Moody Cuts UK Credit Rating [armstrongeconomics]


If anyone doubts we are in a serious Sovereign Debt Crisis, then explain why even the Credit Agencies are cutting the credit ratings of sovereign nations. There was France, and now there is the UK. Moody’s cuts the UK Credit Rating to Aa1 from Aaa, citing weakness in the nation’s medium-term growth outlook that it now expects to extend for a number of years. Europe should put in a NEGATIVE growth rate in GDP for 2013. We are in absolute denial that the world around us is crumbling. Only those who are on point and think outside of the box will even survive. The rest as usual will see their futures stripped from them. This will be the most important event in our lifetimes.

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Tony Blair widens his web via the stock markets [telegraph]

His investment unit, headed by a former senior banker at Barclays, reflects the former prime minister’s growing business empire, worth tens of millions of pounds.

Five members of his staff are registered with the Financial Services Authority and trading screens have been installed at Mr Blair’s offices, in Grosvenor Square in central London.

Mr Blair has established a complex web of companies, designed, according to accountants, to hide just how much money he makes and from where his money comes.

He has denied being “super rich”, but having built up a property portfolio of several homes and two multimillion-pound businesses, it is expected that he will enter the rich-lists for the first time this year with a fortune of somewhere between £35 million and £60 million.

Details of his trading desk have been pieced together by The Sunday Telegraph, which has conducted a series of investigations into Mr Blair’s finances since he left office in 2007.

Stock market trading desk installed at Tony Blair's headquarters

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Sterling crisis looms as UK current account deficit balloons [Telegraph]

It’s the sort of problem you might have thought disappeared with the 1970s, but as the Coalition renews its wedding vows, that’s the unsettling possibility raised by economists at both HSBC and Royal Bank of Scotland. With fears of a eurozone break-up, a calamitous fiscal contraction in the US, and a hard landing in China now fast receding, it is possible financial markets will refocus their attentions on more conventional concerns. The failings of the UK economy might be prime among them.

Some of the reasons for this need little explanation. Low growth has undermined attempts to reduce the fiscal deficit, which remains one of the highest in the OECD. This in turn is likely to lead to the loss of Britain’s prized triple A credit rating this year, making the UK comparatively less attractive to overseas investors. What’s more, capital flows from the eurozone to perceived “safe havens” such as the UK are slowing as the crisis eases. There is also evidence of elevated concern among investors about Bank of England money printing.

But some of the other reasons are less well appreciated, possibly because we’ve become so accustomed to them. Almost unbelievably, Britain has not enjoyed a trade surplus in goods since 1981, or more than 30 years ago. This long-standing weakness has been partially compensated for by a relatively large surplus on services, and on overseas income, but even so, Britain has been in overall current account deficit ever since the mid-1980s.

Large stack of £50 British bank notes with toxic skull symbol on money ties

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Britain – Land of the Defenceless Victim [LewRockwell]

My American cousins must at least concede that the natural right to keep and bear arms was recognized long before their forebears did – in the English Common Law and in the 1688 Bill of Rights. For what it is worth, that document is still part of British constitutional law and states: “subjects… may have arms for their defence…”

While Americans should concede that point, my fellow countrymen should also concede that King George’s invading army deserved exactly what they got from the American citizen militia, leading up to that pivotal year of 1776.

Of course, Britain’s Christian background meant that belief in the God-given right of arming oneself to defend person and property went back much further – and not just to the Old Testament: In the New, Jesus did emphasise mercy and restraint, but also instructed his disciples to sell their coats if necessary to buy a sword; his illustrated teachings included armed land owners and home owners (ref: here) resisting robbers; and he himself used a whip when driving out moneychangers from his “Father’s house”.

These and other ideas were consolidated into the precedent of Common Law, as expounded upon by Blackstone, and distilled into common speech through terms like: “An Englishman’s home is his castle”.

However, if the English did to some extent pass on to the early Americans a belief in the right to keep and bear arms, unfortunately it seems to have been because they were not intending to use it any more.

Especially since the early 1900’s, many of the rights and liberties of Englishmen have gradually dwindled away. How the mighty have fallen: The income tax for example, early on was well below ten percent but rose to 90% or more in the 50s and 60s. Today, according to a recent mainstream media documentary, the overall total of government spending is bigger than the private economy.

Socialism was introduced under a facade of Christian compassion in the United Kingdom. But the only reason it could get any foothold at all was the existence of a landless underclass kept in its place by the residual presence of feudalism.

