THE INTERNATIONAL FORECASTER

WEDNESDAY, MAY 6, 2009

050609 (2)_IF
P. O. Box 510518, Punta Gorda, FL 33951-0518
An international financial, economic, political and social commentary.

Published and Edited by: Bob Chapman

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The Clay Douglas Show - Wednesday April 29th, 2009
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– Rob Johnson In The Morning – FRIDAY, MAY 8, 2006.
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and the Northshore. He is the Political Analyst for WGNO-TV ABC26 and a Columnist for
selected publications. For more information, visit his web site at RingsidePolitics.com. E-mail
him at jeff@ringsidepolitics.com.
Bob Ney – Nationally/Syndicated – Monday, May 11, 2009 1:36 – 1:55 p.m. EST –
www.talkradionews.com

*****
NEXT SCHEDULED ISSUE
SATURDAY, May 9, 2009

Alex Jones’ Interview of Bob Chapman, The International Forecaster - April 24, 2009
http://www.mediafire.com/?tj0gmdngyk3

Bob Chapman you tube channel

http://www.youtube.com/user/TheBobChapmanChannel
*****
theheartlandusa.com <http://theheartlandusa.com> with Evensen and Drew Raines
*****
Clayton Douglas, talks with BOB CHAPMAN - ARE THE BIG THREE
SALVAGABLE?
http://www.blogtalkradio.com/claydouglas/2009/04/29/The-Free-American-Hour
*****

US MARKETS
America’s government, Wall Street, banking, the whole financial sector and
major corporations are rife with fraud. One of the latest scams is the Foreclosure
Prevention Plan, which has been extended to second mortgages. Homeowner
mortgage payments will fall as will the interest rate. As we predicted more than five
years ago, the government will end up owning half of the homes in America. Under the
plan government supplies a home equity line as well all of which you get to pay for.
Karl Marx has to be howling in laugher. For good measure the mugs in the beltway are
throwing in another $75 billion. As we reported long ago lenders get $500 for a
modified second mortgage and an additional $250 a year for 5 years. This program is
supposed to help one million homeowners. In all of this creative our Marxism lenders

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want to be protected as well from lawsuits from CDO holders - those owners of bonds
known as collateral debt obligations. It sounds like everyone wins except the taxpayers
who get to pay for it all. Most of these are subprime and ALT-A loans and they’ll never
work. They will have a 50% failure ratio. This is a payoff as well for major banks to
modify the terrible loans they wrote in the first place, plus it protects them against fraud
if they commit fraud. This is a real beauty, a piece of unconstitutional legislation. What
does Congress care – they are in the bank’s back pocket. So goes America down the
slippery slope to oblivion.
We have seen extensive coverage of the bankruptcy of Chrysler and the
possible demise of GM. If both go into receivership Pension Benefit Guaranty
Corporation, PBGC, will have serious problems. The PBGC, is a quasi-government
agency, that insures defined benefit pension plans for those who contribute. Chrysler
and GM have 250,000 and 500,000 participants respectively. There is no question part
of benefits will be lost. We see a payout of 30% to 50% of current benefits and if the
Dow goes to 4,000 it will be much less.
The PBGC, which is out of money now, would need at least $150 billion from
the government. If government doesn’t come up with the money to bail out the system
all the other participants will bail out of PBGC and probably cancel their 401k
programs.
Fraud is everywhere and it continues unabated and un-prosecuted. A crime
syndicate runs America. JP Morgan Chase, Goldman Sachs and Citigroup run our
government. Every time these three firms participate the system is exploited one way
or the other. The latest example is the rules change by the FASB allowing mark-to-
model, which means our balance sheet is what we say it is. You ask, how does this
happen? It happens because they control the system and our government.
The greatest fraud is the Federal Reserve and our government. They are both
throwing money at the problems. The Treasury borrows the funds and the Fed creates
them out of thin air. America, under the privately owned Federal Reserve for almost
100 years has done the same thing over and over again, and it looks like this time they
are headed over the edge. Between the looting by the Fed and our welfare state our
country is on its knees financially and economically. While this transpires, Americans
and people in other nations clamor for government intervention. They want
government to get even bigger and they want an even larger welfare state. That said,
is it any wonder people all over the world have started buying gold over the past year?
As every nation has learned no nation prospers under monetary inflation
because it robs the people of the fruits of their labor. Due to the wanton creation of
money and credit we have had two stock market collapses in the last 10 years and a
monumental collapse in residential and commercial real estate. How can the Fed be
still in charge after the past 20 years of financial and economic disaster? If we include
commodities, the losses could be as high as $100 trillion. The people who caused this
are the Fed, banking, Wall Street and rating agencies, which are still in charge, and
they are not even being investigated. There obviously are no rules. They are what the
participants want them to be. As a result of these policies we are in worldwide
depression. Due to monetization and reckless creation of money and credit little has
been accomplished, except keeping banking and Wall Street afloat for the time being.
This spending can only be viewed as further taxation for future generations. After the
current injections of money and credit and stimulus end in the summer of 2010, the
governmental and monetary powers either create $15 trillion more to jack up the US
economy and others do the same, or the delayed deflation takes over. They still are
treating the disease and not the cause at a terrible future price. Complicating matters
China is creating $1.2 trillion in debt, the Japanese $250 billion and Europe $500

4
billion. You have to ask, where does it all end? London, Washington and New York
have no further answers. They know that massive more money, credit and
monetization has to be produced or deflation will take over. They are running on a
treadmill that never stops. The bond market breakdown through the 200-day moving
average is already telling us there are higher interest rates ahead, which means much
higher interest costs are in the future in the long end of the market, which will cut into
corporate profits as well.
In the US federal debt, on a short-term basis, should be close to an additional
$9 trillion with long-term debt at $110 trillion. Tax revenues will continue to decline if
not crash over the next few years as the lagging indicator unemployment hits 35%.
After August there will again be a fall off in economic activity until the 2010
stimulus hits. That will affect the economy for six months from April onward. After that
comes more stimulus and the monetization of bank assets now held in a sterilized
mode.
One of the problems the US is facing is that governments and corporations
worldwide are all raising money crowding out each other. The answer to that will be
higher interest rates that have already begun with the breakdown of the US T-bond,
the 30-year, and the 10’s that have telegraphed that rates are going higher. This
creates real problems for all borrowers. Recently the UK had trouble selling their gilts.
This is because government deficits are widening. This is and can be a limit to
government borrowing that is generally governed by interest rates.
The FDIC is insuring deposits of $4.7 trillion with a $13.6 billion deposit
insurance fund.
Every day the Chrysler saga brings about new complexity. Now, a group of 20
lenders that balked at the terms of a government-brokered deal to cut Chrysler’s $6.9
billion debt, are now planning to object to the company’s planned bankruptcy sale.
Selling the assets in 30 to 60 days infringes on their legal rights. This group includes
Oppenheimer Funds, Stairway Capital and other secured lenders who have their own
group of investors, including teachers, credit unions pension funds, retiree plans,
college endowments, and retirement funds.
The government’s proposed plan inverts the classic priority scheme written into
the bankruptcy code, when senior secured creditors are paid in full first, followed by
junior lenders, administrative claims, unsecured lenders and equity holders in that
order.
There is no question the sale is an attempt to end-run the procedural
protections that are provided by Chapter 11. The senior secured creditors are going to
get $0.29 on the dollar and the unsecured creditors $10 billion. The secured lenders
are subsidizing junior creditors who have little or no standing. No court has ever
approved something like this before. It is without precedent. The senior holders have
been deliberately precluded from negotiations with the government. This is the way
corporatist fascism works. The pressure by the administration was intense. A president
has never thrust himself into a bankruptcy case like this. This means the court is not
independent and unbiased, but rather an instrument of the executive.
This is a cram down – not a negotiation. There is no sanctity of the bank’s debt
holder’s investment contracts. Control is to be given to the United Auto Workers, who
caused the problem and Fiat a “black nobility,” Illuminist entity. Do you see the picture?
The Obama administration is increasingly treating its growing intervention in
Pakistan as a separate counter-insurgency war for which it is demanding the same
kind of extraordinary military powers obtained by the Bush administration in
Afghanistan and Iraq.

