Tuesday, May 31, 2011

The Dollar and the Biggest Inflection Point of the Year........... AN ABSOLUTE MUST READ

The Dollar and the Biggest Inflection Point of the Year
 
With so much going on with Europe's debt crisis, the continuing disaster and economic contraction in Japan, the potential for a very hard landing in the Chinese growth miracle which is one of my favorite "black swan candidates" for 2011, and the developing and unfolding debt crisis that, despite claims of recovery, will eventually drag down most of the developed economies at some point. Understanding the dollar and dollar relationships  becomes crucial for long term investment success.
 
This is why we are going to turn our attention to the dollar in this article. 
 
The bearish case for the dollar stems from its broad-based weakness to global currencies. Over the last month the USD has experienced a decent bounce but this strength is deceptive and not as strong as would appear on the surface. I track 30 world currencies and all four precious metals returns relative to the USD over various time frames to gain an understanding as to how weak/strong the USD is on a global basis, with my return table shown below.

The USD Index began to rally roughly one month ago and the third column from the left shows the 1-month returns relative to the dollar. You can see that only 6 out of 34 currencies and metals declined relative to the USD while 82% of them rallied, which indicates this countertrend bounce has been incredibly weak. A strong reversal in the dollar such as was seen in the summer of 2008 or late 2009 often occurs when it displays widespread strength. As shown in the table below, whether one looks at a one day relative return or a one year relative return, the USD Index is weak on a global basis and is not showing improving strength that would indicate a major reversal of its bearish trend.

FOR THE SLOW PEOPLE OUT THERE THE DOLLAR IS DOWN AGAINST ALMOST EVERYTHING IN JUST THE PAST YEAR, ADD IN INFLATION AND IT GETS MUCH WORSE. ADJUST YOUR INVESTMENT RETURNS FOR THIS AND YOUR GETTING KILLED!

I GUESS IGNORANCE REALLY IS BLISS, AT LEAST UNTIL YOU FIND OUT IN THE LONG TERM!

THE FEDERAL RESERVE AND CENTRAL BANKS WORLD WIDE HOPE YOUR DUMB ENOUGH NOT TO HAVE NOTICED THIS! ARE YOU? DO YOU UNDERSTAND WHAT IT MEANS GOING FORWARD?

world currencies usd metals
Source: Bloomberg

If the dollar does experience a decline similar to 1978 (declineing over 15% in less than four months), one of THE primary beneficiaries would likely be commodities in general, and precious metals in particular. With gold already approaching $1600/oz, some have a hard time imagining how much further it can advance. One way to analyze gold is on a relative basis to help create some price targets, and rather than purely analyze how high gold can rise, we also need to analyze how far the USD can fall as gold and the USD are two sides of a the same coin. Thus, looking at the value of US governmental holdings of gold bullion in relation to the US monetary base helps in determining some price targets for gold and to gauge how expensive it may be.

Shown below on the left hand side is the percentage of the US monetary base backed by the value of US governmental gold bullion (ounces of gold * current price). On the right hand side is the required price of gold necessary to back the US monetary base to a set percentage with 25%, 50%, and 100% backing shown. I'd like to make a few quick points. First off, please note that the beginning of the secular bull market in gold in the 1970s that took it from $35/oz in January 1970 to $835/oz ten years later (+2285%) began with gold representing a mere 17.8% of the US monetary base. By the middle of the decade after the first big run in gold US government bullion holdings represented 58% of the monetary base, and by the peak in early 1980 the value of governmental gold bullion represented 131% of the US monetary base. By the time the secular bull market in gold was over, the value of US gold bullion represented more than the entire monetary base!

While it may come as a huge surprise that after rallying from $254/oz in 2001 to a recent high of $1577 (+520%), the present value of governmental holdings of gold bullion backing the US monetary base is currently BELOW the starting point of the prior secular bull run in gold!

I believe this point is too big not to reiterate, the present value of gold bullion relative to the US monetary base is BELOW where it stood at the beginning of the last secular bull market.

us monetary base gold

Source: Bloomberg

This is due to rapid expansion in the monetary base caused by quantitative easing (QE) round one and two by the Bernanke Fed which has more than doubled the monetary base in short order.

To bring the gold backing of the monetary base to 25% would require a gold price of $2382/oz, and for 50% gold backing would require a price of $4763/oz, which would still be less than the peak seen at the mid point for the last secular bull market in gold in which by mid 1970s government gold holdings represented 58% of the monetary base. For 100% gold backing of the monetary base we would need to see gold rally to nearly $10,000/oz.

I HOPE ALL THE DUMB ASSES, THAT'S ABSOLUTELY RIGHT, DUMB ASSES, OUT THERE TAKE A LONG HARD LOOK AT THIS AND REALIZE HOW ABSOLUTELY MORONIC IT IS TO INVEST IN EQUITIES AND BONDS IN THIS ENVIRONMENT. YOU CAN'T BE A PROFESSIONAL INVESTMENT ADVISOR AND BUY INTO THE MAINSTREAM STORY! IDIOT, YES! PROFESSIONAL, HARDLY!  I WOULD BE EQUALLY STUPID IF I ATTEMPTED TO PREDICT EXACTLY WHEN THE MOMENT WILL ARRIVE, IT IS CLOSER EVERY DAY AND THE MARKETS KNOW THIS.  

As you can see, it is highly erroneous for anyone to call gold a bubble as we do not have an over abundance of gold bullion as we did of technology companies in 2000 or a glut of homes in 2005-2006. What we do have is a glut of US dollars.

BUT PROFESSIONAL IDIOTS HAVE AN AGENDA AND CAN'T SEE PAST THEIR IDIOTIC OPINIONS! THE NASDAQ WILL NEVER FALL! HOME PRICES NEVER DROP! THE FED WILL FIX EVERYTHING.......

