- Consumer credit in the US grew by 6.2%, the highest pace in nearly five years;


- US non-financial credit market debt grew by 5%, the highest pace in nearly four years;

- Total household debt increased 1.2%, the highest pace in over four years;

- US Treasury debt has increased 110% in four years;

- After contracting by 1.2% in the first quarter, state and local borrowing is now up 0.8%

http://www.zerohedge.com/news/2012-09-24/guest-post-greatest-trick-devil-ever-pulled

Taxing Millionaires at 100% Wouldn't Be Enough to Keep U.S. Running

http://www.foxbusiness.com/government/2012/09/24/taxing-millionaires-at-100-wouldnt-be-enough-to-keep-us-running/

Barack Obama says he favors government redistribution of wealth. Views welfare recipients and “the working poor” as “a majority coalition.

http://dailycaller.com/2012/09/24/full-audio-of-1998-redistribution-speech-obama-saw-welfare-recipients-as-majority-coalition/

More Americans Added to Food Stamps Than Find Jobs

http://www.weeklystandard.com/blogs/more-americans-added-food-stamps-find-jobs_652837.html

100 Days Until Taxmageddon

http://www.atr.org/days-taxmageddon-a7203

Ponder this for a moment...

According to the US mint website a total of just over 241 million silver eagle coins were sold from the beginning of the program in 1986 till the end of 2010. This means that significantly less than 1 silver eagle coin for every person living in America is even available to buy.

Gold Should Be ‘Owned by Everyone’: Dalio

http://www.cnbc.com/id/49118464

Rising food prices stretch budgets

http://www.fdlreporter.com/article/20120921/FON0101/309210085/Rising-food-prices-stretch-budgets?nclick_check=1

Bernanke briefs lawmakers on fiscal cliff

http://ca.news.yahoo.com/bernanke-briefs-u-lawmakers-fiscal-cliff-214236206--sector.html

FedEx says economy is stalling, cuts outlook

http://www.businessweek.com/ap/2012-09-18/fedex-says-economy-is-worsening-cuts-outlook

Few people understand how large a part of the US industrial food chain is tied to corn.

http://www.zerohedge.com/contributed/2012-08-21/forget-europe-real-crisis-be-afraid

US Corn Crop Estimate Cut 17% With Yields Forecast To Drop To 17 Year Lows

http://www.zerohedge.com/news/us-corn-crop-estimate-cut-17-yields-forecast-drop-17-year-lows

Prepare For A 15% Food Price Surge, Rabobank Warns

http://www.zerohedge.com/news/prepare-15-food-price-surge-rabobank-warns

The Fed’s Balance Sheet Puts Gold and Silver on the Warpath

http://wallstcheatsheet.com/stocks/the-feds-balance-sheet-puts-gold-and-silver-on-the-warpath.html/?ref=YF

Fake gold bars turn up in Manhattan

http://www.myfoxny.com/story/19578206/fake-gold-bars-turn-up-in-manhattan

Dollar Index Headed for Rapid Collapse: Chart There is a very low probability the U.S. dollar will resume its uptrend.

http://www.cnbc.com/id/49068436

Dollar hovers near seven-month lows, markets eye BOJ

http://www.reuters.com/article/2012/09/17/us-markets-forex-idUSBRE88903020120917

Is the Economy Due For Another Meltdown?

http://video.foxbusiness.com/v/1844513355001/is-the-economy-due-for-another-meltdown/

US Credit Rating Cut by Egan-Jones ... Again

http://www.cnbc.com/id/49037337

Bernanke Unleashes The Path To New All Time Highs In Precious Metals

http://www.zerohedge.com/news/bernanke-unleashes-path-new-all-time-highs-precious-metals

'Obama's Middle East Policy Is in Ruins'

http://www.spiegel.de/international/world/german-press-review-on-middle-east-violence-against-us-embassies-a-855835.html

Carney: Protests not directed at the United States

http://freebeacon.com/carney-protests-not-directed-at-the-united-states/

Carney: Protests not directed at the United States

http://freebeacon.com/carney-protests-not-directed-at-the-united-states/

Markets Rally as Fed Announces Open-Ended QE3

http://www.foxbusiness.com/news/2012/09/14/markets-rally-as-fed-announces-open-ended-qe3/

.Fed Seen Starting QE3 While Extending Rate Pledge to 2015

http://www.bloomberg.com/news/2012-09-12/fed-seen-starting-qe3-while-extending-rate-pledge-to-2015.html

More Americans opting out of banking system

http://www.washingtonpost.com/business/economy/more-americans-opting-out-of-banking-system/2012/09/12/6380b986-fcf1-11e1-a31e-804fccb658f9_story.html

Treasuries Rise With Oil as Stocks Fluctuate Before Fed

http://www.bloomberg.com/news/2012-09-13/yen-strengthens-asian-stocks-little-changed-before-fed-decision.html

Budget deficit tops $1 trillion for fourth time

http://www.washingtontimes.com/news/2012/sep/10/govt-officially-tops-1-trillion-deficits/

The week that could make or break the eurozone

http://www.independent.co.uk/news/world/europe/the-week-that-could-make-or-break-the-eurozone-8122407.html

Moody’s expects to cut US rating without deal to lower debt/GDP ratio

http://www.forexlive.com/blog/2012/09/11/moodys-expects-to-cut-us-rating-without-deal-to-lower-debtgdp-ratio/

The Coming Derivatives Crisis That Could Destroy The Entire Global Financial System

Most people have no idea that Wall Street has become a gigantic financial casino. The big Wall Street banks are making tens of billions of dollars a year in the derivatives market, and nobody in the financial community wants the party to end.

http://theeconomiccollapseblog.com/archives/the-coming-derivatives-crisis-that-could-destroy-the-entire-global-financial-system

Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks

We expect a moderate slowdown in the beginning of next year, as two small policy shocks—another debt downgrade and fiscal tightening—hit the economy. The “not-so-super” Deficit Commission is very unlikely to come up with a credible deficit-reduction plan. The committee is more divided than the overall Congress. Since the fall-back plan is sharp cuts in discretionary spending, the whole point of the Committee is to put taxes and entitlements on the table. However, all the Republican members have signed the Norquist “no taxes” pledge and with taxes off the table it is hard to imagine the liberal Democrats on the Committee agreeing to significant entitlement cuts. The credit rating agencies have strongly suggested that further rating cuts are likely if Congress does not come up with a credible long-run plan. Hence, we expect at least one credit downgrade in late November or early December when the super Committee crashes.

http://www.businessinsider.com/huge-prediction-from-bofa-another-us-debt-downgrade-is-coming-in-just-a-few-weeks-2011-10

EU bank failures will crash Wall Street — again

Worst-case scenario’s closing fast: Occupy Wall Street growing. But no political power or allies yet. Feared yes, attacked by GOP proxy tea party. Soon the Occupation will explode into a new American Revolution.

http://www.marketwatch.com/story/eu-bank-failures-will-crash-wall-street-again-2011-10-18

'Solving eurozone crisis is a long way off': Warning leads global stock markets to tumble

Stock markets around the world slammed into reverse yesterday after Germany warned that a solution to the debt crisis in the Eurozone was a long way off.
German Chancellor Angela Merkel warned the deadlock might not be broken until next year – dashing hopes of a comprehensive rescue plan emerging this weekend.
It came as a leading forecaster in London said the crisis in the single currency bloc will plunge Britain back into recession.

Read more: http://www.dailymail.co.uk/news/article-2050327/Eurozone-crisis-Recession-warning-leads-global-stock-markets-tumble.html#ixzz1bIJYyYQa


http://www.dailymail.co.uk/news/article-2050327/Eurozone-crisis-Recession-warning-leads-global-stock-markets-tumble.html

S&P downgrades 24 Italian banks, financial firms

Standard & Poor's on Tuesday downgraded 24 Italian banks and financial institutions, citing renewed "market tensions" and lower economic growth prospects.

The action was taken after a review of the implications of a tougher-than-previously-anticipated macroeconomic and financial environment for the Italian banks, the credit rating agency said.

"In our opinion, renewed market tensions in the euro zone's periphery, particularly in Italy, and dimming growth prospects have led to further deterioration in the operating environment for Italian banks," it said in a statement.

http://www.reuters.com/article/2011/10/18/us-italy-ratings-sp-idUSTRE79H4RZ20111018

10 Essential Fiscal Charts Demonstrating America's Disastrous Condition

With stagnating economic conditions and the passage of new legislation, especially the Budget Control Act of 2011, the outlook for the deficit and debt has changed considerably over the past six months.

http://www.zerohedge.com/news/10-essential-fiscal-charts-demonstrating-americas-disastrous-condition

Moody's warns France on possible negative outlook

Moody's warned on Monday it may slap a negative outlook on France's Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.

http://www.reuters.com/article/2011/10/18/us-france-ratings-moodys-idUSTRE79G6XT20111018

Ron Paul’s Economic Plan: Cut 5 Cabinet Agencies, Cut Taxes, Cut President’s Pay

GOP presidential candidate Rep. Ron Paul will unveil his economic plan Monday afternoon, calling for a lower corporate tax rate, cutting spending by $1 trillion during his first year in office and eliminating five cabinet-level agencies, including the Education Department, according to excerpts released to Washington Wire.

Mr. Paul’s “Restore America” plan calls for a drastically reduced federal government to help spur American business — a familiar theme for the Texas Republican and many of the GOP White House hopefuls. But unlike some of his Republican rivals who have released economic plans, the libertarian congressman mostly avoids the weeds of tax and trade policy, according to excerpts.

http://blogs.wsj.com/washwire/2011/10/17/ron-pauls-economic-plan-cut-5-cabinet-agencies-cut-taxes-cut-presidents-pay/?mod=google_news_blog

Greece Faces 'Hellish Week' as Debt Crisis Tests Nation

The national newspapers proclaim in large 40-point type “Hellish Week,” or more sarcastically “It Begins — the Week of Thrills.” Both are a reference to a massive 48-hour strike, beginning Wednesday, that may bring out as many as 50,000 to 60,000 protestors.

The protest is timed for a controversial vote in parliament, scheduled for Thursday, that would effectively eliminate the minimum wage for millions of workers.

http://www.cnbc.com/id/44931473

Stocks End Sharply Lower on Recession Fears

Stocks came off their worst levels, but still finished sharply lower Thursday in heavy-volume trading as a gloomy outlook from the Federal Reserve in addition to ongoing economic jitters fueled concerns of a recession.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, soared above 41.

All 10 S&P sectors finished firmly in the negative territory, led by materials and energy.

The Fed announced it would launch a new $400 billion program in a move to rebalance its $2.87 trillion portfolio—a version of the widely expected Operation Twist—by selling shorter-term notes and using those funds to purchase longer-dated Treasurys.

http://www.cnbc.com/id/44624491

Warnings mount on euro crisis, BRICS mull more aid

World leaders and finance chiefs pushed Europe to quell its debt crisis and big emerging economies said they might provide more money to help stop the chaos from spreading.

As finance ministers and central bankers gathered for talks amid growing concern about sharply slowing growth and plunging stock markets, the leaders of seven big economies stressed the need to contain the euro zone crisis.

"Euro zone governments and institutions must act swiftly to resolve the euro crisis and all European economies must confront the debt overhang to prevent contagion to the wider global economy," the leaders of Australia, Canada, Indonesia, Britain, Mexico, South Africa and South Korea wrote in an open letter to France, chair of the Group of 20 leading economies.

Separately, officials from the so-called BRICS countries, including heavyweights China, Brazil and India, said they would consider giving more funds to the International Monetary Fund to boost global stability.

http://www.gmanews.tv/story/233185/business/warnings-mount-on-euro-crisis-brics-mull-more-aid

Fear gauge enters the red zone

Key indicators of credit stress have reached the danger levels seen before the Lehman Brothers failure three years ago, with Markit's iTraxx Crossover index – or "fear gauge" – of corporate bonds surging 56 basis points to 857 on Thursday.

