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Monday, January 16, 2012

Judge: Following Christian Beliefs WRONG!!!

A ministry that follows the dictates of its faith is engaging in wrongdoing, according to a New Jersey judge who recommended today that the state Division on Civil Rights find the Ocean Grove Camp Meeting Association violated the state’s nondiscrimination law.

“The respondent violated the [Law Against Discrimination] when it refused to conduct a civil-union ceremony for Ms. Bernstein and Ms. Paster,” wrote Solomon Metzger, an administrative law judge whose determination will become final if not overturned by the Division of Civil Rights.

“Respondent opposes same-sex unions as a matter of religious belief, and in 2007 found itself on the wrong side of recent changes in the law.”

The seaside location has been popular for years for weddings, but the association, which is affiliated with the United Methodist Church, determined it could not biblically allow same-sex ceremonies to take place on its property.

So when Harriet Bernstein and Luisa Paster signed up for such a ceremony, they were turned down. They filed the discrimination complaint, and the state’s Division on Civil Rights joined their cause.

“The government should not be able to force a private Christian organization to use its property in a way that would violate its own religious beliefs,” said Jim Campbell, a litigation staff counsel for the Alliance Defense Fund.

“Religious groups have the right to use their private property in a way that is consistent with their beliefs. That right, protected by both the New Jersey and U.S. constitutions, obviously trumps any law enacted by the state’s legislature.”

ADF, which represented the ministry, said would it consider the next step in the case, but its argument is that the ministry is exercising its constitutionally protected right to use its private property in a way consistent with its beliefs.

The women made their request in 2007, and the association declined because such an event would have violated its religious convictions.

ADF had argued that the association’s evangelistic goals include even classical concerts and Saturday-night family entertainment.

“Through these events, the association connects with people who might not attend its worship services and encourages them to attend those services in the future. For example, the association begins its Saturday-night family entertainment events with a brief prayer and typically a quick promotion of its upcoming religious services and events. These are just some of the diverse ways that the association strives, in all its programs, to reach the entire community with the love and Gospel message of Jesus Christ.”

Allowing various events at its pavilion, a wood-framed, open-air structure overlooking the Atlantic, was part of such an outreach, the arguments said.

Metzger’s opinion noted that since the dispute erupted, the state denied a portion of the organization’s tax exemption relating to the piece of property, because it “was not available on an equal basis.”

Ocean Grove then requested and obtained a tax exemption for the property under a different application standard.

“As a religious organization that deems same-gender unions sinful, respondent is loath to be associated with such ceremonies and maintains that compelling this through the LAD violates its right of expressive association, free speech and free exercise of religion,” Metzger said.

But he wrote, “That it had never before declined a wedding, other than for scheduling conflicts, only means that it had never before been asked to permit a same-gender service.”


Obama warned Israel against Iran strike

The US administration has spent the last few days working frantically to prevent an Israeli strike on Iran and reinforcing presence in the region in preparation for Iranian counter attacks, Yedioth Ahronoth reported Sunday.

Israeli state officials suggested Saturday that the sanctions against Tehran were not sufficient, which works to enhance US concern over an Israeli strike.

US President Barack Obama is operating several secret channels to deliver messages to all sides. On Thursday, Obama spoke to Prime Minister Benjamin Netanyahu and warned him of the serious consequences of a military strike on Iran's nuclear facilities.

The Wall Street Journal reported that US Defense Secretary Leon Panetta and other top officials have privately sought assurances from Israeli leaders in recent weeks that they won't take military action against Iran and will allow further sanctions to be imposed on the Islamic Republic. It was also reported that US Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, will meet with Israeli military officials in Tel Aviv next week.

US defense officials claim that the Israeli response has been noncommittal. Some American intelligence officials complain that Israel represents a blind spot in US intelligence, which devotes little resources to Israel, the WSJ said.

The officials accused the Israeli security establishment of playing a "good cop, bad cop" routine and increasing uncertainty in Washington.

