Iran anniversary 'punch' will stun West: Khamenei

Supreme leader Ayatollah Ali Khamenei said on Monday that Iran is set to deliver a "punch" that will stun world powers during this week's 31st anniversary of the Islamic revolution.

"The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.

The country's top cleric was marking the occasion when Iran's air force gave its support to revolutionary leader Ayatollah Ruhollah Khomeini, a key event which led to the toppling of the US-backed shah on February 11, 1979.

His comments came as Iran said it would begin to produce higher enriched uranium from Tuesday, in defiance of Western powers trying to ensure the country's nuclear drive is peaceful.

This year's anniversary is expected to become a flashpoint between security forces and supporters of opposition leaders Mir Hossein Mousavi and Mehdi Karroubi, who charge that the June re-election of President Mahmoud Ahmadinejad was rigged.

Opposition supporters are expected to stage anti-government protests on Thursday when the traditional regime-sponsored marches to mark the revolution take place across the country.

Mousavi renewed his call for demonstrations on the February 11 anniversary.

Just over a week ago, he and Karroubi had implicitly called for a gathering of their supporters.

"The 22nd of Bahman is upon us, truly it should be called the day of gathering," Mousavi said on his Kaleme.org website Monday.

"I feel we have to participate while maintaining the collective spirit as well as our identity and leave an impression," Mousavi said.

"Anger and bitterness should not take our control away.

"The clerics should know that since imprisonment, beatings, and other confrontational methods are done in the name of Islam and the Islamic regime, it is hurting Islam and we all should try to stop," he added.

Anti-government protests were first triggered after the June 12 presidential election won by Ahmadinejad.

Over the past eight months, several thousand people were arrested. Some were released and others were given hefty prison terms, among them politicians, journalists and human rights activists.

Two protesters were tried, convicted and hanged in the aftermath of the election.

Khamenei told the air force personnel the "most important aim of the sedition after the election was to create a rift within the Iranian nation, but it was unable to do so and our nation's unity remained a thorn in its eyes."






Iran anniversary 'punch' will stun West: Khamenei

FED GAVE Banks Access to 23.7 TRILLION DOLLARS NOT $700 Billion!

Looky Looky, what do we have here ?
Another fast one by the FED on our Dime !!

This stuff has to STOP !!

Funds flee Greece as Germany warns of "fatal" eurozone crisis

Germany has triggered a near-panic flight from southern European debt markets by warning that there will be no EU bail-outs, even though it fears the region's economic crisis has turned dangerous and could prove "fatal" for the entire eurozone.

The yield on 10-year Greek bonds blasted upwards by over 40 basis points to 7.15pc in a day of wild trading. Spreads over German Bunds reached almost four percentage points, by far the highest since Greece joined the euro, and close to levels that risk a self-feeding spiral. Contagion hit Portuguese, Spanish, Irish, and Italian bonds.

George Papandreou, the Greek premier, said in Davos that his country had been singled out as the weak link in a "attack on the eurozone" by speculators and political foes. "We are being targeted, particularly by those with an ulterior motive."

Marc Ostwald, from Monument Securities, said the botched bond issue of €8bn (£6.9bn) of Greek debt earlier this week has made matters worse. Many of the investors were "hot money" funds that bought on rumours that China was emerging as a buyer, offering them a chance for quick profit. When the China story was denied by Beijing and Athens, these funds rushed for the exit.

However, a key trigger yesterday was testimony in Germany's parliament by economy minister Rainer Brüderle, who said there would be "no bail-outs" for struggling debtors and no move to a "European economic government".

"A few European nations are exhibiting dangerous weaknesses. That could have fatal consequences for all countries in the eurozone," he said. Despite the warning, he said each country must solve its own problems.

"Germany is not in a mood to be the deep pocket for what they consider profligate, southern neighbours," said hedge fund doyen George Soros.

Mr Brüderle's hard line contradicts a report in Le Monde that Franco-German officials are discussing a rescue for Greece in order to keep the International Monetary Fund at bay.

The paper cited a source saying that EMU partners were ready to "help" Greece. "It is a question of credibility for the eurozone. The IMF might want to impose monetary conditions."

Le Monde's story was shot down by Berlin and Paris, but there is little doubt that certain officials have been trying to build momentum for a rescue. It is clear that the EU family is split on the issue. Jean-Claude Juncker, head of the Eurogroup of finance ministers, backs "assistance", with support of EU integrationists hoping to nudge the EU towards full fiscal union.