Societe Generale led a further rout of bank shares, crashing 9pc in Paris on concern that it might need recapitalisation to cope with losses on Italian and Spanish debt.

The yield spread between Italian 10-year bonds and Bunds reached a fresh record of 408 basis points before the European Central Bank (ECB) intervened in late trading. It is near the level at which LCH.Clearnet raises margin requirements, the trigger that forced Greece, Portugal and Ireland to request bail-outs.

Global investors appear shaken by the refusal of the US Federal Reserve to come to the rescue yet again with quantitative easing (QE3) even though it was never likely the bank would launch fresh stimulus with core inflation running near 2pc or in the face of protests from Capitol Hill.

http://www.telegraph.co.uk/finance/financialcrisis/8783067/Fear-gauge-enters-the-red-zone.html

Europe's Problem Is Decidedly Not the Euro

"The sole use of money is to circulate consumable goods" - Adam Smith, The Wealth of Nations, p. 370

With the health of Europe's economy increasingly in question, a great deal of ink is being spilled as to its causes. Most unfortunate and wrongheaded is the growing view that the creation of a common currency - the euro - is behind the continent's troubles.

http://www.realclearmarkets.com/articles/2011/08/25/europes_problem_is_decidedly_not_the_euro_99208.html

Panic & Anxiety Swirl a Storm

Something big is going on in the United States in a sentiment change, an altered state of psychology, a growing sense of panic. My opinion is that the nation has entered the early stage of comprehension among the population of systemic failure. The most immediate measures are the rash of heavy selling down days in the US Stock market, the strong purchases in Gold, as well as the reactions to constant news of sovereign debt in trouble, and the big banks teetering.

http://news.goldseek.com/GoldenJackass/1314216000.php

In An Unsustainable System, A Warning of Collapse

August 24 2011: The meaning of the social security and medicare cuts, the continuing influence of the Council on foreign Relations, no real Consumer Price Index to go by, Euro zone not fully aware of the problem they have, a massive exposure for them, extended and unpayable debt.

http://beforeitsnews.com/story/1003/550/In_An_Unsustainable_System,_A_Warning_of_Collapse.html

We've been warned: the system is ready to blow

To understand the mess we are in, it's important to know how we got here. Today marks the 40th anniversary of Richard Nixon's announcement that America was suspending the convertibility of the dollar into gold at $35 an ounce. Speculative attacks on the dollar had begun in the late 1960s as concerns mounted over America's rising trade deficit and the cost of the Vietnam war. Other countries were increasingly reluctant to take dollars in payment and demanded gold instead. Nixon called time on the Bretton Woods system of fixed but adjustable exchange rates, under which countries could use capital controls in order to stimulate their economies without fear of a run on their currency. It was also an era in which protectionist measures were used quite liberally: Nixon announced on 15 August 1971 that he was imposing a 10% tax on all imports into the US.

http://www.guardian.co.uk/business/2011/aug/14/larry-elliott-global-financial-system

World Bank chief: Global economy in 'new danger zone'

The head of the World Bank warned Sunday that many key market players have lost confidence in recent weeks, pushing the fragile global economy into a "new danger zone."

Speaking to members of the Asian Society in Sydney, Australia, Robert Zoellick said events the past few weeks in Europe and the United States already have had an adverse impact, and could signal even bigger problems ahead. Several European nations continue to struggle with high debt, slow economies and other issues, while U.S. politicians went to the wire before they raised its debt ceiling -- only to see credit agencies downgrade its credit rating, and stock markets flounder.

"There was a convergence of some events in Europe and the United States that has led many market participants to lose confidence in the economic leadership of some of the key countries," Zoellick said.

http://www.cnn.com/2011/BUSINESS/08/14/world.bank.danger/

U.S. economy's wild ride is far from over

Congratulations on surviving the U.S. stock market's wildest week ever -- when the Dow registered some of its biggest ups and downs, gold briefly surged above $1,800 an ounce and interest rates on downgraded U.S. Treasury bonds fell to record lows.

In the end, the Dow closed down 1.5% for the week.

That was after stocks rose for a second straight day Friday after investors were drawn to the more positive of two economic reports. The monthly retail report showed consumers spent more on autos, furniture, clothing and gas in July, pushing up retail sales by the largest amount in four months. That seemed to outweigh concerns over a key consumer sentiment index falling to its lowest reading in more than 30 years.

http://www.freep.com/article/20110813/BUSINESS07/108130414/U-S-economy-s-wild-ride-far-from-over

Employees Bid Farewell to Corporate America

With the U.S. unemployment rate at 9.1 percent as of July 31 and a fragile economic recovery underway, many workers feel they are left with no choice but to take their careers into their own hands.

Employees are bidding farewell to corporate America in the hope of finding a more secure, or at least fulfilling, future. They are reinventing themselves by starting their own companies or by pursuing long-put-off dreams that include creative or charitable endeavors.

While it might seem like a bold move, countless workers believe the abundance of uncertainty in today’s job market mitigates the fear factor.

http://www.cnbc.com/id/42822615

0% Interest Rates Lock in Inflation

The decision by the Fed, last week, to keep a key interest rate at near zero percent for 2 years is historic because the Fed has never done this before. This action will have profound negative effect on the U.S. dollar and its buying power. It also signals that even the Fed thinks the economy is not going to get better for at least 2 years. This action will affect every American and telegraphs a policy of inflation by the government. In November of 2009, I predicted this very path in a post called “The Fix is In.” Back then, I said, “It appears the “fix” is in as far as the road plan for the U.S. dollar and economy. The government and the Fed appear to have chosen a path of inflation for America and the world. This is not an official announced plan but it might as well be.”

http://usawatchdog.com/zero-interest-rates-lock-in-inflation/

A big bounce, ounce by ounce, as gold takes off

Welcome to the new American gold rush. The price of gold is on a remarkable run, setting a record seemingly every other day. Stomach-churning volatility in the stock market this month has only made investors covet gold more.

