Gold World News Flash

Haynes, Norcini, and Hathaway interviewed at King World News
The New SuperHawks of the FED
Rock on!!!! and buy silver!!!!!!
DOLLAR DOOMED: Bob Chapman, Part 1 of 2
Gold Investing Hits the Horoscopes
American Fear
Salivating at the Upside Potential of the Gold Market
China's central bank sees strong commodities, weak dollar
J.P. Morgan, HSBC May Have Gained Billions from Influencing Silver Prices
US Dollar Under Acute Pressure As World seeks an Alternative Reserve Currency
Ask and Listen
Follow London's Biggest Demonstration In A Decade As 300,000 Protest Austerity And Public Sector Cuts
The Best of the Week
$500 Silver Bullion – If You Want It!
$500 Silver Bullion – If You Want It!
Things
Federal Reserve Officials Talking The Dollar Up?Gold Down On Cue
In The News Today
Forcing the world’s most over-leveraged banks to accept massive write-downs on their assets, which would likely lead to the collapse of the some of the continent’s biggest banks – is a non-starter among Europe’s governing elite
Fed Ponders Actions While Global Economy Reels
Market Volatility Creates Resource Stocks Opportunity
Gold No Breakout So Far, Silver Hits Strong Resistance
Gold Bubble: Written in the Stars
Completed Correction for Silver Wheaton (SLW) ?
Gold Bubble : Written in the Stars
Look who's calling Utah and gold 'eccentric'

Haynes, Norcini, and Hathaway interviewed at King World News

Posted: 26 Mar 2011 02:41 PM PDT

10:34p ET Saturday, March 26, 2011

Dear Friend of GATA and Gold (and Silver):

Bill Haynes of CMI Gold and Silver and market analyst Dan Norcini review last week in the precious metals in interviews totaling 19 minutes at King World News here:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/26_KWN_W...

Also at King World News, Tocqueville Gold Fund manager John Hathaway muses about the event that could send gold up $100 or $200 and ignite the gold mining shares. You can listen to that interview here:

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/26_John_...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf

Join GATA here:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

http://www.goldmoney.com/munich-2011-april-29.html

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

ADVERTISEMENT

Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php

The New SuperHawks of the FED

Posted: 26 Mar 2011 01:08 PM PDT

The US economy has been aggressively & actively managed by the HEAVY hand of the US Federal Reserve system since the summer of 2007, in my opinion. During this era we have seen the Fed Funds rates slashed from above 5% to .25% and held there for over a year.

We have seen the Federal Reserve purchase the Maiden Lane assets from Bear Stearns. For an encore, they returned to do it again with AIG….twice. The Fed also started a series of special liquidity facilities, including one with that exact name. These facilities, like the Term Auction Facility, Primary Dealer Credit Facility, & the Term Securities Lending Faculties to name a few, were intended to enhance system liquidity.

We have seen the Federal Reserve roll out Quantitative Easing 1.0 (buying of MBS), Quantiitative Easing “Lite” (the MBS roll off, and replacement with US Treasuries), & Quantitative Easing 2.0 (direct POMO operations to support treasury prices as needed anywhere in the curve).

The sum of these actions are that the US Federal Reserve has generated credits on its own balance sheet, which have been used to buy up US assets at no *Actual* cost to the Federal Reserve. Their balance sheet has more than doubled in size during this short time frame as the Bank has injected liquidity into its member banks.

The US dollar has experienced significant pain during this process, dropping against both other fiat currencies, but also against most commodities. Very recently, the market has been expecting some kind of comment on the continuation of Quantitative Easing, now expected to be called Q.E. 3.0.

However, it now appears that the end of this cycle could be arriving. The much ballyhooed Quantitative Easing 3.0 has not yet been defined and, if the US economy continues to grow, may not be needed at all.

The Federal Reserve has a unique structure with regional Presidents. This gives the Federal Reserve a choral affect at times. Since the Fed allows each of these regional Presidents a chance on the podium, it gives us a chance to hear more than one voice on a topic when it concerns the state of the economy.

Lately, the historically outnumbered hawks on the Board have been waiting for a change in the rolls of voting members. This change has taken place, and with it a new voice of concern over the actions already taken has started to arise from voting members.

The first of these comments caught my eye today. It was from the Philadelphia Federal Bank President Plosser, who announced a wish for the Federal Reserve to change its dual mandate of growth balance with controlled inflation, to an inflation-only focus. There are significant ramifications to this, if it were to happen. It is very interesting in the context of the future actions of this Fed, once we reach the stage when we need to unwind the Quantitative Easing already in play.

Fed’s Plosser ”Headline inflation is all that matters. Core only matters to extent it helps predict headline inflation

The news flow on this Friday was fascinating, with a burst of Federal Reserve Presidents making public comments on the same topic. It was very obvious, that this has been under discussion for awhile, and a new round of jaw boning is getting started. In a matter of hours, I counted no less than 5 comments from the Federal Reserve and its new club of hawks. The silence from the rest of the chorus was…. interesting!

“Following through on that to the tune of $600 billion, like we’ve said, I think is appropriate,” Chicago Fed President Evans told reporters at the regional bank’s headquarters. “I personally don’t see as many needs for a further amount, as I probably thought last fall.”

It appears that votes are changing within the makeup of the Federal Reserve’s voting members. This could have serious implications in the coming months if the US economy slows down, and lack of liquidity starts to become significant again.

Minneapolis Fed President Narayana Kocherlakota told reporters in Marseilles that the U.S. economy would need to worsen “materially” for the bank to consider further bond-buying.

