US Dollar in Major Decline

In today's fast market action, the U.S. dollar has continued its historic decline, falling still further on world markets.

That puts the dollar just an eyelash away from breaking through its all-time low!

Meanwhile, the prices we pay for gold, oil, food and many other critical natural resources are hopping:

Oil has jumped to over $79 per barrel, its highest level this year and nearly DOUBLE its March low.

Copper has just surged by a whopping 4% today.

And gold is back up to $1,061 per ounce, poised for ANOTHER major surge.

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading.
Tuesday, 6 October 2009

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

Massive Put Buying - Wells Fargo

Not only do [Wells Fargo’s] outstanding commercial loans collectively exceed the property values to which they are attached, but derivative trades leftover from its acquisition of Wachovia are creating another set of problems for the already beleaguered San Francisco-based megabank.

Wachovia, which Wells purchased last fall as it teetered on the brink of collapse, was so desperate to increase revenue in the last few years of its existence that it underwrote loans with extremely shoddy standards and paid traders to take them off their books.

According to sources currently working out these loans at Wells Fargo and confirmed by Dan Alpert of Westwood Capital, when selling tranches of commercial mortgage-backed securities below the super senior tranche, Wachovia promised to pay the buyer’s risk premium by writing credit default swap contracts against these subordinate bonds. Should the junior tranches eventually default, then the bank is on the hook.

There is much more in the article. Suffice it to say, Wells (WFC) is in much deeper trouble than its executives are letting on.

By the way, Warren Buffett says he knows Wells Fargo’s book better than bank examiners and that the company is doing just fine. We shall see…

Hong Kong Recalls Gold Reserves in London

HONG KONG (MarketWatch) -- Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.

The facility, industry professionals said, would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.

"Having a central government-sponsored vault would create a situation where you could conceivably look at Hong Kong as being a hub, where metal could be traded for the region," said Sunil Kashyap, managing director at Scotia Capital in Hong Kong, adding that the facility was the first with official government backing in the region.

The Hong Kong Monetary Authority, which functions as the territory's unofficial central bank, will transfer its gold reserves stored in other vaults to the depository later this year, the Hong Kong government said in an earlier statement.

The monetary authority reported $63 million in physical gold reserves as of July 31, according to its International Reserves and Foreign Currency Liquidity statement. The authority wouldn't disclose where the reserves are held, but local media reports cited gold traders as saying that London's the most likely location.

Traders said the new depository facility could also foster new financial products, such as exchange-traded funds based on precious metals.

The 3,660-square-foot depository, located at the city's main Chek Lap Kok Airport, will serve as a "storage facility for local and overseas government institutions," according to the government statement.

Martin Hennecke, a financial advisor with the Hong Kong-based Tyche Group Ltd., said that could be appealing to regional central banks unnerved after watching the global financial system teeter on verge of implosion last year.

"Central banks are increasingly aware of the importance of having gold reserves at time of financial crisis and having it easily available at their own disposal," he said.

Meanwhile, local newspaper reports said the Hong Kong Mercantile Exchange had signed an agreement to use the depository for its physical settlement and storage needs.

Marketing efforts will be launched to convince Asian central banks to transfer their gold reserves to the Hong Kong facility, according to reports citing Raymond Lai, finance director with the Hong Kong Airport Authority.

Efforts will also be made to reach out to commodity exchanges, banks, precious-metals refiners and ETF providers, the reports said.

Management firm Value Partners planned to launch an ETF gold fund that will use Hong Kong instead of London as a repository for the gold backing the fund, local reports said Thursday.

Selling of U.S. Treasuries

Brazil and Canada were among big sellers of Treasurys in the latest month for which data is available and the previous year, catching analysts off guard and raising speculation that quieter nations may be concerned about investing in the U.S.

Brazil and Russia, which along with India and China are part of the so-called BRIC countries, have expressed concern with the strength of the U.S. dollar. It was therefore not so surprising that the two countries reduced their holdings of Treasurys in May, according to the latest data available from the Treasury International Capital report released last week. The two are among the largest holders of Treasurys.

But Canada, the biggest trading partner for the U.S., has publicly said nothing of the sort. Taiwan and France were also notable sellers of Treasurys in the latest month.