Some want it as a safe investment for turbulent times. What worries some investors is that many others are buying simply because the price is rising and they want to make money fast.

http://finance.yahoo.com/news/A-big-bounce-ounce-by-ounce-apf-2335343368.html?x=0

What went wrong with the global recovery?

As recently as six months ago, mainstream economic forecasters were expecting real GDP growth to be comfortably above trend in 2011, and surveys of business activity were hitting new peaks. Of course, everyone knew that the underlying condition of the western economies was still very weak, but that did not seem to be sufficient to prevent a continuing normalisation of economic activity, with GDP returning slowly towards pre-recession trends.

http://blogs.ft.com/gavyndavies/2011/08/18/what-went-wrong-with-the-global-recovery/#axzz1VRnaQ4NG

Credit-rating agencies still threaten US debt recovery

As many had predicted, the deadlock over the US debt ceiling was broken at the very last moment.

On Monday night the House of Representatives approved the deal and Tuesday's senate vote is almost certain to go through.

But as the fears of a default on US debt are now receding, America faces the task of dealing with its huge deficit.

Credit-rating agencies have not yet commented on the deal, and their threat to downgrade the United States' credit rating remains.

http://www.bbc.co.uk/news/business-14372355

Debt Ceiling Agreement to Trigger Hyperinflation

President Obama just announced late this evening that a deal has been reached to cut government spending and raise the debt ceiling in order to avoid a debt default. If the deal is approved on Monday, it will raise the debt ceiling by between $2.1 and $2.4 trillion in three installments: $400 billion immediately, $500 billion this fall subject to a disapproval vote by Congress, and $1.2 to $1.5 trillion more after a special committee agrees on a matching amount of spending cuts that will be in addition to $900 billion in spending cuts proposed in the bill. With no tax increases included in this plan, all of this additional debt will eventually be monetized and paid for through monetary inflation.

http://www.rightsidenews.com/2011080114194/us/politics-and-economics/debt-ceiling-agreement-to-trigger-hyperinflation.html

Glenn Beck puts the Federal debt cap deal in prepper terms.

http://www.glennbeck.com/content/videos/?uri=channels/451373/1428412

China downgrades America

"China's credit rating agency Dagong downgraded the U.S. to A from A+ with a negative outlook, citing the increased debt limit and questions over creditor protection in the current political and economic environment."

America, you've been Dagonged.
The move "suggests that China may be getting more concerned about its U.S. exposure and that it may be stuck holding the bag should another financial or political crisis flare up," according to CMC Markets analyst Colin Cieszynski. China's problems have been well-documented -- including, depending on whom you talk to, a residential real estate bubble, rising inflation and questionable corporate governance. But the Asian powerhouse is also the top foreign holder of U.S. debt. That would be the debt that narrowly escaped getting downgraded by American ratings agencies in the wake of the theatrical U.S. debt ceiling fiasco.

So China has a direct stake in what happens south of the border, just as the rest of the world -- including Canada, increasingly -- has a direct stake in China's economy. Some commentators contend that the Chinese economy is sailing along on a bubble inflated by cheap government money and real estate speculation -- sound familiar, Canada? But it's hard to argue that in a world where the power balance is shifting from west to east, China's economic clout is rising as quickly as America's is falling.

http://communities.canada.com/vancouversun/blogs/yourmoney/archive/2011/08/04/china-downgrades-america.aspx

Unemployment rose in nearly all US cities

WASHINGTON (AP) -- Unemployment rates rose in more than 90 percent of U.S. cities in June, mirroring a national slowdown in hiring.

The Labor Department said Wednesday that unemployment rates rose in 345 large metro areas. They dropped in 20 cities and were unchanged in seven. That's worse than May, when rates rose in only 210 cities. And it is a sharp reversal from April, when unemployment rates fell in nearly all metro areas.

The biggest increase was in Joplin, Mo, which was hit by a major tornado on May 22. The city lost 9,400 jobs in June, and the unemployment rate jumped nearly 2 percentage points, to 9.6 percent.

The national unemployment rate ticked up to 9.2 percent in June, the highest level this year.

http://finance.yahoo.com/news/Unemployment-rose-in-nearly-apf-3394283988.html?x=0

Can't get no relief: Economic news sours investors

BOSTON (AP) -- What relief rally? Hope that the stock market would surge on news of Washington's debt ceiling deal has given way to pessimism. Increasingly defensive-minded investors are adapting to the reality that the economic recovery is stalling, if not ending.

Stocks rose slightly on Wednesday to snap an eight-day string of declines that sent prices down nearly 7 percent.

That stumble complicates matters for investors who recently pulled cash from the market, fearing a government default was a strong possibility. With that worry behind, the question is what to do next.

Richard Shortt had expected to be buying stocks, putting his sidelined money back to work. Yet he was at his home computer Wednesday, selling some of his stocks, and trimming investments in stock mutual funds. The 66-year-old from Somerville, Mass. put the proceeds into safer money-market mutual funds -- the same actions he took last week, when he sold stocks before Congress and President Obama reached the debt ceiling deal.

http://finance.yahoo.com/news/Cant-get-no-relief-Economic-apf-3742787640.html?x=0

US Yield Curve Flattening To Prompt Fed Easing and $1800 Gold

Weaker economic data from the US has caused the yield curve for US Treasuries to flatten significantly in recent months. However when the July manufacturing ISM came in at 50.9, well below the predictions of around 55.5, the curve flattened to a level not seen since August 2010. It was in August 2010 that the Fed first hinted at QE2 and therefore the fact that the curve has got back to this level puts pressure on the Fed to embark on another round of monetary easing. Whether this will be through QE3 or some other mechanism we do not know, however we are confident that further easing of US monetary policy is very bullish for gold prices.

http://www.skoptionstrading.com/updates/2011/8/3/us-yield-curve-flattening-to-prompt-fed-easing-and-1800-gold.html

Jim Rogers: Fed Will Launch QE3 by Q3

The head of Rogers Holdings expects this will happen "in the fall or early next year,” Rogers told CNBC, as FT Adviser reported.

http://www.moneynews.com/StreetTalk/JimRogers-Fed-Launch-QE3/2011/07/19/id/404095?s=al&promo_code=CA65-1

Poor Man's Gold is Breaking Out -- Sell Your House and Buy Silver?