Evans comments, along with those of Atlanta Fed President Dennis Lockhart who said on Friday that “it’s a high bar” for the Fed to do more, suggest the debate at the Fed has moved away from a consideration of further easing.

It appears that Q.E. 1, lite & 2.0 will be drawing to a close by the middle of this summer, if only for a few months, while the system attempts to see if it is capable of standing on its own without liquidity injections from the Fed.

“The economy is looking pretty good,” Bullard told reporters in Marseille, France, today. “It is still reasonable to review QE2 in the coming meetings, especially this April meeting, and see if we want to decide to finish the program or to stop a little bit short.” Bloomberg

“The oil price increases so far is not enough to derail the U.S. recovery at this level,” Bullard said. “If oil prices stabilize where they are, we’ll be fine.” Prices would have to go substantially higher for there to be a “significant and material effect,” he said.

“We have to weigh those in the decision” on whether to stop the Fed’s QE2 program earlier than planned, Bullard said.

I honestly expected that the events in Japan had green lighted the Fed to start Q.E. III. But it appears that the shift in the votes, along with expected massive stimulus expected to be generated in Japan, has slowed the need. It appears that Japan will be providing the world with liquidity, as it rebuilds its infrastructure.

When you consider that the IMF (realistically a vehicle typically funded by the US Gov indirectly) is going to need to help bail out the European banking and sovereign debt markets again. It is possible that the Federal Reserve maybe be ready to firm up the value of the US dollar.

It has been the proverbial one way trade for a while now. The words of the different Presidents of the US Federal Reserve in the last few days, and their actions and words in the coming weeks maybe pointing towards a change in the Bernanke Put. If so, commodities may have a headwind in the near term, as the US seeks to raise the value of the US dollar, which is used to price commodities with around the world.

I expect we could see rates raised in 2011, and the start of a possible winding down the HEAVY hand. If so, the markets will be acting confused for a while, as major shifts in strategy take shape. The last thing anyone expects now, is a STRONG US Dollar.

When you consider that Bill Gross has gone flat US Treasuries, and they are supposed to be 40% or so of his bench mark, a surprise small rate increase by the Federal Reserve would make more sense, than not, in my opinion. In fact, you could argue it’s already long over due.

http://www.newyorkfed.org/markets/maidenlane.html
http://www.ft.com/cms/s/0/69e8c92c-e758-11df-880d-00144feab49a.html
http://imarketnews.com/node/28402
http://www.realclearmarkets.com/news/reuters/finance_business/2011/Mar/25/fed_unlikely_to_extend_qe2__officials.html
http://www.bloomberg.com/news/2011-03-26/u-s-1st-qtr-gdp-may-not-be-as-strong-as-expected-bullard-says.html

WWW.JackHBarnes.com

Confessions of a Macro Contrarian

Rock on!!!! and buy silver!!!!!!

Posted: 26 Mar 2011 07:17 AM PDT

Up to 500,000 activists attend anti-cuts demo Share this:

DOLLAR DOOMED: Bob Chapman, Part 1 of 2

Posted: 26 Mar 2011 05:23 AM PDT

Share this:

Gold Investing Hits the Horoscopes

Posted: 26 Mar 2011 05:09 AM PDT

Oh no...Gold Investing is being tipped in tabloid horoscopes. Sell...!

American Fear

Posted: 26 Mar 2011 04:00 AM PDT

Whether they realize it or not Americans live in a constant state of fear every day. I'm not referring to the fears of everyday life like losing a job or having an accident of some kind, but rather a more sinister and devious fear; a fear that Americans only dare talk about around the water cooler or at cocktail parties so as not to be taken seriously; a fear they try to mask with a with a whimsical tone of sarcasm or indifference. Whether Americans want to admit it or not, it's the single greatest fear in their lives: fear of the government.

Right about now there are those reading this thinking: Don Cooper is a drunk. To which I reply: what's that got to do with it? Maybe more people should drink if that's what it takes to sober up and confront what they are really afraid of.

In their defense, I'll admit that reality is scary. No argument that living in delusion is warmer, safer, cozier, and easier. Pretending is always more fun than reality, that's why we go to the movies. But fear of the government is a fear that invades a person's soul and – since the government intervenes in every aspect of our lives – it affects every move we make every day.

Fear of the government is hard to recognize and acknowledge. It's a fear that we are taught early on in life and to which we become accustomed. We inevitably end up tucking it away in the far reaches of our minds in order to function "normally" every day and live our lives. But just as a car backfiring will trigger a sense of fear from a shell-shocked veteran, so too can the State trigger that sense of fear they've instilled in us.

One need only ask: when you see a cop in your rearview mirror with his lights on, do you feel a sense of safety and comfort or do you get a shot of adrenaline from your body's "fight or flight" reflex? Do you immediately start asking yourself what he could possibly pull you over for, other than the fact that he was abused as a child, bullied at school and his mother didn't love him, and now he's going to whittle away at that chip on his shoulder by abusing you.

As you search for your proof of government permission to drive (i.e., your license), and your government permission to own the car (i.e., your registration), and your proof of government mandated insurance, do you do so calmly and with a smile on your face and with gleeful anticipation of speaking with someone who gives of himself to serve and protect you, or do you do so nervously, fumbling through your papers hoping everything's up to date and acceptable to him for fear of being detained for whatever reason and having it affect your job, your family, and every aspect of your life?

