take place for several more months.
Thus, in theory, naked short sales by and among Wall St. “insiders” could be
used to suppress the prices of a stock, the stock market in general, or even
commodities (like gold). I.e., by means of “naked short selling,” the alleged “free
market” could be fixed.
The SEC continues:
“. . . . A fail may also result from naked short selling. For example, market makers
who sell short thinly traded, illiquid stock in response to customer demand may
encounter difficulty in obtaining securities when the time for delivery arrives. Naked
short selling is not necessarily a violation of the federal securities laws or the
Commission's rules. Indeed, in certain circumstances, naked short selling contributes
to market liquidity.
The SEC apparently sees “market liquidity” as a justification for “naked short
selling”. But what is “market liquidity”? A: It is essentially the “rate of sales” for a
particular stock. If a particular stock sells once every decade, it’s not very “liquid”. If
that same stock sells a thousand of times every day, it’s very liquid.
Why should anyone care whether a particular stock was more or less “liquid”?
One answer is commissions. Suppose you were a broker for an “illiquid” stock that
traded once every decade: You’d receive one commission every ten years. Suppose
you were broker for a liquid stock that traded a thousand times a day: You might
receive a thousand commissions a day.
Thus, if you were Wall St. broker/market-maker/investment firm, you’d have a
compelling interest to insure stock market “liquidity” by artificially pricing stocks at low
levels that buyers couldn’t resist. This “something for nothing” opportunity is the same
motivating force that keeps Las Vegas casinos in business.
“For example, broker-dealers that make a market in a security generally stand
ready to buy and sell the security on a regular and continuous basis at a publicly
quoted price, even when there are no other buyers or sellers.”
The SEC’s rationale for “naked short selling” appears to be the “publicly quoted
price” of a stock. I.e., suppose I were a Ford dealer and advertised new Ford pickups
for sale at $5,000 each. If customers came to my dealership looking for $5,000
pickups, I’d better find a way to sell trucks at that price to avoid being charged with
false advertising or at least suffering a serious blow to my reputation as a Ford dealer.
Similarly, if a broker/market-maker advertises that a particular stock is priced at $100 a
share, that broker/market-maker has some legal or moral obligation to supply stock for
sale at that price.
The SEC appears to justify “naked short selling” as a device to allow
broker/market-makers to offer to sell stocks they don’t even have at an artificially low
(manipulated) prices in order to “liquefy” (artificially stimulate or “churn”) the market for
that stock. (Do you suppose the SEC would also justify my plan to “make a market” for
the Brooklyn Bridge by offering to sell the Brooklyn Bridge (or perhaps several of
them)—which I admittedly do not own—for say, $5,000 each. Wouldn’t it be great (at
least for me) if I could “make the market” for the Brooklyn Bridge more “liquid” by
offering to sell it at a reduced price?)
“Thus, market makers must sell a security to a buyer even when there are
temporary shortages of that security available in the market.”
B.S.! That makes about as much sense as claiming that the Ford dealer must sell
Ford pickups for $5,000 even when he doesn’t have any pickups.

27
 If there’s a demand for a stock at $100 a share, but no stocks available for sale
at that price, that simply tells us that those who hold the stock believe it’s worth more
than $100 a share and will not voluntarily sell unless offered a higher price (say, $150
per share).
Just because a stock can’t be purchased at a particular low price should not
compel “market makers” to somehow contrive to seemingly sell at the buyer’s
preferred price rather than agreed to by the seller. All that should happen is that the
price offered by the potential buyer should be increased to a point where sellers are
suddenly willing to sell. To contrive to sell a stock for less than the holders of such
stock would otherwise demand is a form of market manipulation, a violation of the
fundamental principle of “free markets” and a means of artificially suppressing the
price of the stock. The brokers/market-makers are setting the price rather than the
market (people) itself. That’s extortion.
“This may occur, for example, if there is a sudden surge in buying interest in
that security, or if few investors are selling the security at that time.”
Why would there be a “sudden surge in buying interest”? One reason would be
that the stock was being sold at artificially low prices. A stock that’s believed worth
$120 a share may not sell, while that same stock selling for $100 a share may move
like hotcakes.
The SEC’s description of “few investors are selling the security at that time” is
also deceptive. Yes, time is an issue—at least for the commission-hungry
broker/market-makers who want sales now so they can earn commissions now. But
the real issue is not time, but money. If the SEC were honest, it would’ve written “few
investors are selling the security at that price.” When the price is right, the market
moves (becomes liquid). When the price is too low, the market should be “illiquid”.
But even at the right (“free market”) price, the volume of sales might not be
particularly high. The only people willing to pay $120 for a stock that’s worth $120 are
investors who intend to hold the stock for some considerable time. But there aren’t
many investors around these days.
Today, our stock and commodity markets are populated primarily by those who
want to “get rich quick”—in other words, by speculators, gamblers. These speculators
aren’t interested in investing $120 in a stock currently worth $120 and then waiting
patiently for ten or twenty years to reap their profits. Today’s speculators want a stock
that’s worth $120 but can be purchased right this minute for $100 and sold tomorrow
morning for $110.
Like all gamblers, today’s market speculators want the “action” (a/k/a “liquidity”)
and therefore bet compulsively on one stock after another. Like all casino operators,
the broker/market-makers cater to and encourage the speculators (gamblers) because
the brokers make a commission every time the compulsive gamblers place a bet (buy
a stock).
Implication? The SEC rules are designed to encourage stock speculation
(gambling) rather than investing. More, SEC rules are designed to enrich the Wall St.
broker/market-makers by encouraging lots of “action” (liquidity) that generates lots of
commissions. Conversely, the SEC rules are biased against investing and investors
and seek to treat those who “play the stock market” with same respect and high
esteem as Las Vegas casino operators reserve for the suckers who urinate their
money away on slot machines.
Still, you’ve got to give the SEC credit. They’re telling the truth to anyone
willing to take the time to read. They’re telling you exactly how this game is played. If
you’ll read the SEC’s description, you can see that so long as there’s “naked short
selling,” the stock and commodity markets aren’t merely run like casinos but run like