Shown below is the growth in the monetary base and global gold production. Since 1990 the monetary base has grown by 570% thanks to the Federal Reserve, while global gold production has grown by a mere 21%. 

READ THAT LAST LINE  A NUMBER OF TIMES, S  L  O  W  L  Y  IF YOUR AN INVESTMENT PROFESSIONAL OR YOU WENT TO AN IVY LEAGUE SCHOOL AND THEN TAKE SOME TIME AND T  H  I  N  K  ABOUT IT.  BY THE WAY IT IS SIMILAR FOR SILVER AND MANY OTHER COMMODITIES SUCH AS OIL. THEY ARE ONLY GOING UP UNTIL OUR FEDERAL RESERVE IS STOPPED. BUY AND HOPE IS DEAD!

So I ask you, where is the supply glut characteristic of a bubble, in US dollars or gold bullion?

monetary base
Source: Bloomberg

Summary

Over the course of the last few years major pivot points in global financial market relationships have been centered around moves in the USD.

We are at yet another major inflection point and what the USD does from here will likely have widespread implications.

IF YOUR ON WALL STREET OR IN ANYWAY CONNECTED TO THE MARKETS AND YOU DON'T CONSIDER THE IMPLICATIONS OF THESE FACTS, YOUR CARREER IS EFFECTIVELY OVER IN THE NEXT FEW YEARS, AS INVESTORS ARE NOT GOING TO CONTINUE TO BE FOOLED BY IDIOTIC IN VESTMENT ADVICE THAT GETS BLIND SIDED WITH EVER INCREASING FREQUENCIES AND INTENSITY.  

If the USD Index tracks the path of the 1970s and witnesses a sharp decline in the months  ahead, a sign that this is happening would be a decisive close of the USD Index below its 50 day moving average. My personal leaning is towards a USD decline given the widespread weakness relative to global currencies and precious metals. If the USD does experience an accelerated decline in the months ahead, then precious metals are likely to be the ultimate beneficiary.

usd index 1970 present

Since the early part of May the USD Index has been experiencing a short-term rally in which it looked like it was going to make a move to test its 200 day moving average similar to its rally in November-December of 2010. Once the USD Index broke its 50 day moving average (green line below) the bearish trend resumed. Presently the USD Index is testing its 50 day and 20 day moving averages and a decisive close below both would likely indicate the dollar is continuing its decline. Given the break in the multi-year pennant formation, the USD's decline may accelerate to the downside.

usd index

Since the top earlier last week, the Index has shifted into a mini-collapse that quickly violated the short-term rising trend line, and changed the outlook from moderately positive to negative. Note that the 20-EMA was very close to crossing up through the 50-EMA, which would gave generated a buy signal. Now the Index is below both EMAs, meaning that they are now declining and diverging. The PMO has topped.

Chart

The weekly chart shows that long-term overhead resistance is still an issue, and we can see that the Index turned down prior to reaching either of those lines of resistance.

usd weekly

Bottom Line: Several weeks ago it appeared that the Dollar Index was on the verge of a total collapse. At that point the most probable possible outcome was that the bear market rally in the dollar would fail before it was able to cause a new buy signal to be generated. That is what appears to be happening now. The next thing we should expect is a retest of the May lows.

The Dollar Index is in a long-term bear market. Our expectations should be shaded by that fact.

THE FED MAY BE ABLE TO SAVE US A  FEW MORE TIMES BUT THE FEDs SALVATION WILL
BE WEAKER WITH EACH DESPERATE MISGUIDED ATTEMPT AND ECONOMIC DEVASTATION LIES AT THE END OF THE FEDs REIGN. IF YOU THINK DIFFERENTLY, YOU REALLY ARE AN INVESTMENT "PROFFESIONAL"!

WHAT HAPPENS WHEN THE GOVERNMENT TIGHTENS ITS BELT?............. A MUST READ.

WHAT HAPPENS WHEN THE GOVERNMENT TIGHTENS ITS BELT?

By Stephanie Kelton, Ph.D.
 
Imagine two people sitting on opposite ends of a 15-foot teeter-totter. The laws of physics dictate that the seesaw will balance if the product of the first mass (w1) and its distance (d1) from the fulcrum (i.e. the balancing point) is equal to the product of the other mass (w2) and its distance (d2) from the fulcrum. Thus, the physicist can show that the teeter-totter will be in balance when the fulcrum is placed 6 feet from the end holding a 150lb person and 9 feet from the end holding a 100lb person. Moreover, the laws of physics ensure that an imbalance will arise if the mass or the relative position of one of the people is changed.

The laws of accounting allow us to demonstrate that similarly powerful concepts apply to the science of economics. Beginning with the simple identity for GDP in a closed economy, we have:

[1] Y = C + I + G, where:

 

Y = GDP = National Income
C = Aggregate Consumption Expenditure
I = Aggregate Investment Expenditure
G = Aggregate Government Expenditure

For economists, this is as obvious as stating that a linear foot is the sum of 12 sequential inches. It simply recognizes that the total amount of money spent buying newly produced goods and services will yield an equivalent income to the sellers of these products. Thus, it demonstrates that expenditures are a source of income.

Once earned, income can be allocated in one of three ways. At the end of the day, all income (Y) will be spent (C), saved (S) or used in payment of taxes (T):

[2] Y = C + S + T

Since they are equivalent expressions for Y, we can set equation [1] equal to equation [2], giving us:

C + I + G = C + S + T

Or, after canceling (C) from both sides and moving terms around:

[3] (S – I) = (G – T)

Equation [3] shows that there is a direct relationship between what's happening in the private sector (S – I) and what's happening in the public sector (G – T). But it is not the one that Pete Peterson, Erskin Bowles, or President Obama would have you believe. And I want you to understand why they are wrong.

