Posts Categorized: USAWatchdog.com

Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

As I look over the news and try to find the one story that I need to comment on, I am overwhelmed.  I see the nuclear meltdown story in Japan and wonder how it will all turn out.  It is nowhere near under control.  We still do not know the full extent of the damage, but there are traces of radiation showing up in things like milk here in the U.S.  Yes, I know experts say the amount is tiny and causes no health threat, but then again, this thing is not over by a long shot.  Brave workers there are sacrificing themselves to try and stop a total meltdown and save a large part of Japan from becoming a dead zone.  Fox News reported yesterday, “The so-called Fukushima 50, the team of brave plant workers struggling to prevent a meltdown to four reactors critically damaged by the March 11 earthquake and tsunami, are being repeatedly exposed to dangerously high radioactive levels as they attempt to bring vital cooling systems back online.”  (Click here to read the complete FOX News Story.)

Next, there is the third war front in Libya.  Defense Secretary Robert Gates was grilled in Congress yesterday and reassured lawmakers that there would be no U.S. troops used in that North African country.  However, he would not address reports that the CIA was already there.  ABC News reported yesterday, “The confusion prompted one US congressman to dub Libya probably the ‘most muddled definition of a military operation in US history.’ News of a secret order signed by the US president authorizing covert American support for the rebels has been received as paving the way for a possible arming of the opposition.” (Click here to read the complete ABC News story.) Let’s hope the mess in Libya is cleaned up before Japan, but I fear both problems will be with us for a long time.

Now, it is reported the next country to destabilize in the Middle East could be Syria. Foreignpolicy.com is reporting the Assad regime in Damascus may be in deep trouble.  The story said, “Syria lies at the center of a dense network of Middle East relationships, and the crisis in that country — which has now resulted in the deaths of well over 100 civilians, and possibly close to double that number — is likely to have a major impact on the regional structure of power. . . . This edifice may now be crumbling, and the United States would be wise to spend a little less time thinking about Libya and a little more time thinking about a state that truly has implications on U.S. national interests. If things go south in Syria, blood-thirsty sectarian demons risk being unleashed, and the entire region could be consumed in an orgy of violence.”  (Click here to read the complete Foreignpolicy.com story.)

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Posted by & filed under USAWatchdog.com.

By Greg Hunter USAWatchdog.com

Dear CIGAs,

Last Friday, I wrote a piece called Could America be Pushed over the Economic Edge?” It was about how Libya, Japan or even covert economic warfare (from America’s enemies) could push the U.S. into another financial meltdown.  I received a one sentence email from my friend Jim Sinclair that said, “We are way over the edge right now.” His message gave me a sinking feeling.  Mr. Sinclair is a world renowned gold expert, but in order to trade that market, you must be extremely knowledgeable in many aspects of economics and politics.  Almost everything affects the price of gold.  War, government, oil, debt, money creation, the Fed and many other variables can dictate how much the yellow metal costs.  Gold is probably the single most difficult market to trade, and Sinclair is the Yoda of the gold traders (except much better looking.)

Last week on his website JSMineset.com, Mr. Sinclair outlined “why” we are already way over the edge right now and why gold is going much higher in price.  Here are a few of his reasons that I picked out from his bullet pointed post:  “You must realize that the economic and political damage is already done.  You must realize that the mountain of OTC derivative paper is not going away. . . . You must realize that this means the mountain of OTC derivative weapons of mass financial destruction can only grow. . . .You must realize that it is not whether or not QE will continue, it is what it already has done to the Western economies that much higher gold prices will reflect. . . .You must realize the monumental change in the Middle East is NOT positive for the West in any manner, shape or form. . . . You must realize that it is the currency that breaks, not the country.” (Click here for the entire Jim Sinclair post.)

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

The situation in Japan is getting worse, not better. There are shortages in food, fuel and warm dry shelter. To make matters exponentially worse, nuclear power plants there continue to burn out of control and emit high levels of radiation. Japan is a stark reminder of how fast a modern technologically advanced society can be brought to its knees by an unforeseen calamity.

On the other side of the Pacific, the devastating pictures from that island nation are taking the attention away from our own, much more predictable, calamity coming from a tsunami of debt. As the U.S. and other world governments continue to print money to keep the banks and system solvent, a ball of debt is growing. It is on course to swamp the system. In his latest report, Martin Armstrong, former Chairman of Princeton Economics and an expert in the study of economic cycles, said events happening in places like Japan or the Middle East are not the main issue the world is facing. Armstrong said, “This is coming at a time when governments are broke. We have state and local governments in a debt crisis and that meltdown is very real!!!!!!! Government is collapsing. That is the issue.” Armstrong says because of all the money created to bail out failing banks, gold is gaining in price. “This is not just inflation. We are on the verge of a currency meltdown this time,” said Armstrong. (Click here to read the latest report from Martin Armstrong.)