28
casinos where the game can be fixed—for the benefit of the casino-operators (Wall St.
brokers/market-makers). Simply put, by means of “naked short selling” the game is
rigged to favor the stock brokers rather than the stock buyers.
Folks, it is against you. Get out. Buy Gold.
Next Week: “Naked Short Selling II: Deeper and Deeper”
For the best in gold coin pricing and service, call Melody at 1-800-375-
4188. Be certain to listen to DGSTC live on Short-wave 7.415Mhz M-F
4:00PM ET, and 3.215 MHz M-F 11PM ET. Be certain to call 1-800-375-
4188 or visit the Web site at
www.discountgoldandsilvertrading.net\main.htm
or email us at: discountgoldandsilver@yahoo.com
Discount Gold & Silver Trading Co. provides all forms of precious
metals including gold, silver platinum and palladium whether you are
buying or selling. Our inventory includes but not limited to the
American Gold, Silver, Platinum Eagle and numismatic products
including rare, investment and circulated coins. Silver dollars, silver
bars, rounds are on hand for the silver investor. Foreign gold is also
available. Call for information regarding your precious metal gold and
silver IRA. 1 800 375 4188
*****

CANADA
Canadian Manufacturing Shipments decrease 2.7% in March.

*****
GM: Almost as Canadian as American
http://business.theglobeandmail.com/servlet/story/RTGAM.20090514.wreynolds0514/BNStory/rob
ColumnsBlogs/?cid=al_gam_nletter_maropen
*****

EUROPE
German Finance Minister Peer Steinbrueck Wednesday criticized suggestions
that the European Commission may be considering carrying out a stress test on the
European banking sector, saying Germany has been "surprised" by the plan.
Steinbrueck said it would have been better to discuss the matter first internally within
the European Union.
"One must know exactly [beforehand] whether such stress texts could increase
a pro-cyclical negative effect," Steinbrueck told Germany's lower house of parliament.
He added that the risk of such tests would be - as was the case in the U.S. - getting
"results that would be corrected afterwards by the Treasury and the Fed and that have
a counterproductive effect."
"One has to think about this beforehand very thoroughly...Simply demanding
stress tests makes no sense in my view but one must be very well aware about the
consequences."
"We are currently experiencing that the stress test in the U.S. is therefore
worthless because the central bank exercised influence as well as the Treasury," he
said. The European Union's bank regulators' committee said earlier this week that
European bank regulators are preparing a second assessment of the risks facing the
region's banking system to determine whether financial institutions may need more
capital to survive the economic crisis.

29
 Evidently the ECB, European Central Bank, and the European commission
have been discussing a stress test with out letting Germany know what they are doing.
This will give Germany another reason to leave the Euro Zone.
The fall in Spanish consumer prices accelerated in April due to a worsening
economic recession and lower international oil prices, final data from Spain's National
Statistics Institute, or INE, showed Wednesday.
Spain's April consumer price index fell by 0.2% on the year and rose by 1% on
the month, the INE said in a statement. In March, Spanish CPI fell 0.1% on the year,
its first annual decline since records began in 1961.
On a European-Union harmonized basis, the INE said Spanish consumer
prices fell at a 0.2% annual rate in April, a slightly steeper pace than the preliminary
reading of a 0.1% decline.
Consumer prices have fallen across many of the world's developed economies
as economic activity drops at its fastest rate in decades. Stripping out volatile oil and
fresh-food prices, underlying Spanish inflation held steady at a 1.3% annual rate in
April, the same as in March.
The French annual inflation rate in April dropped to its lowest level for over half
a century on a sharp fall in energy prices, which was only partly offset by an increase
in food and services prices, data released by French national statistics bureau Insee
showed Wednesday.
The April consumer price index in the euro zone's second-largest economy
rose 0.1% on the year, Insee said. This was the smallest annual increase since 1957.
The monthly inflation rate was 0.2%.
Portuguese consumer prices in April posted their second consecutive annual
fall, data from Portugal's National Statistics Institute, or INE, showed Wednesday.
Portugal's April consumer price index fell 0.5% on the year, but rose 0.2% on the
month, the INE said in a statement.
In March, Portugal's CPI fell 0.4% on the year and rose 0.8% on the month.
On a European-Union harmonized basis, the INE said Portuguese consumer prices fell
0.6% on the year in April and rose 0.4% on the month.
Indstrial production in the Euro Area has posted a 2.0% decline in March;
20.2% from the same month last year, according to Eurostat; The Euro has not been
affected and continues trading right below 1.3700.
The decline on Industrial production has been sharper than expected; market
consensus was for a 1.2% monthly drop and a 18.2% decline year on year; actually
the 20.2% yearly drop is the largest on record.
Estonia GDP Falls 15.6% In 1Q, Euro Adoption At Risk. The decline in
Estonia's economy deepened in the first quarter, confirming the economic meltdown in
the Baltics and threatening the country's euro-adoption aspirations.
The country's gross domestic product fell 15.6% on the year in the first quarter,
on lower manufacturing, construction, and retail sales, Statistics Estonia said in a
preliminary estimate. In the fourth quarter, output was 9.7% weaker on the year.
Spanish consumer prices in April posted their second consecutive annual fall,
final data from Spain's National Statistics Institute, or INE, showed Wednesday.
Spain's April consumer price index fell by 0.2% on the year, but rose by 1% on the
month, INE said in a statement.
April was the second month of lower annual prices, after the index in March -
with a decline of 0.1% on the year - had shown the first annual fall in INE records
dating back to 1961.

