Monday, December 1, 2008

Common Man News 12/2008


News for the common man because the elite already know!


12/31/2008

Major Protest Against Gaza Assault Rally & March in Washington, D. C. Friday, January 2 at 3:30

Israel continues to pound Gaza as troops mass on border

The New York Times and Gaza: Justifying genocide

In Pictures: Massacre of Gazan Children

Arab Connivance in the Gaza Massacre

The Paradox of Peace

Rampage in Gaza for a Bump in the Polls

Israel’s Lie Machine Working Flat Out To Dodge “Killer” Question

UN chief demands immediate Gaza cease-fire

How Hypocrisy on ’Terrorism’ Kills

Year-end data shows deeper slump in US

Irish banks bailed out as economy unravels

Beyond Bailouts: On the Politics of Education After Neoliberalism

List of Troubled Banks

Obama dismisses Bush Pentagon appointees

Why I Am a Socialist By Chris Hedges

NY Times urges Obama to stand up for labor


12/30/2008

Kucinich Calls for UN Investigation into Israeli Attacks on Gaza

Israel inflicts mass suffering on Palestinian population

Israeli attacks deepens anger of Arab masses

Israel strikes key Hamas offices

Israel pounds Gaza for fourth day

Gaza: the logic of colonial power

Economic stress drives rise in child abuse and domestic violence

Freedom of the press as a foreign concept

More than 1 million job cuts seen in 2009: Challenger Report

Lehman bankruptcy filing wiped out billions: report

Treasury added $6 billion to the $17. 4 billion auto bailout

Chinese drywall causes health problems on the Treasure Coast

Unrest caused by bad economy may require military action, report says

Modern face of slavery

Under Bush, OSHA Mired in Inaction

Labor, business gird for battle over unions bill


12/29/2008

Washington bears guilt for Gaza war crimes

May We No Longer Be Silent

Inside Gaza: A Living Hell

If Gaza falls . . .

Israeli air raids pound Gaza Strip for a third day

Israeli minister vows ‘war to the bitter end’

Wall St. faces record losses in last week of 2008

The Federal Reserve Abolition Act

Holiday sales are shaping up to be the worst in 40 years

A First Hand Account of the TVA Coal Ash Disaster in Kingston, TN

Energy dispute over Rockies riches

Child maid trafficking spreads from Africa to US

Was the ’Credit Crunch’ a Myth Used to Sell a Trillion-Dollar Scam?

Cash-strapped states weigh selling roads, parks

Cash-strapped states cut juvenile justice programs

Obama to Inherit Legacy of Free Market Free Fall


12/28/2008

Now, Is The Crucial Time You can make a difference!

Herding Humans For Profit

Economic Death and Millionaire Taxes

Bush Winks at Israel’s Slaughter in Gaza, While Obama and Clinton Are Silent

Israel Strikes Demolish Hamas Compounds, Kill 200+

With jobs scarce, military recruiters are filling their quotas

The Noose Tightens

Two Dangerous Bush-Cheney Myths

Coalition sues over mining ruling Revisions allow waste into streams

Japan Should Scrap U. S. Debt; Dollar May Plummet, Mikuni Says

US Warns Russia Against Selling Missiles to Iran

Russia to raise nuclear missile output fourfold

US police could get ’pain beam’ weapons

Feds consider searches of terrorism blogs

Obama wants Bush war team to stay

Congress to crack down on bailout recipients

Dismantling the Imperial Presidency


12/23/2008

Roger Farmer: 50% chance of depression in US

Depression Hits Detroit: Average home price $18,513 - Unemployment rate 21%

Britain edges to recession, IMF warns of Great Depression

Pay cuts, layoffs mount in US

UAW beginning talks with GM on concessions

Obama, the military and the threat of dictatorship

Progressive journalist fights felony charges

New School students occupy building and win!