And when it's all over, do you feel glad that it happened or are you just glad it's over? Later that evening do you recount the story to others with a sense of pride, or do you do so with a sharp tongue and kick yourself for all the things you wish you would have had the presence of mind to say at the time but didn't? Do you feel happy that you have to pay $150 to the government because you were driving down the street faster than the government allows you to, or are you angry?

And in the end, do you send the money to the government even though you don't agree with it? Even though you feel it's unfair to have to pay so much money yet you've harmed no one? Of course you do. And why? Because you're afraid of what the government will do to you if you don't. In the end, you'll retreat back into your cubby-hole of delusion in order to justify paying the fine by convincing yourself that what you did was wrong, the government was right, and you deserve the punishment.

My favorite delusional argument from those still attached to the matrix is that they pay their taxes voluntarily. To these people I ask: when you do your tax returns, do you take as many deductions as the government will allow you? Of course, the answer is always yes. Then I ask them that if they could take enough deductions such that their tax liability was zero would they do so? Again, not surprisingly, the answer is yes. I then ask them that if their preference is to pay zero taxes then why don't they simply refuse to pay taxes. Inevitably, that's where their train of thought always runs out of track. Of course everyone knows the answer: because they're afraid of what the government will do.

I challenge everyone to ask themselves: when was the last time you even thought about the possibility you might be robbed, your house broken into or shot at? Can you even remember? Now ask yourself when was the last time you were afraid of doing something that could be deemed "illegal" by the government and for which you could be fined, detained or arrested? Something like not wearing a seatbelt, speeding, making a U-turn, going through a yellow light, not crossing the street at the cross-walk, riding a bike on a sidewalk, forgetting your license at home, taking too many deductions on your taxes, talking on your phone while driving, not allowing strangers to touch you or your children at the airport, cutting down a tree on your own property, owning and transporting a gun, collecting rain water and the list goes on. I would wager the answer is: daily! The first word out of everybody's mouth when asked a normal, completely benign question these days is: "Well legally…" It's first and foremost on our minds, and why wouldn't it be, there are 76,000 pages to just the federal register alone. Some argue that everyone commits at least three felonies every day!

Ignorance is a dangerous thing, and it must be stopped in our lifetime, fo' it kill somebody.

At the end of the day, all government mandates are enforced at the end of the barrel of a gun, and that scares the hell out of everyone, as it should. But if we truly believe we are free then we have to start acting like it. It's time we cared about something bigger than ourselves. It's time we stopped living our lives in fear.

Having said all that, I'm not holding my breath. It's proven to be difficult to convince people that freedom is more important than the real housewives of New Jersey.

And that's why I drink!

Regards,

Don Cooper
for The Daily Reckoning

American Fear originally appeared in the Daily Reckoning. Daily Reckoning founder Bill Bonner recently wrote articles on stagflation and the great correction.

Salivating at the Upside Potential of the Gold Market

Posted: 26 Mar 2011 03:50 AM PDT

Not long ago, as I recall, a pension fund in some foreign country, one of those Scandinavian ones I think, was ordered to invest no more than about 3% of its custody assets in gold, meaning that the fund had too much gold, and to sell part ... Read More...

China's central bank sees strong commodities, weak dollar

Posted: 26 Mar 2011 03:13 AM PDT

By Langi Chiang, Kevin Yao, Aileen Wang, and Simon Rabinovitch
Reuters
Friday, March 25, 2011

http://www.reuters.com/article/2011/03/25/us-china-economy-overview-idUS...

BEIJING -- Loose monetary policies in developed economies will place more upward pressure on global commodity prices and weigh on the dollar this year, the Chinese central bank said on Friday.

In a report reviewing the performance of global financial markets, the People's Bank of China also warned of a deepening of the European debt crisis, though its broad view was colored with optimism.

"We expect that the world economy will keep recovering, and the foundation for the recovery will be firmer," it said in the 125-page report.

In a brief discussion of risks, it pointed to Europe's debt woes as well as inflation and the potential for asset bubbles in developing markets.

... Dispatch continues below ...

"In 2011, the dollar will be on a downward trend overall, because of the slow recovery of its economy, low interest rates and twin deficits," the central bank said. "The possible spreading of European sovereign debt crisis and geopolitical risks may push up the dollar in some periods."

It noted that short-term interest rates in major economies would gradually rise as their recovery solidifies.

"But as the global recovery momentum is not strong, the increases will not be too large," it said.

Looking at global commodities, it said that wealthy nations were printing money to kick-start their economies and this would inevitable push up prices.

"Developed countries will continue with their loose policies and global liquidity will remain ample, which will keep prices of commodities, especially crude oil and grains at high levels," it said.

Concerns about inflation would trigger demand for gold as a store of value, but the precious metal's bull run may be near its end, it added.

"We need to note that gold prices have reached historical highs, and its downward risks should not be overlooked," the central bank said.

It said the global recovery depended in large part on coordination between major economies.

"All countries should avoid competitive devaluation of their currencies and pay more attention to risks brought by excessively loose policies on the back of a global recovery," it said.

The central bank reiterated that China would make its currency more convertible under the capital account, a long-standing pledge that has resulted in only incremental progress so far.

"We will relax restrictions on cross-border capital transaction activities in a selective and step-by-step manner, making sure that all risks are effectively under control," it said.