30
 On a European-Union harmonized basis, the INE said Spanish consumer
prices fell at an 0.2% annual rate in April, a slightly steeper pace than the preliminary
reading of 0.1% released by the statistics agency April 30.
German corporate insolvencies in February rose 1.2% on the year, Germany's
Federal Statistics Office said Wednesday.
The figures didn't include the state of Nord-Rhine Westphalia, which filed
incorrect statistics for 2008, the office said.
A total of 2,394 companies filed for insolvency in February, compared with
2,444 in January 2009. In January to February 2009, corporate insolvencies rose 0.6%
to 4,838. However, insolvencies of private households, also called consumer
insolvencies fell 7.6% in February on the year to 7,450. From January to February this
year, household insolvencies fell 10.3% to 15,351.
Total insolvencies in February, including businesses, consumers and formerly
self-employed, fell 5.1% on the year to 12,120. Total claims for creditors for unpaid
debts declined in February to EUR2.5 billion from EUR2.6 billion in February 2008.
The German government on Wednesday adopted a “bad bank” scheme to rid
the country’s institutions of their toxic assets in its latest attempt to tackle the crisis of
confidence that is crippling the financial sector and weakening Europe’s largest
economy.
Yet mounting hostility against the plan from within the Social Democratic party,
junior partner in the coalition of Angela Merkel, chancellor, means it could still undergo
substantial changes before implementation.
The draft bill – foresees the creation of several, institute-specific bad banks.
Any bank that chooses to will be able to park its least liquid assets – and the risks
associated with them – for up to 20 years.In exchange, these special-purpose vehicles
would issue the bank with a bond whose value would be guaranteed by Soffin, the
federal authority that manages the government’s bank rescue fund created last
October.
By pushing the text through cabinet on Wednesday, the government hopes
parliament can turn it into law by early July at the latest, the last opportunity to pass
the legislation before a summer recess and the September 27 general election.
People close to Ms Merkel’s Christian Democrats told the FT the bill would not
meet resistance among the party’s MPs. Yet Social Democratic legislators led by
Carsten Schneider, budget expert in the SPD parliamentary group, have expressed
serious misgivings about the scheme.
Mr. Schneider thinks few banks would take advantage of the bad bank scheme
as it stands and that participation should be made compulsory. He also favours a
forced recapitalisation of the banks that would result in the government taking equity in
the institutes it supported.
“I would be very happy to increase Soffin’s reserves,” Mr Schneider said on Monday.
“Another €80bn [$109bn, £72bn] would be perfectly OK” if it solved the problem.
By taking the illiquid assets off the banks’ balance sheets and replacing them
with a state-guaranteed security, the finance ministry hopes to break the vicious spiral
that has forced financial institutions to hoard more and more capital to offset the fast-
shrinking value of their toxic assets, limiting their willingness to lend to business.
European Central Bank policy makers clashed over the bank’s asset-buying
program less than a week after President Jean-Claude Trichet engineered a truce.
Slovenia’s Marko Kranjec said yesterday the ECB is likely to spend more than the 60
billion euros ($82 billion) it has earmarked for covered-bond purchases and hasn’t
ruled out acquiring corporate bonds and commercial paper. Hours later Germany’s
Axel Weber, who had already said there’s no need to buy other assets, insisted 60

31
billion euros is the “maximum.” Slovakia’s Ivan Sramko said today nothing can be
excluded.
“The ECB Governing Council looks like a battlefield,” said Laurent Bilke, an
economist at Nomura International in London. “It would be simply ridiculous if we
weren’t already in the middle of the worst recession in postwar history. But now it has
more dramatic consequences. Trichet will have to restore some order.”
The diverging views suggest the ECB is still split over the best way to tackle
Europe’s worst recession since World War II, even after Trichet said the decisions
taken last week by the 22- member Governing Council were “unanimous.” Weber has
always opposed asset purchases and warned yesterday against stimulating the
economy too much. Other policy makers have argued the bank may need to do more
to counter the risk of deflation.
Prime Minister Silvio Berlusconi’s allies in parliament passed a bill making it
easier to deport illegal immigrants and requiring public employees to report anyone in
the country without a permit.
After three confidence votes yesterday to approve amendments, the Chamber
of Deputies passed the legislation today. The bill now goes to the Senate for final
passage before becoming law.
Berlusconi and his Northern League coalition allies are taking a hard line on
illegal immigration before June 6 and 7 European Parliament elections. Interior
Minister Roberto Maroni, a League member, started turning back boats full of illegal
immigrants off of Sicily back to Libya last week. On May 10, Berlusconi defended the
move, saying he didn’t want a “multiethnic” Italy.
President Giorgio Napolitano today said that “public rhetoric that doesn’t
hesitate to be intolerant or xenophobic” is aggravating the risk of social tensions in
Italy, according to a speech delivered in Rome.
The bill proposes making it a crime, punishable by a fine, to be an illegal
immigrant. This will allow public officials to flag clandestine foreigners to the police.
Anyone who rents rooms or homes to illegal immigrants could face jail time.
Neighborhood-watch or vigilante groups will be allowed to be formed, and illegal
immigrants won’t be able to get children born in Italy legalized.
There are more than 4.1 million foreigners living in Italy, with almost 20 percent
residing illegally, according to a report in October by the national statistics institute.
Italy has a population of about 60 million.
Spain’s economy, shattered by a housing-market collapse and the global
financial crisis, contracted the most in four decades in the first quarter as
manufacturing sank and unemployment soared toward 20 percent.
Gross domestic product shrank 1.8 percent in the three months after a 1
percent contraction in the fourth quarter, the Madrid-based National Statistics Institute
said in an e-mailed statement today. From a year earlier, the economy contracted 2.9
percent. Both numbers were the sharpest declines since at least 1970, according to
the institute’s data.
Spain, whose construction boom made it a motor of job creation in Europe,
now has 4 million people out of work, accounting for almost 70 percent of the annual
increase in euro- area unemployment over the last year. The European Commission
expects Spain to contract further next year even after other economies in the region
start to recover. First-quarter data tomorrow may show the euro-region economy
shrank 2 percent, a fourth consecutive contraction, according to a Bloomberg News
survey.
“While at the moment you’re seeing less negative growth rates in Spain than in
the euro zone, that will probably reverse in the next quarter and beyond,” said Ben

