Is August 2nd really the debt limit deadline?
Despite multiple statements from President Barack Obama and Treasury Secretary Tim Geithner that the government will not be able to meet all of its obligations after that date, a new UBS report sets the real deadline perhaps a week later.
"UBS analysis suggests (the U.S.) Treasury has the funds to make all payments until about August 8th - 10th," wrote Chris Ahrens, head of interest rate strategy for the firm in a note obtained by The Wall Street Journal.
A study by the Bipartisan Policy Center last month reaffirmed the government position that the Treasury Department cannot fund all of its obligations on August 3rd. Default would no necessarily occur immediately if the government prioritizes interest payments.
Geithner repeatedly refused to comment on which bills would be paid after August 2nd in an interview with Fox News Sunday.
Read more: http://www.businessinsider.com/ubs-august-2nd-isnt-real-deadline-for-debt-limit-deal-2011-7?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheMoneyGame+%28The+Money+Game%29&utm_content=Google+Reader#ixzz1T7rwau5u
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Monday, July 25, 2011
Gold hits record as U.S. debt talks grind on
SAN FRANCISCO (MarketWatch) — Gold futures traded in record territory Monday as U.S. debt-ceiling talks to avert a default continued, with little to indicate progress toward a deal.
Gold for August delivery gained $16.80, or 1%, to $1,618.20 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,624.30 an ounce earlier.
Protracted U.S. debt-limit negotiations and concerns about Europe’s sovereign-debt crisis pushed gold to a nominal record of $1,602.40 an ounce last week.
Adjusted for inflation, gold would have to settle at around $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980.
The metal has benefited from uncertainty stemming from global debt problems in recent weeks, with the deadlock in U.S.talks taking center stage on Monday.
U.S. lawmakers failed to reach agreement on an approach to raise the debt-ceiling in Washington on Sunday, despite a weekend of talks. President Barack Obama later met with the congressional leaders of his own party.The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk of defaulting on its obligations.
Analysts at MF Global said the lack of resolution in U.S. debt-ceiling talks will weigh on the dollar, and in turn present upward potential for gold.
“Raising the debt ceiling in such last-minute fashion relays [an] unwelcome message to investors,” the analysts said, “The main casualty of such a decision will be the U.S. dollar.”
Commodities should do better, at least initially, they said, as the asset class will be viewed as an alternative to paper currencies.
“Gold should benefit the most,” the MF Global analysts said.
“Raising the debt ceiling in such last-minute fashion relays [an] unwelcome message to investors,” the analysts said, “The main casualty of such a decision will be the U.S. dollar.”
Commodities should do better, at least initially, they said, as the asset class will be viewed as an alternative to paper currencies.
“Gold should benefit the most,” the MF Global analysts said.
China’s top military commander delivers 15-minute tirade against USA
On Thursday in Beijing, Gen. Chen Bingde, chief of the People’sLiberation Army’s general staff, issued an unusual and caustic tirade against the United States at the start of a meeting with visiting South Korean Defense Minister Kim Kwan-jin.
The comments followed Gen. Chen’s meetings the week before with his American counterpart, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Gen. Chen lectured his South Korean guest on America’s hegemonic attitude toward other countries. Furthermore, he suggested to Kim that Seoul should have the same resentment against Washington’s hegemonic attitude, and that China understands South Korea’s reluctance to openly express such resentment against the United States because of its close ally status with Washington.
Gen. Chen’s outburst drew criticism from South Korea. The Chosun Ilbo newspaper published an editorial that said, “Chen’s comments were discourteous and violated diplomatic protocol. … Using such a setting to harshly criticize a third country, and a close ally of the visitor’s, is unlikely to make the visitor feel comfortable. Chen, who is the chairman of the People’s Liberation Army General Staff, ranks lower than China’s defense minister, Kim’s counterpart. It was a diplomatic discourtesy for Chen to ramble on and on without giving his senior a chance to speak.”
