Now we have to bailout Afghanistan’s biggest bank? This bank launders Afghanistan’s drug money and is owned by the corrupt Karzais and now they want the U.S. taxpayer to guarantee the bank’s depositors. The world has gone mad.-Lou

Karzai’s Brother Calls For U.S. To Shore Up Kabul Bank As Withdrawals Accelerate

DUBAI – As depositors thronged branches of Afghanistan’sbiggest bank, Mahmoud Karzai, the brother of the Afghan president and a major shareholder in beleaguered Kabul Bank called on Thursday for intervention by the United States to head off a financial meltdown.

“America should do something,” said Karzai in a telephone interview, suggesting that the U.S. Treasury Department guarantee the funds of Kabul Bank’s clients, who number about a million and have more than a billion dollars on deposits with the bank.

Kabul Bank handles salary payments for soldiers, police and teachers. It has scores of branches across Afghanistan and holds the accounts of key Afghan government agencies. The collapse of the bank would likely spread panic throughout the country’s fledgling financial sector and wipe out nine years of effort by the United States to establish a sound Afghan banking system, seen as essential to the establishment of a functioning economy.

Action by the United States, said Mahmoud Karzai, would prevent a run on Kabul Bank and protect other banks, too. He said Kabul Bank is “stable and has money” but cannot withstand a stampede by panicked depositors.

“If the Treasury Department will guarantee that everyone will get their money, maybe that will work,” said Karzai, who holds 7 percent of the bank’s shares, making him the third-biggest shareholder. Karzai, who spends most of his time in Dubai – where he lives in a waterfront villa paid for by Kabul Bank – rushed to Kabul on Wednesday to join efforts to salvage the bank.

Treasury officials have said they have confidence in Afghanistan’s Central Bank, which ousted Kabul Bank’s top officials earlier this week and has sought to stabilize the bank’s finances.

But those moves may have spurred a panic: Depositors, said people familiar with the situation, yanked at least $90 million from Kabul Bank on Wednesday and the hemorrhaging of funds accelerated Thursday.

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Talk about your deadbeats, even the dead are being foreclosed on-Lou

The Financial Crisis Inquiry Commission today held hearings with former Lehman Brothers Chairman Dick Fuld. They are trying to figure out why Lehman Brothers was allowed to collapse, with the belief that the failure of Lehman Brothers caused the financial crisis of 2008. The truth is, the failure of Lehman Brothers was a result of the crisis and allowing them to fail was the only correct decision the government made during the crisis.

The pain that was felt after the collapse of Lehman Brothers is nothing compared to the pain that will come when we begin to feel the effects of bailing out the rest of Wall Street. U.S. second quarter GDP growth was revised down on Friday from 2.4% to 1.6%. In order to get this 1.6% GDP growth, the U.S. government had to spend $3.7 trillion on bailouts, stimulus bills, the buying of mortgage backed securities, and other commitments.

General Motors reported today that their August deliveries fell 25% from one year ago to 185,176 vehicles. The U.S. government used “cash for clunkers” to buy GDP growth in 2009, but that growth stole from future automobile sales. NIA believes that GM’s sales decline is a sign that the U.S. will likely see a sharp contraction in GDP beginning in the third-quarter, which will lead to the Federal Reserve implementing the mother of all quantitative easing and cause a massive sell off in the U.S. dollar.

Christina Romer, outgoing Chairwoman of Obama’s Council of Economic Advisers, today called for more government spending and less taxes as a way to bring down unemployment. The combination of more government spending and less taxes equals massive inflation, but this represents the state of mind in Washington today. Inflation is still the last thing on their minds because they don’t see it yet.

Even though we might not see massive across the board price inflation at this time, gold and silver prices have been surging ever since NIA released its article “Gold and Silver Capitulation is Near” on July 28th. Gold is very close to breaking its all time nominal high of $1,264.90 per ounce set during June and silver is getting ready to test the critical $20-$21 per ounce resistance level.

Rising gold and silver prices indicate that the U.S. is headed for an explosion in budget deficits that will rise far beyond what it can pay for through borrowing. Leading Chinese economists are now calling Japanese debt less risky than U.S. debt and with the Japanese savings rate in decline, the U.S. will soon have nobody left to borrow from. The only option will be monetization and already the Federal Reserve is getting ready to buy $10 billion to $30 billion per month in U.S. treasuries to keep its balance sheet at inflated levels.

There are now 50 million Americans on Medicaid, with annual Medicaid costs rising 36% over the past two years to $273 billion. The recently enacted health care bill will add 16 million more Americans to Medicaid beginning in 2014, but the U.S. government will likely go bust by then. It is impossible to have an economic recovery when jobless benefits are encouraging Americans to stay unemployed. U.S. unemployment insurance spending has nearly quadrupled since 2007 to $160 billion annually. Even food stamp costs have surged 80% over the past two years to $70 billion annually.