32
May, an economist at Capital Economics in London, who forecasts a 5 percent
contraction for Spain this year. The economy will return to growth “probably another
two or three quarters after the euro zone turns positive,” he said.
The Polish central bank said Thursday that annual growth in M3, the broadest
measure of money supply, slowed to 14.4% in April, from 17.6% in March.
Annual M3 growth was slower than the 16.4% average forecast of nine bank
economists surveyed by Dow Jones.
Among the components of money supply, household borrowing rose 38.9% in
April, compared with a 43.7% increase in March. April lending to corporate borrowers
increased 20.4%, down from March's 25.3% rate.
On the month, household borrowing fell 1.4%, while corporate credits were
down 2.2% on the month.
Net borrowing of the central government sector decreased 6.1% on the month.
Irish consumer prices slumped in April on lower mortgage interest repayments, posting
the lowest annual measure since the second quarter of 1933, data from Ireland's
Central Statistics Office said Thursday.
April consumer prices fell 3.5% on the year, the CSO said, and fell 0.8% on the
month.
But, excluding mortgage interest costs, the CPI in April was down only 0.3% on
the year. Mortgage interest costs were down 38.7% on the year. Airfares on the month
also fell 15% on the month.
In March, CPI fell 2.6% on the year and was unchanged on the month and, in
February CPI fell 1.4% on the year and was 0.4% lower on the month.
Finance Minister Brian Lenihan said during his emergency budget in April that
CPI will average a 4.0% decline in 2009, after rising 4.1% in 2008.
The European Union Harmonized Index Of Consumer Prices fell 0.7% on the
year in April and rose 0.1% on the month, the CSO said.
Spain's economic output fell at its fastest rate on record in the first quarter,
following the collapse of the country's decade-long construction boom, data showed
Thursday.
According to preliminary data from Spain's National Statistics Institute, or INE,
Spanish gross domestic product fell by 1.8% in the first quarter from the fourth quarter,
while it fell by 2.9% from the first quarter last year.
The declines are the biggest on INE records dating back to 1970.
Russia's gold and foreign exchange reserves fell by $700 million to $385.2
billion in the week to May 8, the central bank said Thursday.
The decline follows an increase of $5.3 billion in the previous week.
After reaching a record high of $597.5 billion in early August, reserves have
declined dramatically as the central bank spent more than $200 billion on propping up
a depreciating ruble.
The Netherlands' annual inflation rate dropped 0.2 percentage point on the
month to 1.8% in April, the Dutch Central Bureau for Statistics said Thursday.
Food prices in April were 0.6 percentage point lower compared with March,
while gas and electricity prices were 0.7 percentage point lower on the month, the
bureau said.
According to the European Harmonized Index of Consumer Prices, or HICP,
Dutch inflation also came in at 1.8% in April, the bureau said, compared with a euro-
zone average of 0.6%.
The value of exports from Ireland in the first three months of the year fell nearly
10% year-on-year and could potentially lead to the loss of 90,000 jobs, the Irish Export
Association said Thursday.

33
 The fall in exports will accelerate in the months to come unless the government
gives more support to the sector, the association said, adding that export values have
been hit by the recession and a weaker sterling.
The value of exports in the first quarter fell 9.6% to EUR34 billion and the IEA
expects a 13% drop for 2009, equivalent to a loss of more than EUR20 billion in export
revenue.
The annual decline in Czech retail sales slowed more than expected in March,
and sales increased on the month earlier in most categories, data from the Czech
Statistics Office, or CSU, showed Thursday.
Sales fell 1.1% on the year in March compared with a revised annual decline of
8.5% in February, reported in constant average prices for 2005. The February figure
was earlier reported as an annual fall of 7.9%.
The March figure is better than the market expectation for a 1.9% annual
decline, according to a Dow Jones Newswires poll of seven economists. The annual
data aren't adjusted for seasonal effects and differences in the number of work days.
On the month, sales rose 0.1% in March, after falling 1.5% in February. The
monthly data are seasonally adjusted.
Swiss Producer and Import Prices down a 0.2% in Apr, -3.6% YoY.
Russia’s economic output plummeted 23 percent in the first quarter from the
previous three months as industrial production plunged and the government’s 3 trillion-
ruble ($93.5 billion) stimulus package failed to boost lending.
Gross domestic product declined an annual 9.5 percent in the period, the
Federal Statistics Service said on its Web site today, citing preliminary data. It was the
biggest year-on-year slump since the first three months of 1995, according to
Bloomberg data. The annual decline was forecast by Deputy Economy Minister Andrei
Klepach on April 23.
Russia’s economy has tumbled into its first recession in a decade as the price
of oil, its main source of export revenue, fell from a July record and industrial
production contracted for five consecutive months. Prime Minister Vladimir Putin’s
fiscal stimulus has failed to prop up growth with investment in the first three months
declining 15 percent.
Alfa Bank, Russia’s largest privately owned bank, yesterday joined Goldman
Sachs Group Inc., Citigroup Inc. and the International Monetary Fund in revising down
the forecast for growth this year. Alfa cut its outlook to a 5.7 percent contraction from a
drop of 3 percent.
Europe’s economy contracted at the fastest pace in at least 13 years in the first
quarter as companies cut output and jobs to survive the worst global slump in more
than six decades.
Gross domestic product in the 16-member euro region fell 2.5 percent from the
fourth quarter, the biggest decline since the data were first compiled in 1995, the
European Union’s statistics office in Luxembourg said today. That exceeded the 2
percent contraction economists expected in a Bloomberg survey and followed a 1.6
percent drop in the prior three months.
The deepest global recession since World War II is curbing European exports
and eroding consumer demand, forcing companies to cut spending and jobs. The
German and Italian economies also contracted by the most on record. Hong Kong’s
economy shrank at the fastest pace since at least 1990, prompting the government to
forecast a full-year contraction of as much as 6.5 percent.
“The recession is an exceptionally deep one,” said Kenneth Wattret, chief euro-
region economist at BNP Paribas in London. “The headwinds to growth are