To understand the argument, imagine that you and Uncle Sam are sitting on opposite ends of a teeter-totter. You represent the private sector, and your financial status is given by (S – I). Your budget can be in balance (S = I), in deficit (S < I) or in surplus (S > I). When your financial status is positive (S > I), you are net saving. When your financial status is negative (S < I), you are net borrowing. Uncle Sam's financial status is equal to (G – T), and, like yours, his budget may be balanced (G = T), in deficit (G > T) or in surplus (G < T). When you interact, only three outcomes are possible.

First, it is conceivable that (S = I) and (G = T) so that (S – I) = 0 and (G – T) = 0. When this condition holds, the teeter-totter will level off with each of you experiencing a balanced budget.

 

In the above scenario, the government is balancing its receipts (T) and expenditures (G), and you are balancing your savings and investment spending. There is no net gain/loss.

But suppose the government begins to spend more than it collects in taxes (i.e. G > T). How will Uncle Sam's deficit affect your position on the teeter-totter? The answer is as straightforward as increasing the mass of the person on the right-hand side of the seesaw. As Uncle Sam's financial position turns negative, your financial position turns positive.  SO THE SO CALLED RECOVERY IS NOTHING BUT A MIRAGE BASED ON GOVERNMENTAL BALANCE TRANSFERS. TRANSFERS WHICH ARE TEMPORARY AT BEST AND DEBILITATING AND DESTRUCTIVE AT WORST.

 

This should make intuitive as well as mathematical sense, because when Uncle Sam runs a deficit, you receive more financial assets than you lose through taxation. Put simply, Uncle Sam's deficit lifts you into a surplus position. Moreover, bigger deficits mean bigger surpluses for you. NOTHING BUT BULLSHIT AND MANIPULATION!

Finally, let's see what happens when Uncle Sam tightens his belt. Suppose, for example, that we were able to duplicate the much-coveted surpluses of 1999-2001. What would (and did!) happen to the private sector's financial position?

 

Because the economy's financial flows are a closed system – every payment must come from somewhere and end up somewhere – one sector's surplus is always the other sector's deficit. As the government "tightens" its belt, it "lightens" its load on the teeter-totter, shifting the relative burden onto you.

This is not rocket science, but it appears to befuddle scores of educated people, including President Obama, who said, "small businesses and families are tightening their belts. Their government should, too." This kind of rhetoric may temporarily boost his approval ratings, but the policy itself will undermine the efforts of the very families and small businesses that are trying to improve their financial positions.

COMMERCIAL REAL ESTATE IS NOWHERE NEAR A BOTTOM............

"The Moody's/REAL Commercial Property Price Index (CPPI) measured a 4.2% decline in March, bringing the index to its lowest level since the peak in October 2007. The CPPI continues to bounce along the bottom as a large share of distressed transactions preclude a meaningful recovery of overall market prices at this juncture.
 
Indeed, the post peak low in price has been reached in the same period as a post peak high in distressed transactions has been recorded. The growing share of distressed transactions is consistent with Moody's observations from the CMBS market. Given that it may take 12 to 24 months to foreclose on a property and execute an REO sale there is a lag effect that results in fewer distressed transactions coming to market in the early stages of a downturn and an increased level in later stages (i.e. now)…."
 
The index is back to where it was 11 years ago based on actual sales, but the banks are not marking these assets down on their balance sheets. Extend, pretend and pray that the cash flow holds up for a while longer.  THERE IS AN ECONOMIC DISASTER HEADED OUR WAY, IT WILL INVOLVE THE BANKS ABSOLUTE STUPIDITY ON EXTENDING AND PRETENDING.

7 major risks brewing............. A MUST READ

David Rosenberg brings us his 7 major risks brewing:
  • China hard landing (PMI down to 51, perilously close to contraction mode)…equity market may have begun to price in some probability of such.
  • Contagion sovereign credit risks in Europe (the rating agencies have already begun to take action against Spain, Italy and Belgium).
  • Countertrend rally in the US dollar – this is crushing the risk-on carry trades: the unwinding of net speculative short positions in the dollar and long positions in the Euro seem to have further to go based on the latest CFTC data.
  • Deepening recession in Japan – still one of the world's largest economies; spill-over on global production schedules still to be felt.
  • US fiscal policy is becoming more radically austere at all levels of government.
  • The end of QE2 will be a very big deal given the 89% correlation between the Fed's balance sheet and the movements in the S&P 500 over the past two years.
  • US leading economic indicators are rolling over.  The Conference Board Index fell in April for the first time since June 2010; the coincident-to-lagging indicator is down three months in a row; and the ECRI smoothed index is down now for four straight weeks, a streak last seen in July 2010.

More Confirmation Of The Economic Slowdown..................... A MUST READ

More Confirmation Of The Economic Slowdown
 
Comstock
 

Our comment of two weeks ago outlined the major headwinds likely to impact both the economy and stock market over the period ahead, while last week's comment discussed the actual economic slowdown that was already happening.  Events of the past week have confirmed these views.

The Chicago Fed's National Activity Index of 85 coincident indicators for April dropped to minus 0.45, its lowest level since last August.  The index has now been below zero for five of the last eight months, as is the three-month moving average.  This means that the economy was probably growing below trend in the first quarter, and possibly the second as well. 

First quarter revised GDP growth was not revised upward as the consensus expected, but remained at the originally reported 1.8%.  Moreover the underlying data deteriorated as consumer spending growth was revised down to 2.2% from 2.7% and inventory accumulation was revised up by $9 billion.   Furthermore, major firms have been reducing their second quarter GDP growth estimates to well below 3%.  Recall that toward the end of 2010 most pundits were looking for 4% growth in the quarters ahead.