The same Seoul newspaper sounded a more serious note by concluding that “the more China resorts to crude tactics that do not befit its global status, the more suspicious of its intentions its neighbors will grow.” The newspaper said Seoul ultimately might have to choose between Chinaand the U.S.
After politely listening to the Chinese general, Mr. Kim was treated with a visit the next day to the army’s Third Guard Division, a military unit located outside Beijing that is renowned for its role in the Korean War fighting against the Americans and the South Koreans, a typical and less-than-subtle message of the kind frequently used by Beijing's military.
South China Sea storms
Military and diplomatic tensions in the South China Sea continue to rise as China shows no sign of easing verbal and military posturing over its disputed sovereignty claims in the resource-rich South China Sea. On Tuesday, foreign ministers of the Association of Southeast Asian Nations (ASEAN) met in the Indonesian resort of Bali to finesse and finalize, among other measures, a joint proposal to work with China on the South China Sea disputes. Four of its 10 member states - Brunei, Malaysia, the Philippines and Vietnam - challenge China’s claim of control over most of the vast Southeast Asian waters.
However, ASEAN’s proposed Code of Conduct in the South China Sea so far has received a lukewarm response from Beijing. Instead, China is hyping its robust claims while accusing the United States of meddling “with ulterior motives” in the sovereignty claims.
Since last week, China’s state-controlled media has fired off a new anti-U.S. propaganda campaign: The purchase by the Philippines of a used U.S. Coast Guard ship, a Hamilton-class 3,300-ton cutter, as a patrol ship for Manila.
In response, on the day before the newly purchased ship set sail for Manila from San Francisco, the Chinese government announced its latest warship launching in Shanghai. The largest warship to date is the 19,000-ton amphibious dock-landing ship Jinggangshan, the second of China’s Type 071 ships. Jinggangshan refers to the mountainous area in Eastern China where the Communist Red Army was born. The official China Daily explained that name of the ship is “to show the love for the revolutionary base area and inherit and carry forward its revolutionary spirit.”
Violence in China’s northwest
Conflicting reports emerged this week about violent clashes between ethnic Uighurs and Chinese police in the ancient Silk Road city Hotan. Official government news outlets said Monday that Uighur separatist thugs stormed the police station, taking hostages, triggering shooting that left four people and “several” thugs killed. In line with Beijing’s propaganda, China attributed the incidents to what it calls “Three Forces” terrorism, separatism and religious extremism.
Hotan’s population is 90 percent Uighur, an ethnic group seeking more basic freedoms from Chinese control. The overseas-based World Uighur Congress disputed Beijing’s narrative Tuesday. “The shooting took place not at a police station, but at the close main bazaar of Hotan, in the Nurbagh area, when more than 100 local Uighurs peacefully gathered to protest a police crackdown imposed on the city for the last two weeks,” it said in a statement.
“Demonstrators gathered and demanded to know the whereabouts of relatives who had gone missing into police custody,” the group said. “Police [then] opened fire on the demonstrators, killing at least 20 people.”
Washington Times
Iran blames US, Israel for killing of scientist
Parliament speaker says 'terrorist US-Israeli action' is another example of level of US animosity towards Iran
A senior Iranian official on Sunday blamed the United States and Israel for the assassination of an Iranian scientist, the semi-official Fars news agency reported.
Darioush Rezaie, 35, a university lecturer with a physics doctorate, was shot dead by a motorcyclist in Tehran on Saturday. The student news agency ISNA quoted an unnamed police official as saying Rezaie was a nuclear scientist but Deputy Interior Minister Safarali Baratlou said this was not certain.
"The terrorist US-Israeli action yesterday, which targeted one of the country's scientific elites, is another example of the level of the US animosity (against Iran), said parliament speaker Ali Larijani in a speech to the legislative body.
Iran's security apparatus is investigating the assassination, but no arrests have been reported.