34
considerable, consistent with output contraction and sharply rising unemployment for
some time to come.”
From a year earlier, the euro-area economy shrank 4.6 percent, also the
biggest decline on record, today’s report showed. The statistics office is scheduled to
publish a breakdown of first-quarter GDP on June 3.
The Portuguese government on Friday revised down its estimate for 2009
gross domestic product, saying it now expects the economy to contract by an annual
rate of 3.4%.
Portugal's unemployment rate rose sharply in the first quarter of the year as the
country's industrial, construction, energy and water sectors kept shedding jobs amid
an intensifying economic downturn.
Portugal's National Statistics Institute, or INE, said Friday that the
unemployment rate increased to 8.9% in the first quarter from 7.8% in the fourth
quarter of last year.
Portugal posted its third consecutive quarterly decline in economic output in the
first quarter, preliminary data from the country's National Statistics Institute, or INE,
showed Friday.
In a statement, the INE said first-quarter gross domestic product fell by 1.5%
from the fourth quarter, with a drop of 3.7% from the first quarter of last year.
Italy's recession deepened at the start of 2009, with first-quarter gross
domestic product falling at its fastest rate since at least 1980, adding weight to the
view that Europe's fourth largest economy is headed this year for its worst downturn
since World War II.
Preliminary data from statistics office Istat showed Friday that Italian GDP in
January to March fell 2.4% from the previous quarter, compared with a downwardly
revised 2.1% contraction in the fourth quarter of last year.
On an annual basis, Istat said GDP fell 5.9%, also the sharpest drop for at least
29 years, as exports were hit by the global economic crisis. Istat's new series began in
1980.
In January, the government had estimated GDP would contract at an annual
rate of 0.8%
Greek first-quarter gross domestic product growth slowed to 0.3% on the year
from 2.4% in the fourth quarter of 2008, according to a flash estimate from the
country's National Statistics Service Friday.
Economic activity in Greece has been slowing since the beginning of 2008. The
annual real GDP growth rate was 2.9% last year, down from 4% in 2007.
Dutch gross domestic product in the first quarter posted its sharpest fall since
the end of the Second World War, mainly as a result of falling exports and investment,
underscoring the deep recession Europe is facing.
First-quarter GDP fell 4.5% compared with a year earlier, while quarter-on-
quarter, the Dutch economy contracted 2.8%, the Dutch Central Bureau for Statistics,
or CBS, said Friday.
Italian consumer price inflation for April was revised lower to an annual 1.2%
rate, the same as in March and the lowest since February 1969, as energy prices
continued to fall, final data from statistics office Istat showed Friday.
EU Apr CPI MoM rises a 0.4%, +0.6% YoY.
Austrian consumer prices in April rose by the smallest amount year-on-year
since September 1999, data showed Friday.
Consumer prices rose 0.2% on the month and were up 0.7% on the year in
April, while the European Union-harmonized annual inflation rate was 0.5%, the
Austrian Statistics Office said.