* * *

Join GATA here:

An Evening with Bill Murphy and James Turk
Sponsored by Deutsche Edelmetall-Gesellschaft
Friday, April 29, 2011
Hofbrauhaus, Munich, Germany

http://www.goldmoney.com/munich-2011-april-29.html

Support GATA by purchasing gold and silver commemorative coins:

https://www.amsterdamgold.eu/gata/index.asp?BiD=12

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

ADVERTISEMENT

Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php

J.P. Morgan, HSBC May Have Gained Billions from Influencing Silver Prices

Posted: 26 Mar 2011 03:00 AM PDT

¤ Yesterday in Gold and Silver After Thursday's late afternoon price adjustment by one of the usual not-for-profit sellers, the gold price remained in a quiet and very tight trading range up until 12:15 p.m. in New York. Then out of the blue...and for no reason I could see...someone decided to pull their bids and mark gold down about $13 in the space of half an hour. A bid appeared at 12:45 p.m...and gold recovered to close sixty cents below its Thursday close. Silver spent most of Friday up between thirty and fifty cents...but at 12:15 p.m. Eastern...the silver price got hit for more than sixty cents before recovering a lot of that going into the close of electronic trading at 5:15 p.m. in New York. You could be forgiven if you thought the timing of this price drop yesterday was more than coincidental, as it bore a remarkable resemblance to what happened to the price at the exact same time on Thursday in both metals. I can tell you that it pinned the need...

US Dollar Under Acute Pressure As World seeks an Alternative Reserve Currency

Posted: 26 Mar 2011 02:45 AM PDT

The days and years of manipulation, fraud and criminal behavior are fast coming to an end. New alliances are evolving, as are outspoken advocates of a new world reserve currency. As a result more and more foreigners are bypassing Treasury and Agency bonds, as well as other US dollar denominated investments. We watch as other major nations accumulate gold and cannot help but think that the new world reserve currency will be gold backed.

Ask and Listen

Posted: 26 Mar 2011 02:34 AM PDT

The head of the Minneapolis Fed, Narayana Kocherlakota gave a presentation in Marseilles, France on Friday. This was another attempt at convincing the public that the Fed can fix anything provided they are left to their own devices and have unlimited capacity to print money. The presentation was a “No Sale” for me.

The deep thinkers in Minneapolis have come up with a new formula. Bubbly Equilibria? What does that mean?

I suppose that someone has to create such drivel. The formulas were based on an Apples and Bananas economic model. Unfortunately the real world is a bit more complex.

The bottom line from Mr. K is that bubbles of any kind don’t create a threat to employment provided that the Fed provides the “appropriate” level of monetary stimulus. He does point out the limits of monetary policy due to the limitations of zero interest rates. So really this is just a defense of QE. His words:

“The bubble collapse has no impact on unemployment or output, given sufficiently accommodative monetary policy,”

This suggests that the Fed can "fix" all bubbles. What Mr. K does not seem to get is that the Fed is the one that causes bubbles. They do it with accommodative monetary policy. We are seeing this in ink every day. Look at the S&P, look at the CRB and look at the two-year note. They are all at bubble levels today. It’s cheap money and loose monetary policy that did it. The current bubbles formed by the Fed will pop. And when (not if) they do, guys like Kocherlakota will respond with: “We need more stimulus!!”

We do need some folks at the Fed who are purely academic economists. But they should not be pulling the strings on policy. We need pragmatists. Ones that can look beyond the next six months and say, “We should follow policies that promote long –term stability”. The current policies that create bubbles, and then fight them when they burst with more monetary stimulus, are old school. We need some new leadership. That leadership should not come from academia.

Want some evidence of that? (Reuters)

In one of the paper's more surprising claims, Kocherlakota suggested that extending unemployment benefits -- sometimes seen as adding to the jobless rate because it can discourage those receiving benefits from actively seeking jobs -- actually reduces it.

Mr. K. has to get out of ivory tower and talk to the people. He may be able to argue that extending unemployment benefits is countercyclical. But if he bothered to ask around and see what is happening he would understand that extending unemployment just creates more unemployed. I’d be happy to introduce him to a few folks that maxed out unemployment because it was much easier than working. But those people found work as soon as the checks stopped.

I suspect he would hear as much back in Minneapolis (if he bothered to ask). He would also hear that the folks in his district are just sick and tired of bubbles and the Fed that keeps causing them.

Follow London's Biggest Demonstration In A Decade As 300,000 Protest Austerity And Public Sector Cuts

Posted: 26 Mar 2011 02:08 AM PDT

After leading to the collapse of the Portuguese government, anti-austerity anger is now ramping up at the very heart of the old continent, where the biggest demonstration in over a decade has struck in London. Per the Guardian: "More than a quarter of a million protesters against public sector cuts are expected to flood central London today in the biggest political demonstration for nearly a decade. Police sources, normally cautious about estimating numbers, said last night they were braced for up to 300,000 people to join the march – far higher than previous forecasts from TUC organisers. More than 800 coaches and at least 10 trains have been chartered to bring people to the capital from as far afield as Cornwall and Inverness. The Metropolitan police, under fire for their use of kettling in previous protests, said "a small but significant minority" plan to hijack the march to stage violent attacks. Organisers, however, insist it will be a peaceful family event. Union members are expected be joined by a broad coalition, from pensioners to doctors, families and first-time protesters to football supporters and anarchists. Ed Miliband said the government was dragging the country back to the "rotten" 1980s. Labour is calling today's event the "march of the mainstream"." Some of the protesters, already pigeonholed as "anarchists", have already become unruly as a splinter group has formed on the iconic Oxford street where it is engaged in altercations with the Police, including throwing smoke bombs, lightbulbs filled ammonia.

The protest can be followed in real time on Sky News below.

The Guardian also has a live blog of the protest that can be followe here:

Some of the most recent entries:

1.44pm: Richard Evans has been talking to PA News about his 166 miles trek from Cardiff to join the march.