Initial weekly unemployment claims, reported today, rose to 424,000 and have now remained well above 400,000 for the seventh straight week after a period of coming in below that level.  This does not bode well for upcoming monthly payroll employment.

The ECRI Weekly Leading Index was down again last week, the fourth decline in the last six weeks, and the lowest since the week of January 15th.  A slowdown in this indicator generally suggests a period of tepid growth in the period ahead.

The May numbers for both the Richmond and Kansas City Fed indexes fell sharply, confirming the previously reported results for the Philly Fed and the Empire State Manufacturing Survey.  This strong unanimity strongly suggests that industrial production is still extremely sluggish in May.  These results are consistent with the April decline in core capital goods orders of 2.6%.  Similarly, shipments dropped 1.7%.

Keep in mind that this has happened during a period where QE2 poured reserves into the financial system, the stock market rallied and fiscal policy was boosted by the reduction in payroll withholding.  With all of that, we have an economy that is growing below trend and fading rapidly.  Now QE2 is ending within weeks, fiscal policy is about to tighten and housing prices are still falling with lots of additional supply still coming.

The stock market has now stalled for over three months and appears to be in the process making a top.  The S&P 500 reached an intra-day high of 1344 on February 18th, backed off and then broke out to a new high of 1370 on May 2nd.  It has since declined to well below the 1344 mark, a strong indication that the breakout has failed and that a new decline may be underway. This would be similar to the pattern of 2010, when the market dropped 17% following the end of QE1.  That time the market was saved by the initiation of QE2.  The Fed, however, is running out of ammunition, and we doubt that a QE3, if ever implemented, would be that effective.   

New Evidence That The Economy Is Slowing Down.........................

New Evidence That The Economy Is Slowing Down

April Durable Goods was a disaster

April Durable Goods was a disaster 

On May 24, the Richmond Fed was a total debacle

On May 24, the Richmond Fed was a total debacle

Image: AP Images

10-year yields have been diving again

10-year yields have been diving again

More and more it looks like the Chinese economy is coming off the rails

More and more it looks like the Chinese economy is coming off the rails

Image: clara-maya via Flickr

This has huge implications for the US. 
 
Europe is breaking apart.
 
Europe is breaking apart. Enough said There.

Image: Jose Maria Miñarro Vivancos on flickr

The May Philly Fed: Another disaster

The May Philly Fed: Another disaster

Image: AP

The UK economy is practically double dipping.

The UK economy is practically double dipping.

Image: Telegraph.co.uk.

Case Shiller Is Showing The Housing Double Dip Getting Worse

Case Shiller Is Showing The Housing Double Dip Getting Worse

Small Business Confidence Is Suddenly Turning Lower

Small Business Confidence Is Suddenly Turning Lower

Image: NFIB

Durable goods have been weak

Durable goods have been weak

Las Vegas gaming revenue has suddenly turned south again.

Las Vegas gaming revenue has suddenly turned south again.

Image: WilWheaton on flickr

Oil prices have pushed the economy to the breaking point

Oil prices have pushed the economy to the breaking point

Austerity warnings from the UK

Austerity warnings from the UK

Image: Twitpic

In London, where fiscal tightening is further along than here, it's having a clear effect on consumer spending. That's coming to the US, too.

Q1 GDP was very mediocre.

Q1 GDP was very mediocre.

Image: St. Louis Fed

Initial jobless claims are clearly heading higher over the past few weeks

Initial jobless claims are clearly heading higher over the past few weeks

Image: St. Louis Fed

Copper futures, a great tell on the economy, are heading south

Copper futures, a great tell on the economy, are heading south

Image: StockCharts.com

Shanghai stocks are falling as well

Shanghai stocks are falling as well

Image: StockCharts.com

Big companies like Procter & Gamble are seeing their earnings get hit due to higher commodities

Big companies like Procter & Gamble are seeing their earnings get hit due to higher commodities

Image: Flickr

Multiple political polls have indicated heightened economic anxiety in April

Multiple political polls have indicated heightened economic anxiety in April

Image: Facebook.

The CEO of Wal-Mart says his customers are running out of money

The CEO of Wal-Mart says his customers are running out of money.

Several regional Fed surveys have shown a slowdown in April

Several regional Fed surveys have shown a slowdown in April

Image: By MikeSheridan89 on Flickr

Monday, May 30, 2011

Second Biggest Weekly Drop Ever In Treasurys Held In The Fed's Custodial Account As Foreigners Dump..............

Second Biggest Weekly Drop Ever In Treasurys Held In The Fed's Custodial Account As Foreigners Dump

There was one truly interesting observation in this week's Fed balance sheet update: not that the actual balance sheet hit a new all time record (which it did at $2.779 trillion), or that the Fed added another $24 billion in Treasurys to its balance sheet, or that total reserves hit a new all time record, increasing by $53 billion to $1.59 trillion. No. The biggest surprise was that in the just ended week, Treasury securities held in custodial accounts at the Fed, considered by some the best real-time representation of foreign holdings of US Treasurys considering that the TIC update is not only wildly inaccurate in its monthly update, but is also 3 months delayed, dropped by the largest amount in 4 years. From a total of $2.704 trillion, USTs held in custodial accounts declined by $18.7 billion to $2.685 billion. This is the second largest decline in history, only topped by the $22.1 billion in the week of August 15, 2007 which is the week that followed the great quant crash of 2007 that wiped out, among others, Goldman Alpha. This observation is in stark contrast to the recent record strength of bond issuance, after both the 5 and 7 Years auctions posted record Bid to Cover investor interest.