The latest analysis from economist John Williams of Shadowstats.com agrees with Armstrong. In a special report released yesterday, Williams warns a “great collapse nears.”  Williams said the collapse will take the form of “a hyperinflationary great depression. Such will encompass a complete collapse in the purchasing power of the U.S. dollar; a collapse in the normal stream of U.S. commercial and economic activity; a collapse in the U.S. financial system as we know it. . .”  The hyperinflation will come from bank bailouts and ongoing Quantitative Easing (QE or money printing) used to keep the financial system from collapse. Calamities in places like Japan will likely accelerate QE. The Fed will have to make up for the loss of Japan as a buyer of our debt. Williams said,“. . . the economic and systemic-solvency crises appear to be worsening, not improving, suggesting more, not less, quantitative easing.”  This, in turn, will quicken the loss of buying power for the buck. So, we have a vicious cycle of QE coupled with declining tax revenue that is accelerating the “great collapse” scenario.

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Last Friday, the Bureau of Labor Statistics (BLS) reported the economy created 192,000 new jobs and the unemployment rate fell to 8.9%.  The good news was reported almost everywhere as a turning point in the U.S. economy.  For example, CNBC said, “U.S. employers hired more workers in February than in any month since May last year and the unemployment rate fell to a near two-year low, the strongest sign yet the recovery has become self-sustaining. . . . “We have moved into the expansion phase of the economic cycle and the economy is self-sustaining,” said Brian Levitt, an economist at Oppenheimer Funds in New York.”(Click here for the complete CNBC story.)

But if you look deeper into the numbers, as John Williams does at Shadowstats.com, you don’t see the turnaround picture.  In fact, just the opposite is going on.  In his latest report, Williams estimates the government is routinely overstating job growth by “230,000 jobs” a month.  Using simple math, 192,000 created jobs (according to BLS) subtracted from 230,000 overstated jobs gives you an actual net loss of 38,000 jobs.  I called Williams to check my analysis, and he told me it is not that simple because the government’s estimations are “the worst in modern economic history.” Williams says unemployment numbers are “openly misleading” and virtually “worthless.”

In an interview yesterday from his San Francisco office, Williams told me when it comes to calculating unemployment numbers, the BLS is “flying blind.” He admitted, “It is hard to put an exact number on the actual job losses last month, but we likely lost jobs—not gained them.” He added, “The job losses could be as high as 30,000 for last month.”

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

This weekend, violence continued to erupt in the Middle East.   In Libya, the Gaddafi government launched counter attacks against the rebels.  Many fear there is a full blown civil war brewing in that oil rich country.

Yemeni loyalists also staged counterattacks against anti-government protesters in hopes of dispersing them.  They used sticks and stones, but still, 25 people were reported injured. All is not quiet in Egypt this weekend as the peaceful revolution there turned violent.  Reuters is reporting, “Men in plain clothes armed with swords and petrol bombs attacked protesters in Cairo on Sunday night during a demonstration demanding reform of security services with a reputation for brutality, witnesses said.” (Click here for the complete Reuters story.)

Even Saudi Arabia, the world’s biggest oil producer, is seeing protests gain momentum.  Officials are so worried, the security forces rounded up and detained nearly two dozen protesters in an effort to quell even the hint of revolution, but it may be too late.  Reuters reported yesterday, “More than 17,000 people backed a call on Facebook to hold two demonstrations in Saudi Arabia this month, the first one on Friday. A loose alliance of liberals, moderate Islamists and Shi’ites has petitioned King Abdullah to allow elections in the kingdom.” Keep in mind, public dissent is frowned upon in that part of the world.  (Click here to read the complete Reuters story.)

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Yesterday, gold hit fresh all-time highs at $1,432.10 an ounce. Silver hit a 31 year high, closing at more than $34.50 per ounce. Oil nearly touched $100 per barrel, which is the highest it has been since September 2008.   What’s going on?  Part of the price spikes are, no doubt, due to riots and rebellions in the Middle East, but it is also the world’s awakening realization America’s crushing debt will never be repaid in real money.  The U.S. needs to slash its budgets, but finding politicians on Capitol Hill with the nerve to make deep cuts is elusive, to say the least.  Yesterday, the Associated Press reported, “The Republican-controlled House is on course to pass legislation cutting federal spending by $4 billion and averting a government shutdown for two weeks. And Senate Democrats say they will go along. . . . Republicans want to slash more than $60 billion from agency budgets over the coming months as a down payment on larger reductions later in the year, but are settling for just $4 billion in especially easy cuts as the price for the two-week stopgap bill.”  (Click here for the complete AP story.)