Evans, a PCS union rep who was interviewed by the Guardian about his protest earlier this week, said the walk was worth it although his feet were "very sore".

"I wanted to encourage people to get on a bus. I think the best way to do that is to go a step further.
"The whole point of this is the government looks again at the cuts. I'm hoping there is enough people here to make them realise when you're in the position you're in - in the coalition government - you need to think again. With this number of people, the government have to take notice. "

1.39pm: Paul Lewis has just tweeted about police penning in protesters outside Downing Street.

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Reports of "light kettle" at Downing Street and rolling shop occupations at Picadilly #march26 #26marchless than a minute ago via Twitter for BlackBerry®Paul Lewis
paul__lewis

1.31pm: Activists from Ukuncut, the peaceful direct action group that has closed down more than 100 high street stores accused of tax avoidance, are moving into position on Oxford Street. They are planning 14 different occupations of high street stores accused of tax avoidance, Matthew Taylor writes.

A spokesman just said there were about 200 people moving towards their various targets with more expected to join in the next half an hour.
Meanwhile the main march just gets bigger. People are still streaming across bridges to join from south London while others are making their way from the north.

Bernard Goyder, a veteran of last year's student protests, said he had been "blown away" by today's turnout.

"This couldn't be any better. I have never seen such a wide diverse group of people together. It dwarves anything I have seen before. It is much much bigger than any of us were expecting"

1.15pm: Tom Wills, a student journalist based in Brighton, has posted a set of photos from the march on Flickr, which give a sense of the mass turnout.

1.10pm: EastLondonLines, a news website run by the journalism department of Goldsmiths, has posted this Twitpic, which shows the protesters marching past police lines near Parliament.

Paul Lewis Photograph: Sarah Lee

1.04pm: Paul Lewis has sent through an update, describing the wide range of groups who have joined today's protest.

"Standing here watching hundreds of thousands of people stream past, you get a real sense of the broad coalition against the government. I noted down every banner that past through over a couple of minutes.
"Somerset Teachers Association, Vulnerable Chinese Migrants Association, Society of Radiographers, Prison Officers Association, Don't Cut Out The Disabled, Southend On Sea Unison Branch, Ipswich Labour Party, Cut Trident, Nurses Uncut, Met Police Group PCS Union, Calderdale Division of the NUT, Chelsea Anti Cuts Alliance, Colchester NHS SOS, South Ribble Children, The Bohemian Storm is Rising, Parents Alliance of Community Schools, Isle of Wight Uncut."

1.02pm: Matthew Taylor says thousands of people are still joining the march, with the total number estimated at around 400,000.

"I am now on a footbridge overlooking the Embankment and people have been streaming underneath us for about an hour. People are queuing as far back as I a can see and tens of thousands more are still arriving from side streets. Organisers are suggesting there could be as many as 400,000 here today. That is impossible to verify at this stage. But it is clear that this is a very big demo."

1.00pm: While this photo from Mary shows crowds gathering at Embankment.

12.58pm: This photo by Mary Hamilton pokes fun at undercover police officers - whose activities have recently been investigated by the Guardian.

Undercover police assembly point on the anti-cuts march in London. Photograph: newsmary/twitpic

12.45pm: Journalist Mary Hamilton - aka newsmary - has been posting photos of the march on Twitpic.

12.35pm: The Public and Commercial Services Union has set up its own live blog of the march.

12.30pm: Here's a map of the march route

View March for the Alternative Route in a larger map

...

9.15am: Good morning and welcome to the Guardian's live coverage of the mass protest in London against the coalition government's public sector cuts.

Around 300,000 people are expected to join the March for the Alternative organised by the TUC, the biggest union-organised event for over 20 years and the largest in the country since the protest against the Iraq war in 2003. More than 800 coaches and 10 trains have been chartered to bring people to the capital from as far afield as Cornwall and Inverness.

Union members are expected to be joined by a broad coalition, from pensioners to doctors, families and first-time protesters, to football supporters and anarchists. My colleague Matthew Taylor has written a guide to all the organisations - both official and unofficial - who will be taking part.

The Metropolitan Police believe a small minority will try to hijack the anti-cuts march to stage violent attacks on property and the police. The TUC organisers of the event say they have organised a family-friendly demonstration with brass, jazz and Bollywood bands. But there are concerns that unofficial feeder marches, sit-down protests and a takeover of Trafalgar Square could turn from peaceful civil disobedience into stand-offs with the police.

The march assembles on the Embankment from 11am but it will still be leaving at 2pm and possibly even later. The TUC has drawn up a set of tips for those planning to join the march. The protest will culminate in a rally in Hyde Park. Guardian reporters Matthew Taylor and Paul Lewis will be out on the streets covering the protest as it happens.

If you're at the demo and want to send me any comments - or share any pictures, audio clips and videos - you can contact me either on david.batty@guardian.co.uk or on Twitter - @David_Batty

The Best of the Week

Posted: 26 Mar 2011 01:21 AM PDT

Author:

Vedran Vuk

Synopsis:

Welcome to the weekend edition of Casey's Daily Dispatch, a compilation of our favorite stories from the week for the time-stressed readers.

Dear Reader,

Welcome to the weekend edition of Casey's Daily Dispatch, a compilation of our favorite stories from the week for the time-stressed readers.

Of course, if you want to read all of the Daily Dispatches from the week, you may do so in the archives at CaseyResearch.com.