While foreign investors are aggressively buying up the belly of the curve, they are even more aggressively selling the other parts of the curve, namely both the short (sub 2 Year) and the Long (10-30 Year). Another question is whether the large outflow from bonds is a consequences to recent market volatility, or is the basis for one: i.e., will the money be used to purchase stocks, or, if as China is posturing, is this merely capital leaving the US and entering Europe. Lastly, the nearly $20 billion in USDs likely will have to be converted to another FX denomination: should any notably USD weakness be observed in the next several days, this could well be a reason.

THE MARKET FACES A LONG, HOT, VOLATILE SUMMER....................

There are a few economic and market related items worth pointing out and none of them look great.

1. Our old Euro Zone issue.  You have heard a lot about Greece lately, but the truth is that the credit risk spreads are blowing out to all time wides for all but Spain:

2.  The economic news continues to be negative.  A particularly poor reading for the Philadelphia Fed Index and the Chicago National Activity Index.  Overall the economic surprises have turned to the sour side:

3. Our perceived economic savior, China, seems to be losing love from the media.  Bloomberg just reported that Chinese companies are cooking the books and Jim Chanos believes they should be shorted.  In addition, inflation is becoming a real problem in asian countries.  Vietnam reported inflation of nearly 20%.  The Shanghai composite is down almost 10% from its recent high.  During the crisis, this proved to be a decent leading indicator:

4.  US equity markets have been trading weakly.  The S&P 500 is only up 4% since its peak, but it seems almost certain that we will test the 1294 level.  A breakdown shows no significant technical support until about 1250:

IT COULDN'T HAPPEN TO NICER FOLKS.............

Thanks to ongoing legal and reputational concerns, the CDS market suggests that Goldman is now a bigger credit risk than Citigroup -- once the poster child of a "bad bank."

Among other things, the company is waiting for a subpoena, and just got trashed by Matt Taibbi.

chart of the day, 5-year cds goldman sachs citi, may 2011

UNDERSTANDING HOW WE GOT HERE..............

 
In a 2008 Congressional hearing Alan Greenspan admitted that the ideological framework he had based his entire life's work on, was "flawed":

REP. HENRY WAXMAN: Do you feel that your ideology pushed you to make decisions that you wish you had not made?

ALAN GREENSPAN: Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to — to exist, you need an ideology. The question is whether it is accurate or not.

And what I'm saying to you is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact.

REP. HENRY WAXMAN: You found a flaw in the reality…

ALAN GREENSPAN: Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working?

ALAN GREENSPAN: That is — precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.

So you can see that the man running monetary policy in the USA for 18 years was working under a "flawed" framework. If the Fed chief has a flawed understanding of our economic system then who can we really expect to understand all of this?

It's clear that no one really does understand it completely and that explains, in large part, why the USA is in the position it is in today.

ISLAM, CHRISTIANITY AND OBAMA.................. A MUST SEE VIDEO

THIS VIDEO IS A LITTLE OVER AN HOUR LONG. IT IS VERY GOOD, PERRY STONE KNOWS HIS STUFF. IT WILL EXPLAIN AN AWFUL LOT THAT SEEMS TO BE CONFUSING MANY, IF NOT MOST AMERICANS.
 

FUKUSHIMA CERTAINLY WAS NAMED APPROPRIATELY.................

FUKUSHIMA CERTAINLY WAS NAMED APPROPRIATELY
 
Evidence is growing that the March 11 earthquake itself caused major damage to the Fukushima Daiichi reactors even before the accompanying tsunami knocked out offsite power and ensured the subsequent meltdowns.

According to Keiji Miyazaki, professor emeritus of nuclear reactor engineering at Osaka University, the earthquake likely damaged the high pressure coolant injection system, part of the emergency core cooling system at Unit 3 (as we reported below, it already has been believed that Unit 1 suffered severe damage from the earthquake). This system is supposed to work to cool the reactor even if power is lost, but at Unit 3, it didn't. A review of pressure readings at Unit 3 indicate that there likely was a major steam leak that ultimately led to the speedy meltdown there. Article from Asahi.com here.

A rough translation of remarks by seismologist Katsuhiko Ishibashi (Emeritus Professor, Kobe University, which also suggest the earthquake itself heavily damaged the reactors, is available here

Tomio Kawata, a research fellow of the Nuclear Waste Management Organization of Japan, said this week that the soil of a large area of northwest Japan—about 600 square kilometers—is contaminated with Cesium-137 at levels higher than prompted compulsory evacuation orders in the Soviet Union after Chernobyl (1.48 million becquerels per square meter). 700 square kilometers is contaminated with levels from 555,000-1.48 million becquerels per square meter.

Tepco recently said that some 60 tons of radioactive water in one of its makeshift storage tanks—where it has been putting radioactive water gathered from the reactors and turbine buildings—has leaked out. The leak is apparently continuing.

Greenpeace is continuing its testing of marine life 12 miles and more from the Daiichi site, this week finding seaweed with contamination levels as high as 60 times legal limits.

The world's media are shocked (shocked, we tell you…) that three Fukushima reactors melted down. Where have they been the past 10 weeks? Where did they think all that radiation was coming from? You know, that radiation that has caused the evacuation/relocation of people as far as 25 miles from the reactor site? Not to mention contamination of food, seawater, etc…..

Even Tepco admitted weeks ago that 35-50% of the fuel had melted at the three reactors (U.S. Energy Secretary Steven Chu had estimated 70% melt at Unit 1); the big difference now is that it seems as if all the fuel has melted and is now a large glop at the bottom of each reactor building.

We expect the media to be equally shocked when they finally realize that the evacuees will never be returning home and that the world now has another piece of itself rendered uninhabitable by nuclear power.  WE ARE A NATION OF DUPES!

In actual news, evidence is growing that Unit 1's meltdown was initiated by the earthquake and only exacerbated by the ensuing tsunami. Bloomberg reports that a radiation alarm inside Unit 1 went off before the tsunami even arrived, indicating coolant already had been lost and fuel melting had begun. If true, this could also require a re-assessment of how quickly reactors can melt down—that would mean meltdown had begun less than an hour after loss-of-coolant.