The underclass were promised not freedom but better masters, and sold the idea that they themselves would be in ultimate control of the new masters through “democracy”. Earlier and better men had grown tired of both this servility and of elite feudalism, and had set out for greener pastures in the colonies.

What had originally begun there as free trade ended up as an empire – subjugating the local populations by denying their right to bear arms. But there must still have been something right about the Common Law and minimal administrative framework of those colonies…

Some went on to be listed among the richest and freest countries in the world – at least, relatively speaking: Canada, Australia, New Zealand, Hong Kong, Singapore, the Bahamas and some of the Caribbean islands. Others have not done so well of course: Jamaica has had the unwelcome distinction of the highest murder rate in the world – since introducing total gun control in the 1970’s.


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Tony Blair teaches Lord Mandelson how to profit from politics [Telegraph]


Tony Blair teaches Lord Mandelson how to profit from politics

Lord Mandelson warned Ed Miliband last week that he and the shadow chancellor, Ed Balls, had yet to prove that they could be trusted on the economy. The former Labour cabinet minister and his mentor, Tony Blair, are, however, flourishing under the Conservative-led Government.

Mandrake can disclose that profits at one of Mandelson’s firms have risen by almost 60 per cent in the past year, while those at one of Blair’s have tripled.

Newly published accounts for Windrush Ventures Limited, part of a complex web of the former prime minister’s companies, show an increase in profits from £1.1million in 2011 to £3.6million last year.

Tony Blair says the profit “is being held in the company for re-investment in expanding the business”. A spokesman adds: “There is a total of £909,000 payable in corporation tax on the group profit.”

The company’s turnover increased by a third, from £12million to £16million, although, in the directors’ report, Catherine Rimmer, a former Number 10 aide, says only that the Windrush group has “traded satisfactorily”.


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George Osborne rocked by a £100bn budget black hole as senior Bank official declares financial crisis ‘as bad as a world war’ [dailymail]

Government borrowing will be nearly £100billion higher than expected over the next five years as economic growth remains ‘weak and inadequate’, according to business leaders.

The report published today by the British Chambers of Commerce warns that the Chancellor’s plans have been blown wildly off course, with weak economic growth meaning it will take far longer than planned to wipe out the record deficit racked up by Labour.

Added to which, senior Bank of England figure Andrew Haldane said this financial crisis would ravage family incomes for generations, with the costs still likely being paid by our grandchildren.

Andrew Haldane said people had every reason to 'feel upset'
George Osborne is prepare to unveil another round of cuts to Britain's bloated welfare bill

Andrew Haldane said people had every reason to ‘feel upset’, while Osborne prepares to cut welfare bill

Borrowing £bn


In his sober analysis if the turmoil inflicted by the 2008 crash, Mr Haldane – executive director for financial stability at the Bank – said: ‘If we are fortunate, the cost of the crisis will be paid for by our children. More likely it will still be being paid for by our grandchildren.

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Free-Market Thinking Advances in Britain [thedailybell]

Nigel Farage

UKIP is now the ‘second party of the North’ Farage declares as panicked Tories hire new guru who warns northern voters feel ‘ignored’ … The UK Independence Party is now the main challenger to Labour in the North of England, leader Nigel Farage declared after his party surged in three by-elections. Mr Farage hailed UKIP’s ‘best-ever by-election result’ after coming second in votes in Rotherham and Middlesborough, humiliating the Conservatives and Liberal Democrats who saw support collapse. – UK Daily Mail

Dominant Social Theme: We just won’t talk about this one, boys.

Free-Market Analysis: Despite the naysayers, free-market thinking continues to advance. In the US conservative libertarian congressman Ron Paul literally had the nomination removed from his grasp by GOP dirty tricks. And now in Britain, we see UKIP making great strides.

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What is UKIP? Here, from Wikipedia …

The UK Independence Party is a Eurosceptic right-wing populist political party in the United Kingdom. The party describes itself as a “democratic, libertarian party”.

UKIP has never won a seat in the House of Commons, but has three members in the unelected House of Lords, all of which are as a result of defections by Conservative peers. It also has 12 seats in the European Parliament, which is a reduction from 13 won in 2009 … UKIP currently holds one seat on the Northern Ireland Assembly due to a defection from former Ulster Unionist Party MLA David McNarry in October 2012.

Two-thirds of millionaires left Britain to avoid 50p tax rate [Telegraph]

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.