Investors have pushed silver above the recent channel high at around $39 or so per ounce and I fully expect a retest of $50 if any more talk is given about QE3 — Silver rises because of the rising digital money supply, not from speculation. Owning cash is speculative whereas owning metals is conservative or a safe haven at current prices.

http://www.businessinsider.com/poor-mans-gold-is-breaking-out-sell-your-house-and-buy-silver-2011-7

The Fed Is Now More Leveraged That Lehman Brothers Was

The 2008 Crisis occurred when private US banks became so distrustful of one another’s balance sheet risk that interbank liquidity dried up triggering a systemic implosion in the unregulated derivatives market, particularly in Credit Default Swaps (which was a $50-60 trillion market at the time).

The Federal Reserve dealt with this situation by suspending accounting policies (permitting banks to lie about their true balance sheet risk), offering to backstop those banks with the greatest derivative exposure (JP Morgan, Bank of America, Goldman Sachs, and Citigroup), shifting trillions of dollars’ worth of toxic debt to the US balance sheet and then funneling trillions of new dollars into the banks most at risk of a derivative collapse (the banks I listed before).

http://gainspainscapital.com/?p=591

Get Ready for a 70% Marginal Tax Rate

President Obama has been using the debt-ceiling debate and bipartisan calls for deficit reduction to demand higher taxes. With unemployment stuck at 9.2% and a vigorous economic "recovery" appearing more and more elusive, his timing couldn't be worse.

Two problems arise when marginal tax rates are raised. First, as college students learn in Econ 101, higher marginal rates cause real economic harm. The combined marginal rate from all taxes is a vital metric, since it heavily influences incentives in the economy—workers and employers, savers and investors base decisions on after-tax returns. Thus tax rates need to be kept as low as possible, on the broadest possible base, consistent with financing necessary government spending.

http://online.wsj.com/article/SB10001424052702304911104576443893352153776.html?mod=WSJ_Opinion_LEADTop

A New Surge In Job Layoffs

Companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery.

Cisco Systems Inc., Lockheed Martin Corp. and troubled bookstore chain Borders Group Inc. are among those that have recently announced hefty cuts, while recent government numbers underscore how companies have shifted toward cutting jobs.

The increase in layoffs is a key reason why the U.S. recorded an average of only 21,500 new jobs over the past two months, far below the level needed to bring down unemployment, which now stands at 9.2%.

http://www.declineoftheempire.com/2011/07/a-new-surge-in-job-layoffs.html

Audit: Fed gave $16 trillion in emergency loans to foreign banks

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government’s first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

http://runronpaul.com/mainstream-media/audit-fed-gave-16-trillion-in-emergency-loans-to-foreign-banks/

Iran Opens Oil Bourse - Harbinger of Trouble for New York and London?

The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of “free markets.” Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people’s, and eventually, the government’s money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration’s head and rating agencies consider downgrading U.S. government bonds in light of Washington’s possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.

http://oilprice.com/Energy/Crude-Oil/Iran-Opens-Oil-Bourse-Harbinger-of-Trouble-for-New-York-and-London.html

Fitch reiterates warning on U.S. credit rating

Fitch Ratings on Monday reiterated its view that if the U.S. debt ceiling is not raised prior to August 2, the agency will place the U.S. AAA rating on what it terms "ratings watch negative," meaning it could downgrade it within three to six-months.
Fitch prefaced its statement by saying it still believes an agreement on the debt ceiling will met before the deadline set by the U.S. Treasury.

"Agreement on a credible fiscal consolidation strategy will secure the U.S. 'AAA' status; failure to do so will inevitably weaken the sovereign credit profile and may result in a sovereign rating downgrade," Fitch said.

The U.S. Treasury Department has said if the debt ceiling is not raised by August 2, it will have to start prioritizing payments.

http://finance.yahoo.com/news/Fitch-reiterates-warning-on-rb-1114763265.html?x=0

How to make sense of the gold-to-silver ratio

Silver’s recent climb has significantly outpaced gains made by gold. But a closely watched ratio based on the two prices suggests silver has even more catching up to do, analysts say.

http://www.marketwatch.com/story/how-to-make-sense-of-the-gold-to-silver-ratio-2011-07-19

Europe's Contagion Effect: Prepare for a Global Economic Collapse

Europe is on the brink of a major financial disaster. Moody’s has downgraded Irish and Portuguese debt to junk, a status until now reserved for Greece. This in turn has led interest rates on Spanish and Italian debt to spike. Contagion of these two major economies is now imminent. If it happens, the global economy will plunge into a crisis that will make the 2008 bankruptcy of Lehman Brothers look like a cakewalk.

http://nationalinterest.org/commentary/europes-contagion-effect-prepare-global-economic-collapse-5640

Return of the Gold Standard as world order unravels

As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability. The spot price surged to an all-time high of $1,594 an ounce in London, lifting silver to $39 in its train.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html

Bernanke Fights Ron Paul In Congress: Gold Isn’t Money

Chairman Ben Bernanke faced-off with Fed-hating Representative Ron Paul during his monetary policy report to Congress on Wednesday. The head of the Fed was forced to respond to accusations of enriching already rich corporations while failing to help Main Street, while he was pushed on his views on gold. When asked whether gold is money, Bernanke flatly responded “No.”

http://blogs.forbes.com/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/

Bernanke: Fed May Launch New Round of Stimulus

Federal Reserve Chairman Ben Bernanke told Congress Wednesday that a new stimulus program is in the works that will entail additional asset purchases, the clearest indication yet that the central bank is contemplating another round of monetary easing.