5
 This was the main message delivered by Pentagon officials on Capitol Hill over
the last few days, together with increasingly dire warnings that without immediate and
unconditional US military funding for Pakistan, the government could collapse.
Defense Secretary Robert Gates warned Congress Thursday that unless it
quickly approved some $400 million requested by the Pentagon for a new Pakistan
Counterinsurgency Capability Fund the Pakistani military would run out of funding
within weeks for its operations against insurgents in the North-West Frontier Province
(NWFP) and other areas of western Pakistan.
One former homeowner rigged his front door with coffeepots filled with boiling
water. Another left piles of ferret feces. Hidden compartments have been used as
living spaces, with people hiding in attics, tool sheds and garages to elude police.
In the D.C. suburbs, a new class of squatter has emerged, as people illegally
remain in homes after they have lost them to the bank. Some have become aggressive
in their efforts to stay, setting booby traps to ward off police.
"People got in over their heads, and they don't want to leave," said Loudoun
County sheriff's Capt. Chuck Wyant, who oversees the department's five-person
eviction unit.
The problem seems especially acute outside the Capital Beltway. Initially
viewed as an unusual symptom of the economic downturn, squatting has grown into
something closer to an epidemic in Loudoun. Court-ordered evictions in the county
have more than doubled over the past three years, and a six-month backlog of cases
at the Loudoun courthouse is a dire reminder that things might only get worse, Wyant
said. A docket at the courthouse has been created for the approximately 2,300 in the
county facing evictions.
President Barack Obama is proposing to close tax loopholes for companies
and individuals with operations or bank accounts overseas.
Obama said Monday he wants to prevent U.S. companies from deferring tax
payments by keeping profits in foreign companies rather than recording them at home.
He also called for more transparency in bank accounts held by Americans in tax
havens such as the Cayman Islands.
Obama said that his plan would generate $210 billion in new taxes over 10
years and "make it easier" for companies to create jobs at home. Congress may resist
portions of the plan.
He said this would be "savings we can use to reduce the deficit. We're putting
a middle class tax cut in the pockets of 95 percent of working families."
Editors Note: You can bet that when legislation is passed the corporations will be able
to bring the $550 billion that they have offshore back into the US at a preferred rate,
perhaps similar to the 5-1/4% they paid 4 years ago, based on the same rouse that
they used before, and that is to create jobs.
For the first time in more than three decades, Social Security recipients will not
get any increase in their benefits next year, federal forecasts show. The absence of a
cost-of-living adjustment, calculated under a formula set by law, will be a shock to
older Americans already hit by plummeting home values, investment losses and rising
health costs. More than 50 million people receive Social Security. President Obama’s
budget assumes no increase in 2010 or 2011, then a 1.4 percent COLA in 2012.
Employers big and small have resorted to slashing hours and once-unthinkable
wage cuts. According to a recent Washington Post-ABC News poll, more than a third
of Americans say they or someone in their household has had their hours or pay cut in
the past few months. Wages in absolute terms -- not adjusted for inflation -- tend not to
fall, even during economic downturns.
Labour is the household sector’s largest single income source, so strong wages

6
growth supports consumer spending, and hence economic growth. Labour is the
corporate sector’s largest single cost, so strong wages damp corporate profits and risk
inflation. We are now seeing exceptional weakness in labour income in the US. On
the one hand, that now helps profits. On the other, it undermines consumer spending
– the bedrock of growth. [The ‘reverse Henry Ford’]
Corporate America is screwing down labour costs. The Employment Cost Index
increased by only 0.3% in the March quarter, and is up only 2.1% on year ago levels –
the lowest quarterly and annual increases for this series (started 1982). Until now,
labour income had not fallen in nominal terms for at least 50 years.
Falling asset prices, elevated debt and declining nominal incomes are the stuff of
debt-deflation cycles. As nominal income falls, leverage ratios increase, even if the
dollar amount of debt does not. This is not yet severe. Moreover, it seems likely that
there’s worse to come. Soaring unemployment points to further significant
deceleration in wages growth (Exhibit 5). Even if the pace of job losses moderates,
wages growth could continue shrinking for some time, damping aggregate labour
income.
As we keep harping, profits from cost cutting will diminish in each passing
quarter. So top-line growth will become increasing important in coming quarters.
As the Obama administration racks up an unprecedented spending bill for bank
bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is
starting to push up the cost of trillions of dollars in borrowing for the government.
To calm nerves and fill the deficit hole, the government is getting creative. The
Treasury is ramping up its auction calendar, holding more frequent sales of
government debt and selling the debt in expanded amounts. It is now holding sales of
its 30-year bond each month, up from four times annually.
An op-ed in the WSJ confirms that the US government will not negotiate with
non-TARP automaker bondholders. As much as anyone, we want to see Chrysler
emerge from its current situation as a viable American company, and we are
committed to doing what we can to help. Indeed, we have made significant
concessions toward this end — although we have been systematically precluded from
engaging in direct discussions or negotiations with the government; instead, we have
been forced to communicate through an obviously conflicted intermediary: a group of
banks that have received billions of TARP funds.
And yet another purported threat from administrations, courtesy of ABC News:
White House Denies Charge By Attorney that Administration Threatened to Destroy
Investment Firm's Reputation. A leading bankruptcy attorney representing hedge funds
and money managers told ABC News Saturday that Steve Rattner, the leader of the
Obama administration's Auto Industry Task Force, threatened one of the firms, an
investment bank, that if it continued to oppose the administration's Chrysler bankruptcy
plan, the White House would use the White House press corps to destroy its
reputation.
Perella Weinberg Partners, Lauria said, "was directly threatened by the White
House and in essence compelled to withdraw its opposition to the deal under the
threat that the full force of the White House press corps would destroy its reputation if
it continued to fight. That’s how hard it is to stand on this side of the fence."
Total construction spending rose for the first time in six months in March,
beating analyst expectations as public sector outlays increased.
U.S. construction spending rose 0.3% to a seasonally adjusted annual rate of
$969.7 billion during the month, the Commerce Department reported Monday.
Analysts expected construction spending would fall by 1.3% in March.

7
 U.S. construction spending has been falling since September, taking with it
thousands of construction jobs. It has fallen more than 11% on a year-over-year basis.
In revising February's construction spending estimates, the the Commerce Department
on Monday said spending fell 1.0%, slightly more than its original estimate of a 0.9%
drop.
In March, the Commerce Department data shows residential construction
spending fell, dropping by 4.1% to $265.85 billion. Residential spending fell a revised
5.6% in February, up from the Commerce Department's original estimate of a 4.1%
drop.
Residential spending in March was down 33.3% from March 2008.
Spending in the non-residential sector, rose 2.0% in March as spending for
educational and power facilities rose while spending on office construction remained
fairly steady.
February's non-residential spending marked a bright spot in that month's
report, climbing 0.5% amid declines in outlays for certain other types of construction.
Total nonresidential construction is up 1.7% for the year.
Private sector construction spending fell 0.1% in March to $661.0 billion.
Private sector spending had fallen a revised 2.1% in February.
Public-sector construction spending by state and federal governments rose
1.1% in March to $308.7 billion. Public sector spending was up a revised 1.3% in
February.
A forecasting gauge of home sales rose more than expected in March, buoyed
by first-time home buyers taking advantage of lower prices.
The National Association of Realtors' index for pending sales of previously
owned homes rose 3.2% to 84.6 from a revised 82.0 in February, the industry group
said Monday.
Private analysts projected pending sales would grow just 1.0% during March.
The gauge rose to a revised 82.0 in February from 80.4 in January.
Still, Lawrence Yun, NAR chief economist, said it's too early to declare a housing
market recovery.
"This increase could be the leading edge of first-time buyers responding to very
favorable affordability conditions and an $8,000 tax credit, which increases buying
power even more in areas where special programs allow buyers to use it as a down
payment," Yun said in a statement. "We need several months of sustained growth to
demonstrate a recovery in housing, which is necessary for the overall economy to turn
around."
In its monthly forecast on the industry, the NAR projected existing-home sales
at 5.28 million in 2010 and 4.97 million in 2009. That compares with 4.91 million in
2008.
The median price for an existing home is seen at $196,800 in 2010 and
$188,500 in 2009. It was $198,100 in 2008.
A month ago, the NAR forecast 2009 sales at 4.96 million and 2010 sales at
5.25 million. The 2009 median price was projected at $188,500 and the 2010 price at
$196,200. The NAR pending sales index, based on signed contracts for previously
owned homes, was 1.1% above the level of 83.7 in March 2008.
The NAR's pending home sales index was designed to try to measure which
way the housing market will go in the future. It is based on pending sales of existing
homes, including single-family homes and condominiums. A home sale is pending
when the contract has been signed but the transaction hasn't closed. Pending sales
typically close within one or two months of signing.

