New Fiscal Showdown Builds Over Debt Limit Michael R. Crittenden and Pedro Da Costa The Wall Street Journal January 26, 2014 Republican lawmakers insisted Sunday that any increase in the nation’s borrowing authority should have policy changes attached, a demand at odds with White House officials and Senate Democrats, who held firm in their position that Congress must pass a “clean” debt-limit increase. Senate Minority Leader Mitch McConnell (R., Ky.), appearing on “Fox News Sunday,” said it was “irresponsible” and “unreasonable” for President Barack Obama to call on Congress to raise the debt ceiling without being open to policy changes. White House advisor Dan Pfeiffer countered that Republicans should “spare the country the drama” of another fiscal showdown like the one that led to a government shutdown in October. “The American people should not have to pay the Republicans in Congress’ ransom for doing their most basic function, which is paying the bills,” Mr. Pfeiffer said on “Fox News Sunday.” Democrats and Republicans girding for another political fight over increasing the nation’s debt limit do not have a lot of time to debate the issue. Treasury Secretary Jacob Lew, in a letter to Congress last week, said the U.S. government would exhaust its borrowing powers by late February without action by Congress. The White House and Senate Democrats have repeatedly said they are not open to negotiating with Republicans on policy changes in return for increasing the debt ceiling. Mr. Pfeiffer confirmed that position Sunday and was echoed by top Democratic leaders. “We don’t want to risk the full faith and credit. We can debate all of these other issues at a different time and place,” Sen. Charles Schumer (D., N.Y.) said on CBS’s “Face the Nation.” Republicans lawmakers have already begun to consider what policy riders they could attach to a debtceiling increase to force negotiations. House Republicans leaders are mulling a number of discrete policy changes, including some to the 2010 health-care law, as their opening gambit in negotiations with Democrats. A decision on how to proceed is likely to come after a House GOP retreat in Maryland at the end of this week. “It’s worth noting, in the past the debt ceiling has been the most effective lever point for structural reform,” Sen. Ted Cruz (R., Texas) said on “Face the Nation,” insisting that “we shouldn’t just write a blank check.” How far Republican leaders will push the issue remains an open question. Democrats are quick to point out that Republicans shouldered much of the blame for October’s government shutdown, while GOP leaders are wary of distracting voters’ attention away from the rocky rollout of the Affordable Care Act. “We should not play Russian roulette with America’s economy,” Sen. Richard Durbin (D., Ill.) said on NBC’s “Meet the Press” on Sunday.
Is A Major Gold Scandal Going Mainstream? Washington’s Blog January 27, 2014
We noted in 2012 that there are serious questions as to whether the Fed and other central banks really have the gold holdings which they claim. This story is starting to go mainstream. The Financial Times writes today (h/t Zero Hedge): A year ago the Bundesbank announced that it intended to repatriate 700 tons of Germany’s gold from Paris and New York. Although a couple of jumbo jets could have managed the transatlantic removal, it made security sense to ship the load in smaller consignments. Just how small, and over how long, has only just become apparent. Last month Jens Weidmann, Bundesbank president, admitted that just 37 tons had arrived in Frankfurt. The original timescale, to complete the transfer by 2020, was leisurely enough, but at this rate it would take 20 years for a simple operation. Well, perhaps not so simple. While he awaits delivery, Herr Weidmann is welcome to come and look through the bars in the Federal Reserve’s vaults, but the question is: whose bars are they? In the “armchair farmer” fraud you are told: “Look, this is your pig, in the sty.” It works until everyone wants physical delivery of their pig, which is why Buba’s move last year caused such a stir. After all nobody knows whether there are really 260m ounces of gold in Fort Knox, because the US government won’t let auditors inside. The delivery problem for the Fed is a different breed of pig. The gold market is far more than exchanging paper money for precious metal. Indeed the metal seems something of a sideshow. In June last year the average volume of gold cleared in London hit 29m ounces per day. The world’s mines are producing 90m ounces per year. The traded volume was many times the cleared volume.
The paper gold in the London Bullion Market takes the familiar forms that bankers have turned into profit machines: futures, options, leveraged trades, collateralised obligations, ETFs . . . a storm of exotic instruments, each of which is carefully logged, cross-checked and audited. Or perhaps not. High-flying traders find such backroom work tedious, and prefer to let some drone do it, just as they did with those money-market instruments that fuelled the banking crisis. The drones will have full control of the paper trail, won’t they? There’s surely no chance that the Fed’s little delivery difficulty has anything to do with the cat’s-cradle of pledges based on the gold in its vaults? John Hathaway suspects there is. He worries about all the paper (and pixels) linked to gold. He runs the Tocqueville gold fund (the clue is in the name) and doesn’t share the nearuniversal gloom of London’s gold analysts, who a year ago forecast an average $1700 for 2013. It is currently $1,260. As has been remarked here before, forecasting the price is for mugs and bugs. But one day the ties that bind this pixelated gold may break, with potentially catastrophic results. So if you fancy gold at today’s depressed price, learn from Buba and demand delivery. And last week, Glenn Beck – hate him or love him, he’s got the 594th most popular website in the world and many viewers on Dish network and various cable providers – did an entire 20-minute episode on the issue:
Glenn Beck Explains "Rehypothecation" From The Fed, And Whats Happening With The World's Gold VIDEO BELOW http://www.youtube.com/watch?v=NKDHgn7uNYI This story hasn’t yet made it to the New York Times, the Washington Post or network television … but it is gaining momentum.
James Turk: We’re Living Within A Money Bubble Of Epic Proportion investmentwatchblog.com January 27, 2014 Full description and comments:http://www.peakprosperit y.com/podcast… James Turk believes the time we live in now will be studied by future historians for generations to come. Just as we today marvel at the collective madness that resulted in the South Sea and Dutch tulip manias, our age will be known as the era when society lost sight of what money really is. And as result, the wrong kinds of wealth — today, that’s mostly financial assets — are valued and pursued. And just like those bubbles from centuries ago, when the current asset boom goes bust, the value of paper wealth will vaporize. In contrast, those holding tangible productive assets or real money will fare much better on a relative basis. James and co-author John Rubino (of DollarCollapse.com) have recently published a new book covering the details of this prediction called The Money Bubble: What To Do Before It Pops. Within it, they delve into the reasons for why the world is destined for what Ludwig von Mises termed a “crack up boom”: James Turk: We're Living Within A Money Bubble of Epic Proportion VIDEO BELOW http://www.youtube.com/watch?v=noAc_3Tnyns
INFOWARS.COM BECAUSE THERE'S A WAR ON FOR YOUR MIND