So, for anyone that’s interested, here’s the link: McClellan Financial Free Trial

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Police are on the scene in Times Square this morning where authorities say they discovered and are in the process of dismantling a bomb inside an SUV. The device, made of three propane tanks, fireworks, and two five-gallon full gasoline containers, had two clocks with batteries attached to it. There is no word how much time, if any, was left on the timer.

CLICK ON IMAGE TO SEE FULL SIZE. Images from Times Square webcam.

Luckily the bomb was discovered before it went off. Reportedly a t-shirt vendor noticed smoke coming from the car and noted a mounted police officer nearby. It is not clear whether the bomb failed to go off or the bomb squad managed to dismantle it before the detonator went off. In any case, this is the second failed terror plot on New York City and the third on the United States in a very short period of time. What kind of sick people do this? As I understand this, the propane and the gasoline would not have produced a lot of structural damage to the surrounding buildings, but it certainly would have been enough to set people on fire and cause a lot of cuts (a lot of glass buildings around). Indeed, the stampede resulting from the panic would have caused numerous injuries (Saturday evening = a lot of people around Times Square).

New York is fortunate to have avoided a disaster this time. Let’s hope they’re as lucky next time around. New York is one of the greatest cities I’ve been to and I wouldn’t want to see the city being taken over by fear and terror.

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The first state that comes to mind when talking about fiscal problems is California with its 49% budget hole and a 16.2% drop in revenue. But there are other states out there whose fiscal problems come eerily close to California: Illinois’ budget is off by 47% while Oregon’s revenue has fallen 19%, which is even worse than California. According to the law, states have to balance their budgets just like every enterprise interested in survival (companies can rely on debt, but they have to service that debt and eventually pay it off, unlike the federal government or the government of Japan, for that matter).

What to expect from all of this?

Well, first off, states will most likely use every possible means to raise revenue – meaning more traffic tickets, higher fees, giving out casino licenses (some states are seriously thinking about legalizing gambling to collect taxes) and downright stupid requirements like the one that New York just imposed on its vehicle owners by requiring them to buy new license plates for no other reason than to collect funds. But aside from collecting more taxes, states will start cutting back on vital public services like the maintenance of roads, bridges, waterfronts, levees, railroad crossings – all the while infrastructure is in a terrible shape and needs immediate fixing. This is very sad indeed – while I remain critical of the way the country is run, I am still very much fond of America. I would like to see America recover as much as Americans themselves, but given the current trends I don’t see that happening. It is indeed a sad chapter in American history.

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“Her great-grandmother’s precious natural pearls and other jewelry had been auctioned off. They were sold for just $1,800, even though they were appraised for $82,500.

These things were things that she gave to me,” Ruff said. “I valued them because I loved her.”"

The article goes on to cite numerous cases where states have taken the liberty to sell or auction off people’s assets without even notifying the real owners. One state (guess which one?) has been particularly keen on seizing its citizens’ assets. If fact, it has been so good at it that it now owes $5.1 billion dollars for all the things it has confiscated.

“California law used to say property was unclaimed if the rightful owner had had no contact with the business for 15 years. But during various state budget crises, the waiting period was reduced to seven years, and then five, and then three. Legislators even tried for one year. Why? Because the state wanted to use that free money.”

This is the kind of stuff that usually happens in third world countries or places that don’t have an established code of law. The fact that this is happening in America is a big disappointment.

Source:
ABC News :How Safe Is Your Safe-Deposit Box?
by Elisabeth Leamy

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When I first wrote about the Chinese disclosing their gold purchases back in April, I was pretty sure that any upside potential these purchases might have were long gone. But then, stories about Chinese government officials openly decrying the US dollar started to surface. Officials from other countries followed suit and German Head of State Angel Merkel dismissed Obama’s cries to print more money. But the US didn’t care, it kept on monetizing debt and buying up toxic assets from insolvent companies. All of this was followed by the TV commercial story.

The TV commercial story, on its surface, is groundbreaking enough to put a smile on every gold bug’s face. But beneath the obvious is something much more powerful. From Lawrence Williams at Mineweb.com: “Chinese state endorsement of gold and silver as good investments means the country can no longer afford to let precious metals prices drop by any significant amount.”

If this doesn’t make you want to run to gold, consider the fact that the Chinese government has to manage it’s way around 1,338,000,000 people, according to the latest estimates for 2009. Civil unrest has been a problem for years with tens of thousands of protests each year occurring all over China, but it is only going to get worse as factories are being closed for various reasons and environmental degradation takes a toll on the health of citizens; unless the government acts in ways to mitigate those problems. One has to realize that the only objective of the Communist Party is to stay in power and the only way to do that is to keep the probability of a revolution, peaceful or not, as close to zero as possible. That government cannot afford to lose the trust of its citizens and it has to, and will, do everything in its power to keep that from happening. Keeping its promises and standing by its words (endorsing gold and silver as an investment) is a part of that.