Larijani also blamed "American adventurism" for the deaths on Friday of a senior commander of the elite Revolutionary Guards corps and five others in a landmine explosion on a road.
"The Americans who regard such measures in their so-called world management as permissible should think well about the consequences," Larijani said.
There has been no claim of responsibility for Rezaie's killing. Several nuclear scientists have been assassinated in Iran in the last few years. One scientist was killed and another wounded in Tehran in November.
Ynet |
More:
http://www.ynetnews.com/articles/0,7340,L-4099255,00.html
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Obama formally ends 'don't ask, don't tell' policy; gays to serve openly
President Barack Obama on Friday formally signed off on ending the ban on gays serving openly in the military.
The end of Don't Ask, Don't Tell marks the fulfillment of a key 2008 campaign promise to the gay community.
"As commander in chief, I have always been confident that our dedicated men and women in uniform would transition to a new policy in an orderly manner that preserves unit cohesion, recruitment, retention and military effectiveness," Obama said in a statement.
"Today's action follows extensive training of our military personnel and certification by Secretary Panetta and Admiral Mullen that our military is ready for repeal. As of September 20th, service members will no longer be forced to hide who they are in order to serve our country."
Secretary of Defense Leon Panetta decided to officially repeal the 17-year-old ban on openly gay and lesbian service members after a report concluded that ending the ban would not interfere with military readiness.
Don't Ask, Don't Tell has remained a heavily contested law since 1993 when it was adopted under President Bill Clinton.
A federal court ordered the government to immediately stop enforcing the policy in early July.
The Obama administration later appealed the order, arguing that an immediate end would be too disruptive.
A former Army Ranger, Sen. Jack Reed (D-R.I.), called the end of the policy a step in the right direction, describing the ban as "an ineffective policy that prevented talented, highly skilled soldiers from honorably serving our nation."
The Pentagon's decision comes just days after Obama's announcement of support for the Respect for Marriage Act, which repeals a ban on same-sex marriage.
The bill, sponsored by Sens. Dianne Feinstein (D-Calif.), Patrick Leahy (D-Vt.) and Kristen Gillibrand (D-N.Y.), ends the 1996 Defense of Marriage Act, which defines marriage as a legal union solely between a man and woman.Read more: http://www.nydailynews.com/news/politics/2011/07/22/2011-07-22_pentagon_is_set_to_announce_official_repeal_of_dont_ask_dont_tell_policy.html#ixzz1T7tkXK7u
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Greece rating cut by Moody's amid default warning
Credit rating agency Moody's has cut Greece's rating, warning that a planned debt swap would constitute a default.
The rating was cut another three notches from Caa1 to Ca - just two more notches shy of a default rating.
"The announced EU programme... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%," the agency said.
The debt swap would increase Greece's borrowing terms by up to 30 years.
However, a statement last week from the Institute of International Finance - a trade body representing global banks and other major lenders - conceded that the debt deal would cost private sector creditors an estimated 21% of the value of the Greek debts they currently hold.
It comes after another rating agency, Fitch, warned that it too expected the deal would mark a "selective" debt default by Athens.
The debt exchange with private sector lenders is part of a comprehensive package announced on Thursday by European leaders to shore up the euro and prevent the Greek debt crisis from spreading to other economies, notably Spain and Italy.'Developing' outlook
Despite Moody's view that the debt swap deal would constitute a default, the agency was generally upbeat about Greece's longer-term prospects.
"Looking further ahead, the EU programme and proposed debt exchanges will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden," it said.
As well as the private sector debt swap deal, European leaders also agreed last week to lengthen the repayment terms on existing bail-out loans, and lower the interest rate they were charging.
"The support package for Greece also benefits all euro area sovereigns by containing the severe near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt," said Moody's.
The ratings agency also warned that Greece "will still face very significant implementation risks to fiscal and economic reform".
Austerity measures demanded by Greece's European partners and the International Monetary Fund remain highly unpopular among many of the country's voters, and face continuing street protests.