35
 Swiss Mar Adjusted Real Retail Sales rise 1.2%.

*****
Top Irish banker pelted with eggs
http://newsvote.bbc.co.uk/2/hi/uk_news/northern_ireland/8047657.stm
*****
ENGLAND
Commercial rents in the U.K. probably will fall until 2012 as landlords lose
tenants in the deepening recession, the global head of research at Deutsche Bank
AG’s real-estate asset management unit said.
“It’s all pretty grim on the economic side,” said Peter Hobbs of New York-based
RREEF Alternative Investments, which manages 46 billion euros ($62 billion) of real-
estate assets. “This will lead to three years of rental declines, starting from this year.”
Rents for offices in central London fell 25 percent in the 12 months ended
March 31, according to CB Richard Ellis Inc., as rising insolvencies forced landlords to
cut rents for new tenants and offer bigger incentives. The vacancy rate rose to 7
percent from 3 percent, the U.S. broker estimates. Almost 5,000 companies went out
of business in England and Wales in the first quarter, 56 percent more than a year
earlier, according to the U.K.’s Insolvency Service.
Owners of commercial properties in the U.K. incurred the biggest losses since
the 1970s last year. To attract tenants, some landlords are offering as much as 2 1/2
years rent-free on standard 10-year leases, 12 months more than in the first quarter of
2008, CB Richard Ellis said.
The number of U.K. homes that were repossessed rose in the first quarter to
12,800 from 10,400 in the fourth quarter, the Council of Mortgage Lenders said Friday.
However, with the number of repossessions rising at a moderate pace, the
CML said it will downgrade its forecast of 75,000 repossessions for 2009.
"Although repossessions are still rising, the CML now thinks its 75,000 forecast
looks pessimistic for the year as a whole," the council said in a statement.
Last year, repossessions totaled 40,000, the largest amount since 1996. There
were 8,500 repossessions in the first quarter of 2008.
The CML said the number of mortgages with arrears of more than 2.5% of the
mortgage balance rose by 12% to 205,300 in the first quarter from 182,600 in the
fourth quarter. That's a 62% rise from the first quarter of 2008.
The London Metropolitan police have just issued new measures in the fight
against terrorism. During a five week campaign police officers are expected to stop
and search more “odd” looking people and the public are being warned to report
anything “suspicious”. But after just two weeks since its launch the public are starting
to question whether it’s infringing on civil liberties. Photographers in particular are sick
of being questioned by policemen and being told to move on. To voice their
complaints, artists are creating their own versions of the campaign’s posters.

*****
Only one in eight terror arrests result in conviction
By Duncan Gardham, Security Correspondent
http://www.telegraph.co.uk/news/newstopics/politics/lawandorder/5318439/Nearly-90-
per-cent-of-terrorist-arrests-do-not-result-in-conviction.html

*****
Egg cancels cash withdrawals

36
http://www.guardian.co.uk/money/2009/may/11/egg-internet-bank-scraps-
withdrawals/print
*****
Police 'to stop monitoring fox hunts and focus on priority crimes'
http://www.telegraph.co.uk/news/newstopics/politics/lawandorder/5327068/Polic
e-to-stop-monitoring-fox-hunts-and-focus-on-priority-crimes.html
*****

LATIN AMERICA
The Chilean Central Bank on Wednesday cut its 2009 gross domestic product
and inflation outlook as a result of the negative effects of the global financial crisis on
the local economy.
GDP is expected to come in somewhere in the range of a 0.75% on year
contraction to a 0.25% increase with a bias toward the weaker end given that there is a
greater risk of increasingly negative international scenarios, the bank said in its four
month Monetary Policy Report presented to Congress.
In the previous January report, the bank expected 2%-3% GDP growth. The
central bank's outlook is more optimistic than what analysts expect for the year.
According to the most recent central bank monthly poll of economic expectations,
analysts see a 0.7% GDP contraction.
During the first quarter of the year, the economy shrank about 2% on year,
based on preliminary figures. The recovery in economic activity "should begin to be
perceived more clearly starting in the current quarter," the bank said in its report.
The monetary authority now sees inflation at 0.6% in 2009 from a previous estimate of
3.1%. This is significantly lower than the 7.1% posted in 2008 and well below the
bank's target of 3%, plus or minus one percentage point in a 24-month policy horizon.
Inflation "will gradually increase, reaching 3% at the end of the policy horizon, which in
this case will be in the second quarter of 2011," the bank said.
Domestic demand, meanwhile, will likely contract 4.7% on year in 2009, mostly
a result of a decrease in investment.

MEXICO
Conditions in Mexico's manufacturing sector remain gloomy as job losses are
likely to continue, sales are seen declining and external demand is weak, a leading
industrial chamber said Thursday.
Mexico is expected to shed 420,000 manufacturing jobs by the end of 2009 as
the sector's domestic sales sink 8.9%, said Miguel Maron, president of the National
Manufacturing Industry Chamber, or Canacintra, at a press conference.
According to Canacintra's quarterly survey of 523 manufacturing companies,
only 9.9% expect an increase in their sales this year, with the rest forecasting negative
or stable revenue.
Just 4% of manufacturers said they have "good" growth expectations for this
year, and 8% reported a "good" employment outlook.
Half the companies surveyed said they are operating at less than 60%
capacity, up from 28% of the companies surveyed a year ago.
Comparing their current situation with that of one year ago, 51% of
manufacturers surveyed said it was worse and 34% said it was the same.
Canacintra said the manufacturing sector shed 423,000 jobs from April 2008 to
last month and 130,000 jobs in the first four months of this year. Current employment
in the sector is 3.49 million.

37
 Mexico sends around 80% of its manufacturing exports to the U.S. Due to its
dependence on the external market, the sector was among the first areas of the
Mexican economy to be affected by the global recession.
Manufacturing output fell 16% in the first two months of this year, following a
4.9% drop in the fourth quarter of 2008, according to the National Statistics Institute.
Canacintra's Maron said a quick turnaround is unlikely: "We'll have to see how
the recovery evolves in other countries first."
Mexico’s central bank reduced its benchmark interest rate for the fifth
consecutive month in a bid to revive a contracting economy strained by falling exports
and the outbreak of swine flu.
The bank’s five-member board, led by Governor Guillermo Ortiz, cut the
lending rate by three quarters of a percentage point to 5.25 percent, matching the
forecast of 18 of 24 economists surveyed by Bloomberg. Other analysts expected cuts
ranging from a quarter point to one percentage point.
Mexico’s central bank is reducing borrowing costs to revive an economy
badgered by a global slump that sapped demand for exports such as cars as well as
an outbreak of H1N1 swine flu that has scared off tourists, shut restaurants and kept
workers at home.