Secret Tapes Helped Build Graft Cases In Illinois

Senior Federal Banking Regulator Removed

Groups want Obama to investigate Bush for war crimes

Guns, Butter, and Obama

Schwarzenegger orders mass layoffs, unpaid furloughs


12/22/2008

Greed has pushed political credibility and financial trust into freefall

New Report: Worldwide Bankruptcy Wave About to Hit

World Faces "Total" Financial Meltdown: Bank of Spain Chief

FDA Stuns Scientists, Declares Mercury in Fish Safe for Infants, Children, Expectant Mothers

Russia starts missile delivery to Iran: Iranian MP

Cheney’s Contempt for the Republic

Hunger mounts in the US

Gaza near to collapse as Israel tightens grip, says bank

Bush and Lawmakers Sneak a National DNA Databank into Existence

A World Enslaved

The Pentagon is muscling in everywhere. It’s time to stop the mission creep

Calif. unemployment rate jumps to 8. 4 percent

Scorched Earth

Auto Workers Told to Take Concessions, Abandon Retirees

UAW’s Sacrifices Look to Some Like Surrender

Home Values Take a Dive

New rules will ease farm hiring, affect wages

EPA Eases Emissions Regulations for New Power Plants EPA Eases Emissions Regulations for New

’Right of conscience’ rule issued for health workers


12/19/2008

Cheney Throws Down Gauntlet, Defies Prosecution for War Crimes

Obama picks Wall Street insider to head main regulatory agency

Dollar plunges after record rate cut by US Federal Reserve

Credit-Card Users Feel Pain as U. S. Banks Reap Gain

Federal spending soars 25% before bailout

Cheney faces 'torture' criticism

Dick Cheney's Fantasy World

Obama v. Washington Mythmaking

As Usual, NYT Ignores Iraqi Opinion

Where Have the Bailout Billions Gone?

Prosecuting Bush and Cheney for Torture: No One Can Be Above the Law

UAW busting, Southern style

AIG's Past Could Return To Haunt

General Motors opens new plant in China

Bush Announces $17. 4 Billion Auto Loan Program


12/18/2008

Madoff collapse has global impact

Hunger and homelessness grow across US cities

Scared by Republic sit-in, banks pay up

Dollar No Longer Haven After Fed Moves Rate Near Zero

IEA produced a date for peak oil and it's not reassuring

London Banker: "The market has failed, and officialdom is perpetuating that failure."

Did Dick Cheney Just Confess to a War Crime on National TV?

Did America Get Punk'd on the Bailout?

Down on upward mobility

Obama's Betrayal of Public Education?


12/17/2008

Secrecy Worsens Wall Street Mess

US Federal Reserve cuts interest rates to near zero

More people on S. F. streets newly homeless

Unemployment: Worse Than it Looks

Best Buy 3Q profit sinks, company offers buyouts

Consumer data shows record slump

Judge signs order to protect Madoff investors

First the Chinese accumulated dollars, now everyone is joining the stampede

Report: Bush masked cost of wars that could top $1. 7 trillion

The United States: A Country Without Mercy

Blundering U. S. Should Spare the World Any More Nation Building

Crippling the Auto Union Is Just a Warm-Up

Senate Panel’s Report on U. S. Torture Abuse

Federal Reserve sets stage for Weimar-style Hyperinflation

Bush’s Pity Party

Cheney Admits Detainee-Abuse Role

Is the GOP Risking the Economy to Win the PR War Against Unions?


12/16/2008

The Madoff scandal

The Neo-Alchemy of the Federal Reserve By Ron Paul

Home values seen losing over $2 trillion during 2008

Americans rich and poor pawn more to pay bills

States’ Funds for Jobless Are Drying Up

Goldman faces $2bn loss – its first since 1929

Collapse of Pension Funds: The End of Retirement?

Loophole guts bailout restrictions on executive pay

US government bailouts: poverty wages for auto workers, trillions for bankers

Auto bailout’s death seen as a Republican blow at unions

Bush sneaks through host of laws to undermine Obama

Bush Excluded by Latin Summit as China, Russia Loom

New study firmly ties hormone use to breast cancer

Mystery illness paralyses girl given cervical cancer jab

War Talk, the Death of the Social, and Disappearing Children: A Lesson for Obama

Obama’s defence appointee signals continuing US belligerence

Why We Must Prosecute Bush And His Administration For War Crimes

Cheney Admits Authorizing Detainee’s Torture

Senate Report Links Bush to Detainee Homicides; Media Yawns

Israel’s Terror Rampage

Israel’s ’Crime Against Humanity’

Gaza families eat grass as Israel locks border

12/15/2008

US military prepares for Obama’s expansion of Afghan war

Senate torture report confirms Bush, top officials guilty of war crimes

Fear triggers gold shortage, drives US treasury yields below zero

Jim Rogers Calls Most Big U. S. Banks "Bankrupt"

Catastrophe for Gaza

What Does Letting Our Own War Criminals Go Free Tell Us About Ourselves?