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The UK’s Most Disturbing Number: Total Unfunded Pension Obligations = 321% Of GDP [Zerohedge]

For all our UK readers, who hope some day to collect pension benefits, we have two messages: i) our condolences, and ii) you won’t.   Why? The answer comes straight from the ONS:

The new supplementary table published by ONS in Levy (2012)10 includes the following headline figures for Government pension obligations as at end December 2010:

  • Social security pension schemes (i.e. unfunded state pension scheme obligations): £3.843 trillion, being 263 per cent of gross domestic product (GDP) (£3.497 trillion at end of December 2009)
  • Centrally – administered unfunded pension schemes for public sector employees (i.e. unfunded public service pension scheme obligations): £852 billion, being 58 per cent of GDP (£915 billion at end of December 2009)
  • Funded DB pension schemes for which government is responsible: £313 billion, being 21 per cent of GDP (£332 billion at end of December 2009).

In summary, the estimates in the new supplementary table indicate a total Government pension obligation, at the end of December 2010, of £5.01 trillion, or 342 per cent of GDP, of which around £4.7 trillion relates to unfunded obligations.

Or visually:


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UK govt forcing poor families out of London – survey [RT]

East London (Reuters/Eddie Keogh)

London authorities plan to eject low-income families from the city and relocate them hundreds of miles away. Skyrocketing housing costs and benefit cuts have made it impossible for disadvantaged families to live in the UK capital.

In a time of welfare cuts and high rent, most of London’s boroughs are buying and renting property in nearby towns as part of plans to relocate families receiving housing benefits, according to a newly released Guardian survey.

The measures are a response to government welfare cuts that will come into force next April. The cuts will cap the housing allowance at £400 ($639) – many will be forced to move, as the average monthly rent for a three-bedroom flat in central London is over $2,000, according to the website London Property Watch.

The Guardian investigation revealed that London councils have obtained rental properties in Thurrock and Luton, Northampton, Gravesend, Broxbourne, Dartford, Windsor, Slough, Margate, Epping Forest, Hastings and Basildon.

“It is going to be practically impossible to provide affordable accommodation to meet our homelessness duties in London,” Ken Jones, director of housing and strategy at Barking and Dagenham council, east London told the Guardian. “As the pressures increase we will be looking to procure well out of London, and even out of the Home Counties.”

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UK facing middle-class brain drain as professionals seek better lives abroad [telegraph]

Almost half of all Britons who emigrate each year are professionals and company managers, potentially threatening the country’s supply of highly skilled workers, research for the Home Office found.

The attractions of a better lifestyle and climate, as well as career opportunities, meant a “large and increasing” number of executives, scientists, academics and doctors have chosen to leave Britain in the last 20 years, the report said.

Business leaders blamed high rates of income tax for the “disturbing” rises in the number of professionals leaving Britain for countries such as Australia, American and Canada. Around 149,000 British citizens emigrated last year, and 4.7 million now live overseas.

There were fears that high tax rates, cost of living and the slow economic recovery could prompt more people to emigrate.

Particular concerns have been raised in recent years over emigration by scientists, academics and pharmacists, who tend to remain abroad for many years.


Briton arrested in Bahrain over security scare


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Dear David Cameron: Entrusting economic policy to ex-investment bankers is no solution [ianfraser]

When David Cameron reshuffled his cabinet earlier this week, the arrival of a trio City of London bankers and consultants at Her Majesty’s Treasury went almost unnoticed. This in my view was a lacuna.

The three men are Paul Deighton, a former Goldman Sachs partner and chief operating officer for Europe (pictured above), Sajid Javid, a former global head of credit trading at Deutsche Bank, and Greg Clark, a former consultant at Boston Consulting Group.

Cameron promoted Javid,  who was first elected as conservative MP in May 2010, to economic secretary to the Treasury, and Clark, who has been a Tory MP since 2005, to the role of financial secretary to the Treasury. Most significantly, however Cameron appointed Deighton, who isn’t even an elected politician, as commercial secretary to the Treasury. While Javid and Clark start at the Treasury with immediate effect, Deighton — who will ennobled as Lord Deighton, giving him to sit in the House of Lords — doesn’t start until January.

The media coverage of Deighton’s appointment, what little there was, highlighted his successful tenure as chief executive of the London Organising Committee of the Olympic and Paralympic Games (LOCOG), the body oversaw the 2012 Summer Olympics and Paralympics Games between 2006 and today (see for example The Guardian). That was perhaps understandable given both the games are widely deemed to have been a huge success, the sums raised from sponsors and the rest.


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Fake cigs: Human excrement, asbestos, dead flies and billions in lost tax revenues [RT]

AFP Photo / Alain Jocard

AFP Photo / Alain Jocard


British undercover detectives in Birmingham have found cigarettes containing human excrement, asbestos, mold and dead flies, as counterfeit cigs flood into the UK at huge risk to public health.