Bernanke said in prepared remarks that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.

"Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation," he said

http://www.cnbc.com/id/43739458

Dollar in full retreat, NZD storms 30-year peak

(Reuters) - The U.S. dollar was on the run in Asia on Thursday after a ratings warning from Moody's and a hint of further policy easing from the Federal Reserve unleashed a wave of panic selling, much to the relief of the hard-pressed euro.

http://www.reuters.com/article/2011/07/13/us-markets-forex-idUSTRE74U02L20110713

Moody’s Places U.S. on Review for Downgrade As Debt Talks Stall

Moody’s Investors Service put the U.S. under review for a credit rating downgrade as talks to raise the government’s $14.3 trillion debt limit stall, adding to concern that political gridlock will lead to a default.

The Aaa ratings of financial institutions directly linked to the U.S. government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody’s said in a statement today.

The U.S., rated Aaa since 1917, was put on review for the first time since 1995 on concern the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes even though the risk remains low, Moody’s said. The rating would likely be reduced to the Aa range and there is no assurance that Moody’s would return its top rating even if a default is quickly cured.

http://www.bloomberg.com/news/2011-07-13/u-s-rating-placed-on-review-for-downgrade-by-moody-s-as-debt-talks-stall.html

Huge rare earth deposits found in Pacific: Japan experts

TOKYO (Reuters) – Vast deposits of rare earth minerals, crucial in making high-tech electronics products, have been found on the floor of the Pacific Ocean and can be readily extracted, Japanese scientists said on Monday.

"The deposits have a heavy concentration of rare earths. Just one square kilometer (0.4 square mile) of deposits will be able to provide one-fifth of the current global annual consumption," said Yasuhiro Kato, an associate professor of earth science at the University of Tokyo.

http://old.news.yahoo.com/s/nm/20110704/ts_nm/us_rareearth_japan

Enough of this Greek farce: everyone knows default is coming

The “Greek tragedy” metaphor has proved irresistible to columnists, but what is taking place in Athens owes less to Sophocles than to Ionesco.

No one seriously thinks that the measures adopted by the Greek parliament will end the crisis. In Brussels and in Athens, officials are conniving at an official suspension of disbelief.

In their imaginary world, Greece has now turned the corner. Tax evasion will stop. Public expenditure will fall. Privatization will bring in an extraordinary €50 billion. The county’s creditors will be satisfied, and Greece will return to growth.

In the real world, none of these things will happen – certainly not while Greece remains caged by the euro. Never mind the credibility of the fiscal reforms. Look at what ought to be the easy bit: the sale of state assets. Greece is proposing to denationalize a water company, a gas supplier, a rail operator, an airport, a casino, a nickel mine and much else. Good. The fact that all these concerns are owned by the state goes some way to explain why the Hellenic Republic is in its present mess and, in the long term, their transfer to the private sector will indeed boost growth.

http://blogs.telegraph.co.uk/news/danielhannan/100094699/what-is-happening-in-athens-is-a-farce-everyone-knows-that-a-default-is-coming/

As Plastic Reigns, the Treasury Slows Its Printing Presses

The number of dollar bills rolling off the great government presses here and in Fort Worth fell to a modern low last year. Production of $5 bills also dropped to the lowest level in 30 years. And for the first time in that period, the Treasury Department did not print any $10 bills.

The meaning seems clear. The future is here. Cash is in decline.

http://www.nytimes.com/2011/07/07/business/07currency.html?_r=1&hp

Pat Buchanan: Overextended U.S. Empire Is Coming Down

"The United States is strategically overextended worldwide. What are we doing borrowing money from Japan to defend Japan. Borrow money from Europe to defend Europe. Borrow money from the Persian Gulf to defend the Persian Gulf. This country is over extended. It is an empire and the empire is coming down," Pat Buchanan said on "Morning Joe" today.

"Well you're not going to get the revenue, so you might as well end the war," he added.

http://realclearpolitics.com/video/2011/07/06/pat_buchanan_overextended_us_empire_is_coming_down.html

Landmark US-Mexico trucking agreement resolves 15-year conflict

After years of wrangling, US and Mexican officials signed an agreement Wednesday that allows trucks from each nation to travel on the other country’s highways – a key provision of NAFTA.

http://www.csmonitor.com/USA/Foreign-Policy/2011/0706/Landmark-US-Mexico-trucking-agreement-resolves-15-year-conflict

Taleb’s Universa Bets on Black Swan Deflation, Hyperinflation

June 1 (Bloomberg) -- Universa Investments LP, the hedge- fund firm advised by “Black Swan” author Nassim Taleb, is adding a new strategy, betting that government efforts to pump money into economies around the world won’t prevent deflation or could result in hyperinflation.

Universa manages $6 billion under investment chief Mark Spitznagel, offering funds and accounts wagering on extreme market moves. The Santa Monica, California-based firm is investing client funds on the premise that no one knows where inflation is headed, Taleb said in an interview today.

“Policy makers have no control over the outcome of their actions,” Taleb said. “The plane they are flying will either hit the mountain, which is hyperinflation, or crash in the ocean, which is deflation. There is a chance of the pilot hitting the runway. But if he’s not skilled, it’s less than he thinks.”

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDVgqxiT9RSg

General Mills sees 2012 profit hit by food costs

General Mills Inc (NYSE:GIS - News) forecast weaker fiscal-year earnings than Wall Street expected as higher ingredient and fuel costs hammer the food company.

The maker of Cheerios cereal and Progresso soups said on Wednesday that it expects costs to rise 10 percent to 11 percent in the 2012 fiscal year, which began May 30. That is more than double the inflation it had forecast for the previous year.

The inflation will be the most intense in the first quarter. As a result, General Mills expects quarterly profit to fall in the current quarter and rise in the remaining three.

General Mills shares were up 1.2 percent in afternoon trading on Wednesday, outperforming the Standard & Poor's Packaged Food index and the S&P 500.

http://finance.yahoo.com/news/General-Mills-sees-2012-rb-756642526.html?x=0&.v=7

Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents. Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

Get Ready for $150 Oil

After a decline this summer, crude's price is likely to rise sharply by next spring. It will hurt the economy, but it won't be a disaster.