8
 By region, pending sales in the Northeast grew 34.9% in March from February;
they were down 20.0% since March 2008. Midwest activity grew 20.2% in March from
February; it's up 12.4% since March 2008. Activity in the South grew 34.2% in March
from February; it has grown 8.9% since March 2008. In the West pending sales rose
23.9% in March from February; they're up 4.3% since March 2008.
With so many U.S. banks failing (32 to date in 2009), government watchdogs
want to change the law so that a review is required only if a bank's failure costs the
FDIC $300M or more. Currently, a review must be done if a bank failure costs the
FDIC $25M or more, which has created a heavy workload of 'material loss reviews' of
failed banks.
The Federal Reserve plans to deliver results of stress tests on U.S. banks to
executives today that may show about 10 companies need additional capital to
weather a deeper recession, people familiar with the matter said. Banks are
formulating plans for filling their capital requirements, much of which would likely come
from conversions of preferred shares, the people said. Many of the 19 lenders under
review and the government are set to discuss publicly the examinations after markets
close May 7, the people said.
GMAC LLC, the auto and home lender that received a $6 billion government
bailout, reported a first- quarter loss of $675 million on surging loan defaults and the
elimination of a one-time gain from extinguishing debt.
The loss widened from $589 million a year earlier, the Detroit-based company
said today in a statement. Auto loans more than 30 days past due rose to 3.1 percent
in the quarter from 2.4 percent in the same period a year earlier.
The DJIA is at its highest PE (17.6258) since Q4 2006, which is when the US
economy rolled over.
While the S&P 500 is up for the year, only three of its ten sectors are in positive
territory. The Technology and Materials sectors are up the most at 19.4% and 18.5%,
while Consumer Discretionary has been the third best at +11.3%.
The historical average PE10 [10-year average earnings] is 16.3. When
earnings gyrate or certain industries produce negative earnings, like now, the PE10
yields a better measure of stock market value. The S&P 500 now sports a PE10 of
about 16. So please don’t believe the hype about stocks being undervalued.
Street pundits and the financial media proffered numerous reasons for rally:
JPM significantly increased it GDP forecast; much better pending home sales, relief
that Swine Flu is not as bad as the hype and the ludicrous ‘the stress test would be
good because it will show US banks are in fine shape’.
But the real reason is the Fed monetized [a record] $8.5B of 7s thru 10s. The
Fed had confined its monetization to $7ishB in previous operations. This new
monetization aggressiveness is why gold and commodities soared and the dollar
tanked.
The Fed had not bought 10s in its previous two monetization operations. So
when it monetized $1B of 10s yesterday, traders perceived this as a signal that it
wants to stop the decline in 10s because it is the basis for mortgage rates…A record
$71B Treasury refunding will occur this week. So the Fed is trying to prop bonds.
John Williams: Reflecting intensified systemic liquefaction efforts by the Fed,
annual growth in the St. Louis Fed’s Adjusted Monetary Base jumping to a record high
112.5% in the two weeks ended April 22nd, up from 105.9% in the prior two-week
period. Such was up sharply from the recent trough of 81.9% in the two weeks ended
February 11th and topped the prior record growth of 107.2% seen in the two weeks
ended January 14th… http://www.shadowstats.com
Both the 1938 and 1932 first rallies out of the final bottom concluded 62 days

9
after their started. That would place the end of this rally on May 7 when the stress
tests are supposed to be released.
Most U.S. banks expect loan delinquencies and losses to increase this year, a
Federal Reserve report showed today ahead of this week’s release of stress tests of
the nation’s 19 largest lenders.
More than 70 percent of respondents on net said bad loans will rise should the
economy progress “in line with consensus forecasts,” the Fed said in a quarterly
survey of banks’ senior loan officers.
The Federal Reserve Bank of New York shaped Washington's response to the
financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall
Street firms. Goldman received speedy approval to become a bank holding company
in September and a $10 billion capital injection soon after.
During that time, the New York Fed's chairman, Stephen Friedman, sat on
Goldman's board and had a large holding in Goldman stock, which because of
Goldman's new status as a bank holding company was a violation of Federal Reserve
policy.
The New York Fed asked for a waiver, which, after about 2½ months, the Fed
granted. While it was weighing the request, Mr. Friedman bought 37,300 more
Goldman shares in December. They've since risen $1.7 million in value.
Mr. Friedman also was overseeing the search for a new president of the New
York Fed, an officer who has a critical role in setting monetary policy at the Federal
Reserve. The choice was a former Goldman executive.
Regulators have determined that Bank of America Corp. requires about $34
billion in new capital, the largest need among the 19 biggest U.S. banks subjected to
stress tests, according to a person familiar with the matter.
Citigroup Inc.’s shortfall is more limited because the company already plans to
convert government preferred shares to common stock, people familiar with the results
said. JPMorgan Chase & Co. doesn’t need a deeper reserve against losses, according
to people familiar with that company’s result.
The banks may outline their strategies to add capital, or in other cases buy out
government stakes, after the Federal Reserve publishes the stress tests results
tomorrow. Firms requiring more capital could raise all the funds through conversions of
preferred shares if they choose, according to people familiar with the matter.
“To the extent that there are banks that need capital, our hope is that many of
them will be able to raise that capital through either private equity offers or through
conversions and exchanges of existing liabilities,” Federal Reserve Chairman Ben S.
Bernanke told lawmakers at a hearing in Washington yesterday. “The data we have
are accurate reflections of the financial conditions of those banks.”
Banks that want to return money injected by the Treasury since October must show
they can borrow from private investors without a Federal Deposit Insurance Corp.
guarantee, according to people familiar with the matter.
American International Group paid about $454 million in previously undisclosed
performance bonuses to employees for 2008, the company said in answers to
questions from a US lawmaker that were released yesterday.
AIG was widely criticized for paying out some $165 million in retention bonuses
after it received $180 billion in government bailout aid. Some of the retention bonuses
were returned by employees after the firestorm of criticism.
The company has told US Representative Elijah Cummings, a Maryland
Democrat, that the performance bonuses were paid out by operating units across the
company's operations in about 120 countries.

10
 Payments ranged from an average of $5,403 to employees of its property-
casualty group to $51,026, on average, for those in its asset-management group.
The payments are in addition to a bonus pool of about $120 million that is
designated for holding company employees and executives at subsidiary companies.
As the most heavily indebted class of students in history graduates from
college into one of the worst job markets in memory, holders of the nation's roughly
$670 billion in student loans are bracing for an increase in the number of students who
cannot pay them back.
Even before the downturn, default rates had risen sharply for federal loans,
which comprise 80 percent of all student loans, from 4.6 percent in 2005 to 6.9 percent
in 2007. The default rate for private loans at Sallie Mae, the largest lender, has almost
doubled since 2006, rising from 1.44 percent in 2006 to 2.85 percent in 2008.
Now, officials expect this year's defaults to jump considerably.
"Economic downturns affect people's ability to pay off all kinds of debt, and you
have more people with student loans than ever before," said Lauren Asher, acting
president of the Project on Student Debt, a nonprofit research and policy organization
in Berkeley, Calif.
Arne Duncan, secretary of education, said recently that he, too, is preparing for
higher defaults. "Whether we like it or not, that's a reality we're looking at," he said.
Companies in the U.S. cut an estimated 491,000 workers from payrolls in April,
indicating the worst of the recession’s job losses may have passed, a private report
showed today.
The drop in the ADP Employer Services gauge was smaller than economists
forecast and the fewest since October. March’s reading was revised to show a
reduction of 708,000 workers, down from a previous estimate of 742,000.
Stabilization in consumer sending following the worst slump in three decades is
stoking expectations that the recession will end in the second half of the year. Still, a
Labor Department report in two days may show employers cut payrolls in April for a
16th consecutive month, pushing jobs losses in the current downturn to almost 6
million, according to a Bloomberg survey.
Federal regulators are asking Wells Fargo & Co. to raise more capital after
government "stress tests" showed the bank would have trouble surviving if the
recession worsens.
St. Warren just two days ago said Wells Fargo didn’t need more capital. Yes,
this time the banks are the gangsters. They're robbing Main Street's Treasury. And it's
an inside job. Hank Paulson, the "Goldman Conspiracy's" Trojan Horse, plays a
"Dillinger," leading a much bigger conspiracy, the "Happy Conspiracy," that robbed
America's 300 million citizens and taxpayers. They made off with trillions, while our
"guards," a clueless Congress, laid down their guns and surrendered the keys to the
vault.
The "Happy Conspiracy?" Yes, that's what Vanguard founder Jack Bogle calls
Wall Street in his bestseller, "The Battle for the Soul of Capitalism." He sees Wall
Street as a "pathological mutation" of capitalism. Adam Smith's "invisible hand" no
longer drives "capitalism in a healthy, positive direction." Instead, Bogle sees the
invisible hands of this elite "Happy Conspiracy" running capitalism to serve its own
selfish, greedy agenda.
Almost 21.8 percent of all owners were underwater as of March 31, the Seattle-
based real estate data service said in a report today. At the end of the fourth quarter,
17.6 percent of homeowners owed more than their original mortgage, while 14.3
percent had negative equity three months earlier.
Creditors to Chrysler describe negotiations with the company and the Obama

11
administration as "a farce," saying the administration was bent on forcing their hands
using hardball tactics and threats.
Conversations with administration officials left them expecting that they would
be politically targeted, two participants in the negotiations said.
The sources, who represent creditors to Chrysler, say they were taken aback by
the hardball tactics that the Obama administration employed to cajole them into
acquiescing to plans to restructure Chrysler. One person described the administration
as the most shocking "end justifies the means" group they have ever encountered.
Another characterized Obama was "the most dangerous smooth talker on the planet-
and I knew Kissinger." Both were voters for Obama in the last election.
One participant in negotiations said that the administration's tactic was to present
what one described as a "madman theory of the presidency" in which the President is
someone to be feared because he was willing to do anything to get his way…
[Chicago mores with a worshipping elite media = more fascism]
The same Homeland Security Department office that categorized veterans as
potential terrorists issued an earlier report that defined dozens of "extremists" ranging
from black power activists to abortion foes. The report was nixed within hours and
recalled from state and local law enforcement officials.
Whites and blacks, Christians and Jews, Cubans and Mexicans, along with tax-
hating Americans were among several political leanings listed in the "Domestic
Extremism Lexicon" that came out of the Office of Intelligence and Analysis (I&A) in
late March.