This is fiercely opposed by Berlin, and the German-led bloc at the European Central Bank. There are reports that Berlin is deliberately bringing the crisis to a head, hoping to lance the boil early and force the Club Med states to reform before it is too late. If so, this is a risky strategy. German banks have huge exposure to Greek, Spanish, and Portuguese debt.

Hans Redeker, currency chief at BNP Paribas, said Greece will face "great trouble" if it has to pay 7pc rates for long. Athens must raise €53bn this year, mostly in the first half. It has a been relying on cheap short-term debt to fund the budget deficit of 13pc of GDP, but this raises "roll-over risk".

Tim Congdon, from International Monetary Research, said the danger is that wealthy Greeks may shift money to bank accounts abroad if they lose confidence (akin to Mexico's Tequila Crisis in 1994-1995). This would set off a banking crisis and become self-fulfilling.

Greece has been financing current account deficits – 15pc of GDP in 2008 – through its banks, which have built up €110bn foreign liabilities. "If foreign creditors want their money back, defaults and/or a macroeconomic catastrophe appear inevitable," Mr Congdon said.

Adding to worries, Moody's has issued an alert on Portugal's "adverse debt dynamics", saying Lisbon needs a "credible plan" to reduce a structural deficit stuck at 7pc of GDP rather than "one-off measures".

The deeper concern is Spain, where youth unemployment has reached 44pc and the housing bust has a long way to run. Nouriel Roubini – the economist known as 'Dr Doom' – said Spain is too big to contain. "If Greece goes under that's a problem for the eurozone. If Spain goes under it's a disaster," he said.

Jose Luis Zapatero, Spain's premier, replied wearily: "Spanish public debt (52pc of GDP) is 20pc lower than Europe's average; our treasury spends 5pc of revenues on debt costs, less than France and Germany. Nobody is going to leave the euro," he said.

The children of illegal aliens (anchor babies) have bankrupted the state of California

In 2009, San Bernardino County spent $64 million providing welfare benefits to U.S.-born children of illegal aliens.

According to county records, during a typical month, close to 15,000 offspring of illegal aliens received either welfare payments or food stamps in 2009. Over 11,000 of those children received both forms of assistance.

Assemblyman Steve Knight, R-Palmdale, told the San Bernardino Sun: "This is a huge burden on our state. Obviously, these kids are U.S. citizens and that's fine. But when you look at it, these parents should have never been here in the first place."

Raymond Herrera, founder and president of We The People California's Crusader, said: "The American people are fed up with illegal aliens depleting our tax dollars by overrunning our schools, our hospitals and our welfare system."

While $64 million more than the county can afford particularly during the current deep recession, it is but a drop in the bucket, when you consider what the entire state of California is paying-out to ‘anchor babies’ and their illegal alien parents.

In August 2009, Los Angeles County Supervisor Michael Antonovich made public the staggering amount which the taxpayers spend on illegal aliens, living in L.A. County. Last June alone, the county paid out $48 million to the children of illegal aliens, an increase of $10 million over June 2007.

$26 million of that total came in the form of food stamps, while another $22 million was given to the illegal alien families in welfare checks.

Assuming that June was a typical month for 2009, Los Angeles County spent nearly $600 million on those two programs last year alone. That is in addition to the more than $1 billion that the county spends annually on the medical treatment, education, emergency services, and incarceration of illegal aliens.

These figures explain why not only L.A. County, but the entire state of California are now in financial ruin. Supervisor Michael Antonovich told reporters that illegal aliens continue to have a “catastrophic impact on Los Angeles County taxpayers.”

In 2003, the American Southwest saw 77 hospitals enter bankruptcy due to unpaid medical bills incurred by illegal aliens. A staggering 84 hospitals in California alone, have been forced to close their doors because of the growing crisis. Hospitals which manage to remain open, pass the unpaid costs onto the rest of us, which translates into more out-of-pocket expenses and higher insurance premiums for Americans.

With rising unemployment, huge trade deficits due to the loss of our manufacturing base, and a soaring national debt, we simply cannot afford to pay the bills for this nation’s illegal alien population. We can no longer accept elected representatives who choose to better represent a foreign national population, rather than those of us who actually pay their salaries.

Illegal immigration is slowly but surely destroying this nation.

Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover

Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover

Even though the U.S. financial system nearly experienced a total meltdown in late 2008, the truth is that most Americans simply have no idea what is happening to the U.S. economy. Most people seem to think that the nasty little recession that we have just been through is almost over and that we will be experiencing another time of economic growth and prosperity very shortly. But this time around that is not the case. The reality is that we are being sucked into an economic black hole from which the U.S. economy will never fully recover.

The problem is debt. Collectively, the U.S. government, the state governments, corporate America and American consumers have accumulated the biggest mountain of debt in the history of the world. Our massive debt binge has financed our tremendous growth and prosperity over the last couple of decades, but now the day of reckoning is here.

And it is going to be painful.

The following are 20 reasons why the U.S. economy is dying and is simply not going to recover....

#1) Do you remember that massive wave of subprime mortgages that defaulted in 2007 and 2008 and caused the biggest financial crisis since the Great Depression? Well, the "second wave" of mortgage defaults in on the way and there is simply no way that we are going to be able to avoid it. A huge mountain of mortgages is going to reset starting in 2010, and once those mortgage payments go up there are once again going to be millons of people who simply cannot pay their mortgages. The chart below reveals just how bad the second wave of adjustable rate mortgages is likely to be over the next several years....



#2) The Federal Housing Administration has announced plans to increase the amount of up-front cash paid by new borrowers and to require higher down payments from those with the poorest credit. The Federal Housing Administration currently backs about 30 percent of all new home loans and about 20 percent of all new home refinancing loans. Tighter standards are going to mean that less people will qualify for loans. Less qualifiers means that there will be less buyers for homes. Less buyers means that home prices are going to drop even more.

#3) It is getting really hard to find a job in the United States. A total of 6,130,000 U.S. workers had been unemployed for 27 weeks or more in December 2009. That was the most ever since the U.S. government started keeping track of this statistic in 1948. In fact, it is more than double the 2,612,000 U.S. workers who were unemployed for a similar length of time in December 2008. The reality is that once Americans lose their jobs they are increasingly finding it difficult to find new ones. Just check out the chart below....



#4) In December, there were also 929,000 "discouraged" workers who are not counted as part of the labor force because they have "given up" looking for work. That is the most since the U.S. government first started keeping track of discouraged workers in 1949. Many Americans have simply given up and are now chronically unemployed.

#5) Some areas of the U.S. are already virtually in a state of depression. The mayor of Detroit estimates that the real unemployment rate in his city is now somewhere around 50 percent.

#6) For decades, our leaders in Washington pushed us towards "a global economy" and told us it would be so good for us. But there is a flip side. Now workers in the U.S. must compete with workers all over the world, and our greedy corporations are free to pursue the cheapest labor available anywhere on the globe. Millions of jobs have already been shipped out of the United States, and Princeton University economist Alan S. Blinder estimates that 22% to 29% of all current U.S. jobs will be offshorable within two decades. The days when blue collar workers could live the American Dream are gone and they are not going to come back.

#7) During the 2001 recession, the U.S. economy lost 2% of its jobs and it took four years to get them back. This time around the U.S. economy has lost more than 5% of its jobs and there is no sign that the bleeding of jobs is going to stop any time soon.

#8) All of this unemployment is putting severe stress on state unemployment funds. At this point, 25 state unemployment insurance funds have gone broke and the Department of Labor estimates that 15 more state unemployment funds will likely go broke within two years and will need massive loans from the federal government just to keep going.

#9) 37 million Americans now receive food stamps, and the program is expanding at a pace of about 20,000 people a day. The United States of America is very quickly becoming a socialist welfare state.

#10) The number of Americans who are going broke is staggering. 1.41 million Americans filed for personal bankruptcy in 2009 - a 32 percent increase over 2008.

#11) For decades, the fact that the U.S. dollar was the reserve currency of the world gave the U.S. financial system an unusual degree of stability. But all of that is changing. Foreign countries are increasingly turning away from the dollar to other currencies. For example, Russia’s central bank announced on Wednesday that it had started buying Canadian dollars in a bid to diversify its foreign exchange reserves.

#12) The recent economic downturn has left some localities totally bankrupt. For instance, Jefferson County, Alabama is on the brink of what would be the largest government bankruptcy in the history of the United States - surpassing the 1994 filing by Southern California's Orange County.

#13) The U.S. is facing a pension crisis of unprecedented magnitude. Virtually all pension funds in the United States, both private and public, are massively underfunded. With millions of Baby Boomers getting ready to retire, there is simply no way on earth that all of these obligations can be met. Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the collective unfunded pension liability for all 50 U.S. states for Forbes magazine. So what was the total? 3.2 trillion dollars.

