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Reversing Europe’s Renationalization

11 April 2012

George Soros
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NEW YORK – Far from abating, the euro crisis has taken a turn for the worse in recent months. The European Central Bank managed to relieve an incipient credit crunch through its long-term refinancing operation (LTRO), which lent over a trillion euros to eurozone banks at one percent. This brought considerable relief to financial markets, and the resulting rally obscured underlying deterioration; but that is unlikely to last much longer.



The fundamental problems have not been resolved; indeed, the gap between creditor and debtor countries continues to widen. The crisis has entered what may be a less volatile but potentially more lethal phase.



At the onset of the crisis, the eurozone’s breakup was inconceivable: the assets and liabilities denominated in the common currency were so intermingled that a breakup would cause an uncontrollable meltdown. But, as the crisis has progressed, the eurozone financial system has been progressively reoriented along national lines.



This trend has gathered momentum in recent months. The LTRO enabled Spanish and Italian banks to engage in very profitable and low-risk arbitrage in their own countries’ bonds. And the preferential treatment received by the ECB on its Greek bonds will discourage other investors from holding sovereign debt. If this continues for a few more years, a eurozone breakup would become possible without a meltdown – the omelet could be unscrambled – but it would leave the creditor countries’ central banks holding large, difficult-to-enforce claims against the debtor countries’ central banks.



The Bundesbank has become aware of the danger. It is now engaged in a campaign against the indefinite expansion of the money supply, and it has started taking measures to limit the losses that it would sustain in case of a breakup. This is creating a self-fulfilling prophecy: once the Bundesbank starts guarding against a breakup, everybody will have to do the same. Markets are beginning to reflect this.



The Bundesbank is also tightening credit at home. This would be the right policy if Germany was a freestanding country, but the eurozone’s heavily indebted member countries badly need stronger demand from Germany to avoid recession. Without it, the eurozone’s fiscal compact,” agreed last December, cannot possibly work. The heavily indebted countries will either fail to implement the necessary measures, or, if they do, they will fail to meet their targets, as collapsing growth drives down budget revenues. Either way, debt ratios will rise, and the competitiveness gap with Germany will widen.



Whether or not the euro endures, Europe faces a long period of economic stagnation or worse. Other countries have gone through similar experiences. Latin American countries suffered a lost decade after 1982, and Japan has been stagnating for a quarter-century; both have survived. But the European Union is not a country, and it is unlikely to survive. The deflationary debt trap is threatening to destroy a still-incomplete political union.



The only way to escape the trap is to recognize that current policies are counterproductive and change course. I cannot propose a cut-and-dried plan, but three observations stand out. First, the rules governing the eurozone have failed and need to be radically revised. Defending a status quo that is unworkable only makes matters worse. Second, the current situation is highly anomalous, and some exceptional measures are needed to restore normalcy. Finally, the new rules must allow for financial markets’ inherent instability.



To be realistic, the current fiscal compact governing the eurozone must be taken as the starting point. Of course, some already-visible defects will need to be modified. Notably, the compact should count commercial as well as financial debts, and government budgets should distinguish between investments that pay and current spending. In order to avoid cheating, what qualifies as investment should be subject to approval by a European authority. An enlarged European Investment Bank could then co-finance investments.



Most importantly, some extraordinary measures need to be invented to bring conditions back to normal. The EU’s fiscal charter compels member states annually to reduce their public debt by one-twentieth of the amount by which it exceeds 60% of GDP. I propose that member states jointly reward good behavior by taking over that obligation.



The member states have transferred their seignorage rights to the ECB, and the ECB is currently earning about €25 billion ($32.7 billion) annually. The seignorage rights have been estimated by Willem Buiter of Citibank and Huw Pill of Goldman Sachs, working independently, to be worth between €2-3 trillion, because they will yield more as the economy grows and interest rates return to normal. A Special Purpose Vehicle (SPV) owning the rights could use the ECB to finance the cost of acquiring the bonds without violating Article 123 of the Lisbon Treaty.