This ambiguity has led the US administration to believe that Netanyahu has plans to attack and the US is therefore preparing for the outcomes of such a strike.

The US military is preparing for a number of possible responses to an Israeli strike, including assaults by pro-Iranian Shiite militias in Iraq against the US Embassy in Baghdad, the WSJ said.

According to the report, the US has 15,000 troops in Kuwait and has moved a second aircraft carrier strike group to the Persian Gulf area.

It has also been pre-positioning aircraft and other military equipment, officials say. Arms transfers to key allies in the Gulf, including the United Arab Emirates and Saudi Arabia, have been fast-tracked as a further deterrent, officials say.

Disappointment with sanctions

According to messages by Israeli state officials over the weekend, the US is right to be concerned. Israeli officials did not deny reports of growing American concern and sent a clear message that Israel was disappointed with the sanctions against Iran.

One source said that without an immediate toughening of sanctions which will include action against Iran's central bank and its ability to export oil, Tehran will never consider halting its nuclear program. They also criticized the fact that the White House failed to adopt a Congress decision to act firmly against Iran's central bank.

Netanyahu addressed the matter in an interview with The Australian. "For the first time, I see Iran wobble under the sanctions that have been adopted and especially under the threat of strong sanctions on their central bank," he said. "If these sanctions are coupled with a clear statement by the international community, led by the US, to act militarily to stop Iran if sanctions fail, Iran may consider not going through the pain. There's no point gritting your teeth if you're going to be stopped anyway."

US President Obama also sent a firm message to Iran's spiritual leader Ali Khamenei and stressed that closing the Strait of Hormuz would be crossing a red line which would lead to counter action by the US.

Yedioth Ahronoth also reported that IDF Chief of Staff Benny Gantz is slated to attend a line of high-profile international events this week. He is scheduled to attend a military chiefs conference in Brussels, hold a meeting with NATO's chief of staff and host US Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff in Israel.


About China.....

China is rising. This is no secret. In fact, China is now a greater part of our daily lives than many Americans would prefer. Not only are many of the goods we purchase manufactured in China (goods that once were made in the USA), but every American owes thousands of dollars to China by virtue of the money it has lent our government.

Gradually, China is buying its way into every country in the world, or so it seems.

But China is also a paradox. While it is undeniably the dominant economic engine of Asia -- some would say of the world -- it is a nation still ruled -- and some would say brutally so -- by a repressive Communist regime.

And, apparently, the regime is growing a little worried. Last week, Chinese President Hu Jintao accused the West of trying to expand its influence in China by corrupting Chinese culture. (He's just now noticing this? He apparently hasn't seen American TV or movies or listened to much American music the last couple of decades.)

Writing in the Communist Party's magazine, President Hu warned his countrymen that the West is trying to divide the Chinese people using ideology and culture. He also declared that China needs to deepen and promote its own brand of Chinese socialism.

He obviously feels America's newfound socialism is inferior to the Chinese version.

It's also no secret that China has embarked on an aggressive military build-up. I suppose with all the extra money from exports, all the extra young men who have no prospects for marriage due to China's one-child per family policy with a premium placed on male children, Chinese industry's massive and unquenchable thirst for energy products and raw materials, and its deep-seated need for regional hegemony, a military build-up is the logical way to go.

Interestingly, China is building its military just as the United States is gutting its own. I'm sure this pleases China, but I'm also sure it perplexes Europe. This means that Europe will have to rethink its own defense capabilities and obligations. For the first time since World War Two, Europe may not be able to rely on the USA to defend it. Europe may actually have to provide for its own defense -- and offense.

This all fits in with Bible prophecy: A weak (or non-existent) USA and a militarily strong China and Europe; not to mention a revived Russia and a united Muslim confederacy that stretches across northern Africa and down the Arabian peninsula. Every bit of which we are seeing develop right now.