The U.S. economy is never completely ready for higher oil prices, which is one reason they take a nasty economic toll when they arrive. But readiness can be enhanced by awareness of the likely outlook for petroleum prices–and the outlook today is relatively grim, although probably not disastrous.

Despite the recent 20% decline from April highs, new highs on crude, heating oil, diesel fuel, jet fuel and gasoline seem likely over the next 12 months. Following some further easing over the summer, the second leg of the long-term bull market in petroleum–the first occurred in 2007-08–probably will begin this fall.

http://online.barrons.com/article/SB50001424053111903617204576411791590055646.html?mod=TWM_pastedition_1

Amazon ends deal with 25,000 California websites

Gov. Jerry Brown has signed into law California's tax on Internet sales through affiliate advertising which will immediately cut small-business website revenue 20% to 30%, experts say.

The bill, AB 28X, takes effect immediately. The state Board of Equalization says the tax will raise $200 million a year, but critics claim it will raise nothing because online retailers will end their affiliate programs rather than collect the tax.

http://www.ocregister.com/articles/amazon-306409-affiliate-california.html

Fed's Massive Stimulus Had Little Impact: Greenspan

The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.

In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.

"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.

http://www.cnbc.com/id/43598606

Forecasts for Growth Drop, Some Sharply

A drumbeat of disappointing data about consumer behavior, factory sales and weak hiring in recent weeks has prompted economists to ratchet down their 2011 economic forecasts to as little as half what they expected at the beginning of the year.

Two months ago, Goldman Sachs projected that the economy would grow at a 4 percent annual rate in the quarter ending in June. The company now expects the government to report no more than 2 percent growth when data for the second quarter is released in a few weeks.

Macroeconomic Advisers, a research firm, projected 3.5 percent growth back in April and is now down to just 2.1 percent for this quarter.

Both these firms, well respected in their analysis, have cut their forecasts for the second half of the year as well. Then this week, the Federal Reserve downgraded its projections for the full year, to under 3 percent growth. It started the year with guidance as high as 3.9 percent.

http://www.cnbc.com/id/43534613

Consumer spending breaks 10-month rising streak

Consumer spending failed to rise in May, breaking a string of 10 straight months of gains, as households struggled with rising prices and automakers could not deliver the models Americans wanted.

When adjusted for inflation, spending slipped 0.1 percent, the Commerce Department said on Monday. It was the second consecutive monthly drop.

The report, which confirmed that underlying inflation had quickened, suggested consumer spending would offer little support to the economy in the second quarter. In the first three months of the year, it advanced at a modest 2.2 percent annual rate, held back by the weak U.S. labor market.

http://old.news.yahoo.com/s/nm/20110627/bs_nm/us_economy

US budget office warns on debt explosion

The US Congressional Budget Office (CBO) has warned that an explosion in public borrowing could lead to debt levels as high as 100 per cent of the gross domestic product by 2021, if the current course remains unchanged.

The report by the independent budgetary think tank, released overnight, notes that US federal debt will reach roughly 70 per cent of GDP by the end of the year, the highest percentage since just after World War II.

That figure compares with a debt level of 40 per cent of GDP at the end of 2008, which compares favourably with the 40-year average of 37 per cent.

Advertisement: Story continues below The non-partisan CBO also said that if tax cuts enacted since 2001 continue to be extended, the country’s debt could be nearly twice the GDP by 2035.

The country’s total debt reached its legal limit of $US14.29 trillion ($13.58 trillion) in mid-May, and pressure has grown to raise that level ahead of an August 2 deadline. After that, says the US Treasury Department, the United States would be in default.

http://www.smh.com.au/business/world-business/us-budget-office-warns-on-debt-explosion-20110623-1ggeo.html

Federal Reserve admits US economy is struggling

The Federal Reserve has again cut its growth forecasts for the US economy and admitted that "longer-lasting" factors may help explain the current slowing in the recovery.

http://www.telegraph.co.uk/finance/economics/interestrates/8592432/Federal-Reserve-admits-US-economy-is-struggling.html

Bernanke Lies Half Life Reduced To Under One Day As Aflac Scrambling To Shore Up Liquidity On European Exposure

Yesterday during his press conference, the Chairman uttered his latest lie: "We have asked the banks to essentially do stress tests and ask, looking at all their positions, all their hedges, what would the effect on their capital be if -- if Greece defaulted...The answer is that the effects are very small.” Enter Aflac to prove that the half life of Bernanke's lies is now under 24 hours. From Bloomberg: "Aflac Inc. (AFL), the largest seller of supplemental health insurance, may issue as much as 100 billion yen ($1.24 billion) in debt as it records losses tied to investments in banks from Greece, Ireland and Portugal.

http://www.zerohedge.com/article/bernanke-lies-half-life-reduced-under-one-day-aflac-scrambling-shore-liquidity-european-expo

Geithner: Taxes on ‘Small Business’ Must Rise So Government Doesn’t ‘Shrink’

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

http://www.cnsnews.com/news/article/geithner-taxes-small-business-must-rise

Releasing Oil Reserves Called a 'Sign of Desperation'

The announcement by the US Department of Energy and the International Energy Agency that the latter would be releasing 60 million barrels of government-held stocks, immediately increasing global supply by nearly 2.5 percent, is "a sign of desperation. You don't do this if you have anything left in your arsenal," Mark Fisher, founder and CEO of MBF Clearing, told CNBC Thursday.

"This is a psychological mechanism. I think that in this case, the government is bringing a knife to a gun fight, when in reality there's only an 'x' amount of supply," Fisher said.

"I mean what happens if there is, God forbid, another Katrina this summer or there's another disaster someplace else in the world, and you really need to release the reserves?"

http://www.cnbc.com/id/43511270

BIS warns low rates may create 'financial distortions'

The Bank for International Settlements (BIS) has warned that low interest rates across the globe are a threat to world financial stability.