*****
Chrysler lender group plans objection to sale
http://uk.reuters.com/article/topNews/idUKTRE54017D20090501

*****

Genesis of the debt disaster

By Gillian Tett
http://www.ft.com/cms/s/2/51f425ac-351e-11de-940a-00144feabdc0.html
*****
America: ‘Sold Out’ for $5.2 Billion! –
Lorimer Wilson
http://www.24hgold.com/english/news-gold-silver-america--sold-out-for-5-2-billion-
.aspx?article=2024853348G10020&redirect=false&contributor=Lorimer+Wilson
*****
Why Congress Won't Investigate Wall Street
By THOMAS FRANK
http://online.wsj.com/article/SB124096712823366501.html
*****
Alex Jones Calls the White House
http://www.infowars.com/alex-jones-calls-the-white-house/
*****
Military Police at the Kentucky Derby
http://www.infowars.com/military-police-at-the-kentucky-derby/
*****

14 of 19 banks may fail the stress test and need to raise capital. Roll out Son of
Tarp.

12
http://mgray12.wordpress.com/2009/05/02/stressing-over-the-test/
Michael Gray
Deputy Sunday Business Editor
New York Post
mgray@nypost.com
*****

http://mgray12.wordpress.com/2009/05/06/stressing-over-the-test-part-2/

Stressing Over Bank Test (Part 2)

16 of the 19 will fail under "worse-case scenario," which caused the delay in the
release.
Michael Gray
Deputy Sunday Business Editor
New York Post
mgray@nypost.com
*****

Ron Paul’s Economic Theories Winning GOP Converts

More and more Congressmen have been signing onto Dr. Paul’s Audit the Fed bill, HR
1207, and it is now up to a whopping 124 cosponsors.
http://washingtonindependent.com/41786/ron-pauls-economic-theories-winning-
gop-converts

*****
LIFE WITH BIG BROTHER
Bilderbergers plan secret meeting in Greece
Source says top agenda item is reconstructing world economy
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=97135
*****

Afghans to Obama: Get Out, Take Karzai With You

By PATRICK COCKBURN
http://www.counterpunch.com/patrick05062009.html
*****

Fox News: Martial Law If It’s a Pandemic?

http://www.infowars.com/fox-news-martial-law-if-it’s-a-pandemic/
*****
New rules for marketing
http://www.vcn.bc.ca/citizens-handbook/rules.html
*****
Swine Flu 'Pandemic'
Martial Law Passes MA Senate
http://www.rense.com/general85/marta.htm
*****
More Information on Flu
Flu timelines with Gov help
http://www.legitgov.org/flu_oddities_shortnews_0409.html
http://www.legitgov.org/flu_oddities_shortnews_0409.html

13
More of the fallen
http://www.stevequayle.com/dead_scientists/UpdatedDeadScientists.html
*****

INTER-AMERICAN CONVENTION AGAINST THE ILLICIT MANUFACTURING OF

AND TRAFFICKING IN FIREARMS, AMMUNITION, EXPLOSIVES, AND OTHER
RELATED MATERIALS
http://www.oas.org/juridico/english/treaties/a-63.html
*****
Swine Flu Martial Law Bill Clears Massachusetts Senate
http://www.infowars.com/swine-flu-martial-law-bill-clears-massachusetts-senate/
*****
Inoculations - The True
Weapons Of Mass Destruction
Causing VIDS (Vaccine Induced Diseases) An Epidemic Of Genocide
By Rebecca Carley, M.D.
http://www.rense.com/general62/inno.htm
*****
Banksters Win One, Lose One in Congress
http://www.truthout.org/050209Y
*****
Max Keiser - France 24 Debate (clip) - A New Revolution in France?
http://www.youtube.com/watch?v=xssFuTgiY_0&feature=player_embedded
*****
Obama - Smoking gun finally found?
http://disc.yourwebapps.com/discussion.cgi?disc=149495;article=123895;title=A
PFN
*****
NEW HATE CRIMES BILL CRIMINALIZES WORDS AND THOUGHTS
By NWV News writer Jim Kouri
http://www.newswithviews.com/NWV-News/news143.htm
*****
Unreported or Underreported Real Pandemics, Not Fake Ones Like Avian and
Swine Flu - by Stephen Lendman
http://sjlendman.blogspot.com/
*****
And, its gone south park 1303
http://www.youtube.com/watch?v=Dtao-V26Tj0
*****
Top Senate Democrat: bankers "own" the U.S. Congress
by Glenn Greenwald
http://www.globalresearch.ca/index.php?context=va&aid=13464
*****
A PLAN COMES TOGETHER: THE SHEEP OBEY
Dr. Sherri Tenpenny, DO May 4, 2009 NewsWithViews.com
http://www.newswithviews.com/Tenpenny/sherri122.htm
*****
Low mortgage rates not for everyone

14
http://www.azcentral.com/business/articles/2009/05/01/20090501biz-
MeltdownMortgage0501.html?source=nletter-business
*****
Montana Governor Signs New Gun Law
Ernest Hancock
http://www.freedomsphoenix.com/Feature-
Article.htm?Info=0056132&PHPSESSID=f5202464b9231b28a22d6d80e8f20afa
*****
Government Up to No Good
http://www.youtube.com/watch?v=hWDawxPJDK8&NR=1
*****

Top Ranking CIA Operatives Admit Al-qaeda Is a Complete Fabrication

http://polidics.com/cia/top-ranking-cia-operatives-admit-al-qaeda-is-a-complete-
fabrication.html
*****
The former FBI translator and whistleblower suggests blackmail may be at the
heart of Congressional refusal to bring accountability and oversight to its own
members - such as both Hastert and Harman - in matters of espionage and
national security. Sibel Edmonds
http://www.bradblog.com/?p=7117
*****

The Broken Congress

By SIBEL EDMONDS
http://www.counterpunch.com/edmonds05052009.html
*****

Ellen Brown's "Web of Debt:" Part I

http://sjlendman.blogspot.com/
*****

From a New Fellow subscriber:

Bob, I enjoy listing to you every night. You are my # 1 source of information while I am
here working in Iraq as a civilian contractor. I would like to subscribe to a one year
subscription.
*****
From a Fellow Subscriber:

A comment was posted by a subscriber on The International Forecaster. Refers

to: International Forecaster Weekly , The Direction Of The Economy Is Not Going To
Change Comment:
Yes, just today (May 4), the sycophantic mainstream media nattering nabobs were
crowing how the S&P 500 had made up all its loses for the year and was now even.
There are those who will fall for this, unfortunately, and they will lose more money if
they invest on this news, not understanding the PPT is at work, yet once again, and
not being Insiders, will have their financial heads handed to them on a platter.
*****
From a Fellow Subscriber:

15
New rules for marketing and position Dan says hello and to make sure I send you this.
What a way to market and build audiences. Ginny http://www.vcn.bc.ca/citizens-
handbook/rules.html
*****
From a Fellow Subscribers:
Dear Bob:
I think the final straw has been laid on the camels back.
The 7th US Circuit Court of Appeals has upheld the conviction of David Olofson
a member of the Wisconsin National Guard for a “Broken Gun”
The court has ruled that the government doesn’t have to share evidence nor do
they have to allow a defendant to bring witnesses to testify on their behalf.
During the trial the BATF with held the fact the rifle was part of a recall and
disallowed Olofson from bring in witnesses that would testify on his behalf.
Here’s what happened…
Olofson loaned a neighbor an old AR15 so he could learn to shoot. One day at
the range the AR15 slam fired.
In the original investigation by the local police and the BATF the AR15 was
deemed to be semi-auto, but after 4 months in the hands of the BATF the gun was
magically found to be a Full Auto Machine gun.
The AR15 was made by Olympia Arms, which is no longer in business.
Olympia Arms originally was allowed to use M16 trigger parts in the manufacturer of
these rifles
In 1983 the BATF issued a recall for all of the rifles made with M16 parts
because of possible slam fire problems.
During the trial the BATF with held the fact the rifle was part of a recall,
disallowed Olofson from bring in witnesses that would testify on his behalf.
Bob every gun owner with a semi-auto firearm is now at risk of becoming a
felon for a broken gun. Please share these links with my fellow subscribers
*****

COMMODITIES
Natural gas is $3.50. It’s been as low as $3.22. If it falls to $2.65, go long - that
is those of you for which this kind of a trade is suitable.