Meanwhile, back at the kibbutz, Israel continues to wonder what will happen when the new gunslinger in the neighborhood, the Muslim Brotherhood, finally assumes power in Egypt. The hardline Islamist group has won the largest share of seats in Egypt's parliament. Contrary to the naive assurances of the Obama Administration, the Muslim Brotherhood, together with the even harder-line Salafist party, will be the dominant power in Egypt. And to no one except the Administration's surprise, its leaders have already announced that they will seek ways to abrogate Egypt's 33-year old treaty with Israel.

Since the 1979 Camp David Accords were the first in the line of insufferable "land for peace" swindles forced upon Israel by the rest of the world, the question may soon be asked, "Will the US uphold its end of the bargain?" You see, President Jimmy Carter convinced Israeli Prime Minister Menachem Begin to sign the treaty with Anwar Sadat and return the Sinai to Egypt by assuring him that the US would guarantee Egypt's compliance with the treaty's terms. And vice versa with Mr. Sadat, I'm sure.

So, if Egypt's new Islamic government reneges on the pact, will the US honor its guarantee and insist that Egypt return the Sinai to Israel, who held it prior to 1979? After all, if it's truly "land for peace," then if the "peace" is withdrawn, the land should be returned, shouldn't it? My advice to you: don't hold your breath until this happens!

In truth, the same should apply to the Gaza Strip as well. Israel ceded land in return for a promise of peace. There's been no peace with the PA and Hamas, so shouldn't the land be returned? Again, no breath-holding.

Well, you get my point.

However, the Bible prophets tell us that someday soon, a man will come along who will seem to be able to finally make a "land for peace" deal stick. He, too, will guarantee Israel's safety and the Israelis will believe him. So much so that they will let down their guard and finally live in peace and security with their neighbors. The prophets described it as a time of living safely "in unwalled villages."

Of course, the Bible also tells us that about halfway through the covenant's seven-year term, this man will reveal his true nature and insist on being worshipped as God. That's when, as the saying goes, all hell breaks loose.

Fortunately, you and I won't be here. We'll be long gone, caught up to meet our Lord and Savior in the air. And you know what? It won't be a moment too soon. Come quickly, Lord Jesus.

Hal Lindsey

Western intelligence sources tell Time Magazine Israel's Mossad targeted Iranian scientist

Western intelligence sources told Time magazine on Friday that Israel's Mossad is responsible for the latest assassination of an Iranian nuclear scientist.

A magnetic bomb was attached to the door of 32-year-old Mostafa Ahmadi-Roshan's car during the Wednesday morning rush-hour in Tehran. His driver was also killed. Sources tell the magazine Israel was behind three previous assassinations of scientists.

A senior Israeli official told is quoted in the report as saying "yeah, one more… I don't feel sad for him."

On Saturday, Iranian state television said that Iran had evidence the United States was behind the latest assassination. We have reliable documents and evidence that this terrorist act was planned, guided and supported by the CIA," the Iranian foreign ministry said in a letter handed to the Swiss ambassador in Tehran, state TV reported.
"The documents clearly show that this terrorist act was carried out with the direct involvement of CIA-linked agents."

The Swiss Embassy has represented U.S. interests in Iran since Iran and the U.S. cut diplomatic ties shortly after the 1979 Islamic revolution.
Tension has mounted between Iran and the West as the United States and European Union prepare measures aimed at imposing sanctions on the Iran's oil exports, its economic lifeblood.

The United States and Israel have not ruled out military action if diplomacy fails to resolve the nuclear dispute.

Also on Saturday, the Wall Street Journal reported that the U.S. has stepped up contingency planning in case Israel launches a military strike on Iran's nuclear facilities.

According to the report, U.S. defense officials are becoming increasingly concerned that Israel is preparing to carry out such a strike.


Iran: We have evidence U.S. killed nuclear scientist in Tehran

Iranian state television said on Saturday that Iran had evidence the United States was behind the latest assassination of one of its nuclear scientists.