There's Battle Lines Being Drawn

By Kevin Brekke

There's battle lines being drawn
Nobody's right if everybody's wrong

For What It's Worth by Buffalo Springfield

I recall vividly watching the PR nightmare cascade out of control on the nightly news. It was 1968, and Mayor Daley had intended to use his city's hosting of the Democratic National Convention to showcase Chicago's progress. Instead, middle-class suburban families like mine watched live coverage of hippies, yippies, and disenchanted youth armed with ideologies, bell bottoms, and protest placards being clubbed by horse-mounted police as they demonstrated outside the convention center.

It was a tumultuous year for America that witnessed the assassinations of Martin Luther King in April and Robert F. Kennedy in June, and would be the high-water mark of U.S. involvement in Vietnam. Across the land, battle lines were deeply etched between pro- and anti-establishment factions.

Today, as well, there are multiple combat lines being incised between a number of fiscal, economic, as well as ideological forces. Of all the various combatants, the U.S. states are emerging on the frontlines of the fight. And some of their tactics are encouragingly following free-market principles. Let's pick up the story with some recently published data.

It is no secret that U.S. states in general are facing large budget deficits, and a dozen or so in particular are in dire straits. State tax revenue has fallen dramatically since the real estate bust and subsequent recession. Although the National Bureau of Economic Research, the official arbiter of recession dating, declared the nation's downturn had ended in June 2009, the states treasuries didn't get the memo for months. Take a look at the table:

The table shows the revenue generated from the three largest sources, not all sources, so the total percentage change may be higher than the data would seem to suggest. Also, these are nominal changes unadjusted for inflation. With inflation ranging between 0.2% and 2.8% during the period reviewed, the gains would have been muted and losses amplified.

I selected the third quarter of 2007 to begin the analysis because that is when the red ink first appeared following the end of the previous recession in 2001. The stand-out in the red ink category is the corporate income tax (CIT). Here's a closer look:

If adjusted for inflation, the two quarters of positive CIT growth would be only a few tenths above zero. With or without the adjustment, CIT revenue has declined 11 of the past 13 quarters and remains a troubling statistic. And considering that the 3Q2010 rise was measured against the 3Q2009 figure that was 22.1% below 3Q2008 that was 13.2% below 3Q2007 that was 4.3% below 3Q2006, it was a mighty small leap over an exceptionally low bar.

Of the three revenue sources, CIT is the one to watch and will determine the path of PIT and sales tax growth. A sustained fall in corporate taxes remitted to the state signals company profits are falling or remain negative. Declining or nonexistent company profits do not encourage hiring. And absent rising employment, both PIT and sales tax revenue will stagnate.

Yes, PIT and sales tax revenue have shown some signs of life for 2010 through September. However, whether this rise was due to income tax rebates and other one-time stimulus schemes or organic growth in employment and wages is hard to determine. Time will tell.

But recent events suggest that a battle for tax revenue has commenced, pitting high-tax states against low-tax states.

In January Illinois, faced with a gaping $13 billion hole in its budget, $8 billion in unpaid bills, and addicted to its corrupt spending ways, raised its personal income tax rate 66% and the corporate tax rate 46%.

The reaction from neighboring Wisconsin Governor Scott Walker was immediate. "Escape to Wisconsin," said Walker, borrowing from an old state tourism board campaign motto, and urged Illinois businesses to move to his state.

Wisconsin's Walker was not alone. Indiana Governor Mitch Daniels, Michigan's Rick Snyder, and even Chris Christie in faraway New Jersey have been promoting their states as a haven for businesses that want to flee the tax-and-spend culture.

This trend is not limited to the big three tax revenue targets – PIT, CIT and sales –with some states getting very creative. The latest twist on beggar-thy-tax-neighbor targets cigarettes. New Jersey, New Hampshire and Rhode Island are considering reducing their taxes levied on cigarettes in the hope of drawing smokers from other states to buy in their state, thus increasing revenue.

This is the age-old border town strategy. States with geographically small footprints and/or those with large towns on or near their borders will entice neighboring state residents to make the short drive and save on sales, use or excise taxes.

My prediction: At some point, states will begin reducing their tax on gasoline to draw motorists from across the border. But that's a topic I will cover next week.

Tax competition is here and it is real, not merely conjecture based on anecdotal evidence. As I pointed out in a previous article in this space, for the years 1998-2008, the states with the lowest PIT experienced far higher rises in gross state product, employment, population and tax receipts. If you want to increase your tax take, lower your tax rate. As counter-intuitive as that sounds, it's true. Free-market competition has entered the tax sector.

The border town strategy is turning today's state lines into tomorrow's battle lines. The taxpayer will be the ultimate winner.

Money on Trial

By Doug Hornig

We know that our readers are probably riveted by the trials and tribulations of Charlie Sheen and Lindsay Lohan. This is important stuff, no doubt. Chas and LiLo, they're like, y'know, family.

But while their personal trials are playing out in sunny Southern California, on the other side of the continent another trial just wrapped up. Not for TV, nor the flash of still cameras. No microphones shoved in faces. In fact, virtually no media coverage at all. Yet this utterly ignored event just might have been the trial of the new century.

The defendant, in a sense, was money itself.

The question of what constitutes "money" was raised back at the dawn of human trade, when people first began to realize the limitations of a barter system. Over the centuries, many things were used as money, such as shells, cattle, salt and dozens of others, including human beings. But wherever they were available, gold and silver became the standard, for a host of reasons – rarity, durability, divisibility, portability and so on – with which readers of this letter are quite familiar by now.