#14) Social Security and Medicare expenses are wildly out of control. Once again, with millions of Baby Boomers now at retirement age there is simply going to be no way to pay all of these retirees what they are owed.

#15) So will the U.S. government come to the rescue? The U.S. has allowed the total federal debt to balloon by 50% since 2006 to $12.3 trillion. The chart below is a bit outdated, but it does show the reckless expansion of U.S. government debt over the past several decades. To get an idea of where we are now, just add at least 3 trillion dollars on to the top of the chart....



#16) So has the U.S. government learned anything from these mistakes? No. In fact, Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $2 trillion to pay its bills, a record increase that would allow the U.S. national debt to reach approximately $14.3 trillion.

#17) It is going to become even harder for the U.S. government to pay the bills now that tax receipts are falling through the floor. U.S. corporate income tax receipts were down 55% in the year that ended on September 30th, 2009.

#18) So where will the U.S. government get the money? From the Federal Reserve of course. The Federal Reserve bought approximately 80 percent of all U.S. Treasury securities issued in 2009. In other words, the U.S. government is now being financed by a massive Ponzi scheme.

#19) The reckless expansion of the money supply by the U.S. government and the Federal Reserve is going to end up destroying the U.S. dollar and the value of the remaining collective net worth of all Americans. The more dollars there are, the less each individual dollar is worth. In essence, inflation is like a hidden tax on each dollar that you own. When they flood the economy with money, the value of the money you have in your bank accounts goes down. The chart below shows the growth of the U.S. money supply. Pay particular attention to the very end of the chart which shows what has been happening lately. What do you think this is going to do to the value of the U.S. dollar?....



#20) When a nation practices evil, there is no way that it is going to be blessed in the long run. The truth is that we have become a nation that is dripping with corruption and wickedness from the top to the bottom. Unless this fundamentally changes, not even the most perfect economic policies in the world are going to do us any good. In the end, you always reap what you sow. The day of reckoning for the U.S. economy is here and it is not going to be pleasant.

One in 7 U.S. mortgages foreclosing or delinquent

NEW YORK, Nov 19 (Reuters) - A record one in seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter, according to fresh data signaling the recovery in the housing market will be tepid at best.

U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process also jumped to records from July to September, the Mortgage Bankers Association said on Thursday.

Rising job losses were behind the increasingly bleak portrait of the housing market in a trend that will continue into next year, the group said in data that adds to recent evidence of a still-struggling housing market.

Housing and related business account for about 20 percent of the economy and recovery is essential to bring unemployment down from a 26-1/2-year high and kick-start economic growth.

Yet record foreclosures will add to the growing supply of unsold homes, sapping the housing market as it attempts to recover from the worst slump since the Great Depression.

The MBA said the percentage of loans in foreclosure rose to 1.42 percent, from 1.36 percent in the second quarter and 1.07 percent in the third quarter of 2008.

"Foreclosures remain the biggest hurdle to the housing recovery," said Michelle Meyer, economist at Barclays Capital in New York.

"Foreclosures will be worse in the first part of 2010 and we do not see a peak in foreclosures until the middle of next year."

More conservative, prime fixed-rate loans often sold to homebuyers with the highest credit ratings continued to represent the largest share of foreclosures started and were the biggest driver of the increase in foreclosures, said MBA chief economist Jay Brinkmann.

The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of loans outstanding, up from 9.24 percent in the second quarter and 6.99 percent a year earlier, the MBA said.

The delinquency rate broke the record set last quarter, based on MBA data going back to 1972. The rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure.

The latest splash of cold water follows a stunning 10.6 percent plunge in housing starts for October, reported on Wednesday. For details see [ID:nN1899353].

The combination of loans in foreclosure and at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever seen in the survey.

In fact, 33 percent of foreclosures started in the third quarter were on prime fixed-rate loans and those loans were 44 percent of the quarterly increase in foreclosures, Brinkmann said.

"The foreclosure numbers for prime fixed-rate loans will get worse because those loans represented 54 percent of the quarterly increase in loans 90 days or more past due but not yet in foreclosure," he said.

The percentage of loans in the foreclosure process at the end of the third quarter was 4.47 percent, up from 4.30 percent in the second quarter and 2.97 percent a year earlier.