In the fifth attack of its kind in two years, a magnetic bomb was attached to the door of 32-year-old Mostafa Ahmadi-Roshan's car during the Wednesday morning rush-hour in Tehran. His driver was also killed.

The United States has denied involvement in the killing and condemned it. Israel has declined to comment.

"We have reliable documents and evidence that this terrorist act was planned, guided and supported by the CIA," the Iranian foreign ministry said in a letter handed to the Swiss ambassador in Tehran, state TV reported.

"The documents clearly show that this terrorist act was carried out with the direct involvement of CIA-linked agents."

The Swiss Embassy has represented U.S. interests in Iran since Iran and the U.S. cut diplomatic ties shortly after the 1979 Islamic revolution.

State TV said a "letter of condemnation" had also been sent to the British government, saying the killing of Iranian nuclear scientists had "started exactly after the British official John Sawers declared the beginning of intelligence operations against Iran".

In 2010, chief of the British Secret Intelligence Service Sawers said one of the agency's roles was to investigate efforts by states to build nuclear weapons in violation of their
international legal obligations and identify ways to slow down their access to vital materials and technology.

Iran has urged the UN Security Council and Secretary-General Ban Ki-moon to condemn the latest killing, which Iran says is aimed at undermining its nuclear work, which the West and Israel say is aimed at building bombs. Ian says its nuclear program is purely civilian.

Tension has mounted between Iran and the West as the United States and European Union prepare measures aimed at imposing sanctions on the Iran's oil exports, its economic lifeblood.

The United States and Israel have not ruled out military action if diplomacy fails to resolve the nuclear dispute.


Even Local German CEOs Say Time To Exit Euro May Have Arrived

(Reuters) - Germany should consider leaving the euro if efforts to impose fiscal discipline upon indebted euro zone countries fail, the head of industrial gases firm Linde (LING.DE) told German weekly paper Der Spiegel.

"I fear the willingness of crisis countries to reform themselves is abating if, in the end, the European Central Bank steps in," Linde's chief executive Wolfgang Reitzle was quoted as saying.

"If we do not succeed in disciplining crisis countries, Germany needs to exit," said Reitzle who was previously a board member at carmaker BMW  and head of Jaguar and Land Rover.

Asking Germans to pay more than 50 percent taxes to help fund other euro zone countries will erode the will of the German electorate to support rescue measures, Reitzle said.

Although this scenario is not desirable, he felt that German industry would survive working in a new currency.

"Of course it would lead the new currency - Deutschmark, North-euro or whatever it is called - to appreciate in value. But it would be by a lesser amount than feared," Reitzle said.

"Although this would lead to higher unemployment in Germany because exports would take a hit, pressure would increase to become more competitive."

Reitzle said the euro zone is unlikely to break up completely but Greece is not in a position to service its debt.

"The country is not in a position to restructure itself in such a way that it can remain in the currency union," Reitzle said.

"In the medium term Greece needs to exit. And the writedowns on Greek debt will not be between 50 to 70 percent, but in the end will be written down by 100 percent," Reitzle said.

So long as Greece remains in the euro it needs to be supported. "All in all this is a 500 billion-euro problem," Reitzle said.

Structural reforms need to continue elsewhere in places like Italy too, Reitzle said.

The year of destiny for the euro is not 2012, but three to four years down the line, Reitzle said.

Upon being asked whether Linde has a plan B to cope with a complete break-up of the euro zone, Reitzle said 'no'.

"Even if we had a recession for years in Europe, it would only impact 30 percent of our revenues," he added.

Turkey halts Iranian arms corridor to Syria, balks at nuclear Iran

Military Intelligence chief Maj.-Gen. Aviv Kochavi accused Iran and Hizballah Wednesday, Jan. 11of directly helping Bashar Assad repress the uprising against him with arms, Turkey had just taken a stand against the Iranian corridor running weapons to Syria via its territory, DEBKAfile's military sources report.
Earlier this week, Ankara reported halting five Iranian trucks loaded with weapons for Syria at the Killis Turkish-Syrian border crossing and impounding its freight. According to our intelligence sources, the Iranian convoy was not really stopped at Killis but at the eastern Turkish Dobubayazit border crossing with Iran, near Mount Ararat. This supply route for Syria had been going strong for months. Ankara's decision to suspend it has reduced its volume by 60 percent.