"It's a bit like friendly fire," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon. "We saw some record selling of long-term Treasurys and that's exactly the kind of thing Wall Street and the government have been worried about for years, and it came from some unexpected places."

Markets, especially currencies, took comfort that China - the largest holder of U.S. Treasurys - continued adding to its holdings despite repeated commentary from officials that it may do otherwise. Japan, the second largest holder, reduced its Treasury portfolio in the latest month but has increased it substantially in the previous 12 months.

Glaxo Limiting Swine Flu Testing

(Bloomberg) -- The swine flu shot that GlaxoSmithKline Plc is developing will be tested on a limited number of people.“The total population studied in clinical trials will be limited due to the need to provide the vaccine to governments as quickly as possible,” the London-based company said in a statement today.

Swine Flu - The Real Deal !!

I have been closely following MSM published and broadcast pieces as well as GLP posted articles on the swine flu pandemic, and, as you know, there has been a mountain released with such velocity it is often difficult to keep the pace. Frequency (and volume) strategy is used when one wants to get a message out. Marketing 101. The speed of release can be attributed to a fast-changing environment, a well-oiled communication machine (established pipeline…when it suits them) as well as good strategy.

However, there were three elements that raised the red flags :

1. Certain H1N1 flu information is being stressed/promoted over equally or more important H1N1 information (instead of informing the public on all data, one main message is being pushed AND it is emotionally based rather than quantitative)
2. The message has reached fervor pitch indicating a level of desperation to get this primary message out and
3. I started to notice discrepancies in reports.