New Rapid-Response Forces to Bolster Homeland Defense Mission

Official History Spotlights Iraq Rebuilding Blunders

Obama and US-Russia Tensions

Banks and consumers brace for new credit card rules


12/12/2008

Arundhati Roy, The Monster in the Mirror

Former chairman of the Nasdaq arrested over alleged $50 billion fraud

As world slump deepens US jobless claims soar to 26-year high

Bush, Democratic auto bailout fails in Senate, talks continue

Torture Trail Seen Starting with Bush

Retail sales post big drop in November

A tattered safety net for US unemployed

UCLA Anderson Forecast: "Nasty Recession" for U. S. to Include Four Quarters of Declining GDP

Senate Report ties Rumsfeld to Abu Ghraib Abuse

U. S. Keeps Silent as Afghan Ally Removes War Crime Evidence

It’s All Spelled Out in Unpublicized Agreement Total Defeat for U. S. in Iraq

Who Originated the ’Nuclear Umbrella for Israel’ Proposal?

Revoking Israel’s UN Membership

"Somebody Has to Respond"

Wal-Mart workers in Minnesota win $54 million settlement

Toronto stood up to bottled water industry

Bank of America to cut 35,000 jobs

Driving continues to decline as gas prices drop

Bailout dead, automakers in search of a lifeline


12/11/2008

New unemployment claims surge unexpectedly

Children displaced by Katrina face severe health risks

Worsening Spending Slump Paces ‘Scary’ U. S. Recession

Black Hole AIG Needs Another $10 Billion

Foreclosure Storm Will Hit U. S. in ‘09 Amid Job Loss

Pentagon approves Iraq sales worth up to $6 billion

Workers of America: Wake Up! We All Need a Union!

House Passes Auto Rescue Plan

Will Obama Buy Torture-Lite?

Online Journalists Now Most Jailed Worldwide

12/10/2008

“Car Czar” to slash wages, jobs of US autoworkers

U. S. to announce rescue for corporate credit unions: Journal

Economy bad all over -- even before current crisis

Coming soon to U. S., 1 million jobs lost every month: Report

World Bank predicts global gloom

Legal Scholars Outraged by Talk of Blanket Pardons

Unions Aren’t the Problem

Workers win a big round in Chicago factory sit-in

A Crisis of Conscience: Conscientious Objection, Law and Morality

US companies announce more mass layoffs

Insurgent attacks on NATO trucks highlight US military crisis in Afghanistan

Victory to the UEW Plant Takeover in Chicago!

Blame the Takers, Not the Makers

The Curse of Global Capitalism

"You Have Nothing To Lose But Your Chains"

The Election of the Greatest Con-Man in Recent History

Who’s at fault for harsh antiterror tactics?

The Silent Winter of Escalation

12/08/2008

Higher education costs soar

Obama calls for “shared burdens” in US economic crisis

Unemployed and Hungry in the US Jobless numbers highest in 15 years

Company Crashes Set to Hit Record Next Year

One Thriving Sector: The Business Of War

Peace By Cindy Sheehan

War Made Easy

U. S. Collective Dictatorship Enlarges

Bush Regime Declares Itself Above the Law

Toxic Toy Guide Lists Chemicals Found in Hundreds of Toys

Spying on pacifists, environmentalists and nuns

Don't Let Them Destroy Our Union

Is Obama Backing Off a Crucial Pledge to Labor?

Action, not words


12/07/2008

Paulson shoots another arrow into the heart of the Economy

Five Blackwater Guards To Face Massacre Charges Next Week

Justices to Decide Legality of Indefinite Detention

Workers occupy Chicago factory! Give your support!