*****
Mexican Data Say Migration to U.S. Has Plummeted
http://www.nytimes.com/2009/05/15/us/15immig.html?th&emc=th
*****
ASIA

CHINA
Hong Kong's economy shrank 7.8 percent in the first quarter, its largest decline
since the Asian financial crisis a decade ago, the government said Friday, as it
forecast a deeper downturn.
With the economy slammed by a plunge in global demand, the territory's
government more than doubled its forecast for the severity of the recession this year.
It now forecasts gross domestic product to shrink between 5.5 percent and 6.5
percent in 2009 compared with its earlier projection for a contraction of 2 percent to 3
percent. Hong Kong's economy slipped into recession in the third quarter of 2008.
Exports of goods in the January-March quarter also plummeted 22.7 percent
from a year earlier, the largest decline since 1954.

JAPAN
April Corp Bankruptcy Cases Up 15.4% on year.
Japan's March current account, the broadest measure of the economy's trade
with the rest of the world, logged a 48.8% on-year drop in surplus as exports and
imports remained weak due to the global economic slump.
The current account fell to Y1.486 trillion before seasonal adjustments, the
Ministry of Finance said Wednesday. It was better than a 57.7% decline forecast by
economists polled by Dow Jones and The Nikkei. In February, it fell by 55.6%.
A big drop in the surplus was widely expected and analysts believe the trend
will last this year because a quick recovery in the global trade is unlikely amid the
global recession.
Japan's exports fell by 46.5% on year and imports declined by 37.8% in March,
the data showed. Income surplus, a component of the current account, also fell by

38
13.0% because falling interest rates worldwide reduce profits from overseas securities
held by domestic firms.
Individual investors in Japan increased bets to the highest in six months that
the yen will weaken as the economy stabilizes, jumping back into a trade that was all
but wiped out last year.
Businessmen, housewives and pensioners held 153,326 margin contracts at
the end of last month that will make money if the yen declines against currencies
ranging from the euro to the Australian and New Zealand dollars, according to the
Tokyo Financial Exchange. “Investors believe the worst of the global recession is over
and higher-yielding currencies are bottoming out,” said Yoshisada Ishide, who
oversees $1.8 billion as a Tokyo-based fund manager at Daiwa SB Investments Ltd., a
unit of Japan’s second-biggest investment bank.
Individual investors, called housewives after the women who traditionally
managed finances in Japanese families, have 1,434 trillion yen ($14.9 trillion) of
savings, according to the Bank of Japan. They’re seeking higher returns after the
central bank cut its benchmark interest rate to 0.1 percent. Investors who sell the yen
against the euro would earn 3.4 percent by year-end, compared with 0.25 percent in
one-year yen-denominated deposit accounts, data compiled by Bloomberg show.
HEALTH
IS MENOPAUSE BAD FOR YOU?
As bad as all the symptoms of menopause are, we don’t think of it as harmful – just
annoying. Menopause should be a graceful right of passage for women and it can be if
we don’t muck it up. The estimate is that there are 45 million women in American going
through menopause right now. Women are experiencing menopause on average of
four years earlier than the previous generation. Natural health experts believe it is due
to nutritional deficiencies. It takes an average of 3-4 years for a menstrual cycle to
completely stop during menopause. Women must not have a menstrual cycle for a
solid 12 months before the menopause transition is completed. If the average women’s
life expectancy in the US is 84 years, this means that most women will spend nearly
50% of their adult life as a menopausal or post-menopausal female.

THE PERCEPTION
We all know what the symptoms of menopause are; hot flashes, night sweats, mood
swings, insomnia, low libido, vaginal dryness, fatigue, joint pain, thinning skin, weight
gain (10-20 pounds), hair loss and memory problems. Statistically 57% of women
suffer from more than one symptom and 22% of them say they have to resort to
medications to help them cope. While the lucky 43% of women report that the only
symptom they had were irregular periods for awhile. The age range when these
symptoms kick in varies. Generally menopause occurs for women over 50. However,
more and more women are experiencing POF (premature ovarian failure) or premature
menopause. Nearly 1 in 1000 women ages 15 to 29 and 1 in 100 ages 30-39 have
premature ovarian failure. These women have female systems failing to ovulate
(release eggs) every month. The cause can be a dysfunction of the ovaries or a loss of
follicles, which produces no estrogen. You have premature menopause if you have the
symptoms and you are under 40. More often than not, women who are too young to be
in menopause are told by their doctor they are too young and should wait and
see….for years.

SOME CAUSES

39
The causes of premature menopause or ovarian failure can be from an autoimmune
disorder, genetics, cancer treatment (radiation or chemotherapy), hysterectomy,
thyroid dysfunction, viral infection and eating disorders to name a few. Once there is
no estrogen to stimulate the uterine lining, it won’t build back up and there is nothing
the shed and menstruation stops. A blood test can confirm if there are high levels of
FSH (follicle stimulating hormone) and LH (lutenizing hormone), which the pituitary
secretes trying to get the ovaries to produce estrogen.

SOME INFLUENCES
Women who smoke develop the symptoms of menopause nearly 2 years earlier than
nonsmokers. Studies suggest that there is a direct correlation between the number of
cigarettes smoked and the duration of smoking and the age of women at menopause.
In other words, the more you smoke and the longer you’ve smoked the earlier you will
experience menopause.