Unusually, Moody's assigned the rating a "developing" outlook, instead of the more typical "positive" or "negative" outlooks.
BBC
More:
http://www.bbc.co.uk/news/business-14271936
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Broke! 10 Facts About The Financial Condition Of American Families That Will Blow Your Mind
The crumbling U.S. economy is putting an extraordinary amount of financial stress on American families. For many Americans, "flat broke" has become a permanent condition. Today, over half of all American families live paycheck to paycheck. Unemployment is rampant and those that do actually have jobs are finding that their wages are rising much more slowly than prices are. The financial condition of average American families continues to decline and this is showing up in all of the recent surveys. For example, according to a new Gallup poll, "lack of money/low wages" is the number one financial concern for American families. To make ends meet, many American families are going into even more debt and more American families than ever are turning to government assistance. Right now, more Americans than at any other point since World War II are flat broke and have lost hope. Until this changes, the frustration level in this country is going to continue to grow.
The following are 10 facts about the financial condition of American families that will blow your mind.....
#1 Only 58 percent of Americans have a job right now.
#2 Only 56 percent of Americans are currently covered by employer-provided health insurance.
#3 The median yearly wage in the United States is $26,261.
#4 The average American household is carrying $75,600 in debt.
#5 Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
#6 At this point, American families are approximately 7.7 trillion dollars poorer than they were back in early 2007.
#7 The poorest 50% of all Americans now own just 2.5% of all the wealth in the United States.
#8 According to one study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.
#9 Today, there are more than 44 million Americans on food stamps, andnearly half of them are children.
#10 According to Newsweek, close to 20 percent of all American men between the ages of 25 and 54 do not have a job at the moment.
So what is causing all of this?
Where in the world did all of the good jobs go?
Well, the truth is that millions of them have been shipped overseas.
Our politicians promised us that merging our economy with the economies of other nations where it is legal to pay slave labor wages to workers would not create more unemployment inside America.
They were dead wrong.
Now we are being told that we just need to accept a lower standard of living.
For example, billionaire Howard Marks says that it is time for all of us to just accept that the standard of living of American workers is inevitably going to decline to the level of the rest of the world....
"In addition to balancing the budget and growing the economy, I think we have to accept that the coming decades are likely to see U.S. standards of living decline relative to the rest of the world. Unless our goods offer a better cost/benefit bargain, there’s no reason why American workers should continue to enjoy the same lifestyle advantage over workers in other countries. I just don’t expect to hear many politicians own up to this reality on the stump."
Are you willing to accept that?
Well, most Americans appear to be willing to accept this "new reality" because they keep sending most of the exact same bozos back to Washington D.C.
Meanwhile, the job losses continue to get worse. As I wrote about the other day, as the U.S. economy has started to slow down again we are starting to see another huge wave of layoffs all over America.
It doesn't take a genius to figure out where all of our jobs are going. But unfortunately, most Americans don't understand what is happening because neither the mainstream media nor our politicians are telling them the truth.
For much more on how millions of our good jobs are being shipped out of the country, please see another article I recently published entitled "How Globalism Has Destroyed Our Jobs, Businesses And National Wealth In 10 Easy Steps".
But it is not just the globalization of the economy that is destroying our jobs.
The federal government bureaucracy has become so oppressive that it is amazing that anyone is still willing to hire workers in this day and age.
Hiring workers has become so complicated and so expensive that many small business owners want to avoid it at all cost.
For example, a small business owner identified as "007" recently left the following comment on one of my recent articles....