GOLD, SILVER, PLATINUM AND PALLADIUM

For the uninitiated, let’s back up. The chart measures the number of ounces of
gold it would take to buy the Dow Jones industrial average. So in 1980, for example,
when the Dow sat around 800 and gold was $800 an ounce, the ratio was 1:1. At the
height of the tech bubble in 1999, it was 44:1.
Notice where we are now… and where in all likelihood we’re going based on
what’s happened before. “That last drop of gold, from 9 ounces to the 1-2 ounce
range,” says Byron, “can bring a lot of hurt to the stock market along the way.”
“One way or another, we'll see, say, $5,000... either $5,000 gold or $5,000 Dow. Even
if the Dow stays at the current 8,000, that implies, say, $4,000 gold at a 2-to-1 ratio.”
“It ain't over. Fat Lady is still warming up backstage.”
At 3:30 a.m. on Monday the general markets continued to trend slightly higher
based on the end of recession and recovery, although there was no real intelligence to
believe that the financial and economic malaise was over.
The Dow was up 63; S&P 69, Nasdaq 77 and the FTSE was unchanged in
Dow numbers. The Nikkei has a life of its own, up 149 at 8977. The CAC rose 37 and
the DAX up 84 in the face of deplorable projected GDP figures just released by the EU

16
and the eurozone. The yen fell .0038; the euro rose .0014 and the pound fell .0023.
The 2-year was 0.91% and the 10’s 3.11%. Oil was unchanged at $53.20, gas rose
$0.01 to $1.53 and natural gas rose $0.03 to $3.58. Gold rose $4.40 to $892.60; silver
gained $0.14 to $12.62; copper rose $0.06 to $2.17 as it takes another whack at trying
to break out over $2.20, which at this time we believe will be unsuccessful. It has to
reconsolidate at $1.80 to $1.90. Platinum rose $3.60 to $1,100.
Monday saw spot gold rise over $8.00 and end the day up $12.80 The June
contract was $1.90 higher. Spot silver rose $0.72 to $13.07 and June was $0.19 lower.
As we have said over and over the “Working Group on Financial Markets now only has
the ability to suppress prices for short periods of time. The sudden jump in prices was
a Reuters report out of Singapore. Physical demand was coming out of China in the
cash market. Everyone except Americans realize that spending and money and credit
creation is out of control. Today the dollar took a hit, which helped, the yen rose .0046
to $.9889 after being off almost all day. The euro rose .0105 to $1.3371; the pound
rose .0045 to $1.4969; the Swiss franc rose .0055 to $1.1282; the Canadian dollar
rose .0046 to $.8496 and the USDX, dollar index, fell .80 to 83.74. The USDX is on a
head and shoulders formation and also has broken the 200-day moving average to the
downside. As we predicted, this is what happens when massive dollar liquidity is
pumped into the system.
Gold open interest rose 2,774 contracts to total 331,840, as silver OI fell 817 to
88,446. We are told India’s April gold imports were up 25% yoy to 30 tons. The yoy
gold price in rupees was up 25%. The Tocom gold shorts cut 20 contracts being net
short 21,264, and they also cut their silver shorts by 17 to net 253 contracts. The XAU
gained 8.45 to 127.89 and the HUI gained 19.38 to 320.83. AEM rose 4.42%, or $1.96
to $46.34; GG rose 6.11%, or $1.68 to $29.19; SSRI rose 4.54%, or $0.78 to $17.97
and MFN rose 4.31%, or $0.33 to $7.98.
The Dow rose 214 to 8427; S&P rose 267 and Nasdaq 266 Dow points. The 2-
year T-bill was 0.93% and the 10-year was 3.16%.
Oil rose $1.27 to $54.47; gas rose $0.02 to $1.60 and natural gas rose $0.19 to
$3.73. Copper rose $0.04 to $2.14; platinum rose $27.20 to $1,123 and palladium rose
$7.50 to $221.40. The CRBwas up for a 4th day in a row 3.34 to 232.38.
If you want to know why the market has been strong on Monday and Tuesday it
is because the Fed provided a huge influx of liquidity into the market.
If the USDX breaks down below 82.50 the next stop is 75 to 77.5 and then to
71.16 to 73.5.
Silver sellers are struggling to make delivery on the Comex; 2.397 contracts
have been delivered or 11,985,000 ounces with 2,869 contracts yet to go. Deutsche
Bank 1000 contracts or 5,000,000 ounces and Goldman delivered on 867 contracts.
iShares SLV have not changed inventory in a month.
Early Tuesday was an indecisive affair. The Dow was 8372; S&P up 13;
Nasdaq up 2 and the FTSE up 149 Dow points. The Nikkei rose 198, the CAC rose 13
and the DAX 14. The yen fell .0029; the euro fell .0045 and the pound rose .0047. The
2-year was 0.94% and the 10’s 3.17%. Oil fell $0.04; gas rose $0.01 and natural gas
fell $0.06. Gold fell $.080 to $901.40; silver fell $0.07 to $13.05 and copper fell $0.02
to $2.12.
We have again encountered a coin scam and it is outrageous and very
upsetting. It does not involve any of the three firms we recommend.
A subscriber purchased commemoratives in September for about $13,500; the
commission was about 23%, or $3,160. The value as of yesterday was $5,530, a loss
of $8,035.00 in a rising gold market. This seller charged obscene commissions and
really took the buyer to the cleaners. We get several letters a week like this and all we

17
can say is check our recommended brokers before you buy. We never take
commissions from anyone we recommend.
Tuesday was an indecisive day to say the least. In the last 15 minutes the PPT
ran the market up again. The Dow fell 16 to 8410; S&P fell 31 and Nasdaq fell 57 Dow
points. The 2-year T-bill yielded 0.97% and the 10’s were 3.16%.
The yen fell .0011 to $.9900; the euro fell .0046 to $1.3310; the pound rose
$.0105 to $1.5068; the Swiss franc fell .0046 to $1.1341; the Canadian dollar rose
.0009 to $.8505 and the USDX rose .08 to 84.05. Oil fell $0.52 to $53.95; gas fell
$0.01 to $1.57 and natural gas fell $0.11 to $3.61. Copper fell $0.07 to $2.08; platinum
rose $8.10 to $1,130 and palladium rose $0.70 to $223.00. Gold in the June month fell
$3.80 to $898.40 and silver rose $0.23 to $13.24. Gold traded lower in the access
market spiking off $9.00 in seconds and then returned to even at last look. The XAU
fell .89 to 136.54 and the HUI fell .91 to 319.94. The CRB fell .54 to 231.84.
Early Wednesday the market looks very suspect. The Dow was off 30 at 8352;
S&P was off 16; Nasdaq was down 57 and the FTSE was up 40. The Nikkei was up
149; the CAC up 28 and the DAX up 12. The yen was up .0041; the euro was up .0008
and the pound rose .0028. The 2-year was 0.95%; the 10’s 3.17%; the 1-month Libor
0.40% and the 3-month 0.99%. Why don’t they just give the money away at zero
interest. It is all guaranteed by the Fed. All this to keep mortgage rates at 4-7/8%. Oil
rose $0.28; gas rose $0.01 and natural gas fell $0.01. Gold was 904.50, up $0.20;
silver was $13.43, plus $0.01 and copper rose $0.03.
Last week’s COT Commitment of Traders report showed the commercials
added 2,289 contracts, or 9.1%, to their net short position, to net 27,460 shorts in
silver; as total contracts fell 5.5% to 90,687. Commercials now represent 30.2% of all
short open contracts, which historically has been bullish for silver. This coupled with
backwardation reflects a market that is pricing in tight supplies as well. Sooner or later
the public investor will get wind of this and silver will take off. The outlook for silver is
very positive.
*****
IT AINT OVER ‘TIL THE FAT LADY SINGS
by Egon von Greyerz
http://matterhornassetmanagement.com/newsletter/?newsletter=17
*****

EUROPE
The European Commission Monday forecast a prolonged slump in Spain's
economic output and spiraling unemployment following the collapse of the country's
construction boom.
In updated forecasts for the world economy, the commission predicted Spain's
gross domestic product will fall by 3.2% in 2009, more than its previous forecast of a
2% contraction.
It also predicted Spanish GDP will fall by 1% in 2010, more than its previous
forecast of a 0.2% contraction.
As the country's labor-intensive construction industry sheds hundreds of
thousands of jobs, the commission forecast Spanish unemployment will rise to 17.3%
in 2009 and to 20.5% in 2010.
Switzerland's purchasing managers index rose for the first time in 16 months in
April, to a higher-than-expected 34.7 points, but the positive signal wasn't strong
enough to suggest a swift economic improvement, economists said.
Spanish car registrations fell 46% on the year in April, Spanish car
manufacturers' association Anfac said Monday.

18
 In a release, Anfac said 67,215 cars were registered in April, down from
123,561 a year earlier.
Spanish car registrations fell by 39% on the year in March, 49% in February
and by 42% in January.
The European Commission has revised its forecast for the French economy
sharply downward to contractions of 3.0% this year and 0.2% next year as the global
economic crisis takes its toll.
"There are no clear signs of recovery in the short term," the commission said in
its Spring 2009 economic survey published Monday. In its January interim economic
report, the E.U. had forecast French GDP would contract 1.8% in 2009 and grow 0.4%
next year. In 2008, the economy grew 0.7%.
Monday's report is in line with other multilateral agencies, such as the
Organization for Economic Cooperation and Development, which sees a contraction of
3.3% this year for France. But the E.U. sees a pullback in 2009 that is double the 1.5%
shrinkage the French government has been forecasting to date.
The euro zone's manufacturing sector contracted for the eleventh straight
month in April, but at the slowest pace since October last year, data showed Monday.
Purchasing Managers Index for the euro zone's factory sector rose to 36.8 in April
from 33.9 in March, according to Markit Economics.
Economists surveyed by Dow Jones Newswires last week had expected the
PMI to be unchanged from the preliminary estimate of 36.7. A reading below 50.0
indicates that activity is declining.
EU Sentix Investor Confidence rises to -34.3 in May from -35.3 in April.
German retail sales fell more than expected in March in light of a sharp
economic downturn and rising unemployment, data from the Federal Statistics office
showed Monday.
Retail sales dropped a real 1.0% in March from February - below economists'
forecasts of a 0.2% decline. The monthly data are adjusted for calendar and seasonal
effects.
Retail sales declined a price-adjusted 1.5% year-on-year, although March 2009
had two more working days than the same month a year earlier, the statistics office
said.
The euro zone's manufacturing sector continued to contract in April, but at the
slowest pace since October last year.
According to Markit Economics Monday, the Purchasing Managers Index for
the euro zone's factory sector rose to 36.8 in April from 33.9 in March.
Economists surveyed by Dow Jones Newswires last week had expected the
PMI to be unchanged from the preliminary estimate at 36.7. A reading below 50.0
indicates that activity is declining.
The manufacturing PMI has been picking up from the lows reported earlier this
year, suggesting that manufacturing output in the euro zone should be beginning to
improve in the coming months.
Germany's manufacturing PMI was also stronger than expected, rising to 35.4
in April, the highest level since November 2008. That compares with 32.4 in March and
was stronger than the 35.0 preliminary estimate, which economists had expected to be
the final reading Monday.
The French manufacturing PMI rose to a six-month high of 40.1 from 36.5 in
March. That was above the flash estimate of 40.0, which economists had expected to
be the final reading.