Once Americans get used to receiving and relying on government entitlement programs, it is hard to wean them off of them. NIA has been hearing reports from members with friends who say they will only “come out of retirement” if they can find a job that pays $25 per hour or more, because with anything less it wouldn’t be worth losing their jobless and food stamp benefits. Americans expect to receive their jobless benefits forever and we are sure Obama will continue to extend them leading up to the 2012 election.

There are now countless warning signs all around us on a daily basis that the U.S. is headed for a complete societal collapse. NIA received an overwhelming response from its members when we asked you to submit any signs you see that a societal collapse is near. The response we received was so strong that we are now beginning to produce a documentary about America’s upcoming collapse of society. The documentary will be over an hour long and we are hoping to release it by the end of October. It will go beyond the economic facts and statistics that were discussed in ‘Meltup’ and help expose the upcoming collapse from a real life perspective. NIA believes this documentary will appeal to a very mainstream audience and help open up the world’s eyes to the truth about the path this country is on.

LINK

This is starting to pick up some steam. What an outrageous proposal to mandate one’s retirement plan must be invested in government debt. What a slippery slope we are on. Hopefully the makeup of Congress will change in November and this will die.-Lou

Government wants your 401(k)

The requirement to invest private retirement assets has been cleverly buried within plans to create “automatic IRAs” that would mandate employer groups enroll all employees in 401(k) or IRA plans.

The U.S. Department of Labor released yesterday an agenda for an upcoming joint hearing with the Department of the Treasury scheduled for Sept. 14 and 15 on whether government life-time annuity options funded by U.S. Treasury debt should be required for private retirement accounts, including IRAs and 401(k) plans.

WND reported in January that Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry are planning to stage a public comment period before implementing regulations that would require private investors to structure IRA and 401(k) accounts into what could amount to a U.S. Treasury debt-backed government annuity.

In a 2010 budget blueprint unveiled Feb. 26, President Obama proposed that employers sponsoring 401(k) plans or other defined contribution plans should be required to offer automatic enrollment in these plans, or in direct-deposit IRAs, as steps that would change the nation’s voluntary retirement plan into a government-mandated nationalized program.

With the Treasury needing to sell another $1.4 to $1.5 trillion in government debt to finance the anticipated fiscal year 2010 federal budget deficit, the Obama administration is obviously scrambling to find ways to sell government debt without having to raise interest rates.

Under ERISA, the Department of Labor regulates approximately 700,000 private pension plans, with approximately $4.7 trillion in assets.

The Investment Company Institute  estimates that IRA assets have grown from $25 billion in 1980 to a peak of $4.747 trillion by the end of 2007, declining to $3.613 trillion in 2008.

For 401(k) plans, the ICI estimates a peak of $3.025 trillion in total assets was reached in 2007, declining to $2.350 trillion in 2008.

The ICI estimates that total U.S. retirement assets decreased to $14 trillion in 2008, down 22 percent from the peak of $17.9 trillion in 2007.

Kerry introduces ‘Automatic IRAs’

Earlier this month, Sens. John Kerry, D-Mass., and Jeff Bingaman, D-N.M., introduced legislation in the Senate to create “Automatic IRAs,” a plan in which employees whose companies do not provide a retirement plan would be enrolled.

Under the Kerry-Bingaman plan, in the first year of enactment, private companies with 100 or more employees would be automatically enrolled into government-mandated IRAs, forcing these businesses to contribute on behalf of their employees a “default amount” equal to 3 percent of an employee’s pay.

Employees would be allowed to raise or lower their contributions, or opt-out of the plan.

In the second year, companies with 50 or more employees would be required to provide Automatic IRAs; in the third year, 25 or more; and in the fourth year, 10 or more.

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So now local governments using taxpayer money will be buying foreclosed homes probably at above market prices. This is right out of the socialist playbook.  Major banks are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors. Good grief.-Lou

Banks to allow local groups to buy foreclosures

Banks say governments, nonprofits will get first chance to buy foreclosures in new program

WASHINGTON (AP) — Major banks are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors.

The Obama administration said Wednesday local officials could benefit from acquiring these properties and renovating them or using the land for redevelopment projects. Congress has provided $7 billion to buy the homes, but these groups are struggling to spend the federal money because they are often outbid by speculators who are snapping up foreclosures.

“The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back,” said Sarah Greenberg, senior manager for community stabilization at NeighborWorks America, a nonprofit housing group.

The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators. The neighborhood organizations will have up to 48 hours to evaluate them.