The Turks kept very quiet about the Dogubayazit route because disclosure would have exposed them as working two sides of the Syrian conflict – letting Tehran set up a clandestine arms route for helping the Assad regime crack down on protest, while publicly posing as the leading champions of the Syrian protest movement – even to providing the Free Syria Army with bases and training facilities.

The influx of Iranian arms supplies via Turkey gave the Syrian army a major boost in quelling the uprising especially in the restive towns of Hama, Homs and Idlib, where demonstrations have dwindled. Now Ankara is worried about the consequences. Thursday, President Abdullah Gul raised fears of the Syrian uprising mutating into civil war. Our sources report that Ankara is concerned that sectarian conflict in Syria could spill over into Turkey.

In fact, as DEBKAfile’s military and intelligence sources report exclusively, Ankara changed course against Iran after Turkish Foreign Minister Ahmet Davutoglu visited Tehran on Jan. 5. His mission was to warn Iranian leaders including President Mahmoud Ahmadinejad whom he met that Turkey will not stand for Iran acquiring a nuclear bomb and would act to disrupt its program.
Although his visit was officially presented as an effort to broker the resumption of long-stalled nuclear talks between Tehran and the five world powers plus Germany (P5+1), Davutoglu in fact informed Ahmadinejad in no-nonsense terms, “Turkey can't live between two nuclear powers, one to the north (Russia) and one to the east (Iran)." The minister warned that if Tehran goes into production of a nuclear weapon, Ankara's first step would be to open the door for NATO forces to deploy along its border with Iran.

According to DEBKAfile sources, Davutoglu gave Ahmadinejad a week to clarify the information reaching the West that Tehran had already begun assembling a nuclear weapon, so belying the persistent Iranian claim that its nuclear program is peaceful. After that, he said, Ankara would embark on progressively tougher counter-action.

And indeed, when clarifications from Tehran had not been received by Tuesday, Jan. 10, Turkey went into action to halt the Iranian weapons convoy to Syria.

Taking advantage of the new opportunities presented by the US military departure from Iraq last month, Iranian officials the next day, Wednesday, Jan. 11, ordered Iraqi Prime Minister Nouri al-Maliki to shut the Iraqi-Jordanian border to convoys carrying Turkish export goods to Persian Gulf destinations.
The following day, Thursday, Iran's Speaker of Parliament, Ali Larijani, turned up in Ankara to try and sort things out between Iran and Turkey before they got out of hand.

Greece gets closer to brink of bankruptcy

Three months of negotiations ground to a halt on Friday night, amid a wave of downgrades by ratings agency Standard & Poor’s aimed at a clutch of European countries, including France.

The unexpected breakdown in talks between Greece and its private-sector creditors has taken the country a step closer to bankruptcy after a failure to sign up lenders to a voluntary and “orderly” 50pc haircut to their holdings.

Greece’s finance minister Evangelos Venizelos said talks would resume on Wednesday to “bridge differences” but insiders remained sceptical that a deal could be stitched at such a late stage.

The clock is ticking for Greece, as a deal must be reached before March 20, when the country is due to receive a further €130bn (£107bn) bail-out tranche from the International Monetary Fund and must make a key €14.5bn bond payment.

The problem centres on the difference between lenders agreeing to a “voluntary” and orderly default – which would mean swapping into bonds with a lower value – and lenders refusing terms, which would cause a default.

This type of “credit event” would trigger billions of insurance claims through credit default swaps (CDS), insurance policies taken out to protect investors in the event of a default.