19
 Italy's manufacturing PMI rose to 37.2 in April from 34.6 in March. That was a
stronger outcome than the 36.3 reading forecast by economists and was the highest
level since October 2008.
Italian producer prices fell in March, hovering around their steepest rate of
decline since January 2006, as energy prices continued to decline, data from statistics
office Istat showed Monday.
On the year, producer prices fell 3.9% in March compared with an upwardly
revised 2.7% fall in February.
On the month, producer prices fell 0.6%, compared with an upwardly revised
0.5% fall in February.
EU May Purchasing Manager Index Manufacturing edges up to 36.8 in April.
The Irish government said Tuesday it posted a budget deficit of EUR7.3 billion
for the first four months of 2009, compared with a deficit of EUR3.7 million from
January to April 2008.
Tax receipts fell 24% to EUR10.1 billion during the period from EUR13.2 billion
during the same period last year, showing that public finances are continuing to
deteriorate, while unemployment is expected to spike at nearly 17% next year.
"The overall situation was little changed from end February (down 24%) and end
March (down 23%), which is of some comfort," said Davy Research economist Lynsey
Clemenger.
Indicative of the reluctance of Irish consumers to spend, he said the falloff in
Value Added Tax receipts has been the main drag on tax revenue in the year,
representing EUR1.04 billion, or a third, of the total shortfall.
German new car registrations rose 19.4% on the year in April, the German
international vehicle manufacturers' association, or VDIK, said Tuesday.
Most consumers opted for smaller, environmentally friendly models. The market share
of VDIK members in the April figures was 41.9%, below the level in March.
The number of new registrations was nearly 380,000 in April, it added.
Adjusted for the number of working days, car registrations rose 30% in April versus
March. New car registrations in the first four months of the year were at the highest
level since 1999, the group said.
Euro-zone industrial producer prices posted their sharpest drop in annual terms
for 22 years in March, supporting the case for the European Central Bank to cut
interest rates to a record low this week, official data showed Tuesday.
Factory gate prices dropped 0.7% on the month and were down 3.1% on the
year in March, the steepest year-on-year fall since February 1987, the European Union
statistics agency Eurostat said. It was the eighth consecutive monthly decline in prices.
The drops were slightly bigger than the market consensus estimate of 0.6% on the
month and 2.9% on the year from a Dow Jones Newswires survey of economists last
week.
However, February's declines were revised up to 0.4% on the month and 1.7%
on the year from drops of 0.5% on the month and 1.8% on the year published in April.
The figures are likely to support expectations that the ECB will cut its main interest rate
to an all-time low of 1.0% from 1.25% after its next policy meeting Thursday.
Spain's breakneck pace of job destruction in recent months slowed in April as
the result of the government's EUR8 billion infrastructure plan, labor ministry data
showed Tuesday.
In a statement, the ministry said jobless claims rose by 39,478, or 1.1%, to
3,644,880 in April from March. April jobless claims were up 56% on the year.
Claims had risen by over 120,000 on the month in both March and February.
Spain had an unemployment rate of 17.4% in March, nearly twice the average for the

20
16 countries using the euro currency, according to data last month from the European
Union's statistics arm, Eurostat.
Spanish government officials had said Spain's job market would start to show
signs of improvement in April as a result of its plan to spend EUR8 billion on local
infrastructure projects.
Swiss April SECO Consumer Climate falls to -38 vs -23.
Norway’s central bank cut the benchmark interest rate by half a percentage
point to a record low in an effort to prevent the world’s fifth-largest oil exporter from
sliding into a deeper recession.
Oslo-based Norges Bank lowered the overnight deposit rate to 1.5 percent, in
line with the median forecast of 10 economists surveyed surveyed by Bloomberg.
Governor Svein Gjedrem has followed central banks across the world in lowering
rates, cutting the benchmark in stages from a five-and-a-half-year high of 5.75 percent
in October. The bank said today the reductions are mitigating the impact of the
recession.
“This is the last cut,” said Shakeb Syed, economist at Svenska Handelsbanken
AB. “It is a wait and see strategy that they will keep now.”

*****
Second Thoughts About E.U. Enlargement
http://www.time.com/time/world/article/0,8599,1895238,00.html?xid=rss-
topstories
*****
Restoring Our Financial Sovereignty: A New Monetary System
http://nikkialexander.wordpress.com/2009/03/18/restor ing-our- f inancial-
sovereignty- a-new-monetar y-system/
*****

Mayday for Capitalism

Amid a gloomy economy, Europe could see a summer of rage.
http://online.wsj.com/article/SB124104080341870321.html
*****
Georgia accuses Russia over foiled rebellion
http://uk.reuters.com/article/topNews/idUKTRE5441PU20090505?sp=true
*****

Venezuela Orders Gold Producers to Sell More Locally

http://www.bloomberg.com/apps/news?pid=20601086&sid=a._KjQ1aRzBo&refer
=latin_america#
*****

From a Fellow Subscriber:

Hello Bob,
Fortunately I earned my money the old fashioned way by manufacturing
products and paying the confiscatory tax rates on it. At one time I was with UBS.
Approximately five years ago UBS created a special division that dealt with
accounts where they didn’t ask any questions about the source of the funds. UBS was
aggressive in seeking new accounts for this division, almost blatantly so. It was just a

21
matter of time before the FEDS got wind of it. UBS was incredibly stupid and they are
paying dearly for it. Unfortunately Swiss banking came under the microscope because
of it. I believe if you have declared your account with the IRS, and paid the taxes on it,
you still have most of the protections afforded by Swiss banks. I am not sure if the
Obombanation administration tries to create retroactive tax laws if you still have full
protection of Swiss banking, but I think that you do. They tell me that in order for
anyone, including the IRS, to get access to your funds you would have had to commit
a most egregious act. The accounts the FEDS are going after are obviously accounts
where the source of funds have been attained through criminal acts. Which begs the
question why are they not going after the funds of the federal reserve banks. I will
convert more chf's into gold this Monday. I would like to commend you on your efforts
to inform everyone regarding the real financial situation of this country and the world. It
is a noble and admirable undertaking.
Best Regards,
*****

ENGLAND
UK house prices fell for a third month in April as banks restricted mortgage
lending, Lloyds Banking Group Plc’s Halifax division said.
Home values fell 1.7 percent from the previous month to an average of 154,716
pounds ($233,000), Halifax said in a statement in London today. From a year earlier,
prices dropped 17.7 percent.
The British economy will keep contracting until the fourth quarter of this year,
the National Institute of Economic and Social Research said in a report today. Bank of
England policy makers will decide this week whether to continue printing money to
counter the recession.
“Rising unemployment, low consumer confidence and the reduced availability
of credit are all expected to exert downward pressure on the housing market over the
next few months,” Martin Ellis, an economist at Halifax, said in the statement. “Further
house price declines are likely.”
Policy makers are spending 75 billion pounds on asset purchases to ease
credit strains in the economy, which contracted 1.9 percent in the first quarter, the
most since 1979.

*****
Study reveals true extent of 'old boys network' between Government and banks
By Tom Peterkin, Scottish Political Editor
http://scotlandonsunday.scotsman.com/latestnews/Study-reveals-true-extent-
of.5230278.jp
*****

From a Fellow subscriber:

Mittal Steel just issued letters to all of its employees with 10 years of service or more,
58 years of age or older, that they will be given 1 year of severance pay and they are
basically terminated. Age discrimination you say, we shall see. Remember I told you
a while back that the word was they wanted to move their operations to Europe. We
shall see. On another note, watch very carefully as Tony Blair looks to be the next
head of the EU with a long tenure, not the current 6-month swing or 12 months,

22
whatever it is. Blair will push the EU for economic advancement at the expense of the
lesser nations and the United States!

*****
LATIN AMERICA
Brazil's foreign currency reserves dropped $1.21 billion in April from the
previous month, according to figures published on the central bank's web site
Tuesday.
Brazil's foreign reserves totaled $201.25 billion at the end of April, down from $202.46
billion at the end of March.
In the first four months of 2009 reserves dropped $5.5 billion. Reserves ended
last year at $206.8 billion, the highest annual level in history.
Reserves grew sharply from 2005 through 2008 after the central bank started
purchasing dollars from the spot market in October 2005. Reserves stood at $53.779
billion at the end of 2005.
The pace of consumer inflation in Brazil's largest city, Sao Paulo, slowed in
April, as food and housing prices costs dropped in the period, the Fipe research
foundation said Tuesday.
Fipe, which is affiliated with the University of Sao Paulo, said its consumer
price index rose 0.31% in the period, compared with a rise of 0.40% in March.
The figure was below market forecasts for an increase of between 0.34% and 0.43%.
Food prices fell 0.26% in April, compared with a rise of 0.70% in March.
Housing costs dropped 0.04% in the period, reversing an increase of 0.25% seen in
the previous month.