“This agreement helps us level the playing field to give communities a better chance to stabilize these neighborhoods,” Housing and Urban Development Secretary Shaun Donovan said in a statement. Donovan said about 100,000 properties are likely to be sold through the program.

A nonprofit group, the National Community Stabilization Trust, will collect information about foreclosed properties and help local groups to identify which ones to purchase.

Almost all of these banks will eventually fail, putting further burden on the FDIC insurance fund. Ultimately it will be the taxpayers bailing out the FDIC.-Lou

Problem bank list climbs to 829

NEW YORK (CNNMoney.com) — The government’s list of troubled banks hit its highest level since 1993 during the second quarter, although the pace of growth continued to slow, according to a government report released Tuesday.

The number of banks at risk of failing rose by 53 to 829, the Federal Deposit Insurance Corp. said in its quarterly survey of the nation’s banking system. That increase marks the smallest rise since the first quarter of 2009.

However, it’s still nearly double the 416 banks that were on the FDIC’s watch list a year ago and is up from 775 in the first quarter of this year.

Banks that end up on the problem list are considered the most likely to fail. But few of the lenders on the list actually reach the point of failure. On average, just 13% of banks on the FDIC’s problem list have been seized and shuttered by regulators.

So far this year, 118 banks have failed, with 45 closings during the last quarter.

While FDIC chief Sheila Bair said she expects 2010 bank failures to exceed last year’s tally of 140, the total amount of assets from this year’s failures will likely be lower since banks have been cleaning up their balance sheets.

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Investors Head for Bunkers, Driving Up ‘Shelter Shares’

Wall Street Journal

It is the ultimate bunker portfolio.

Amid the market tumult, a handful of stocks have seen their share prices ratchet up to record highs in recent weeks. And many of them are connected by a curious, if disconcerting, thread: Between them, they provide an investor with essentials for any respectable fallout shelter—makers of bottled water, canned goods, dehydrated broth, gas masks and auxiliary generators.

A portfolio of the 18 companies that reached their peaks in the past month would be up about 24% this year, compared with the broader market’s 4.5% decline, a sign some investors may be taking the prospects of financial Armageddon more seriously than one might think.

Hormel Foods Inc., the 120-year-old producer of that dugout staple, Spam, is up 12% this year, and hit an all-time high of $43.95 in recent weeks. The company’s stable of long-life provisions, from instant packets of dehydrated broth to wrapped sausages, are critical for weathering even the most prolonged storm.

Bottled-drink maker Dr Pepper Snapple Group Inc., whose brands include DejaBlue purified drinking water, has soared 32% this year. The company also makes Schweppes ginger ale, great for any gnawing queasiness.

Also in the bunker club, Cummins Inc. The maker of a wide range of auxiliary power generators in addition to truck engines is up 66% this year. Shares of the Columbus, Ind., manufacturer hit a record $81.83 last Wednesday.

Hard hats and gas masks? Airgas Inc. makes both. Shares of the Radnor, Pa.-based company, which spiked in February after a hostile bid from rival Air Products & Chemicals Inc., has since added to those gains, hitting its best-ever close, at $66.72, on Friday.

“If it’s the end of the world, what do you buy? Canned foods, guns and the generators,” said Keith Springer, president of Capital Financial Advisory Services. “There are a huge number of people who feel this is the end of the world.”

Of course, stocks trading at such lofty heights high aren’t necessarily a tantalizing buy. But the bunker portfolio, while vastly oversimplified, does reflect investors’ preference for companies with products that are relatively immune to economic swings, and whose conservative strategies are suited to these uncertain times.

“This is a very unusual economic cycle we’re going through—we haven’t been through anything like it in any of our lifetimes, and we don’t know how it’s going to play out,” says Dorsey Farr, partner at Atlanta-based investment advisory French Wolf & Farr. “We don’t see where this economy is going, and some of the potential outcomes are frightening.”

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This is an ominous development.  All indications are pointing to conflict in the Middle East, by year end. When it starts all hell will break out in the financial markets.-Lou

US to sell Israel massive military fuel stocks worth $2 bn

Debka Files

Blockage of the Strait of Hormuz would cut off Israel’s primary source of fuel. Therefore, our sources report, a series of accords, some of them secret, have been transacted to back up America’s standing commitment to keep Israel supplied with its energy needs in the event of armed conflict or crisis on world fuel markets.
In its request to Congress to approve the sale, the DSCA noted:
“The proposed sale of the JP-B aviation fuel will enable Israel to maintain the operational capability of its aircraft inventory. The unleaded gasoline and diesel fuel will be used for ground forces’ vehicles and other equipment used in keeping peace and security in the region. Israel will have no difficulty absorbing this additional fuel into its armed forces.”