In the end, money serves two key purposes. It's a unit of exchange upon which two parties agree, thereby allowing it to be swapped for tangible goods and services. And it should be a store of value, allowing it to have roughly the same buying power next year as it does today, creating confidence in the user and permitting the accumulation of wealth. Precious metals meet both criteria, and meet them well.

What we use for money today, fiat currency unbacked by gold or silver, is adequate for the first purpose, but it fails miserably with the second, simply because there is no limitation on the amount of paper that government (which holds a monopoly) can print, and no possibility that it can hold its value.

When its authors came to write the U.S. Constitution, they gave to Congress the power to "coin Money, regulate the Value thereof, and of Foreign coin, and fix the Standard of Weights and Measures." Immediately following comes the power to "provide for the Punishment of counterfeiting the Securities and current Coin of the United States."

These provisions may seem straightforward enough, but they're not. Though there is plenty of debate on the subject, many interpreters of the Constitution believe that when the Founders wrote "coin Money," they meant exactly that, and that when they omitted the term "print," that was on purpose. Those in this camp contend that the authors were specific about this because they had experienced the ruinous inflation that preceded the demise of the Continental, a paper currency that helped finance the Revolutionary War but became all but worthless by the end of it.

And of the second stipulation, the question is: what exactly constitutes a counterfeit coin?

Both of these were in play in the aforementioned trial – U.S. vs. BVNH, which opened on March 7 in federal court in Statesville, the county seat of Iredell County, in western North Carolina.

BVNH is Bernard von Nothaus. Some of our readers will no doubt be familiar with Bernard. He is the founder of Liberty Services (formerly known as NORFED, the National Organization for the Repeal of the Federal Reserve Act). And, more importantly, he is the creator of the Liberty Dollar, the act for which he is now under prosecution.

The Liberty Dollar – first created in October of 1998 – was intended to give Americans freedom of choice. It was for use by people who wanted to conduct their transactions in something of tangible value, rather than inherently worthless paper. Von Nothaus sees himself as a true patriot, offering a product that can function as a citizen's defense against the ravages of inflation brought on by the systematic debasement of the greenback.

Thus was born his "money," consisting of silver "rounds" – which are perfectly legal, as opposed to "coins," which would not be – and certificates redeemable in silver. (There is a smaller number of gold dollars and certs, too.) I have a Liberty Dollar in my hand right now. (Does this make me a potential co-conspirator?) It was minted in 2006, has a face value of $20, and contains an ounce of .999 fine silver. A real bargain at today's prices.

It's a thing of beauty with an obverse of Miss Liberty that, on a very passing glance, might suggest an official silver dollar from the U.S. Mint. But even a minimal closer look reveals that it isn't one. It even bears the maker's Web address, and it ain't usmint.gov (although if you go to libertydollar.org today, all you'll find is a single banner that says: Site Removed Due to Court Order).

Alternative paper currencies are not exactly unknown elsewhere in the U.S. these days. BerkShares, for example, are a currency designed and issued for the Berkshire region of Massachusetts, intended to keep money in the area when locals trade amongst themselves. Launched in September of 2006, BerkShares are issued from 12 branch offices of five local banks, which will also convert them back into Federal Reserve Notes. They incorporate anti-counterfeiting features, are accepted by more than 370 businesses in Berkshire County, and over 2 million shares are in circulation.

In addition to BerkShares, we also have the Ithaca (N.Y.) HOURS (original model for them all), the Burlington (Vt.) Bread (whose motto is "In Each Other We Trust"), the Traverse City (Mich.) Bay Buck, and several more either in operation or planned.

None has been busted. But von Nothaus has. Why? Because he both produced coin-like rounds and backed his dollars with metal. Neither of which the government could tolerate as competitors to fiat dollars and coins worth less than their metal content. Also annoying was the Liberty Dollar's wide acceptance, with about US$20 million worth – in gold-and-silver specie, redeemable certificates, and digital form – in circulation worldwide.

The mint warned him to stop. He didn't.

On November 14, 2007, the feds took to the field. Agents from the FBI and Secret Service swarmed the Liberty Dollar Company's (LDC) Indiana offices and Idaho production facilities. They seized everything in sight, including 9 tons of gold, silver, platinum and copper, along with all the company's files and all its computers. They froze LDC's bank accounts. They confiscated the gold and silver bullion that backed up the paper certificates and digital currency, and was securely held in a commercial vault on behalf of the LDC by Coeur d'Alene, Idaho's Sunshine Mint. Even the dies for minting the Liberties were taken.

It was one of the larger and more egregious confiscations of private property in U.S. history. And no one cared. Outside of the Internet and a handful of right-wing talk shows, virtually no one spoke out publicly against this atrocity. Including, ironically, Ron Paul, whose image had been featured on some of Liberty's rounds and who was then gearing up for his presidential campaign.

Despite the lack of resemblance between his products and official U.S. coins, von Nothaus was charged with counterfeiting, along with three colleagues, who are being tried separately later on this spring.

The intervening years brought a tangle of legal shenanigans too convoluted to go into here, but the takeaway is this: von Nothaus was offered a plea bargain and turned it down, saying that this raid "was a direct assault against the U.S. Constitution and your right to own and use gold and silver in any way you choose," and vowing to fight the charge all the way to the Supreme Court.

(As an aside, it's worth noting that North Carolina is the site of the trial because that's where the initial complaint against Liberty currency was sworn out. All in the "public interest," of course. According to a government spokesperson, "Merchants and banks [around the country] are confronted by confused customers demanding they accept Liberty Dollars." For anyone needing a clear illustration of the difference between a reason and an excuse, there it is.)