Florida, California, Arizona and Nevada have a disproportionate share of these problems, Brinkmann said.

They had 43 percent of all foreclosures started in the third quarter, down from 44 percent both last quarter and the third quarter last year. They had 37 percent of the nation's prime fixed-rate loan foreclosure starts and 67 percent of the prime adjustable-rate mortgage, or ARM, foreclosure starts.

At the end of September, 25 percent of mortgages in Florida were at least one payment past due or in foreclosure, he said.

OUTLOOK BLEAK

The outlook is for delinquency and foreclosure rates to continue to worsen before they improve, Brinkmann said.

"First, it is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace," he said.

"Second, the number of loans 90 days or more past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently for sale, although there is likely some overlap between the two numbers," he said.

Therefore, the ultimate resolution of these seriously delinquent loans will put added pressure on the hardest hit sections of the country, Brinkmann said.

Reuters

Ron Paul Calling For Revolution? Great Speech!!

SEC order helps maintain AIG bailout mystery

* SEC agreed with AIG to keep some bailout terms sealed

NEW YORK, Jan 11 (Reuters) - It could take until November 2018 to get the full story behind the U.S. bailout of insurance giant American International Group (AIG.N) because of an action taken last year by the Securities and Exchange Commission.

In May, the SEC approved a request by AIG to keep secret an exhibit to a year-old regulatory filing that includes some of the details on the most controversial aspect of the AIG bailout: the funneling of tens of billions of dollars to big banks like Societe Generale, Goldman Sachs (GS.N), Deutsche Bank (DBKGn.DE) and Merrill Lynch.

The SEC's Division of Corporation Finance, in granting AIG's request for confidential treatment, said the "excluded information" will not be made public until Nov. 25, 2018, according to a copy of the agency's May 22 order.

The SEC said the insurer had demonstrated the information in the exhibit, called Schedule A, "qualifies as confidential commercial or financial information."

The expiration date for the SEC order falls on the 10th anniversary of Federal Reserve of New York's decision to provide emergency financing to an entity set up to specifically acquire some $60 billion in collateralized debt obligations from 16 banks in the United States and Europe.

All the banks that got money from the Fed-sponsored entity -- Maiden Lane III -- had purchased insurance contracts, or credit default swaps, on those mortgage-related securities from AIG.

The SEC's decision to approve AIG's request for confidential treatment got scant attention at the time. But it could spark controversy now following the release last week of 14-month-old emails that reveal that some at the New York Fed had discussions with AIG officials about how much information should be disclosed to the public about the Maiden Lane III transaction.

The New York Fed, then led by Treasury Secretary Timothy Geithner, plays a critical role in the world of finance given its close dealings with all the major Wall Street banks, many of which were counterparties of AIG.

SEC spokesman John Nestor declined to comment on the reasons for granting AIG's request to treat the exhibit as confidential.

In a typical year, the SEC receives 1,500 requests from U.S. companies for confidential treatment for portions of regulatory filing, said Nestor. The agency grants those requests, "all or in part," 95 percent of the time, he said.

It's not clear what information is in the exhibit beyond a listing of the 16 banks that were beneficiaries of the Maiden Lane transaction. Last March, under pressure from Congress, AIG released the names of the banks that sold CDOs to Maiden Lane and how much money the banks got in the process.

When AIG filed the Schedule A exhibit with the SEC, it redacted the information it wanted to keep confidential, in anticipation regulators would approve its request.

The Fed's bailout of AIG long has been controversial because the banks that sold CDOs to Maiden Lane III were paid 100 percent of face value, even though many of the securities were worth substantially less at the time of the government bailout.

Last Thursday the furor over the Maiden Lane transaction was reignited after Rep. Darrell Issa, a California Republican, released copies of emails detailing discussions between the New York Fed and AIG over how much information to disclose.

The emails have provided fresh ammunition for critics of Geithner. New York Fed General Counsel Thomas Baxter Jr. said in a letter to Issa's office that Geithner "played no role in, and had no knowledge of" the emails.

Issa, the highest-ranking Republican on the House Committee on Oversight and Government Reform, said the panel will soon hold hearings about how information was disclosed to the public about the Maiden Lane deal.

Issa's spokesman Kurt Bardella declined to comment on the SEC's handling of the AIG's confidentiality request.

But Issa, in a prepared statement, said "as much information as possible should be made available to Congress to review the details and decisions" regarding the payments.