The problem is that, of the €315bn of Greek debt outstanding, only €7.8bn is covered by Greek CDS. The vast majority of Greek debt is held by European banks, which have little insurance on their exposure. Most Greek CDS are held by hedge fund managers – accused by Germany and France of financially benefiting from sovereign woes. Some claim that hedge fund managers would benefit from a default, with Europe’s banks being the losers.

In October last year, the framework of the Greek creditor deal emerged after a late night finance ministers’ meeting. Greek officials and the nation’s creditors agreed in principle to implement a 50pc cut in the face value of Greek debt, with a goal of reducing Greece’s borrowings to 120pc of GDP by 2020.

On Friday evening, the Washington-based Institute of International Finance (IIF), which represents bondholders, said that talks had not produced a “constructive consolidated response by all parties”. The IIF had aimed to implement a swap into new bonds this month. But the two sides still have to agree on the coupon and maturity of the new bonds to determine losses for investors.

The breakdown in talks has been described as “catastrophic” by insiders, who say the repercussions of a default would be felt not just by Greece but by all of Europe.

The bond-swap deal, which aims to cut Greece’s debt pile by €100bn (£82bn), is part of the condition for freeing up €130bn of further rescue funds for the near-insolvent nation. Greece’s credit rating did not change on Friday in S&P’s review of eurozone countries, as it is already considered to be deep into “junk” status.

Lucas Papademos, the Greek prime minister, said the new aid package and bondholder talks were linked and each needed to succeed for Greece to survive. “Neither deal can stand on its own. One is a condition for the other,” he said in a speech on Friday night.

“We are fully aware of how critical the situation is. Until these negotiations are completed, we face dire economic dangers.”

However, Mr Venizelos last week insisted that the threat of a disorderly default could be averted within weeks and that bond swap negotiations could yet be salvaged.

The Telegraph

Obama Seeks New Power to Merge Agencies, Pledges Some Action ‘With or Without Congress’

President Barack Obama wants more power to reorganize the executive branch, powers he says will only be used to make government more efficient.

“This is the same sort of authority that every business owner has to make sure that his or her company keeps pace with the times,” Obama said at the White House Friday. “Let me be clear, I will only use this authority for reforms that result in more efficiency, better service, and a leaner government.”

He also said that he was elevating the Small Business Administration to a cabinet-level position, and pledged to do whatever possible even without Congress.

“So with or without Congress, I’m going to keep at it,” the president said. “I’m hopeful it’s with Congress, because this is an area where we can receive bipartisan support, because making our government more responsive, strategic and leaner should not be a partisan issue.”

The president’s first goal, if Congress approves these powers, would merge portions of the U.S. Commerce Department’s business and trade functions, the Small Business Administration; the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency.

“With the authority I am requesting today, we could consolidate them all into one department with one website, one phone number and one mission – helping American businesses succeed,” Obama said.

Under Obama’s proposed authority, he would be allowed to propose merging federal agencies to save money, and entitle him to an up-or-down vote in Congress within 90 days.

Obama invoked the New Deal era in talking about the presidential powers to reorganize the executive branch that he said Congress granted to presidents up to Ronald Reagan in 1984.

¨Congress first granted this authority to presidents in the midst of the Great Depression, so that they could swiftly reorganize the executive branch to meet the changing needs of the American people,” Obama said.

“For the next 52 years, presidents were able to streamline or consolidate the executive branch by submitting a proposal to Congress that was guaranteed a simple up-or-down vote. But in 1984, while Ronald Reagan was president, Congress stopped granting that authority and when this process was left to follow the usual congressional pace, not surprisingly, it slowed down,” he added.

Obama insisted government has not kept pace with the rest of the world.

“Think of all that has happened since 1984. A generation of Americans has come of age,” Obama said. “Landlines have turned into smart phones. The Cold War has given way to globalization. So much has happened – and yet the government we have today is largely the government we had back then. We deserve better.”

Five different federal agencies deal with housing and more than a dozen in food safety, Obama said, stating it leads to unnecessary duplication.

Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, with jurisdiction over government reorganization, said Obama has not welcomed earlier proposals to streamline the government.