ASIA
Taiwan's consumer prices fell for the third straight month in April on lower fuel,
gas, and fruit prices, government data showed Tuesday.
Consumer prices fell 0.45% in April from a year earlier, widening from March's
0.15% decline, the Directorate General of Budget, Accounting and Statistics said. The
CPI has been falling since February, when it dropped 1.33%.
The CPI's decline in April was less than expected. The median forecast was for
a 0.60% fall, according to a survey of 11 economists by Dow Jones Newswires.
The wholesale price index, a gauge of production costs, fell 10.99% in April
from a year earlier, after dropping a revised 9.25% in March. Economists in the survey
had expected April's WPI to fall 9.52%.

*****
Asia is de-coupling
http://www.creditwritedowns.com/2009/05/asia-is-de-
coupling.html?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=cre
ditwritedowns
*****

AUSTRLIA AND NEW ZEALAND

The Rudd Government is bracing for a $200 billion revenue black hole over the
next four years as the impact of the global recession slashes its tax take. Sources
have told The Australian Treasury advice to the Government indicates it will not return
to surplus before 2015-16.
Australian new car sales crashed by almost 24 per cent in April compared to

23
the same month in 2008. The Federal Chamber of Automotive Industries (FCAI) said
on Tuesday 63,965 new cars and trucks were retailed last month, down from 84,061 in
April last year. The slide left sales over the first four months of 2009 down by 20.3 per
cent at 276,935. Holden recently axed the afternoon shift at its Elizabeth assembly
operations in Adelaide, splitting its 3,000 strong workforce into two teams working one
week on and one week off. Commodore sales this year are down by 11.3 per cent to
just over 13,000, but were down only 4.4 per cent in April in a better performance for
the company.
Another rise in the value of residential building approvals was offset by a fall in
the non-residential category, leaving the total lower in March. The seasonally adjusted
number of residential approvals rose by 3.5 per cent in March while their value,
including additions and alterations, was up by 1.2 per cent, according to the Australian
Bureau of Statistics (ABS).
The Australian Capital Territory & home to Australia's federal parliament, has
forecasted budget deficits for the next seven years. Treasurer Katy Gallagher on
Tuesday painted a gloomy picture of the ACT's fiscal health, announcing an $82.2
million deficit for 2009/10. “We now forecast a deficit of $41.3 million for 2008/09 and
$82.2 million for 2009/10, with deficits continuing until 2015/16,” Ms Gallagher said.
This time last year, the government predicted a $71.2 million surplus for 2009/10. And
it only gets worse with estimates pointing to a deficit of $112.4 million in 2010/11,
increasing to $152.2 million by 2012/13. Two years of revenue growth totalling $224
million has been lost in the past six to eight months due to ailing consumer confidence
affecting GST collection, decreased returns on investments, lower interest earnings
and a weaker local housing market. But despite a similar shortfall being expected
annually over the next five years, totalling around $1.1 billion, the government has not
announced plans to cut expenditure or introduce any new taxes in its 2009/10 budget.
Victoria will spend a record $11.5 billion fast tracking major projects to save
thousands of jobs. Here are the key points:
* Jobs, jobs, jobs: state budget aims to steer state through turbulent economic
conditions
* $3 billion investment in transport infrastructure to improve services, including $2.07
billion boost to public transport services across the train, tram and bus network
* $402 million for new schools, improved facilities and jobs
* Health system gets injection of $2.6 billion, including $825.9 million to address
hospital waiting lists
* $215.5 million for emergency services
* $1.9 billion to Victoria Police
* $150.6 million for mental health reform
* Bushfire threat reduction costing $116.2 million to boost biodiversity
The Reserve Bank of Australia kept the official cash rate on hold for May at 3
per cent. In today’s statement, RBA governor Glenn Stevens said the central bank
believed that the full effects of the previous rate cuts, plus the federal Government’s
two rounds of fiscal stimulus packages, had not fully filtered through to the Australian
economy. Mr Stevens said official figures had shown that the Australian economy had
contracted in the final months of 2008 and, so far, the evidence showed that that trend
had continued. The bank is expected to cut its growth forecast figures when it
publishes its quarterly Statement of Monetary Policy on Friday, thereby officially
showing that a recession is under way in Australia. At the same time, the RBA has
predicted that inflation will continue to fall, as uncertainty within the economic
environment continued.

24
Statement by Glenn Stevens, Governor of The Reserve bank of Australia:
http://www.rba.gov.au/MediaReleases/2009/mr_09_08.html

At its meeting today the Board decided to leave the cash rate unchanged at 3.0 per
cent.

The global economy contracted further during the first few months of this year. While
the near-term outlook remains weak, there are further signs of stabilisation in several
countries. The Chinese economy in particular has picked up speed in recent months
and many commodity prices have firmed a little. The considerable economic policy
stimulus in train in most countries should help contain the downturn and support an
eventual recovery.

Conditions in global financial markets remain generally on a path of gradual

improvement, with equity prices off their lows, term spreads declining and capital
markets re-opening. Nonetheless, confidence remains fragile and balance sheets are
under pressure from the effects of economic weakness on asset quality. Credit
remains tight. Continued progress in restoring balance sheets remains essential to
durable recovery.

The Australian economy contracted in the latter part of 2008, and this has continued in
2009 to date, with both domestic and international demand weaker. Capacity utilisation
has fallen back to about average levels, and will decline further over the rest of the
year. With demand for labour weakening, growth in labour costs will probably also fall.
These conditions are likely to see inflation continue to abate, though this is occurring
only gradually so far, as the effects of the decline in the exchange rate are pushing up
some prices.

Australian markets have seen a decline in term spreads and firmer equity prices over
recent months. Borrowing for housing is picking up, particularly among first-home
buyers. Business borrowing, on the other hand, is declining, as companies curtail
investment plans and seek to reduce leverage, in an environment of tighter lending
standards.

Monetary policy has been eased significantly. Market and mortgage rates are at very
low levels by historical standards and business loan rates are below average, reducing
debt-servicing burdens considerably. Much of the effect of these changes is yet to be
observed. The stance of monetary policy, together with the substantial fiscal initiatives,
will provide significant support to domestic demand over the period ahead.

In assessing whether further reductions in the cash rate are required over the period
ahead, the Board will monitor how economic and financial conditions unfold, and how
they impinge on prospects for a sustainable recovery in economic activity.
*****
H1N1: Government May Soon Tell Australians to Stock 14 Days of Supplies
http://www.infowars.com/h1n1-government-may-soon-tell-australians-to-stock-14-
days-of-supplies/
*****

25
HEALTH
ARE WE BOUND BY OUR TOOLS?
If you are as old as I am you may have had a vacuum salesman knock on your front
door and enthusiastically ask to demonstrate how well his vacuum (not sold in stores)
works. This happened to me when I was about 25-years-old and I got a lesson in “your
work can be as good as your tools.” I watched as the man demonstrated the obvious
benefits of his machine. I won’t go into all the details but suffice it to say that when the
man left my house was at a new level of clean. And yes, I did buy the darn thing. This
vacuum is like a BMW and is still going after 23 years. Why am I mentioning this? We
are all in some aspects bound by the tools we have to do a job and scientists are no
different.

SCIENCE
The universe of science can sometimes be a good thing and sometimes not. Science
can be a severe victim of fact; whether it is chemical analysis, visual analysis or
whatever test they may run to explain “the why of it all.” History is our teacher - when
the polio vaccine was developed in the 1950’s, this vaccine was made from monkey or
pig pus. The scientific community declared it to be sterile (except for the antibody to
the polio virus) and was a safe medical treatment to prevent polio. In the 1960’s
researchers discovered that polio vaccine distributed to some states was infected with
the Simian Virus SV-40 (a monkey virus). When SV-40 is injected into lab animals they
develop brain and lung cancer. We are now finding SV-40 in 61% of all new cancer
patients. Recently they’ve determined that SV-40 is transmitted sexually and through
blood transfusions and is showing up in 23% of blood samples and 45% of sperm
fluids. By 1963, they had estimated there were over 98 million tainted polio
vaccinations in the US. According to the National Institutes of Health, high levels
of SV-40 were identified in polio vaccines given in Washington, Oregon,
Wyoming, Utah, Minnesota, Iowa, Wisconsin, Illinois, Michigan, Pennsylvania,
Washington DC, Maryland, Delaware, New York, Connecticut, Rhode Island,
Massachusetts, Vermont and New Hampshire. Low levels of SV-40 were found in
California, Arizona, New Mexico, Colorado, Texas, Kansas, Nebraska, North
Dakota, Missouri, Louisiana, Georgia, Tennessee, Kentucky, Ohio, and West
Virginia. Polio vaccines given in the other states show no SV-40 present. When
the 1970’s rolled around they examined the polio vaccine under more powerful
microscopes and found 149 live viruses that the 1950’s equipment did not detect.
Many people are still unaware that a potential for cancer had been implanted in their
body and many of these cancers do not develop until mid-life.