The batch of emails released by Issa discussed the SEC's requests for more information about the exhibit that AIG wanted to keep secret. But the emails did not mention the SEC's decision to grant AIG's request for confidential treatment.

Dollar falls, sending gold to record high

Mon Nov 16, 7:05 am ET
LONDON (AFP) – The dollar fell on Monday as China accused the United States of increasing protectionism and following unexpectedly strong Japanese economic growth figures, pushing gold prices to a record high point.

US President Barack Obama is in China for a three-day mission aimed at convincing Beijing that Washington is its partner, not its rival.

As the dollar dropped against the euro and yen, gold struck an all-time peak of 1,133.20 dollars an ounce.

In late morning trading here, the euro climbed to 1.4969 dollars from 1.4918 dollars late in New York on Friday.

Against the Japanese currency, the dollar fell to 89.42 yen from 89.66 yen late on Friday.

"Far better than expected Japanese third-quarter GDP data...spurred risk appetite," said Jane Foley, an analyst for online trading firm Forex.com.

"This pushed the euro close to 1.50 dollars in early European hours."

Japan's gross domestic product (GDP) grew 1.2 percent in the third quarter of 2009 from the previous quarter -- the fastest pace in two-and-a-half years and much better than expected, the government reported.

The euro also gained as higher commodity prices, driven by hopes of a global economic recovery, spurred investor risk appetite, market watchers said.

"Gains in gold prices lifted demand for currencies of commodities-exporting nations like the Aussie against the US dollar," Osao Iizuka, chief foreign exchange trader at the Sumitomo Trust and Banking Co, told Dow Jones Newswires.

"Then the selling of the US dollar spread across other currencies, causing the euro to gain ground," he said.

Comments from a Chinese commerce ministry spokesman accusing the US of protectionism earned a quick rebuttal from senior US officials speaking in Beijing, who said a trade war was in neither country's best interests.

"We used to see that the United States was an innovation-driven US. But what we are seeing now is an increasingly protective US," commerce ministry spokesman Yao Jian told reporters at a regular monthly briefing.

"It is necessary to create for enterprises a stable and predictable environment, including (stable) economic and foreign exchange policies, to help the global economy grow steadily and China's exports recover," he said.

Yao added that the United States had "continued" to let the dollar drop "to improve its competitiveness" while pressing for the yuan's appreciation.

"It is detrimental to the global recovery and is unfair for (the US) to require other (currencies) to rise while allowing the dollar to keep slumping," Yao told reporters.

But US Commerce Secretary Gary Locke said Washington was not at fault.

"The United States is not engaged in increased protectionism," Locke told a luncheon in Beijing.

Obama is expected to raise trade tensions with his counterpart Hu Jintao and also urge China to reconsider the value of the yuan, which has been effectively pegged to the dollar since July 2008 and is deemed by Washington as being kept artificially low to boost Chinese exports.

In London on Monday, the euro was changing hands at 1.4969 dollars against 1.4918 dollars late on Friday, at 133.85 yen (133.57), 0.8966 pounds (0.8937) and 1.5096 Swiss francs (1.5093).

The dollar stood at 89.42 yen (89.66) and 1.0085 Swiss francs (1.0117).

The pound was at 1.6695 dollars (1.6693).

On the London Bullion Market, the price of gold jumped to 1,131.70 dollars an ounce from 1,104 dollars an ounce late on Friday.

China to Buy $2 Billion worth of US Mortgages

China Investment Corp, the country's $200 billion sovereign wealth fund, is set to pour up to $2 billion soon into the U.S. mortgage system by hiring mandates under the U.S. Treasury-backed Public-Private Investment Plan (PPIP), sources told Reuters.

Under the PPIP program launched earlier this year the U.S. government plans to seed a number of public-private investment funds that would combine taxpayer money with private capital to buy as much as $40 billion in toxic securities from banks.

CNBC: USD is not looking good.

And while the White House struggles with issues like health care and puts a fiscal policy exit strategy on the back burner, there are big concerns of about the direction of the U.S. dollar.

“I’m deeply worried about the worries of those investors who have invested a lot, really a lot into the dollar” like the Chinese, Japanese, Arabs and Russians, he said.

“If they have second thoughts about the quality of this currency then the dollar is bound to weaken” which means higher long-term interest rates for a country where government debt is approaching 100 percent of gross domestic product, he said.

If that happens, “2010 could be a worrisome year for all of us,” he said.

Click here for rest of Story ...