“I stand ready to work with President Obama on proposals to reorganize federal agencies,” Issa said. “While I have been disappointed that the White House has not embraced earlier bipartisan congressional efforts seeking collaborative engagement on proposals to reorganize government, I hope this announcement represents the beginning of a sincere and dedicated effort to enact meaningful reforms.”

CNS News

Gerald Celente on The Alex Jones TV 13 January 2012

US media first to bomb Iran

U.S. Debt Nears $15.194 Trillion Ceiling

The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.

The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling “and that further borrowing is required to meet existing commitments.”

Raising the debt ceiling another $1.2 trillion is procedurally simple but politically it is much more complex.

Last year, as part of the White House’s deal with Republicans to avert a potential default on the U.S. debt, both sides agreed to raise the debt ceiling $2.1 trillion, but to do it in two steps. So in August, they immediately raised the debt ceiling $900 billion.

To raise the ceiling another $1.2 trillion, which is what the Treasury Department now wants to do, Congress must first have the opportunity to formally disapprove or block the increase.

The vote of disapproval is expected to fail, but they need the opportunity to vote, which is something they can’t do while they are out of town. Congress has 15 days to vote to disapprove the increase once it is formally requested by the White House.

To be sure, Treasury Department officials, led by Mary Miller and others, have learned multiple ways to buy extra time while Congress deliberates during the near-scare last year. Suspending investments in the exchange-stabilization fund, a reserve account for foreign exchange purposes, is one of several things the agency can do to buy more time. If they need to buy even more time, they can suspend contributions to certain federal pension funds, among other things.

The practical implications of failing to raise the debt ceiling are pretty severe, according to government officials and market analysts. The government can only borrow money up to the limit, and because the government spends more money than it brings in through taxes and other receipts it is constantly running up the debt.

Failing to raise the ceiling would mean the government would have to make severe cuts in spending to avoid defaulting on debt obligations.

Lawmakers are set to return later this month, though it’s unclear how soon a vote of disapproval could be held.

If the debt ceiling is raised $1.2 trillion, it would mean the government wouldn’t need to raise the debt ceiling again until late 2012 or early 2013.