The BIS warned low cost of borrowing had resulted in a credit and property price boom that was fuelling inflation, especially in emerging economies.

Central banks across the globe have cut interest rates in an attempt to boost growth after the 2008 financial crisis.

However, BIS warned that the policy may prove to be counterproductive.

http://www.bbc.co.uk/news/business-13922857

Dollar seen losing global reserve status

The US dollar will lose its status as the global reserve currency over the next 25 years, according to a survey of central bank reserve managers who collectively control more than $8,000bn.

More than half the managers, who were polled by UBS, predicted that the dollar would be replaced by a portfolio of currencies within the next 25 years.

http://www.ft.com/cms/s/0/23183a78-a0c6-11e0-b14e-00144feabdc0.html#axzz1QWvsglhO

Treasury Auctions To Take US Over Debt Ceiling on Monday

The Treasury Department auctioned $56 billion in new debt Tuesday and Wednesday, enough to take the U.S. over its federal debt ceiling when the three- and 10-year notes settle on Monday.

Treasury officials last month flagged May 16 as the day the government would hit the $14.294 trillion debt limit.

The U.S. is selling $72 billion in new debt over three days this week. The Treasury auctioned $32 billion in three-year notes Tuesday and $24 billion in 10-year notes Wednesday, and will sell $16 billion in 30-year bonds Thursday. All of the auctions will settle Monday.

As of Tuesday, total debt subject to the limit was $14.274 trillion, according to the Treasury Department.

The Obama administration has asked Congress to raise the limit, warning that failure to act could lead the government to default by Aug. 2--and could spook investors even before then.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201105111542dowjonesdjonline000477&title=treasury-auctions-to-take-us-over-debt-ceiling-on-monday

Roubini: Jobless Rate Will Jump to Near 10 Percent as Economy Slows

Expect unemployment to return to nearly 10 percent within a year and for the economy to hit the brakes, slowing to 2 percent, says NYU economist Nouriel Roubini.

The U.S. economy faltered to 1.8 percent growth in the first quarter, although some Federal Reserve members still expect growth on the order of 3 percent or higher in 2011.

“Things are going to be much more difficult than they’ve been so far,” Roubini said at a panel debate on alternative investments taking place in Las Vegas, reported CNBC. The error being made is not taking into account the seriousness of the Europe’s debt problems, Roubini said.

http://www.moneynews.com/StreetTalk/Roubini-us-economy-fed/2011/05/12/id/396131

Housing crash is getting worse

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

http://www.marketwatch.com/story/housing-crash-is-getting-worse-2011-05-09?link=MW_latest_news

Smithfield CEO: Higher Food Prices Are Here to Stay

The CEO of Smithfield Farms, the largest pork producer in the US. Among other things he said:

“Maybe to someone in the upper incomes it doesn’t matter what the price of a pound of bacon is, or what the price of a ham, or the price of a pound of pork chops is,” he says. “But for many of the customers we sell to, it really does matter.” Workers can share cars when the price of oil rises, he quips, but “you can’t share your food.”

Mr. Pope also worries about the impact on farmers, who are leveraging up operations to afford the ever-rising price of land and fertilizer that has resulted from the increased corn demand. “There are record prices for livestock but farmers are exiting the business!” he exclaims. “Why? Farmers know they won’t make money.”

Weather is a factor, too. “We’ve had the luxury for the last three years of extremely good corn crops, with high yields and good growing conditions. We are just one bad weather event away from potentially $10 corn, which once again is another 50% increase in the input cost to our live production.”

…Not all companies will survive this economic whirlwind. Mr. Pope recalls what happened the last time there was a surge in corn prices, in 2008: “The largest chicken processor in the United States, Pilgrim’s Pride, filed for bankruptcy.” They “couldn’t raise prices, so their cost of production went up dramatically.” Could it happen again? “It darn well could!” Mr. Pope exclaims.

…Mr. Pope says the “losers” here “are the consumer, who’s going to have to pay more for the product, and the livestock farmer who’s going to have to buy high-priced grain that he can’t afford because he’s stretching his own lines of credit. The hog farmer . . . is in jeopardy of simply going out of business ’cause he doesn’t have the cash liquidity to even pay for the corn to pay for the input to raise the hog. It’s a dynamic that we can’t sustain.”

http://gainspainscapital.com/?p=309

Government Raids PRIVATE Pensions To Pay For Spending

The Irish government plans to institute a tax on private pensions to drive jobs growth, according to its jobs program strategy, delivered today.

Without the ability sell debt due to soaring interest rates, and with severe spending rules in place due to its EU-IMF bailout, Ireland has few ways of spending to stimulate the economy. Today's jobs program includes specific tax increases, including the tax on pensions, aimed at keeping government jobs spending from adding to the national debt.

The tax on private pensions will be 0.6%, and last for four years, according to the report.

Read more: http://www.businessinsider.com/irish-bombshell-government-raids-private-pensions-to-pay-for-jobs-program-2011-5#ixzz1MIT8sFjP


http://www.businessinsider.com/irish-bombshell-government-raids-private-pensions-to-pay-for-jobs-program-2011-5

PIMCO raises bet against U.S. government debt

The increase, albeit small, follows Gross' move to ratchet up his bearishness in March by taking his initial short position in U.S. government-related debt, which includes Treasuries, TIPS, agencies, interest rate swaps, Treasury futures and options and FDIC-guaranteed corporate securities.

The $240 billion Total Return fund also raised its cash position to 37 percent in April from 31 percent in March, added Pacific Investment Management Co, which oversees $1.2 trillion in assets.

The Total Return fund took down its mortgage exposure to 24 percent in April from 28 percent the previous month.

The fund also decreased its allocation in investment-grade credit to 17 percent in April from 18 percent in March and junk bonds to 5 percent in April from 6 percent the previous month.

http://www.reuters.com/article/2011/05/09/us-investing-pimco-fund-idUSTRE7486LU20110509