Should a country violate the fiscal compact, it would wholly or partly forfeit its reward and be obliged to pay interest on the debt owned by the SPV. That would impose tough fiscal discipline, indeed.


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By rewarding good behavior, the fiscal compact would no longer constitute a deflationary debt trap, and the outlook would radically improve. In addition, to narrow the competitiveness gap, all members should be able to refinance their existing debt at the same interest rate. But that would require greater fiscal integration, so it would have to be phased in gradually.



The Bundesbank will never accept these proposals, but the European authorities ought to take them seriously. The future of Europe is a political issue, and thus is beyond the Bundesbank’s competence to decide.



George Soros is Chairman of Soros Fund Management and Chairman of the Open Society Institute. A pioneer of the hedge-fund industry, he is the author of many books, including The Alchemy of Finance and The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means.

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Copyright Project Syndicate - www.project-syndicate.org


FTW Economic Alert
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Global Economic Collapse Imminent,
Pension Fund Disaster;
Stocks, Dollar To Free Fall, Gold To Skyrocket






By Michael C. Ruppert

7-8-2
 
[Ed. Note: The last time FTW issued an emergency economic bulletin to its subscribers was Sept. 9. At that time a derivatives investment bubble on the verge of implosion, a 900-point drop in the Dow Jones average and a pending liquidity crisis signaled a crash on the order of 1929. Only the attacks of Sept. 11 and massive intervention from the U.S. Treasury and Federal Reserve prevented the collapse. Investors blamed the ensuing market losses on the attacks.
 
 
The situation now is much, much worse as more factors combine to suggest that foreign investors and trust in the U.S. economy might soon be a thing of the past. Your pension is at risk today and your home may be at risk in six months to a year.
 
 
One economic analyst has suggested that a nuclear exchange between India and Pakistan might be the perfect cover for the biggest financial wipe out in human history. I think that an ill-conceived and risky invasion of Iraq might serve the same purpose. From consumer confidence, to corporate accounting, to the dollar, to gold, to foreign capital flight, to pension fund wipe outs, to the derivative bubble, to debt, there is not a single economic indicator that is not flashing red.
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The warnings are as clear, explicit and well-documented as were the warnings received by the U.S. government throughout summer 2001 that a terrorist attack against the World Trade Center would take place during the week of Sept. 9 using hijacked airliners from United and American airlines. Nothing was done to prevent that and apparently nothing is being done now in spite of the fact that $4.2 trillion of your money has been stolen right in front of your eyes.
 
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There was no single reason for the attacks of 9-11. I have cited oil, drug cash and geopolitics as three of the primary motives for the U.S. government´s complicity in allowing the attacks to happen. But what also cannot be overlooked is the fact that 9-11 effectively masked a major economic crash that was certain to occur. That crash was not been averted by the extraordinary financial maneuverings of the Bush administration that followed 9-11. It was merely postponed for a very short time.--MCR ]
 
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July 8, 2002, 4 PM PDT (FTW) -- Reuters, London published a story June 27 based upon an interview with billionaire financier George Soros. The headline read, Soros Blames Bush Factor for Dollar s Fall.
 
 
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George Soros is a man to be reckoned with. Emerging from WWII as someone who allegedly cooperated with Nazi occupation troops by identifying assets to be seized, the European financier is one of the most powerful financiers on the planet. He is credited with successfully assaulting the currencies of several nations, including Britain´s pound. He recently participated in the World Economic Forum in New York where he was seated on the dais with the likes of Zbigniew Brzezinski, Hillary Clinton, Shimon Peres and academics from Ivy League colleges. It is more than just a case that when Soros speaks, people listen. The truth is that when Soros speaks, markets move.
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His comments were brutal.
 