SOME NASTY HISTORY

Microbiologist Howard Urnovitz, Ph.D. stated in the Boston Globe that, “The
government will not fund science that makes it look culpable." Also, the oral “live’ polio
vaccine was designed to transmit the polio virus (including the SV-40) to non-
vaccinated individuals thus spreading the cancer potential. Some medical experts and
scientists feel that using animals in making vaccines is the problem. According to Dr.
Michele Carbone of Loyola University Medical Center (one of the first to discover SV-
40 in human tumors) says, “We have the technology to make vaccines in human cell
lines that are clean."

THE RULES

26
Science must have sufficient evidence regardless of 400-years of empirical history and
use. Without evidence scientists are compelled to reject even the most obvious
benefits. Scientists who take their evaluations too seriously can in a short time be seen
as ignorant. The “sterile” polio vaccine is a good example. Just because the current
techno gadgets in the lab don’t see something, doesn’t mean it isn’t there.
IS THE FDA YOUR HERBAL ADVISOR?
Some herbs the FDA will warn against using. Remember, the FDA approved many of
the pharmaceutical drugs and vaccines known to have caused irreversible damage.
Some such herbs, which have been used for centuries to cleanse the blood (the life
source of your body), the FDA excludes from their GRAS (generally regarded as safe)
list. Therefore, poke root, lobelia, bloodroot, chaparral and some others are not FDA
approved. Yet these herbs have hundreds and thousands of years of testing through
use and experience, which science ignores because it doesn’t fit into their test profile.
Translation; it didn’t produce the results they wanted. For example, if a plant does not
show the anti-tumor compounds science has identified they assume it doesn’t have
any. A hundred years from now (if the world as we know it still exists) they may have
better tools to discover and identify the new compounds.

WHAT I DO
I don’t wait for science to catch up to the knowledge herbalist have known for
centuries. Science can go about contriving their “designed reality” and I will use God’s
herbs which work. What can you do to cleanse the blood of impurities like cancer,
parasites, bacteria and viruses? There are herbs you can use to sweep the blood
system of impurities, which will be essential for high blood pressure, cholesterol,
diabetes and cancer issues. Dirty blood will not allow sores to heal, will rob your cells
of oxygen and cause weakness in multiple places within the body. To sweep the blood
system you will need to do a blood cleanse, however not before you’ve cleanse the
bowel, urinary tract, liver & gall bladder. You have to provide the evacuation route for
the impurities to leave the body. The blood system cleanse is always last for your
health and safety. You can do all of these cleanses in a short period of time, still
function normally and go to work. Call Apothecary Herbs for more information 866-
229-3663, International 704-875-8010 online at http://www.thepowerherbs.com.
Apothecary Herbs offers Male and Female Organ Cleanse Packages with step-by-step
instructions plus product support if you have question or concerns while using the
cleanses. You are only as successful as your tools and you will want to use them
properly.

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Male & Female Organ Cleanse Packages – get all your important organ cleanses in

27
one convenient package. Call now 866-229-3663, International 704-875-8010
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salterns (a 2000-year tradition) along the coast of Algarve, Portugal. Salt crystals are
harvested by hand and sun-dried. This is a true artisan sea salt providing richness as
well as a smooth and elegant flavor to food. 1/2 pound ground unrefined Portuguese
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Congestion Formulas plus toxic-free flea and tick collars, shampoo and spray at
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Order your convenient and compact, dehydrated food in the stand-up pouch for food
emergencies or recreational camping. Light weight food pouches have a long shelf life,
are easy to store for your rainy day food shortages and don’t cost a lot to ship. We
have several meals to choose from in single and double serving sizes to avoid waste.
Mix and serve in the stand-up pouch and avoid the need for extra utensils and
cleanup. Order single serving or double serving meals by the case and for a hot meal,
don’t forget the reusable Flameless Oven for just $13.00. Call Apothecary Herbs 866-
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HERB TALK LIVE – with Herbalist Wendy Wilson every Tuesday & Thursday at 7:00
pm EST on AVR www.theamericanvoice.com and Thursday at 4:00 pm on WBCQ
7.415 and Saturday 7:00 am on GCN www.gcnlive.com. Free radio show archives at
http://www.thepowerherbs.com

#10 CANS SURVIVAL FOOD – call Freeze Dry Guy 866-404-3663 or

www.freezedryguy.com.

*****
IMMUNE SYSTEM ENHANCEMENT CAN STOP INFLUENZA
By Dr. James Howenstine, MD.
http://www.newswithviews.com/Howenstine/james176.htm

*****
Engineering Lies & Viruses... Dear Mr. Chapman I listen to you weekly on Gold Seek
Radio and thought to pass this information to you since you are a truth seeker and
speaker. I am very concerned about what is going on and know you speak to many
people maybe this can help in you information to others you may know of this already.
Lots of data in the world and net but here is some that is very bothersome. Thanks for
caring about the people....
There is way too much going on here not being reported by mainstream entertainment
& media. Daily events that could effect your life daily, here is some data I came across
and you decide the merit if any..... Lab engineered virus 3 strains never seen ever now
combined mysteriously? http://www.youtube.com/watch?v=GBeKB7aKzOs
Dr. Deagle - on weaponize viruses
http://www.youtube.com/watch?v=usuKDg6gfMQ&amp;feature=related Swine Flu

28
Smoking Gun? CDC was Combining Flu Viruses in 2004 http://911truth-
sherbrooke.org/2009/04/29/swine-flu-smoking-gun-cdc-was-combining-flu-viruses-in-
2004/ CDC admits the A (H1N1) Flu was created in a government lab
http://www.sodahead.com/blog/67587/cdc-admits-the-a-h1n1
-flu-was-created-in-a-government-lab/ Has virus been gene spliced? That means
made in a lab.... http://www.youtube.com/watch?v=RnSX_jS0STA
coast to coast - you tube 7 part series
http://www.youtube.com/watch?v=IeMwUpbFOBw&amp;feature=PlayList&amp;p=6D4
D258950033899&amp;index=0 Listen to 2 people talking; no facts here but the ideas
are possible? Who can say but they know what many people are talking about....
http://www.youtube.com/watch?v=eGBmSRcghJc
Is swine flu for profit or control?
http://www.guardian.co.uk/commentisfree/2009/apr/29/swine-flu-mexico-uk-media1
Why are a number of microbiologist and scientist best of the best being found dead?
88 count some as young as 24 to 49? Why would getting rid of them be good and for
whom? http://www.rense.com/general66/deadmicro.htm
We lost 40 micro-biologists in less than 4 years...Why?
http://jollyrogerrevolution.blogspot.com/2009/04/if-you-sell-crack-join-gang-or-rob-
mob.html
Have a free mind and think open thoughts! Communicate with others us your free
speech!
*****

Germany Bans Genetically Modified Corn

http://articles.mercola.com/sites/articles/archive/2009/05/05/Germany-Bans-
Genetically-Modified-Corn.aspx
*****

ASSUMING THIS SWINE FLU MIGHT BE REAL or not here is the natural cure that
fixed the 1918 pandemic::

1.Colodial Silver: Kills the bacteria side of the virus. Hold under your tongue for
30secs. then swallow 3-4 times daily (1-2 ounces daily)

2.Colodial Silver: use it in your cleaning products too - kills over 600 pathogens and
bacteria. You can find it at Whole Foods Market or Sunflower Market OR MAKE IT
YOURSELF.

3.Eat raw garlic: it helps kill more bacteria/builds immune system 1-2 raw cloves daily

4.LDM-100: Kills the Flu side of the Virus. During 1918 Pandemic, Washoe Indians
were not affected by the Flu. They ate Biscuit root – also called Lomatium Dissectum -
LDM or Indian Consumption Plant -- was eaten to battle viral illnesses such as
influenza AND fight the 1918 Spanish flu pandemic. LDM-100 is the extract from THE
ROOT.

5.Organic Apple Cider Vinegar: take a swish and swallow in your mouth before lunch
and dinner (kills bacteria – only use the Organic Braggs Brand. It says ‘Made With
Mother’)

6.Vitamin A and Vitamin C: take non-synthetic vitamins. all-natural. Ingest daily

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7.Vitamin D: From sunlight helps. Try to get 20 minutes daily to build immune system

8.Cinnamon: sprinkle on your organic fruits. It helped kill Black Plague.

9.JUICE FRUITS AND VEGGIES AS MANY AS YOU CAN!!!! Use organic carrots and
apples to build your immune system. Costco sells 10lbs for $4.79. JUICE!!!

10.Face Masks: will not protect you. It’s mainstream media lies to give you the illusion
you’ll be safe. Washing hands helps, but you must repair your immune system first.
(thanks goes to maheffe of ConCen site
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More Americans taking drugs for mental illness
http://news.yahoo.com/s/nm/20090505/hl_nm/us_mental_drugs;_ylc=X3oDMTI1NzZyc
3Q3BFJfYWlkAwRSX2RtbgN5YWhvby5jb20EUl9maWQDYmRhMGMzMzU0NTFiYm
Y2YjY0Y2Q0MWRlYjBiYWRlNDYEUl9sdHADMQ-
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NEXT SCHEDULED ISSUE

SATURDAY, May 9, 2009

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