UE Members Occupy Chicago Plant in Struggle for Justice

Workers Occupy Chicago Factory

When a Job Disappears, So Does the Health Care


12/06/2008

Retail Sales Are Weakest in 35 Years

Record 10% of U. S. homeowners in arrears or foreclosure

One in 10 American on food stamps

Investment banks set to cut 30,000 jobs

Foreclosures soar 76% to record 1. 35 million

Democrats Set to Offer Loans for Carmakers

New York Times bares Obama’s campaign lies on Iraq war

Suit claims Halliburton, KBR sickened base

Mukasey’s ’Nixon Defense’ of Bush

Interior Dept. Changes Rule to Remove Congress Veto

Record number of Americans using food stamps: report

World stability hangs by a thread as economies continue to unravel

This (Old) News Just In... Obama Doesn’t Plan to End the Iraq Occupation

Some US bank bailout holdings down $8 billion

Half-million jobs vanish as economy deteriorates

Tensions between leading European nations and US following NATO meeting

Senate hearing sets the stage for the impoverishment of US autoworkers

Canada’s constitutional coup: A warning to the working class

Remaking the World in America’s Image

KBR Sued for Giving Soldiers Ice with ’Traces of Body Fluids and Putrefied Remains’

Coal Mining Debris Rule Is Approved


12/04/2008

The Threat of Realism

Layoffs soar as US plunges deeper into recession

FDA Reluctantly Admits Mercury Fillings Have Neurotoxic Effects on Children

U. S. FEDERAL RESERVE MAY BUY U. S. TREASURIES

Fortress, the Hedge Fund, Is Crumbling

Fed: Economy Darkens Heading Into Holidays

Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil

Broader medical refusal rule may go far beyond abortion

Generic Heart Drugs as Good as Brand-Name Counterparts

US private sector shed 250,000 jobs in November: ADP

Why Won’t the Bush Administration Release the Uighur Prisoners at Gitmo?


12/03/2008


Obama warns US governors of “hard choices”

States Want $176 Billion Slice of Stimulus

Colonial style empire-building is making a huge comeback

Chevron in the White House

Class Bigotry Mars Auto Debate

Afghanistan in Crisis

Bush’s 11th-Hour Bid for Secrecy

Political coup in Canada; Dion to replace Harper as new PM

Federal Workers Unions Want ’Burrowers’ Lists

GOP rush to change voting rules is ruse

High Court Case Tests Power Plants’ Water Rules

12/02/2008

Barack Obama’s kettle of hawks

UAW pledges to impose further job losses and concessions on auto workers

US stock market plunges 680 points on signs of severe recession

Pentagon to deploy 20,000 troops on domestic “anti-terror” mission

Pentagon to Detail Troops to Bolster Domestic Security

Censorship in America?

The Cost of Hegemony is Beyond Reach

The End of the Affair Obama and the antiwar movement

With Gates, Obama Opts for Empire

Analysis:Defense policy under Obama and Gates

Hillary Clinton’s Disdain for International Law -- Change We Can Believe In?

Cops Get Their Kicks, Tasering

Going to College & Grad School Looks Like a Disaster

Bush Still Lies about Iraqi Inspections

In Courtroom Showdown, Bush Demands Amnesty for Spying Telecoms

Media and Retailers Both Built Black Friday

Indictments against Cheney, Gonzales dismissed

Confronting the Terrorist Within

12/01/2008

A New Foreclosure Wave Hits The Jobless

Sick babies denied treatment in DNA row

Debunking The Myth of the $70-per-hour Autoworker

Poverty spreading in suburbs: study

How the Financial Crisis Was Built Into the System

Citigroup says gold could rise above $2,000 next year as world unravels

Hope You Die Before You Get Old

The Worst Is Yet To Come

Every Trick in the Book

Obama’s First Problem is US War Crimes

Press and "Psy Ops" to merge at NATO Afghan HQ: sources

Bush Aides Rush to Enact a Rule Obama Opposes

Transition or Coup D’état?