Masataka Shimizu, President of Tepco, resigned today after leading the company into the largest financial loss in Japanese history—about $15 Billion, and that's before any compensation has been paid to the tens of thousands of people who have lost their homes and livelihoods.

Woods Hole Oceanographic Institution says that the impact on the world's oceans by Fukushima exceeds the impact of Chernobyl—in fact, the impact is 10 times higher. Woods Hole has received an emergency grant from the National Science Foundation to set baseline radionuclide levels in both the Atlantic and Pacific Oceans and to monitor the impact of Fukushima fallout.

FOR ALL OF YOU DOUBTERS THE FACTS FROM RELIABLE SOURCES PROVE THAT THREE REACTORS HAVE MELTED DOWN AND THAT THIS EVENT IS MAGNITUDES OF SCALE WORSE THAN CHERNOBYL.

Chernobyl Times Ten ................

Chernobyl Times Ten - Fukushima and the Radioactive Sea

By Harvey Wasserman

New readings show levels of radioisotopes found up to 30 kilometers offshore from the on-going crisis at Fukushima are ten times higher than those measured in the Baltic and Black Seas during Chernobyl.

"When it comes to the oceans, says Ken Buesseler, a chemical oceonographer at the Woods Hole Oceanographic Institution, "the impact of Fukushima exceeds Chernobyl."

The news comes amidst a tsunami of devastating revelations about the Fukushima disaster and the crumbling future of atomic power, along with a critical Senate funding vote:

Fukushima's owner, the Tokyo Electric Power Company, has confirmed that fuel at Unit One melted BEFORE the arrival of the March 11 tsunami.

This critical revelation confirms that the early stages of that melt-down were set in motion by the earthquake that sent tremors into Japan from a relatively far distance out to sea.

Virtually all of Japan's 55 reactors sit on or near earthquake faults. A 2007 earthquake forced seven reactors to shut at Kashiwazaki. Japan has ordered shut at least two more at Hamaoka because of their seismic vulnerability.

Numerous reactors in the United States sit on or near major earthquake faults. Two each at Diablo Canyon and San Onofre, California, are within three miles of major fault lines. So is Indian Point, less than 40 miles from Manhattan. Millions of people live within 50 miles of both San Onofre and Indian Point.

On January 31, 1986, the Perry reactor, 35 miles east of Cleveland on Lake Erie, was damaged by an earthquake rated between 5.0 and 5.5 on the Richter Scale---orders of magnitude weaker than the one that struck Fukushima, and that could hit the sites in California, New York and elsewhere around the globe.

TEPCO has confirmed that at least three of the Fukushima reactors---Units One, Two and Three---have suffered fuel melts. In at least one case, the fuel has melted through part of the inner containment system, with molten radioactive metal melting through to the reactor floor. A wide range of sources confirm the likelihood that fission may still be proceeding in at least one Fukushima core. The danger level is still growing. But it clearly requires still more commitment to some kind of cooling regime that will send vast quantities of water into ocean.

At least one spent fuel pool---in Unit Four---may have been entirely exposed to air and caught fire. Reactor fuel cladding is made with a zirconium alloy that ignites when uncovered, emitting very large quantities of radiation. The high level radioactive waste pool in Unit Four may no longer be burning. Some Fukushima fuel pools (like many in the United States) are perched high in the air, making their vulnerability a serious concern. But a new report by Robert Alvarez indicates the problem in the US may be more serious that generally believed.

Unit Four is tilting and may be sinking, with potentially devastating consequences. At least three explosions at the site have weakened critical structures there. Massive leakages may have softened the earth and undermined some of the buildings' foundations. Further explosions or aftershocks---or a fresh earthquake---could bring on structural collapses with catastrophic fallout.

TEPCO has now confirmed that there are numerous holes in the containment covering Unit Two, and at least one at Unit One. The global nuclear industry has long argued that containments are virtually impenetrable. The domes at Fukushima are of very similar design and strength as many in the US.

The health impacts on workers at Fukushima are certain to be devastating.

After Chernobyl, the Soviet government sent more than 800,000 draftees through the seething wreckage. Many stayed a matter of 90 seconds or less, running in to perform a menial task and then running out as quickly as possible.

Despite their brief exposure, these "liquidators" have suffered an epidemic of health effects, with an escalating death toll. Angry and embittered, they played a significant role in bringing down the Soviet Union that doomed them.

At Fukushima, a core of several hundred workers essentially sacrificed themselves in the early stages of the disaster. They courageously entered highly contaminated areas to perform tasks that almost certainly prevented an even worse catastrophe.

David Brenner, the director of the Center for Radiological Research at Columbia University Medical Center, said of the workers: "Those are pretty brave people. There are going to be some martyrs among them'."

"I don't know of any other way to say it, but this is like suicide fighters in a war," said University of Tokyo radiology professor Keiichi Nakaga.

Unfortunately, the toll among Fukushima's workers is certain to escalate. As few as two in five being sent into the Fukushima complex are being monitored for radiation exposure. According the Mainichi Shimbun, just 1,400 workers at Fukushima had been given thorough checkups, with just 40 getting their results confirmed.

Even at that, Japanese officials have raised the allowable dosages for nuclear workers from 100 millisieverts to 250, five times what's allowed for US workers, and 125 times what reactor workers typically receive in a year.

Some 88% of Japan's reactor work force are part-timers, sparsely trained and often paid extra money to race into highly radioactive areas and then run out.

But Nobuaki Terasaka, head of the Nuclear and Industrial Safety Agency, May 16 confirmed some 4,956 cases of internal exposure to radiation among workers at reactors around the country. Of those, 4,766 were originally from Fukushima and had moved to other sites, but had re-visited the prefecture after the 3/11 disaster.