.The international financial system is coming apart at the seams & There is a lack of confidence. That´s what I call the Bush factor in the economy. There is a liquidity crisis in financial markets, said Soros. Everybody´s going home. The Swiss banks are going home. The strengthening of the yen clearly shows repatriation. Translated, that means that foreign capital is fleeing the United States in the wake of as yet not fully realized accounting scandals that will, according to Fox News on July 6, take an estimated $600 billion in value out of the U.S. stock market this year. One of the many smoke alarms triggered by this is the fact that the U.S. economy needs an estimated $1.5 trillion per year in new foreign investment just to remain solvent.

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Reuters quoted Soros as saying that the global economic downturn had exposed the weaknesses of corporate America and how the U.S. administration runs the international economic system.
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Soros is aware of what FTW and noted economic thinkers like Catherine Austin Fitts, former assistant secretary of housing, and British economist Chris Sanders of Sanders Research have been saying for years: as much as half of the value of the U.S. financial markets is derived from criminal endeavors, whether it is the laundering of drug money or the fraudulent cooking of financial statements to boost profits..
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PUMP AND DUMP
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It s a simple scheme really. The mafia knows it quite well. By whatever means necessary, drive a stock´s price higher and higher. Make it look like a mover, even if it´s a dog. Cook the books and get suckers to buy in, helping to drive the price even higher. When you think the balloon will pop, call all your buddies and sell your shares. That effectively steals all the money that the suckers put in. When the stock crashes, the suckers who weren´t part of the scheme will take the loss, whether they be individual investors or the New York City police and fire pension fund.
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The U.S. stock markets have been pumped to the breaking point, and they are trying very hard to dump right now. Most sober analysts have agreed for a long time that the prices are over-inflated by as much as 50 percent or more; that price/earnings ratios, now averaging more than 30-1, should properly be corrected to about 15-1. That means the Dow should be at 5,000 or lower. We´ll talk about how the meltdown is being temporarily prevented later. It is first necessary to examine the severity of the crisis.
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If I mention the bookkeeping problem that´s threatening Wall Street right now and asked you how many companies were being investigated for or had announced overstated earnings, how many would you say? Six? Eight? Try 17.* Seven of them are energy companies, and this adds another degree of imperative for Congress to force the White House to compel full disclosure from Vice President Cheney´s 2001 energy task force. But he has a problem there too. One of the companies under investigation for fraudulent bookkeeping is Halliburton. Cheney was its CEO until taking office, and the fraudulent accounting occurred while he was the boss.
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Did you think that WorldCom was a big one, having illegally claimed $3.8 billion in earnings to boost its share price? On July 5, according to Newsday, the energy giant Reliant Resources restated its 1999-2001 earnings by chopping off $7.8 billion in revenue. Just today it was disclosed on CNN that the pharmaceutical giant Merck has overstated its revenues by $14 billion.
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At the core of all these accounting problems is a non-transparent form of corporate bookkeeping called pro forma. As opposed to the more transparent and rigid practice called GAAP (Generally Accepted Accounting Practices), pro forma bookkeeping allows for all kinds of manipulations like hiding debt as income, double booking revenues and sneaking drug money onto the bottom line. What has yet to be fully explored by any of the major media is which other major corporations use pro forma bookkeeping. The reason is that all of the major media companies use it too. Also on the pro forma system are GE (NBC), AOL/Time Warner (CNN), Microsoft (MS-NBC), Viacom (CBS), Disney (ABC), IBM, Intel, Cisco Systems, Sun Micro, Tribune (the Chicago Tribune and the L.A. Times), The Washington Post (Newsweek) and the New York Times.
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The accounting scandals are starting to nip at the heels of these and other cornerstones of American capital markets. Trading of GM shares was halted June 27 after unconfirmed market rumors of accounting irregularities. And New York Times reporter Gretchen Morgenson offered the suggestion in an April 14 story that GE might be cooking its books. Thanks to PBS´s Lowell Bergman in a 2000 report, we already know that GE has been called on the carpet for accepting drug cash, lots of drug cash, as payment for the good things it brings to life. So has Philip-Morris.
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How much foreign capital can Wall Street expect to attract, let alone retain if foreign investors expected to be wiped out for leaving their money here? American investors, especially pension funds are still putting money in or leaving it in place in the stock market. Are there other alarm bells that mom and pop investors should be hearing? What will happen to the value of the American brand name as a trustworthy place to invest money if GM is ultimately revealed to have cooked its books?
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A look at the real health of the stock market is revealing. On April 26, The International Forecaster made two chilling observations:

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At the time of the AOL Warner merger the combined companies were worth $290 billion. They are presently worth $85 billion. Their quarterly loss is estimated to be $50 billion. This could be the business mistake of the new century &
 
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The downgrade of Bristol Myers Squibb to Aaa by Moody´s leaves only 8 AAA-rated companies left. They are GE, UPS, AIG, ExxonMobil, Johnson & Johnson Berkshire Hathaway, and Pfizer & Merck. In 1990 there were 27 AAA companies and in 1979 there were 58.
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.THE DOLLAR
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Soros was extremely upset about what was happening to the U.S. dollar, which has been falling against various currencies for about a month. The key to understanding this lies in the lesson I learned at an economic conference in Moscow in spring 2001. Almost all countries in the world use the U.S. dollar as their reserve currency. They have bought trillions and are holding them. If another currency becomes more valuable or is viewed as more stable, then the world will switch currencies, and trillions of dollars will come back into the country -- inflation would be inevitable and the dollar would lose its value.
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In the week ending July 5, the dollar closed consistently at or near parity with the Euro. As of this posting it sits at (US) 99 cents and has been hovering there for more than a week. Since various economic reforms from the 1950s to the 1970s removed the dollar from the gold standard it has been a fiat currency, unconnected to any measure of intrinsic value. The full faith and credit of the United States -- along with its military -- have given the dollar its value. The Euro is partially backed by gold and there have been lingering but credible rumors for years that the U.S.´s gold reserves have been moved to Europe.
 

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Soros told Reuters, But the declines in the markets have gone somewhat further than what would be the natural consequences of the previous exuberance &
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The decline in the dollar came as a surprise to me & I attribute it to lack of confidence in the management of affairs by the United States, its unilateralism, the pursuit of national self-interests and not living up to the responsibility of being the dominant financial power in the world, not taking care of the system.
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What is Soros setting us up for? The pumping of the stock market occurred while Bill Clinton was president. Yet he´s blaming Bush. Is another Herbert Hoover being created before the big crash? The signs are there. Britain´s paper the Independent ran a June 28 story headlined, WorldCom scandal: Currencies: Latest Wall Street disaster sends investors all over the world running for cover. The lead read, The U.S, dollar yesterday moved to the brink of free fall, a nightmare scenario for the world economy, after reverberations from the WorldCom scandal triggered panic among investors..
 
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That was before the announcements about Reliant and Merck.
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The story painted a glum picture. This is threatening to become a disorderly market, David Bloom, global economist at HSBC said. There´s no better way to show loss of confidence in a country than through its currency.
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Quoting another financial expert, the Independent reported, If the dollar´s decline turns explosive, this could compound the problems of the U.S. asset markets as currency losses raise fears of massive capital flight out of the U.S.
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.GOLD

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For years the price of gold -- the ultimate smoke alarm signaling a failing economy -- has been artificially suppressed by paper traders who are capable of flooding the commodities markets with gold future options when the price needs to be kept low. Why low? Because rising gold prices have always signaled inflation and/or a lack of faith in the financial markets. Years of efforts by the Gold Anti-Trust Action Committee, or GATA, while not being successful at halting or fully exposing the artificial manipulation of gold prices by the Federal Reserve, major banks, the Bank of International Settlements and major commodities traders, have opened the eyes of many to overt manipulations in gold pricing.
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As one investment banker told me recently, there is five times more paper gold than there is actual gold out of the ground. If gold prices ever pop they ll be out of sight.