One Man’s Military-Industrial-Media Complex

Guerra unveils why his investigation led him to the Vice President

Military bases brace for surge in stress-related disorders among returning war veterans

America’s Child Soldiers: US Military Recruiting Children to Serve in the Armed Forces


A New Foreclosure Wave Hits The Jobless

A New Foreclosure Wave Hits The Jobless

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There's a new wave of foreclosure sweeping across the country, and the people who are getting swept up are not greedy investors, or people who got in over their heads with bad loans, reports CBS News correspondent Ben Tracy. Rather, the crisis is hitting home for those who never expected to be in trouble until the slumping economy put them out of work.

As a code enforcer, Judy Jones' job was to make sure foreclosed homes, often trashed by owners on their way out the door, got cleaned up. With a government job, good credit, and a 30 year fixed rate loan on her southern California house, Judy never planned on taking her work home.

But last month she was laid off, joining a new wave of homeowners who paid their mortgages on time but now can't because they're out of work.

"The foreclosure crisis began mostly as a problem for lower income households," says Mark Zandi of Moody's. "It is now a problem for all households: low, middle income and even higher income households."

More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That's 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.

"We didn't necessarily expect the distress levels that we are seeing at this point," says economist Mark Fleming.

It used to be if you couldn't afford your mortgage you could always try to refinance or sell your home and pay off your loan. But these days, for a lot of people, those options no longer exist.

That's because 12 million households now owe more than their homes are worth, according to Moody's.

Homeowners with risky adjustable rate mortgages are getting help from banks, but there are no programs to aid those who already have good loans but no jobs.

"I wake up in the middle of the night thinking about it," says Terri Osier, a struggling homeowner.

Meanwhile, Judy Jones is hoping her bank will lower her payments until she finds work.

"If they don't, I'm not going to drain my savings, I am not going to drain my 401k, I am going to walk away," Jones says.

Sick babies denied treatment in DNA row

Sick babies denied treatment in DNA row

Julie Robotham

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BABIES with a severe form of epilepsy risk having their diagnosis delayed and their treatment compromised because of a company's patent on a key gene.

It is the first evidence that private intellectual property rights over human DNA are adversely affecting medical care.

Deepak Gill, head of neurology at the Children's Hospital at Westmead, said he would test at least 50 per cent more infants for the SCN1A gene - which would diagnose the disabling Dravet syndrome - if the hospital could conduct the test in-house.

But rights to the gene are controlled by the Melbourne-based Genetic Technologies, which has already threatened to stop public hospitals testing for breast cancer gene mutations, and the hospital will not risk a similar problem.

Specialists are sending blood samples to Scotland, and only babies whose seizure patterns closely resemble Dravet syndrome are tested. This means children with slightly different symptoms may be treated with the wrong medicines for months, potentially retarding their development.

"It's frustrating that we can't get the test done readily," Dr Gill said. "If we could include it as part of the work-up, we could identify them early."

At present the diagnosis is often delayed until the child is 12 to 18 months old. This is after the optimum time for treatment with strong drugs that are unsuitable for most babies with epilepsy but are used for infants with Dravets to control severe seizures that can damage the brain. Standard childhood epilepsy medications are ineffective with Dravets and may worsen it, Dr Gill said.

The situation comes amid growing concern among doctors and medical researchers over the ethics of granting private ownership to human DNA. A Senate inquiry announced this month will investigate the effects of gene patenting on health-care.

SCN1A is the most important epilepsy gene discovered, Dr Gill said, and is abnormal in about 70 per cent of children with Dravet syndrome, which affects about one in 30,000 babies - almost 10 per cent of infant epilepsy cases.

About one in 20 children have a seizure when they develop a fever, though only a minority had epilepsy, Dr Gill said.

The Scottish laboratory conducts SCN1A testing for all of Britain. Dr Gill said the price of the test - about $1800 - was similar to that offered by Genetic Technologies, but he had more confidence in the expertise of the Scottish laboratory, run by a pediatric neurologist.

Dr Gill said patenting the gene "may have helped initially to define and produce the test, but in 2008 it's not helping kids right now to access the test".

John Christodoulou, director of the Western Sydney Genetics Program, based at the same hospital, said his laboratory could not risk SCN1A testing in case Genetic Technologies - which licenses the gene patent from an Adelaide biotechnology firm, Bionomics - later barred him from testing or imposed a prohibitive royalty.