debkafile adds: Israel is therefore ready and able to absorb this huge injection of military-purpose fuels.
Tehran published its response through an item on the Tabanak Website on Saturday, Aug. 28. It was headlined in large capitals: ISRAEL ORDERS MASSIVE MILITARY FUEL STOCKS FAR IN EXCESS OF THAT REQUIRED FOR NORMAL OPERATIONS. Our Iranian sources report that this site belongs to Mohsen Rezaei, ex-commander of the Revolutionary Guards and much respected in the highest Iranian military and intelligence circles.
The Iranian site goes on to cite bloggers’ comments, the most quoted of which comes from an anonymous ex-US Air Force officer, who wrote on Aug. 27:
“I explained, as I have in the past, how it would be necessary for the US to supply the massive amounts of fuel need for such a [-n Israeli] strike. If Israel were to strike Iran, Israel would only require the massive amounts of jet fuel and over a billion litres of jet fuel would be more that enough to do the job in practical terms.”

According to debkafile’s military experts, the shelf life of JP-8 jet fuel is not long – no more than six to eight months.
Also Saturday, the Kuwait Al-Rai claimed that Israel is making its last preparations for an attack on the Hizballah missile stores located in Syria close to the Lebanese border, for which an IDF armored division has been called up.

LINK

All hell would break out in the gold and currency market if there is no gold in Ft Knox or the NY Fed. Ron Paul is right, let’s audit the gold in both Ft. Knox and the NY Fed.-Lou

Ron Paul questions whether there’s gold at Fort Knox, NY Fed

The Hill

The government and BP have not been telling the truth regarding the health effects of the oil spill. Last month I was in Tampa on three TV news shows discussing the financial impact of the spill and most people I spoke with did not trust BP or the government either. This is pretty scary stuff.-Lou

Tests find sickened family has 50.3 ppm of Corexit’s 2-butoxyethanol in swimming pool — JUST ONE HOUR NORTH OF TAMPA

Source: FloridaOilSpillLaw.com

“Our heads are still swimming,” stated Barbara Schebler of Homosassa, Florida, who received word last Friday that test results on the water from her family’s swimming pool showed 50.3 ppm of 2-butoxyethanol, a marker for the dispersant Corexit 9527A used to break up and sink BP’s oil in the Gulf of Mexico.

The problems began for the Scheblers a few weeks after the April 20 blow-out. “Our first clue were rashes we both got early in May. Both my husband and I couldn’t get rid of the rashes and had to get cream from our doctor,” Schebler noted, “I never had a rash in my life.”

Then, on “July [23], my husband Warren mowed the lawn. It was hot so he got in the pool to cool off afterward. That afternoon he had severe diarrhea and very dark urine. This lasted about 2 days,” she revealed.

Initially, they reasoned this was caused by the heat. The following week Mr. Schebler again mowed the lawn and went in the pool, and again he was sickened with the same severe symptoms.

Suspicious that the pool may be a problem, the family set out to get the water tested. “We have a 15 year old and felt we owed it to him to live in a clean, healthy environment,” said Mrs. Schebler.

The Scheblers found Robert Naman, a Mobile, Alabama chemist who’s performed multiple tests (1, 2, 3) for WKRG Channel 5, also out of Mobile.

“Warren collected a water sample from the pool filter on August 17th… packed the sample according to Mr. Naman’s instructions, and overnighted it to his Mobile, Ala. lab that same day,” she noted.

The results were delivered by Naman over the phone on August 27 at 11:00 a.m. EDT. A copy of the findings were then e-mailed to the Scheblers. To view the document, click here.

“Naman [said] our pool water sample we sent him contained 50.3 ppm [parts per million] 2-butoxyethanol marker for Corexit,” according to Mrs. Schebler. Tests for arsenic came back at less than .02 ppm.

A July letterfrom four top scientists noted, “Corexit 9527A contains 2-BTE (2-butoxyethanol), a toxic solvent that ruptures red blood cells, causing hemolysis (bleeding) and liver and kidney damage (Johanson and Bowman, 1991, Nalco, 2010).”

The safety data sheetprovided by Nalco, the manufacturer of Corexit 9527A, warns, “Harmful if absorbed through skin. May be harmful if swallowed. May cause liver and kidney effects and/or damage. There may be irritation to the gastro-intestinal tract.”

Mr. Schebler’s “severe diarrhea and very dark urine” appear to indicate gastro-intestinal tract irritation.

BP Press Officer Daren Beaudo released a statementon August 28 that reads, “Unified Command records indicate that the last date of use of the Corexit 9527 was May 22,” almost three months before the samples were taken from the pool.

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