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Over the past year, certainly since 9-11, gold prices have often moved in exactly the opposite direction (lower) from what conditions would dictate. The financial effort required to do this requires the support of powerful state banking institutions and cash to service the paper. Gold has risen in price from around $280 an ounce nine months ago to a high of around $327 in recent weeks. That´s a return on investment of 16 percent -- far better than the Dow has done this year.
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In our last economic bulletin FTW noted that the Dow had lost close to 900 points. Since March of this year it had lost, before the profit-seeking 300-point rally of July 5, almost 1,600 points. Yet even as the economic news worsened last week, the price of gold peaked and then started to fall. As of this writing it sits at $312 an ounce. The gold price dropped as the worst economic news was hitting the streets. Why?
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As one astute gold watcher, Jay Taylor, summed it up in an October 2000 newsletter, Every single time there is concern about a stock market debacle, gold is bombed. Always.
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On June 5 GATA described one of the recent moves to fiddle with gold prices. MiningWeb.com has just reported an explanation for the plunge in the gold price today. The plunge, MiningWeb says, came in the wake of a large after-market trade in New York last night, with an unnamed fund liquidating 5,000 futures contracts, a move which knocked the price first to $326/oz, then to $324/oz, and finally to $321/oz, & The sale was executed using the Access system on Comex, which allows for anonymous trading by large funds.
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There are unmistakable signs of market manipulation now with regards to both gold and stocks. Who is it that keeps the markets from correcting, only making the inevitable crash that much worse? It s called the Plunge Protection Team, or PPT. And now it has to have the liquidity to flood both the gold and the stock markets with enough cash to keep the bubbles from bursting. This, at the same time that major banks like J.P. Morgan/Chase and Citigroup sit atop huge derivatives bubbles that have been estimated at between $150 trillion and $300 trillion. Most major U.S. banks have heavy exposure as a result of the mushrooming financial scandals. All of these bubbles require cash, and this is the liquidity Mr. Soros is rightly worried about.
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Rep. Ron Paul, R-Texas, has been challenging the gold manipulation for years. He has been one of the few fiscally sane voices anywhere on Capitol Hill. His website has a listing of his writings and much needed legislation he has or is sponsoring.

.Only recently have there been signs that the PPT is also working in the U.S. equity (stock) markets
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THE PLUNGE PROTECTION TEAM

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The Washington Post acknowledged the existence of a select group of four who could and would intervene in markets to prevent massive capital flight and a run on shares that would cause an economic collapse if there weren´t enough cash to pay out during a massive sell off. In his Feb. 23, 1997 story headed Plunge Protection Team, Post reporter Brett Fromson identified the Federal Reserve chairman, the Securities and Exchange Commission chairman, the chairman of the Commodities Futures Trading Commission, and the secretary of the Treasury as the team´s key players. The intervention of the team in the 1998 crash of Long Term Capital Management, after it became wildly overexposed in the gold market, revealed that private institutions such as Goldman Sachs, J.P. Morgan, Merrill Lynch and other major banks could be involved as well.


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Fromson quoted a former team member as saying, In a crisis, a lot of deference is paid to the Fed. They are the only ones with any money. Or, I might add, the ability to print it.
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Pointing to the 1987 stock market crash, the single largest crash in history, Fromson observed, The Fed kept the markets going by flooding the banking system with reserves and stating publicly that it was ready to extend loans to important financial institutions, if needed.
 