Some of the stricken workers believe they were contaminated when they returned home for their families, even though they may have stayed only briefly.

Workers at Fukushima itself report spotty testing and dangerous facilities, including a leaky earthquake-resistant building where they took their breaks. "We had our meals there, so I think radioactive substances came into our bodies," says one male worker. "We just drink beer and wash them down."

A "dead zone" around Fukushima similar to the one surrounding Chernobyl is likely in the making. According to a report published in the Japan Times, levels of contamination in areas around Fukushima are at least comparable to those around Chernobyl.

But people outside the official evacuation zone are also vulnerable. Radiation detected in Tokyo, nearly 200 miles away, at one point prompted the Japanese government to recommend mothers not use tap water to mix formula for their infants.

Nonetheless children have been observed attending schools while bulldozers were removing the radioactive soil from their playgrounds outside. Amidst global protests, the Japanese government has weakened the limits of allowable radiation exposures to children.

In the midst of the disaster, the owners of the Indian Point reactors have announced their refusal to upgrade fire protection systems which New York Attorney-General Eric Schneiderman says are "."

More than 70% of the plant remains unprotected, he says, a "reckless" practice. Schneiderman accuses federal regulators as being too cozy with the plant's owners. Schneiderman and New York Governor Andrew Cuomo want the two IP reactors shut.

Over the weekend only four of Germany's seventeen reactors were operating, but the country suffered no apparent energy shortages. Prime Minister Angela Merkel has ordered seven older reactors shut, and the rest to be closed by 2011. But six of the newer ten closed for various technical reasons.   DO YOU THINK WORLD LEADERS KNOW SOMETHING WE DON'T? WHY WOULD GERMANY CLOSE ALL THOSE REACTORS IF THERE WASN'T SOMETHING VERY WRONG.

More than 20,000 Swiss citizens rallied to demand an end to plans to build new reactors there. The Swiss government has now confirmed it will not build new reactors, another major blow to the industry, this time resulting in the cancellation of plans for at least three projects.  AGAIN, IS IT MORE THAN JUST FEAR?

Japan is standing by its decision to build no more reactors, while China has put some 28 proposed projects on hold. China's reaction to Fukushima will be crucial to the future of nuclear power, as it is by far the largest potential market for new reactors. Though prevailing winds head the other way, Fukushima is relatively close to China, and some fallout has been detected there.

The Obama Administration has still produced no comprehensive monitoring of radioactive fallout coming to the United States and has provided no guidance as to how American citizens can protect themselves, except to say not to worry. Polls now show more Americans opposing new reactors than favoring them, and grassroots opposition is fierce.  I BELIEVE POLITICIANS HAVE DONE THIS TO LIMIT PANIC. I BELIEVE RADIATION IS FALLING ON THE WEST COAST AND BECAUSE SO MUCH FOOD IS PRODUCED THERE,WE ARE ALL IN DANGER. I DON'T BELIEVE POLITICIANS WITH ALL OF OUR OTHER PROBLEMS, WANT TO ACKNOWLEDGE WHAT IS REALLY HAPPENING.

But the industry is pushing ahead with demands for $36 billion in loan guarantees for new reactors, with a preliminary vote expected soon in a House Appropriations Subcommittee. Nuclear opponents are asked to call the White House and Congress steadily through the 2012 budget process.

The International Atomic Energy Agency of the United Nations, has announced it sees no health effects at Fukushima. The pronouncement comes as no surprise from an agency whose mandate is focused on promoting atomic energy. THIS IS REALLY HARD TO BELIEVE.

The IAEA has consistently low-balled death toll estimates at Chernobyl and regularly ignores industry critics. The pronouncement comes as the agency begins a long-term study of Fukushima's health effects. Meanwhile, a French watchdog agency has urged that 70,000 more people be evacuated from the Fukushima area. Coming from France, among the world's pro-nuclear nations, the warning is a grim reminder of how deadly the contamination surrounding Fukushima must be.

But for all the focus on land-based contamination, the continuing flood of radioactive materials into the ocean at Fukushima could have the most problematic long-term impacts. Long-term studies of radiological impacts on the seas are few and far between. Though some heavy isotopes may drop to the sea bottom, others could travel long distances through their lengthy half-lives. Some also worry that those contaminants that do fall to the bottom could be washed back on land by future tsunamis.

Tokyo Electric has now admitted that on May 10-11, at least 250 tons of radioactive liquid leaked into the sea from a pit near the intake at Unit 3, whose fuel was spiked with plutonium. According to the Japanese government, the leak contained about 100 times the annual allowable contamination.

About 500 tons leaked from Unit 2 from April 1 to April 6. Other leaks have been steady and virtually impossible to trace. "After Chernobyl, fallout was measured," says Buesseler, "from as far afield as the north Pacific Ocean."

A quarter-century later the international community is still trying to install a massive, hugely expensive containment structure to suppress further radiation releases in the wake of Chernobyl's explosion.

Such a containment would be extremely difficult to sustain at seaside Fukushima, which is still vulnerable to earthquakes and tsunamis. To be of any real use, all six reactors and all seven spent fuel pools would have to be covered.

But avenues to the sea would also have to be contained. Fukushima is much closer to the ocean than Chernobyl, so more intense contamination might be expected. But the high radiation levels being measured indicate Fukushima's most important impacts may be on marine life.

The US has ceased measuring contamination in Pacific seafood. But for centuries to come, at least some radioactive materials dumped into the sea at Fukushima will find their way into the creatures of the sea and the humans that depend on them.

THE IMPLICATIONS OF THIS DISASTER ARE ENORMOUS AND FOR THE MOST PART BEING IGNORED. WE WILL ALL PAY A PRICE FOR ALLOWING LEADERS AND INSTITUTIONS TO ACT IN THESE WAYS.