These combined elements prompted me to research the actual numbers and events to determine if I should be as concerned as the media and health agencies seem to want me to be and to answer a few questions nagging me. In other words, do the numbers and the evidence really support this massive push, especially to the point of justifying the removal of my health decision rights for “the good of society’?
Following is what I gathered and found:
Can I Trust the WHO Numbers?
WHO is now recommending that countries STOP testing for H1N1 and “assume” that all flu cases are H151. Yes, that’s right. Lump all cough, sore throat and fever symptoms into the H1N1 reporting numbers. How much are - or will - these numbers be inflated with this methodology?[link to www.upi.com]
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Can I Trust the CDC Numbers?
CDC is reporting aggregate cases of both confirmed and unconfirmed (suspected). They are collecting the data separately. Fair enough. But they are not reporting the numbers separately to the people. Why not?:
[link to www.godlikeproductions.com]
But, further, the CDC also admits the reported numbers include ALL flu not just swine flu, which is clearly indicated on their website and interactive maps; however, the media obviously pay little attention to this quite important differentiation and tend to identify all as “swine flu”:
“The flu activity map includes both novel H1N1 flu and seasonal flu because both novel H1N1 and seasonal flu viruses are still circulating. Illnesses caused by seasonal and novel H1N1 flu infections have similar symptoms and can’t be differentiated from one another without specific laboratory tests.”
[link to www.cdc.gov]
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Is H1N1 a ‘Super Spreader?
I found that it has been scientifically shown that this H1N1 strain “spreads from person to person less effectively than other seasonal flu viruses” and that it “binds human receptors much less effectively than other flu viruses that infect humans”.
[link to www.upi.com]
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What are the H1N1 numbers to date compared to the historical regular, seasonal flu numbers?Even though my confidence in the CDC numbers is in question, let’s review what they do report…Flu mortality stats per CDC, which include all forms/strains of flu as well as pneumonia, (referred to as the P&I Index):2005 = 63,001 people died2006 = 56,000 people died“2007-08 season, the proportion of deaths due to pneumonia and influenza was higher than the previous two years, but was similar to the 2004-05 season.”Between 1993 to 2003, an average of 36,171 people died each year of flu[link to www.cnsnews.com] [link to www.cdc.gov] Compared to…H1N1 current 2009 stats per CDC as of July 17th:
Jan to July 17 = 263 deaths
Jan to July 17 AGGREGATE confirmed AND suspected infected = 40,617
We have less sickened to date than all who died each year in 2005, 2006 and possibly 2007-2008.
Additionally, to reach the 2006 mortality number (chosen in absence of 07-08), based on calendar months (not seasonal), would require a 9,824% mortality increase. This is a very loose, extrapolated number to give a general idea only; seasonal variables are not available for proper calculations.
[link to www.cdc.gov]
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Pandemic? Epidemic?
Well, H1N1 is not even an epidemic according to the CDC historical charts…even when H1N1 is combined with all other flu and pneumonia deaths. Take a peek. We haven’t crossed the epidemic threshold, and, per the chart, mortality rates were much worse in 2007-2008 . Where was the gov and health agency panic then?? Did I sleep through it? These numbers include ALL flu and pneumonia, in which swine flu (H1N1) is a SUBSET[link to www.cdc.gov] The chart piqued my curiosity, so I then compared the current P&I morality rates to the first week of flu season the previous four years – the first week of flu season because the CDC either does not track from June – Aug each year (hardly) or they are not exposing the data. Interesting it is that this is all unfolding when we don’t have historical comparative data. Even more interesting is the mortality chart indicates the data do exist.Additionally, mortality rate was chosen because the CDC does not report raw numbers for P&I illnesses either confirmed or suspected except this year. Again, why?
2009Week ending July 11, 2009 = 6.5%
Epidemic Threshold = 6.6%
2008Week ending Oct 4, 2008 = somewhere around 5.8% *only a chart was provided; no raw data
Epidemic Threshold = unknown
2007Week ending Oct 6, 2007 = 5.9%
Epidemic Threshold = 5.8%
2006Week ending Oct 7, 2006 = 6.26%
Epidemic Threshold = 6.31%2005
Week ending Oct 8, 2005 = 5.5%
Epidemic Threshold = 6.7%
The mortality rate is comparable to the first week of flu season to epidemic threshold ratio in 2006 and 2007, did we have this level of hype in those years? If not, then why not?
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What are the WHO Pandemic Numbers?
As of July 6th, the WHO reports less than 100,000 confirmed cases of swine flu illness WORLDWIDE. Only 100,000 globally sickened when in the US we have an average of 36K regular flu deaths on average per year? But we have a pandemic?What is that global infection rate? .00148%Yes, that is one one-hundredth of one percent of the entire population, but it’s a pandemic?
[link to www.who.int]
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What numbers are the media reporting?
Yet media are getting away with inflating the numbers to “over a million” Americans sickened”:[link to www.sfgate.com] What else is the media reporting?At every turn, there are swine flu stories in the news of people dying and contracting H1N1, and thousands of articles on swine flu as a general topic. A “H1N1” search in Google news alone resulted in 204,998 articles
[link to news.google.com] Comparatively, a “healthcare plan” search in Google news resulted in only 8,536 articles.[link to news.google.com] It is not my intent in any way to minimize those deaths and illnesses, but these events, unfortunately, happen every year with regular flu. We just don’t hear about it in the media. In fact, 83 children in the US died from the flu in the 2007-2008 season. It is harsh, but it’s factual. Look again at the CDC numbers and specifically the mortality chart above. At minimum, why aren’t the actual historical numbers being reported with these emotional stories for perspective to prevent public overreaction?
[link to www.cdc.gov]
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Will the Vaccine Be Safe? Effective?
Well, the US gov has been advised to accept the vaccine without the safety and efficacy tests.[link to www.webmd.com]
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If the Vaccine Is not Safe or Effective, Will the Makers be Held Accountable for Damage?
No. Congress has made them legally “immune” (pun fully intended), and Kathleen Sebelius, the Secretary of Health and Human Services, reinforced this with a recent, signed document from her office.
[link to apnews.excite.com]
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Summation
My summation is brief because I believe the data and evidence above speak without needed explanation: I’m not stating that people are not ill; rather, I am presenting the actual numbers, which indicate this is a mis- and dis-information fear campaign perpetrated on the people. The numbers do not warrant the emotional hype.I welcome any additional evidence and certainly corrections if needed.Oh, and on another note, have you noticed that: From 2003 – to date, the Military Industrial Complex made off like bandits…
From 2007 – 2008, it was Big Oil’s turnFrom 2008 to date, the BankersNow it appears it is Big Pharma and Big MedHas all the money been transferred to the intended recipients? FFS, there isn’t any money left. Is this it?