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On April 5, 2000 New York Post reporter John Crudele reported that the stock market had turned back from the abyss. After a 500-point drop that looked like it was leading to a meltdown, & someone started buying large amounts of stock index futures contracts through two major brokerage firms -- Goldman Sachs and Merrill Lynch & Unless the brokers tell, there is no way of knowing which of their clients were making the purchases & Then the market rebounded.
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Calling it the PPT, Crudele both referred to the 1997 Washington Post story and suggested that private banks were acting as team captains.
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Gold activist David Guyatt, relying on information obtained from GATA Chairman Bill Murphy, pointed to the PPT in October 2000. The hand of the Plunge Protection Team (PPT) is clearly visible for the first time. The entire short gold play over the last few years is a technique that has been used to prop up key stocks and fund futures operations. In the simplest form it works like this. Borrow (at negligible interest rates) someone´s [America´s , Germany´ s, Britain´s, Goldman Sachs ] gold and sell it in the market. This gives a handsome pool of near-interest-free dollar cash. Whenever the stock market looks shaky, or key stocks come under pressure, dive in and buy, buy, buy &

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But it is not only necessary to manipulate the stock market to succeed. It is also necessary to manipulate the gold price and keep the price of gold below the price PPT sold the leased gold for & This is a game of double jeopardy & The problem the PPT now have is that there is virtually no more official gold left to borrow, wrote Guyatt.
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The causes of this intervention were a pending NASDAQ crash and the imminent downgrading of IBM and Intel stocks.
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And the PPT´s hand has been noted recently from as far away as Australia. Progressive Review Editor Sam Smith recently quoted a story by Richard Bromby of the Australian Financial Review:

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At 2:32 Wednesday [June 26, 2002], New York time, something extraordinary happened at the corner of Wall and Broad streets. The New York Stock Exchange´s Dow Jones industrial index -- struggling since the opening bell after the WorldCom fraud revelations -- threw off its problems. From an intraday low of 8,926.6, the Dow shot skywards to its high of 9,160 at 3:29 PM & Could it be the work of the much talked about, but never seen, Plunge Protection Team? There is a belief that this team represents a powerful and secretive hand that is ready to act at any time the Dow looks ready to tank big-time &
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& London´s Observer newspaper last October reported it had information the plunge team was preparing to spend billions of dollars to avert a repeat of 1929 and 1987.
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The problem is clear: With a strong dollar the PPT has demonstrated that it has enough cash to suppress gold prices or to save the stock market. It may not have enough cash to do both -- especially if the dollar were to suddenly lose its value. Then, all of the chickens that have been locked out will come home to roost with a vengeance.
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As The International Forecaster reported on April 26, The American consumer has run out of credit and buying power & All bets are off if the housing and credit bubbles break and that´s a distinct possibility & Debtor´s prison is drawing nearer. House and Senate conferences are deciding on a new set of rules for Chapter 7 bankruptcy &If the Plunge Protection Team weren´t manipulating the market with all these scandals, the Dow would already be at 4,500.
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REALIZING THE EXTENT OF THE DESTRUCTION
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Not all of the money looted from American taxpayers is going to support the PPT market manipulations. A lot of it is just being stolen.
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According to the Standard and Poor´s website, domestic equity allocation (stock market) of U.S. pension fund investments was near 50 percent by the end of the 1990s. It has topped 50 percent since then.
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Before the 2000 presidential election, candidate George W. Bush promised that he would tap the Social Security Trust Fund only in the event of war, recession or national emergency. On Sept. 11, he was quoted by his budget director, Mitch Daniels, as saying, Lucky me! I hit the trifecta!
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It s not a question about stealing a little here and a little there. It s a question about open, full-scale looting -- but only from the pockets of the American people who, in my opinion, will soon have almost nothing left. Let´s look at the hard numbers of what has been taken and from where. These numbers are by no means exhaustive. It s just what we know about.
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.$34 Billion - Social Security in 2001 (USA Today/Washington Post)
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$160 Billion - Social Security in 2002 (est.) (House Budget Committee)
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$42 Billion - Federal Employees Retirement System (Wall Street Journal 6/13/02)
(to Meet 2002 budget deficits)

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$2 Billion - Civil Service Retirement and Disability Fund (ibid)
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$1,100 Billion - Stolen from the Dept. of Defense -- 1999 (Cong. Record and Insight Magazine)
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$2.3 Billion - Stolen from the Dept. of Defense -- 2000 (CBS News)
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$59 Billion - Stolen from HUD -- 1999 (Cong. Record)
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$600 Billion - Shareholder Equity Lost to Financial Fraud -- 2002 (Fox)
$4,297 Billion TOTAL