Genetic Technologies caused an uproar last month when it threatened to sue hospitals that test for breast cancer genes.It is reviewing that position.

Mervyn Jacobson, a founding director of the company, said, "The question is, are public hospitals allowed to break the law and breach patents granted by the Australian Government?"

While in principle the company would insist on its rights, in practice it would be prepared to negotiate, he said. "We don't need to necessarily enforce them against publicly funded institutions."

He was unaware of an earlier approach by Dr Christodoulou to ask how the company would view the establishment of public SCN1A testing, made to a previous management team.

Luigi Palombi, an intellectual law expert from the Australian National University, said legislation needed to be revised to prevent patenting of human genes.

"Why should these people have a patent over DNA, and over treatment?"

Poverty spreading in suburbs: study

Poverty spreading in suburbs: study

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Poverty in the United States is spreading from rural and inner-city areas to the suburbs, according to a study, a situation that can worsen as the economy confronts what may be a protracted recession.

The study by the Federal Reserve's Community Affairs department and the Brookings Institution Metropolitan Policy Program found that poverty levels in the world's richest nation were on the rise.

"It shows that concentrated poverty is still very much with us, and that it can be found among a much more diverse set of communities and families than previous research has emphasized," said Bruce Katz, a director Brookings Institution Metropolitan Policy Program.

"Poverty is spreading and may be re-clustering in suburbs, where a majority of America's metropolitan poor now live."

The study was released ahead of next week's conference on concentrated poverty at the Fed. It shied away from explaining the causes of poverty, but past research have linked the phenomenon to loss of jobs in manufacturing, agriculture and mining.

With the U.S. economic outlook rapidly deteriorating, poverty could get worse.

The U.S. housing market collapse has unleashed the worst financial crisis since the Great Depression, forcing business to scale back on investments and driving the unemployment rate to a 14-year high.

Data on Tuesday showed the U.S. economy contracted 0.5 percent in the third quarter, its fastest pace in seven-years, with consumer spending dropping to a 28-year low.

Many analysts believe the United States already has joined Europe in recession, though it will take another quarter of contraction to meet a widely used definition for it -- back-to-back quarters of declining output.

The study noted that a strong economy had helped to reduce the incidence of concentrated poverty across the United States, but the process might have stalled during the current decade.

"Not only does concentrated poverty affect the big, older inner cities in the North, but it also exists within smaller cities in the South and West," said Katz.

"While the case studies in this report point to unique factors that accompanied rising poverty in each of these communities, the negative consequences ring familiar across places, big and small ... African American, white, Latino and Native American.

How the Financial Crisis Was Built Into the System

How the Financial Crisis Was Built Into the System

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How did we get into the current financial mess? Great question.

Turmoil in the Making

In 1910, seven men held a secret meeting on Jekyll Island off the coast of Georgia. It's estimated that those seven men represented one-sixth of the world's wealth. Six were Americans representing J.P. Morgan, John D. Rockefeller, and the U.S. government. One was a European representing the Rothschilds and Warburgs.

In 1913, the U.S. Federal Reserve Bank was created as a direct result of that secret meeting. Interestingly, the U.S. Federal Reserve Bank isn't federal, there are no reserves, and it's not a bank. Those seven men, some American and some European, created this new entity, commonly referred to as the Fed, to take control of the banking system and the money supply of the United States.

In 1944, a meeting in Bretton Woods, N.H., led to the creation of the International Monetary Fund and the World Bank. While the stated purposes for the two new organizations initially sounded admirable, the IMF and the World Bank were created to do to the world what the Federal Reserve Bank does to the United States.

In 1971, President Richard Nixon signed an executive order declaring that the United States no longer had to redeem its paper dollars for gold. With that, the first phase of the takeover of the world banking system and money supply was complete.

In 2008, the world is in economic turmoil. The rich are getting richer, but most people are becoming poorer. Much of this turmoil is directly related to those meetings that took place decades ago. In other words, much of this turmoil is by design.

Power and Domination

Some people say these events are part of a grand conspiracy, and that might well be. Some people say they represent the struggle between capitalists, communists and socialists, and that might be, too.