One also has to consider cultural implications. “‘Losing face’ is an important aspect of Chinese psychology and if millions of investors lose out because state-promoted investment in precious metals is not borne out this would be a massive government loss of face and one which is certainly not beyond its capabilities of not allowing to happen.”

The Chinese have no problems with keeping a floor under the price of gold and silver, especially considering the huge currency reserves that they have accumulated over the years and their diversification plans which involve the central bank of China and an undisclosed number of Chinese sovereign wealth funds buying up domestic as well as international gold. In effect, the Chinese have issued a massive insurance policy on the price of gold and silver. So there you have it. Considering that China started promoting gold and silver as an investment back in August, one can assume that the current floor is around the price seen in August: 950 in US dollars, 650 in euros, 1130 in Aussie dollars, 1030 in Canadian dollars, 570 in pound sterling, 890,000 in Japanese yen. The price of silver was around $14 in August, which means that one ounce of gold bought you 67.85 ounces of silver (use that to calculate the price of silver in other currencies for the month of August). Over time, I would expect to see the floor price rise as more and more Chinese accumulate gold and silver at higher price levels.

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Major stock indexes have rallied around 50% from their March lows and it seems that the rate of decline of the American economy is slowing or even turning positive. Needless to say, the mainstream media and the politicians along with the central bankers are all over this, claiming that the recession is over or about to end and that we are in a recovery. But is this a real recovery or just a cover-up? Why don’t just look at the numbers, shall we?

1) Household net worth is down $12.2 trillion from the peak in 2007, currently standing at $53.1 trillion (chart here). According to the Federal Reserve report issued on Thursday, net worth was up $2 trillion in the three months leading to June 30th. Up? UP? What about the falling dollar? Households might be “richer” in terms of dollars but that will be flushed away by inflation, especially as foreign currencies make imports more expensive. No recovery here.

2) Unemployment. The rate of new jobless claims has been falling and this was something most people expected. Companies have eliminated the most obvious inefficiencies and are now having to make tougher calls on who to keep. U-3 is at 9.7% and U-6, the broader unemployment rate is at 16.8% (data here). If you’re confused about U-3 and U-6, you should read this. The depression has thrust America way back into the year 2000! And even the people that have a job are taking home less pay as wages and working hours alike have been dropping and continue their decline. People haven’t gotten back their jobs, no recovery here.

3) Mortgages.Over a million people have lost their homes any many more are on the brink of foreclosure. A recovery would imply that these people have gotten their houses back or purchased new homes. If you figure in the massive Alt-A mortgages that are about to be reset in the coming quarters then the picture turns really, really bleak. Recovery? No way.

4) Health insurance. Nearly FIVE million people have lost health care insurance since September 2008. Recovery? Are you kidding me?

5) Household income. According to the US Census Bureau, real median household income fell 3.6% between 2007 and 2008 from $52,163 to $50,303. Recent data suggests that real median household income is not about to recover, especially with all the jobless claims. No recovery.

6) Poverty. A new comprehensive economic survey shows that the recession has plunged 2.6 million more Americans into poverty. Come again? The nation’s poverty rate rose to 13.2 percent in 2008, up from 12.5 percent in 2007. In all, 39.8 million Americans were living in poverty in 2008, defined as an income of $22,025 for a family of four. The last time there were that many poor people was 1960, although the nation’s population was smaller then. Wow! It’s no surprise that the politicians are lying and Ben Bernanke’s prognosis is wrong, but geez…this is really scary. Think about the implications this has for America’s future. Poverty is something that cannot be reversed overnight like the financial markets can. Recovery? NO! This is a cover-up!

7) Food stamp program. From Sudden Debt: The number of people on food stamps reached a record 35.1 million in June 2009, up 21% from last year and +33% from the end of 2006. That’s almost 12% of the entire population of the United States, the highest percentage since the food stamp program began in 1969.

The bottom line is that for people who have jobs, this a recession. For people who are unemployed, this is a depression. A recovery in the stock markets is not the same as a real economic recovery. However, this does not mean that we are going to see another crash in the financial markets. With all the government stimulus and the Fed monetization, the GDP numbers will very likely end up on the positive side by the end of this year. According to the Economic Cycle Research Institute, we are headed for another growth period for the overall economy. This means rising stock prices, but especially rising commodity prices as business starts to pick up. It is fair to say that GDP doesn’t measure the well-being of the people but when it comes to economic activity, I find it to be most helpful. With all the new credit in the system (right now, credit is up compared to 2008, which is a very powerful sign of economic activity) a shift in economic activity to the upside is almost guaranteed. The recent FOMC meeting added strength to what you just read as the Fed promised to keep on monetizing government and GSE (govt. sponsored entity; Fannie Mae, Freddie Mac) debt. Rumours have it that Congress is also working on a second stimulus. So in the end, the economy is still in the toilet in terms of the well-being of the people, but for investors it’s a very good time. Use this to your advantage, but whatever you do, don’t short the markets. It will kill you.

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