Sunday, May 29, 2011

INSPIRE, TOUCH, MOVE THOSE AROUND YOU.............. DON'T MISS THIS!

INSPIRE, TOUCH, MOVE THOSE AROUND YOU..............
 
If Johnny could do this, why can't the rest of us do something similar for others.

After viewing the video think of what you could do...........
 
 
 
DO YOU HAVE VISION?
 
ARE YOU A LEADER?
 
JOHNNY WAS AND IS! WINNERS COME IN ALL SHAPES AND SIZES AND IN MOST CASES SCOREBOARDS HAVE NOTHING TO SAY ABOUT IT!
 

Putting Things into the proper perspective..................

DO ANY OF US REALLY PROPERLY APPRECIATE WHAT WE HAVE?

WHEN YOU READ SOMETHING LIKE THIS IT IS HARD TO DENY THAT WE ALL COULD BE MORE GRATEFUL AND AWARE. 
 
Putting Things into the proper perspective
 
 
 
 
 
 
The wedding.



Her name is Katie Kirkpatrick, 21 yrs old. Next to her is her fiancé, Nick, 23.
 
This picture was taken prior to their wedding January 11th, 2005. Katie has terminal cancer and spends hours in chemotherapy.
Here Nick awaits while she finishes one of the sessions...



Even in pain and dealing with her organs shutting down, with the help of morphine,
Katie took care of every single part of the wedding planning.

Her dress had to be adjusted several times due to Katie 's constant weight loss.



An expected guest was her oxygen tank. Katie had to use it during the ceremony and reception.

The other couple in this picture is Nick's parents, very emotional with the wedding and to see their son marrying the girl he fell in love when he was an adolescent.



Katie , in a wheel chair listening to her husband and friends singing to her.


In the middle of the party, Katie had to rest for a bit and catch her breath.
The pain does not allow her to stand for long period of time.



Katie died 5 days after her wedding. To see a fragile woman dress as bride with a beautiful smile makes you think... happiness is always there within reach, no matter how long it lasts..... lets enjoy life and don't live a complicated life. Life is too short. 


Please pray for those suffering from cancer.










    
  
 
   
 
 

 

 

 

 

   

   

 

 





 
 
 

 
 
 
 
 
 
 

Saturday, May 28, 2011

The power of Gratitude ...............

The power of Gratitude
 
Understanding the power of gratitude can change your life forever.
 
Sarah Breathnach said;
 
"When we choose not to focus on what's missing from our lives but are grateful for the abundance that's present... We experience heaven on earth."
 
Sincerely giving thanks not only helps us recognize our blessings, but it also unlocks the doors of heaven.
 
When you walk with gratitude, you do not walk with arrogance and conceit and egotism, you walk with a spirit of thanksgiving that is becoming to you and will bless your lives in many ways. Real confidence is rooted in gratitude to others for their help in your life and accomplishments.
 
The Pilgrims made seven times more graves than huts.  No Americans have been more impoverished than these who, nevertheless, set aside a day of thanksgiving. 
 
                                                                          H.U. Westermayer
 
God gave you a gift of 86,400 seconds today.  Have you used one to say "thank you?" 
 
                           William A. Ward
 
If the only prayer you said in your whole life was, "thank you," that would suffice. 
 
                                  Meister Eckhart
There is no such thing as gratitude unexpressed.  If it is unexpressed, it is plain, old-fashioned ingratitude. 
 
                                                                                         Robert Brault

Gratitude is an art of painting an adversity into a lovely picture. 
 
             Kak Sri

The only people with whom you should try to get even are those who have helped you. 
 
                                           John E. Southard

Praise the bridge that carried you over. 
 
                                                           George Colman


GRATITUDE VIDEO CLIPS

http://www.youtube.com/watch?v=bAxlBwbDGv8&feature=related

http://www.youtube.com/watch?v=EWox-_G8YjU&feature=related
 


THE GREATEST PLAY IN SPORTS HISTORY.................... NOT WHAT YOU MIGHT THINK!

THE GREATEST PLAY IN SPORTS HISTORY.................... NOT WHAT YOU MIGHT THINK!
 
CHARACTER COUNTS!
 
WATCH THE CLIP HERE;
 
 
EVEN IF THE DODGERS LOST THE GAME THAT DAY, RICK MONDAY PROVED THAT HE IS A WINNER FOR LIFE!

Friday, May 27, 2011

MEMORIAL DAY ..................

HAPPY MEMORIAL DAY  TO ALL..........
 
THANKS TO EVERYONE THAT HAS SELFLESSLY SERVED OUR GREAT NATION!
 
 
 

 

 
 
MEMORIAL DAY
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Keep it
moving, please, even if you've seen it before.
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It is the
 
VETERAN
,
 not the preacher, 
 who has given us freedom of religion.

It is
the
VETERAN,
 not the reporter,
  who has given us freedom of the press.

It is
the
VETERAN,
 not the poet,
who has given us freedom of speech.

  

It is
the
VETERAN,
not the campus organizer,
who has given us freedom to assemble.

   

It is
the
 VETERAN,
 not the lawyer,
who has given us the right to a fair trial.


 

It is
the
VETERAN,
 not the politician,
Who has given us the right to vote.
 

 
 

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It is the
 
VETERAN
who
salutes the Flag,
 



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It is
the
 
VETERAN
who serves
under the Flag,
 


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ETERNAL REST GRANT THEM O LORD, AND LET PERPETUAL LIGHT SHINE UPON THEM.
 
 

 
We can be very proud of our young men and women in the service no matter where they serve.



 

God Bless them all!!!

 
 Some things still make you proud to be an AMERICAN!!!!!!!!!!!!!