I personally don't participate in the debate over a possible global conspiracy; it's a waste of time. To me, the wider struggle is for power and domination. And while this struggle has done a lot of good — and a lot of bad — I just want to know how to avoid becoming its victim. I see no reason to be a mouse trying to stop a herd of elephants from fighting.

Currently, many people are suffering due to high oil price, the slowdown in the economy, loss of jobs, declines in home values, increased bankruptcies and businesses closings, savings being wiped out, the plummeting stock market, and rising inflation. These realities are all direct results of this financial power struggle, and millions of people are its victims today.

An Extreme Example

I was in South Africa in July of this year. During my television and radio interviews there, I was often asked my opinion on the world economy. Speaking bluntly, I said that South Africans had a better opportunity of comprehending the global turmoil because they're neighbors to Zimbabwe, a country run by Robert Mugabe.

In my interviews, I said, "What Mugabe has done to Zimbabwe, the Federal Reserve Bank and the IMF are doing to the world." Obviously, my statements disturbed many of the journalists. I did my best to comfort them and assure them I was not an anarchist. I explained, as best I could, that Zimbabwe was an extreme example of an out of control power struggle.

After they were assured I was only using Zimbabwe to illustrate my point, I said, "If you want to understand the world economy, take a refugee from Zimbabwe to lunch." I advised them to ask the refugee these questions:

1. How fast did the economy turn?

2. When did you know that you were in financial trouble?

3. When did you finally decide to leave Zimbabwe?

4. If you could do things differently, what would you have done?

Three Approaches to a Crumbling Economy

I spoke to three young couples from Zimbabwe while I was in South Africa. Two couples were recent refugees now living in South Africa, and one couple still lives in Zimbabwe. All three couples had interesting stories to tell.

One couple said that they would have quit their jobs earlier. Instead, they hung on, hoping the economy would change. Then, virtually overnight, the value of the Zimbabwean dollar dropped and inflation went through the roof. Even though they received pay raises, the couple couldn't survive and soon depleted their savings. They left Zimbabwe by car with almost nothing. If they could've done something differently, they told me, they would have started a business in Zimbabwe and began exporting products to South Africa, so that they would have had South African currency and a bank account there before they fled.

The second couple that fled the country said they saved money and paid off their house and other debts even as the Zimbabwean dollar fell in value. Looking back, they say they would've saved nothing and gotten deeply in debt in Zimbabwe, allowing them to pay off their debt with the cheaper dollars. Instead, they fled after they lost their jobs, leaving behind their house and owning $200,000 in nearly worthless Zimbabwean dollars.

The third couple still lives in Zimbabwe. When they saw the writing on the wall, they set up a business in South Africa and, with the profits, began acquiring tangible assets in Zimbabwe. Often, they'll buy an asset in Zimbabwe and pay the seller in South African currency. They believe that once Mugabe is gone and order is restored, they'll be in a strong financial position.

Many Problems, Few Solutions

There are three major problems with the events of 1913, 1944, and 1971. The first is that the Fed, the World Bank, and the IMF are allowed to create money out of nothing. This is the primary cause of global inflation. Global inflation devalues our work and our savings by raising the prices of necessities.

For example, when gas prices soared, many people said that the price of oil was going up. In reality, the main cause of the high price of oil is the decreasing value of the dollar. The Fed, the World Bank, and the IMF, like Zimbabwe, are mass-producing funny money, thereby increasing prices and devaluing our quality of life.

The second problem is that our economic crises are getting bigger. In the 1970s, the Fed faced and solved million-dollar crises. In the 1980s, it was billion-dollar crises. Today, we have trillion-dollar crises. Unfortunately, these bigger crises mean more funny money entering the system.

Apocalypse Soon

The third problem is that in 1913, the Fed only protected the large commercial banks such as Bank of America. After 1944, the Fed, the World Bank, and the IMF began bailing out Third World nations such as Tanzania and Mexico. Then, in 2008, the Fed began bailing out investment banks such as Bear Sterns, and its role in the Fannie Mae and Freddie Mac debacle is well known. By 2020, the biggest of bailout of all will probably occur: Social Security and Medicare, which will cost at least a $100 trillion.