Pending Thefts:
 
.$845 Billion - Social Security (by 2010) (Washington Post citing Cong. Budget Office figures)


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An anecdotal story reveals the damage to pension funds. If you think that Social Security will be a safety net, please read the above section again. Of course we all know about the Enron employees who were wiped out. But according to the New York Times on April 3, New York City s pension system has lost $9 billion in the wake of recent stock scandals. Imagine the impact if local governments declared bankruptcy or defaulted on their pension obligations. It has been estimated that the California state employee retirement system (CALPERS) has more than 90 percent of its money invested in the stock market.
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..A WORD ABOUT HOUSING
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Most Americans believe that their homes are their last, best retirement insurance. Yet many Americans have mortgaged their homes for 120 percent of value. Their loans are backed with the full faith and credit of the U.S. government through various agencies such as Ginnie Mae, Fannie Mae, Freddie Mac, and the Federal Housing Authority.

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The International Forecaster has predicted that 40 percent of Fannie and Freddie´s loans are going to come back and haunt them. We envision an S&L type bailout of $2.4 trillion down the road. This will be the biggest financial disaster in history.
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The full faith and credit of the U.S. government lie behind these home loans. If the homeowners go broke in an economic crash, they default. If the U.S. government goes broke -- before or after that point -- it defaults, and the holders of U.S. debt ultimately have the right (especially under WTO and globalization) to foreclose on the collateral -- your home loans. In the worst case scenario most of the United States could legally be owned by all of the countries holding U.S. debt -- better described as T-Bills, or U.S. gold, or U.S. stocks.
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.CONCLUSION
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The Great Depression was not an event that wiped out U.S. capitalists. It was an event that made the rich even richer by transferring the wealth of the people into the hands of the wealthy. Legendary is Bank of America´s rise to affluence through real estate foreclosures from 1929-37. Don´t believe for a minute that the richest of the rich will be hurt by the coming collapse. The only ones hurt will be you and me.

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George Soros is a member of the Bilderberger Group, a collection of the wealthiest individuals on the planet. It includes, from the U.S., both Democrats and Republicans, and from Europe and Asia the richest old money that can be found. U.S. participants in this year´s conference included David Rockefeller, Henry Kissinger, former Treasury Secretary Larry Summer, former CIA Director John Deutch and George Soros. It was just after this year´s meeting which ended in early June, that all of the revelations about corporate fraud started to really hit the news. One wonders if it had been on the agenda.

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I also note sadly a recent financial report from the Denver area stating that mortgage foreclosures were going through the roof. This, at the same time that Reuters (July 2, 2002) reported that corporate layoff announcements had risen by 12% in one month. In this context Bush´s tax cuts seem worse than bad judgment. As former Asst Secretary of Housing Catherine Fitts pointed out to me in a last minute e-mail, By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 per cent of the total tax cuts will go to the richest one per cent & Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go to just 1.4 million taxpayers..
 
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Unless you can convince me that gravity might suddenly reverse direction, this collapse is inevitable and imminent. It will be unspeakably brutal. How long do we have? Maybe weeks. Maybe months. Maybe only days. But the house of cards is already starting to collapse all around us. A major terrorist attack, the folly of an invasion of Iraq or a nuclear exchange between India and Pakistan would only be a momentary diversion from a much greater tragedy.
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.Suggested Resources:
www.sandersresearch.com
www.solari.com
www.gata.org
www.house.gov/paul/

* -- Enron, WorldCom, QWest, Tyco, ImClone, Martha Stewart (the company), Global Crossing, Dynegy, CMS Energy, El Paso, Halliburton, The Williams Co., Clear Channel (which owns approximately 1,200 radio stations), Adelphia, Reliant, Motorola and Merck. [Source: CNN and various news services]