The face-off down in Statesville was a classic confrontation between a single individual and the full might of the U.S. government, over some pretty basic rights.

Most gave von Nothaus little chance from the get-go. But considering public sentiment about our fiscal mess these days, a conviction was by no means a slam dunk. It was not inconceivable that twelve good folks and true would take the side of liberty.

You may remember a column I wrote not long ago in which I detailed the efforts of legislators here in my home state, the Commonwealth of Virginia, to launch a study into the possibility of developing our own currency. Among other things, they put their philosophy down in writing, and it's a credo that puts them on a collision course with the feds every bit as inevitable as Bernard von Nothaus's: "Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated 'legal tender'." That must've warmed Bernard's heart.

I remember my colleague David Galland once opening a Casey conference by saying: "So who is Lindsay Lohan, anyway, and why do we care how much she drinks?" Good question. I'm sure, given the intellectual quality of our readership, your answer would be, "We don't." But far more Americans are fascinated by her trials than have even heard of the supremely important one down in North Carolina. And that's sad. Because von Nothaus's fate matters, to all of us, an awful lot more than whether LiLo is headed for jail or rehab.

As I was finishing this article last Friday, the verdict came down, and von Nothaus sent a message to his email list:

I sincerely regret to inform you that I was found guilty on all four counts regarding the Liberty Dollar in less than an hour on Friday, March 18. The only explanation is that a strong, anti-liberty person took control of a weak-willed jury and pushed the verdict through in record time in spite of well-worded Jury Instructions. A government forfeiture hearing immediately followed the conviction. PLEASE NOTE: Your property is at risk, so please continue to read these emails and take action so the government does not steal your property. An appeal is planned, but that will take years. More news to follow. An unofficial, but most interesting account of the trial is available via Heather's blog at: http://www.liberty4free.com/Liberty%20Dollar%20Trial.htm.
God help you and our country as America descends into a hellish hyperinflationary future without the benefits of the Liberty Dollar.

I am very sorry our efforts to return America to value failed.

We are, too.

[The government may have stopped Bernard von Nothaus in creating sound money, but it can't stop you from buying gold and silver bullion to protect your assets. As the U.S. dollar loses more and more of its value, only precious metals and related, sound investments can save your wealth. Read more about our gold expert's portfolio strategies that can make all the difference for your year-end balance sheets.]

AT&T-Mobile: The Mega Merger

By Alex Daley, Casey's Extraordinary Technology

This Sunday, AT&T and T-Mobile USA operator Deutsche Telekom AG made a huge merger announcement. AT&T, the United States' second largest wireless operator, agreed to acquire the fourth largest provider, T-Mobile, for $39 billion in cash and stock.

The merger has been rumored in the industry for a few years now, as AT&T and its neck-and-neck rival Verizon Wireless have jostled to take the crown of largest provider in the nation. But few really thought it would happen. Sure, T-Mobile has failed to execute well in the U.S. for years. Yes, wireless continues to consolidate. Could it ever make it past the regulators, however? Well, a lot can change in a few years.

AT&T itself is an example of exactly the kind of unexpected change that does occur occasionally. When the former iteration of the company tried to merge with SBC in 1987, the deal was labeled "unthinkable" by then-FCC Chairman Reed Hundt. Now consumer advocate group Public Knowledge is calling for the same label to be applied to this deal. Ironically, just seven years after the SBC merger failed, the reverse happened – SBC took over AT&T Wireless, adopting the acquired company's moniker and forming the company we know as AT&T today.

Only time will tell what action the regulators will take. But if the deal is approved, there will be many parties affected, from competitors to partners, to consumers, not just by the deal itself but from what will probably follow – more regulation and further consolidation.

The Merger Terms

Not all of the details of the proposed deal have been announced just yet, but the companies have been pretty forthcoming. What we know so far: $14 billion of the purchase price will be paid in stock, which means at the end of the deal, Deutsche Telekom (DT) will own about 8% of AT&T and will have walked off with about $25 billion in cash. Some of these terms are subject to tweaking as the deal comes to a close, but net DT will own at least 5% of AT&T, and the purchase price will remain flat even if the split adjusts.

If the deal fails to garner regulatory approval, AT&T will still owe $3 billion to T-Mobile as a "breakup fee" and will have to transfer over some of its spectrum not being used in the company's LTE rollout. Plus, they will come out with a better-than-previous roaming deal across the two networks. So, a dejected T-Mobile may at least come out more competitive than it was before on the cost and spectrum side, though brand questions will probably linger for years.

The combined company would hold about 130 million wireless subscriber accounts, making it the largest wireless provider (passing Verizon Wireless' 102 million subscriber accounts). But the big deal from AT&T's perspective is the increase in potential "POPs" – industry jargon for "point-of-presence," or the people covered by a line of service – for its next-generation "4G" LTE technology-based network. Prior to the merger, the company would have been able to cover about 247 million POPs with its rollout plans. If the deal goes through, the number jumps to 294 million, or about 95% of the American population.

AT&T is not just buying subscribers here. They are buying wireless spectrum to allow them to stay competitive with Verizon Wireless, which is planning to make LTE available to 200 million POPs just by the end of this year, and can theoretically launch to their entire network covering 97% of Americans.

The companies themselves are likely to be massively impacted by a merger of this size. But there have been no announcements of plans for consolidation and cost reductions (such as layoffs) thus far. With so much regulatory scrutiny likely to be applied to the deal, it is probably wise of the companies to keep mum on that subject as long as they can.

(Read the rest of this article here.)