Even if we find more oil and produce more food, prices will continue to rise because the value of the dollar will continue to decline. The dollar has lost over 90 percent of its value since the Fed was created. The U.S. dollar will continue to decline because of those seven men on Jekyll Island in 1910.

Granted, the funny-money system has done a lot of good — it has improved the world and made a lot of people rich. But it's also done a lot of bad. I believe somewhere between today and 2020, the system will break. We're on the eve of financial destruction, and that's why it's in gold I trust. I'd rather be a victor than a victim.

Citigroup says gold could rise above $2,000 next year as world unravels

Citigroup says gold could rise above $2,000 next year as world unravels

Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world's monetary system with liquidity, according to an internal client note from the US bank Citigroup.

By Ambrose Evans-Pritchard

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The bank said the damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

"They are throwing the kitchen sink at this," said Tom Fitzpatrick, the bank's chief technical strategist.

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.

"This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised."

"What happens if there is a meltdown in a country like Pakistan, which is a nuclear power. People react when they have their backs to the wall. We're already seeing doubts emerge about the sovereign debts of developed AAA-rated countries, which is not something you can ignore," he said.

Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. "If true, this is a very material change," he said.

Mr Fitzpatrick said Britain had made a mistake selling off half its gold at the bottom of the market between 1999 to 2002. "People have started to question the value of government debt," he said.

Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.

Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.

Debunking The Myth of the $70-per-hour Autoworker

Debunking The Myth of the $70-per-hour Autoworker

By Jonathan Cohn

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If you've been following the auto industry's crisis, then you've probably read or heard a lot about overpaid American autoworkers--in particular, the fact that the average hourly employee of the Big Three makes $70 per hour.

That's an awful lot of money. Seventy dollars an hour in wages works out to almost $150,000 a year in gross income, if you assume a forty-hour work week. Is it any wonder the Big Three are in trouble? And with auto workers making so much, why should taxpayers--many of whom make far less--finance a plan to bail them out?

Well, here's one reason: The figure is wildly misleading.

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.

More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.

So the "wage gap," per se, has been a lot smaller than you've heard. And this is no accident. If the transplants paid their employees far less than what the Big Three pay their unionized workers, the United Auto Workers would have a much better shot of organizing the transplants' factories. Those factories remain non-unionized and management very much wants to keep it that way.

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted yesterday, the claim that workers are getting $70 an hour in compensation is just "not true."

Of course, the cost of benefits for those retirees--you may have heard people refer to them as "legacy costs"--do represent an extra cost burden that only the Big Three shoulder. And, yes, it makes it difficult for the Big Three to compete with foreign-owned automakers that don't have to pay the same costs. But don't forget why those costs are so high. While the transplants don't offer the same kind of benefits that the Big Three do, the main reason for their present cost advantage is that they just don't have many retirees.

The first foreign-owned plants didn't start up here until the 1980s; many of the existing ones came well after that. As of a year ago, Toyota's entire U.S. operation had less than 1,000 retirees. Compare that to a company like General Motors, which has been around for more than a century and which supports literally hundreds of thousands of former workers and spouses. As you might expect, many of these have the sorts of advanced medical problems you expect from people to develop in old age. And, it should go without saying, those conditions cost a ton of money to treat.

To be sure, we've known about these demographics for a while. Management and labor in Detroit should have figured out a solution it long ago. But while the Big Three were late in addressing this problem, they did address it eventually.

Notice how, in this article, I've constantly referred to 2007 figures? There's a good reason. In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.

The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.

In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers.

One can debate the propriety and wisdom of these steps; two-tiered wage structures, in particular, raise various ethical concerns. But one thing is certain: It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line--years the industry probably won't have if it doesn't get financial assistance from the government.

Make no mistake: The argument over a proposed rescue package is complicated, in no small part because over the years both management and labor made some truly awful decisions while postponing the inevitable reckoning with economic reality. And even if the government does provide money, it's a tough call whether restructuring should proceed with or without a formal bankruptcy filing. Either way, yet more downsizing is inevitable.

But the next time you hear somebody say the unions have to make serious salary and benefit concessions, keep in mind that they already have--enough to keep the companies competitive, if only they can survive this crisis.