Over in the Senate, the Banking, Housing and Urban Affairs Committee asked questions of Fed Chief Ben Bernanke about the state of the economy and raising the debt ceiling.  It currently stands at $14.3 trillion.  Senator David Vitter said “the biggest” problem the nation faced was “reaching our debt limit . . . sometime between late March and May.”   Senator Vitter asked Mr. Bernanke, “Would it be better to increase the debt limit and go along our merry way on the present fiscal path or would it be better to increase the debt limit and at the same time pass meaningful budget reform?”  I really do not see how cutting $60 billion is “meaningful reform” when PIMCO’s Bill Gross said two months ago on CNBC, “We have a deficit in the $1 trillion plus arena, which means we must borrow at least a trillion dollars additional a year in order to fund the deficit.  And, so, the debt ceiling currently at $14.3 trillion, which is 95% of GDP, has to go up by another trillion or so every 12 months.” (Click here to read more about raising the debt ceiling.)

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Posted by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Looking around the Middle East you can find turmoil and conflict almost everywhere you turn.  Morocco, Tunisia, Libya, Yemen, Bahrain, Jordan, Syria, Oman and Egypt have all been caught up in a fire storm of anti-government protests.  Some appear to be mostly peaceful, such as the pro-democracy movement in Egypt; and some are descending into bloody civil conflict, such as Libya.  The multiple revolutions unfolding in the Middle East are really just getting started.  Even in the Kingdom of Saudi Arabia, the smell of revolution is in the air and on the Internet.  Organizers in the Kingdom are calling for “DAY OF RAGE.”  Saudi King Abdullah is so worried he recently announced $37 billion dollars in subsidies and giveaways.  That’s enough to pay everybody in Saudi Arabia around $1,500 each.  Some look at it as a bribe to encourage citizens not to protest.  (Click here to read more.)  If Saudi Arabia falls, war will surely follow.

This changing of the guard across the Middle East will be much more impactful to the rest of the world than the fall of the Berlin Wall.  The main reason is oil.  The Middle East produces most of the world’s petroleum.  If supplies are curtailed and shipping lanes are cut, the world could plunge into economic ruin.

It took a little more than 2 years after the fall of the Berlin Wall to collapse the Soviet Union.  I look for the same pace of change in the Middle East.  The first domino to fall was tiny Tunisia, followed by mighty Egypt with a population of more than 80 million.  Egypt has an up-to-date army outfitted with the latest U.S. made weapons.  After Egyptian President Hosni Mubarak stepped down, the military took control of the country. A writer at Foreignpolicy.com recently described the fall of Mubarak this way, “I wish I could be there today, in solidarity with the thousands of young and old Egyptians, to celebrate the demise of his dreadful regime. But what we are witnessing is more than the end of a government — it is nothing less than the birth of a new liberal order in Egypt. And that’s not only good news for the beleaguered citizens of Egypt, but also the United States and Israel.”

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Posted by & filed under USAWatchdog.com.

Courtesy of Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Saturday, the House of Representatives passed legislation with more than $60 billion of budget cuts.  It is the proverbial “drop in the bucket” when compared to the $14.1 trillion (and counting) outstanding federal debt.  Soon, this ever increasing national debt will eclipse the Gross Domestic Product (GDP.)   That means America will owe more than all the goods and services it produces in one year.  When you owe more than you make, isn’t that a sign you need to change course?  The new Speaker of the House, John Boehner, said this just after the budget cut vote, “We will not stop here in our efforts to cut spending, not when we’re broke and Washington’s spending binge is making it harder to create jobs.” I think it is ironic Congress wants to cut $60 billion today and then turn around and consider raising the debt ceiling $1 trillion tomorrow.  This is crazy, but that is exactly what’s going to happen because if we don’t, Treasury Secretary Tim Geithner says it could cause, “catastrophic damage to the economy.”

I don’t think most people grasp just how serious America’s budget problem really is. When Mr. Boehner says, “we’re broke,” he’s not kidding.  America is broke. The only reason this has gotten so out of control is the U.S. dollar is the world’s reserve currency, and the government can just print money whenever it needs funds.  Right now, the Fed is creating $75 billion a month to help finance government operations.  This is met with a shrug, like it is no big deal.  But, it is a big deal, and it comes with a significant downside—inflation.  Sure, there is deflation in housing, but everything else is going up in price.     

It is not just the federal government that’s swimming in red ink, but more than 40 states in the union are also tens of billions of dollars underwater in deficits, pensions and health-care obligations.  The union protests in Wisconsin are just the tip of the iceberg.  Contrary to what left wing commentator Rachael Maddow says, the $137 million deficit problem in Wisconsin was not caused by Governor Walker’s tax-cut bills approved in January.  Here’s how The Wisconsin Journal Sentinel summed up the false story, “There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion.” (Click here to read the entire Sentinel story.)

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