Bam! Bam! Bam! Huge Financial Bombs Just Got Dropped All Over Europe

The European debt crisis has just gone to an entirely new level.  Just when it seemed like things may be stabilizing somewhat, we get news of huge financial bombs being dropped all over Europe.  Very shortly after U.S. financial markets closed on Friday, S&P announced credit downgrades for nine European nations.  This included both France and Austria losing their cherished AAA credit ratings.  When the credit rating of a country gets slashed, that is a signal to investors that they should start demanding higher interest rates when they invest in the debt of that nation.  Over the past year it has become significantly more expensive for many European nations to borrow money, and these new credit downgrades certainly are certainly not going to help matters.  Quite a few financially troubled nations in Europe are very dependent on the ability to borrow huge piles of cheap money, and as debt becomes more expensive that is going to push many of them over the edge.    Yesterday I wrote about 22 signs that we are on the verge of a devastating global recession, and unfortunately that list just got a whole lot longer.
Over the past several months we have seen quite a few credit downgrades all over Europe, but we have never seen anything quite like what S&P just did.  Standard & Poor’s unleashed a barrage of credit downgrades on Friday....
-France was downgraded from AAA to AA+
-Austria was downgraded from AAA to AA+
-Italy was downgraded two more levels from A to BBB+
-Spain was downgraded two more levels
-Portugal was downgraded two more levels
-Cyprus was downgraded two more levels
-Malta was downgraded one level
-Slovakia was downgraded one level
-Slovenia was downgraded one level
This is really bad news for anyone that was hoping that things in Europe would start to get better.  Borrowing costs for many of these financially troubled nations are going to go even higher.
In addition, there was another really, really troubling piece of news that came out of Europe on Friday.
It was announced that negotiations between the Greek government and private holders of Greek debt have broken down.
The Institute of International Finance has been representing private bondholders in negotiations with the Greek government about the terms of a "voluntary haircut" that is supposed to be a key component of the "rescue plan" for Greece.
Greece desperately needs private bondholders to agree to accept a "voluntary haircut" of 50% or more.  Without some sort of an agreement, the finances of the Greek government will collapse very quickly.
For now, negotiations have failed.  There is hope that negotiations will resume soon, but Greece is rapidly running out of time.
The Institute of International Finance issued a statement on Friday which said the following....
"Unfortunately, despite the efforts of Greece's leadership, the proposal put forward … which involves an unprecedented 50% nominal reduction of Greece's sovereign bonds in private investors' hands and up to €100 billion of debt forgiveness — has not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt"
The IIF says that negotiations are "paused for reflection" right now, but they are hoping that they will be able to resume before too long....
"Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach"
Something needs to be done, because Greece is experiencing a complete and total financial meltdown.
Back at the end of July, the yield on one year Greek bonds was sitting at about 40 percent.  Today, the yield on one year Greek bonds is up to an astounding396 percent.
That is how fast these things can move when confidence disappears.
Those living in the United States should keep that in mind.
Unfortunately, Greece is not the only European nation that is completely falling apart financially.
We aren't hearing much about it in the U.S. media, but Hungary is a total basket case right now.  The credit rating of Hungary was reduced to junk status some time ago, and now the IMF and the EU are threatening to withhold financial aid from Hungary if the Hungarians do not run their country exactly as they are being told to do.
In particular, the IMF and the EU are absolutely furious that Hungary is trying to take more political control over the central bank in Hungary.  The following is from an article in the Daily Mail....
The European Union has stepped up pressure on Hungary over the country's refusal to implement austerity policies and threatened legal action over its new constitution.
The warnings escalated the standoff between Budapest and the EU, as Hungary negotiates fresh financial aid from Europe and the International Monetary Fund.
Over the past months, the country's credit rating has been cut to junk by all three major rating agencies, unemployment is 10.6 percent and the country may be facing a recession.
But bailout negotiations broke down after Budapest refused to cut public spending and implemented a new constitution reasserting political control over its central bank.
Slovenia is a total mess right now as well.  The following comes from a recent article posted on EUObserver.com....
Slovenia's borrowing costs have reached 'bail-out territory' after lawmakers rejected the premier-designate, putting the euro-country on the line for further downgrades by ratings agencies.
Zoran Jankovic, the mayor of Slovenia's capital Ljubljana, fell four votes short of the 46 needed to be approved as prime minister by the parliament, with the country's president set to re-cast his name or propose someone new within two weeks.
Some time ago, I warned that 2012 was going to be a more difficult year for the global economy than 2011 was.
Well, things are certainly starting to shape up that way.
Europe is heading for some really hard times.  What is about to happen in Europe is going to shake the entire global financial system.
Those that live in the United States should take notice, because the U.S. financial system is far more fragile than most people believe.
Our banking system is a gigantic mountain of debt, leverage and risk and it could fall again at any time.
In addition, the U.S. debt problem is bigger than it has ever been before.
For example, did you know that the federal government is on a pace to borrow6.2 trillion dollars by the end of Obama's first term in office?
That is more debt than the U.S. government accumulated from the time that George Washington became president to the time that George W. Bush became president.
For now the U.S. government is still able to borrow giant piles of super cheap money, but such a situation does not last forever.
Just ask Greece.
Already there are indications that foreigners are starting to dump large amounts of U.S. debt.  If this trickle becomes a flood things could become very bad for the United States very quickly.
We are on the verge of some very bad things.  The kinds of "financial bombs" that we saw dropped today are going to become much more frequent.  As governments, banks and investors scramble to survive, we are going to see extreme amounts of volatility in the financial marketplace.
Things are not going to be "normal" again for a really, really long time.
Hold on tight, because 2012 is going to be a very interesting year.
Economic collapse