Speaking as a small employer, I would rather have a root canal than another employee. Let’s see. You first have to hire someone you trust without some labor lawyer suing you for some type of discrimination. Then you have OSHA to make sure your work place is safe. Then you have workmans compensation insurance, unemployment taxes, health insurance, liability insurance, now Obamacare. Oh be careful not to be deemed to have a “hostile work environment”. Then you have to negotiate the labor laws. The Department of Labor is constantly cranking out regulation.Then you get the pleasure of paying payroll taxes both state and federal along with the required filing of a multitude of payroll forms. Miss filing or paying these taxes and you will be crushed with interest and penalties.Of course, you are competing with businesses that can hire at a fraction of the cost of American Labor and with very little regulations. In this economy, no one in their right mind is hiring into this unstable and declining economy.If business turns down all you have to worry about is laying off workers. Of course your unemployment insurance tax will go up 200% for years. Then you only have to then worry about a wrongful termination law suit.
The entire system is stacked against American workers.
If you are a blue collar worker, you should give up hope that things are going to get better. The system has failed you.
You can stop waiting for the "good jobs" to come back.
They aren't coming back.
That is one reason why I try to encourage everyone to become more independent of the system.
As our economic system continues to degenerate, Americans are going to become increasingly desperate.
Sadly, desperate people do desperate things. Already we are starting to see signs that the fabric of American society is starting to be ripped to shreds.
So what is going to happen if the economy gets even worse?
There is a limit to how many people we can actually put in prison. The reality is that the number of Americans in prison has nearly tripled since 1987.
Our prisons are already dangerously overcrowded. As society falls apart, many communities will simply not be able to shove more people behind bars.
Even with our prisons stuffed to the gills, many of our largest cities continue to be transformed into absolute hellholes.
Detroit is now the 3rd most dangerous city on the entire planet and New Orleans is now the 9th most dangerous city on the entire planet.
So what are our leaders doing about all of this?
Well, they appear to be too busy fighting with each other and cheating on their wives to do much about our problems.
According to Politico, U.S. Representative David Wu is the latest member of Congress to be accused of a sex scandal....
Rep. David Wu has been accused of an “unwanted sexual encounter” with the teenage daughter of a longtime friend, the latest scandal to engulf the troubled Oregon Democrat.
This country is a complete and total mess. Tens of millions of American families are flat broke and are about to slip into poverty. Meanwhile, our politicians continue to prove that they are some of the most corrupt on the planet.
There are many out there that still believe that America has a bright future ahead.
It is getting really hard to see why anyone could possibly believe that.
The Economic Collapse
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North Korea and Iran increase collaboration on nuclear missile, report claims
North Korea and Iran are jointly working on weapons programmes designed to build a long-range missile capable of carrying a nuclear warhead, a leading British security think tank has said
According to a study by the International Institute for Strategic Studies (IISS), North Korea's weapons programmes are now benefiting from technology from Iran.
Pyongyang also possesses technology that would enable Iran's uranium enrichment programme to increase its output. However concrete evidence that North Korea has supplied the Iranians with its superior equipment has not been uncovered by IISS.
The disclosure marks a disturbing escalation in the race for nuclear weapons technology by the two states which are seen to present the biggest threat to global security.
Mark Fitzpatrick, the IISS expert on weapons proliferation, said North Korea possessed a technological edge over Iran in making nuclear equipment.
It was capable of manufacturing high strength steel that Iran has been unable to manufacture. Iran has instead relied on carbon fibre materials that are less reliable.
"What previously had been a one way flow of North Korean missile technology to Iran is now going two ways," he said. "North Korea may be self-sufficient in its uranium programme and there are some areas where Iran can't produce equipment that North Korea has the capacity to produce."
The emergence of a North Korean "comparative advantage" over Iran in uranium enrichment has caught experts by surprise. Iran has been working for 20 years on manufacturing advanced centrifuges that enrich uranium to weapons grade. However North Korea has make the breakthrough to produce advanced machines where Iran had failed.
The IISS's fears over North Korea's activities are widely shared by defence experts.
"North Korea has been assisting Iran in going forward with its nuclear programme," said Bruce Bennett, the senior defence analyst at the Rand Corporation, a US think tank. "North Korea has been providing help to Iran with missile technology and testing (nuclear) triggering devices while Iran has only more recently done that kind of thing."
The Telegraph
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