THE WEIGHT GAIN

Premature menopause can cause a 10 to 20 pound weight gain around the waist and
hips, also known as middle-age spread. Some women may have this problem a while
caused by insulin resistance or adrenal fatigue and only notice the symptoms when
their estrogen levels dip. How your body processes food and converts it for energy or
stores if for fat can be a contributing factor. Fat cells and hormones are connected in
the system and regulate appetite, metabolism, heat regulation, digestion and how your
body detoxifies. If there is a hormone imbalance it is enough to through influence these
systems. Stress can also contribute with the release of the cortisol hormone, which
can block all your weight loss efforts. This is your body’s survival mechanism and
stress signals your body to store fat as if there were a famine threat. So, if we’re
dealing with a poor diet, stress, hormonal imbalance – a weight gain will occur and if
the body can’t detoxify, this will complicate matters. Examine the lifestyle and if there
are emotional issues which cause unhealthy eating habits, these also need to be
addressed.

OTHER CONCERNS
Premature menopause can affect your future health and you should take precautions.
You may be at higher risk of cardiovascular disease, osteoporosis and Alzheimer’s.
Science says that the absence of estrogen before the age of 50 can increase
cholesterol plaque in the blood and vessel walls. Blood clots can be an issue and the
risk of heart attack and stroke. Also, estrogen slows down the build-up of osteoclasts
(cells that break down bone) causing weak and brittle bones. Estrogen also helps the
brain with positive effects on neurons and offsets Alzheimer’s.

EXTREME INTERVENTION
Young women are going to their doctors with menopause symptoms and are told their
lab work (hormones) is within normal limits. They are given the option of a procedure
that promises to end their symptoms and even their periods. The procedure is called
Cryoablation Therapy, which is a CryoEndometrialAblation (CEA) procedure. What this
procedure does is in about 30 minutes; under local anesthesia they freeze the uterus.
It is said to have a 94% success rate of getting rid of the symptoms of painful
menstruation and pre-menopausal symptoms. Approximately 60% of women having
this procedure have no down time and no longer have periods. The procedure is said
to not affect hormone levels. Disabling the uterus if you plan to have a family someday

40
is not wise. Medicine does not know for sure if women will be able to bear children or
what effect it would have on the fetus afterward.

DO SAFE SOLUTIONS EXIST?

I always want to address the cause with nutrition and stop doing what has caused the
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41
Order your convenient and compact, dehydrated food in the stand-up pouch for food
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*****

Judge rules family can't refuse chemo for boy

May 15, 2:08 PM (ET)
By AMY FORLITI
MINNEAPOLIS (AP) - A Minnesota judge ruled Friday that a 13-year-old cancer
patient must be evaluated by a doctor to determine if the boy would benefit from
restarting chemotherapy over his parents' objections.

In a 58-page ruling, Brown County District Judge John Rodenberg found that Daniel
Hauser has been "medically neglected" by his parents, Colleen and Anthony Hauser,
and was in need of child protection services.

While he allowed Daniel to stay with his parents, the judge gave the Hausers until
Tuesday to get an updated chest X-ray for their son and select an oncologist.

If the evaluation shows the cancer had advanced to a point where chemotherapy and
radiation would no longer help, the judge said, he would not order the boy to undergo
treatment.

The judge wrote that Daniel has only a "rudimentary understanding at best of the risks
and benefits of chemotherapy. ... he does not believe he is ill currently. The fact is that
he is very ill currently."

Daniel's court-appointed attorney, Philip Elbert, called the decision unfortunate.

"I feel it's a blow to families," he said. "It marginalizes the decisions that parents face
every day in regard to their children's medical care. It really affirms the role that big
government is better at making our decisions for us."

Elbert said he hadn't spoken to his client yet. The phone line at the Hauser home in
Sleepy Eye in southwestern Minnesota had a busy signal Friday. The parents' attorney
had no immediate comment but planned to issue a statement.

42
Daniel was diagnosed with Hodgkin's lymphoma and stopped chemotherapy in
February after a single treatment. He and his parents opted instead for "alternative
medicines" based on their religious beliefs.

Child protection workers accused Daniel's parents of medical neglect; but in court, his
mother insisted the boy wouldn't submit to chemotherapy for religious reasons and she
said she wouldn't comply if the court orders it.

Doctors have said Daniel's cancer had up to a 90 percent chance of being cured with
chemotherapy and radiation. Without those treatments, doctors said his chances of
survival are 5 percent.

Daniel's parents have been supporting what they say is their son's decision to treat the
disease with nutritional supplements and other alternative treatments favored by the
Nemenhah Band.

The Missouri-based religious group believes in natural healing methods advocated by

some American Indians.

After the first chemotherapy treatment, the family said they wanted a second opinion,
said Dr. Bruce Bostrom, a pediatric oncologist who recommended Daniel undergo
chemotherapy and radiation.

They later informed him that Daniel would not undergo any more chemotherapy.
Bostrom said Daniel's tumor shrunk after the first chemotherapy session, but X-rays
show it has grown since he stopped the chemotherapy.

"My son is not in any medical danger at this point," Colleen Hauser testified at a court
hearing last week. She also testified that Daniel is a medicine man and elder in the
Nemenhah Band.

The family's attorney, Calvin Johnson, said Daniel made the decision himself to refuse
chemotherapy, but Brown County said he did not have an understanding of what it
meant to be a medicine man or an elder.

Court filings also indicated Daniel has a learning disability and can't read.

The Hausers have eight children. Colleen Hauser told the New Ulm Journal
newspaper that the family's Catholicism and adherence to the Nemenhah Band are
not in conflict, and that she has used natural remedies to treat illness.

Nemenhah was founded in the 1990s by Philip Cloudpiler Landis, who said Thursday
he once served four months in prison in Idaho for fraud related to advocating natural
remedies.

Landis said he founded the faith after facing his diagnosis of a cancer similar to Daniel
Hauser. He said he treated it with diet choices, visits to a sweat lodge and other
natural remedies.

43