Private eyes working for the tobacco industry have spent weeks rummaging through litter bins and scouring pavements for cigarette butts to access the scale of the black market in England’s midlands region, according to the Birmingham newspaper the Sunday Mercury.

Operation EDPC – which stands for Empty Discarded Pack Collection – was funded by Swiss-based brand protection company MS Intelligence – found that 31% of cigarettes were either bogus or bought abroad.

Investigators were shocked by the sheer volume of the trade, which has more than doubled in the last 12 months. A similar study last year found only 14% of packets were fakes or had been smuggled into the country.

The trade in counterfeit cigs is big business. HM Revenue and Customs (HMRC) estimate that non UK duty-paid cigarettes cost the tax payer up to £3.6 billion during the financial year 2009-2010.

Most of the brands originated in the Far East, particularly from China, which has had a problem with counterfeits for a number of years.


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Business Quantitative easing Britain’s richest 5% gained most from quantitative easing – Bank of England [Guardian]

Bank of England

A Bank of England paper in response to MPs’ queries says quantative easing has helped the fortunes of Britain’s wealthiest 5% to blossom. Photograph: Andy Rain/EPA

The richest 10% of households in Britain have seen the value of their assets increase by up to £322,000 as a result of the Bank of England‘s attempts to use electronic money creation to lift the economy out of its deepest post-war slump.

Threadneedle Street said that wealthy families had been the biggest beneficiaries of its £375bn quantitative-easing (QE) programme, under which it has been buying government gilts for cash since early 2009.

The Bank of England calculated that the value of shares and bonds had risen by 26% – or £600bn – as a result of the policy, equivalent to £10,000 for each household in the UK. It added, however, that 40% of the gains went to the richest 5% of households.

Although the Bank said it could not come up with precise figures for the gains from QE, estimates can be produced using wealth distribution data from the Office for National Statistics. These show the average boost to the holdings of financial assets and pensions of the richest 10% of households would have been either £128,000 per household or £322,000 depending on the methodology used.

However, Threadneedle Street said that QE had helped all sections of the population by sparing the country from a deeper slump. The rise in asset prices after QE was announced in early 2009 followed sharp falls in the two previous years.

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Britain invites global revulsion [MaxKeiser]

Britain will carry out its “binding obligation” to extradite Assange to Sweden in spite of Ecuador’s decision, a spokesperson for the FCO has said.

We are disappointed by the statement from Ecuador’s Foreign Minister that Ecuador has offered political asylum to Julian Assange.

Under our law, with Mr Assange having exhausted all options of appeal, the British authorities are under a binding obligation to extradite him to Sweden. We shall carry out that obligation. The Ecuadorian Government’s decision this afternoon does not change that.

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Britain to spend millions on spy drones [dailytimes]

LONDON: Britain will spend millions of pounds on unmanned spy drones which will patrol its shores as well as look for illegal immigrants and smugglers.

The European Commission aims to spend £260 million on its ‘Eurosur’ project, which includes a plan for surveillance drones to patrol the Mediterranean coast. At the same time, several schemes are underway in Britain, aiming to develop civilian roles for aircraft based on the killer drones hunting al Qaeda terrorists in Afghanistan and Pakistan.

If the high-tech measures against terrorists, illegal immigrants and smugglers in the Mediterranean are successful, there would be pressure on the UK to follow suit. Surveillance planes with military-grade cameras would be more effective at monitoring the coastline than satellites or standard planes. British defence firms are testing sophisticated “sense and avoid” systems on unmanned aerial vehicles (UAVs) over the Irish Sea and some experts believe European civilian airspace could soon see drones flying alongside other aircraft.

British police are working on a £3 million project with partners in the UK, France and the Netherlands to explore the use of unmanned aircraft to patrol its coastline and the English Channel. A spokesman said the likely targets would include organised criminals, such as people-smugglers.

Eurosur, which is about to go before the European Parliament, involves small drones being deployed along the Mediterranean coastline, and is a response to the large numbers of illegal immigrants crossing from North Africa in small boats. The umbrella body for EC border agencies, Frontex, which came up with the idea, has hosted demonstrations by defence companies for member states to show them the range of drones available. One of the craft, the Spanish-built Fulmar, has a 10ft wingspan, cruises at 60mph and can stay up for eight hours. The larger Israeli-manufactured Heron is 26ft long and can fly for 52 hours at 35,000ft. Both can carry infrared sensors and sophisticated video cameras which send a live feedback to a remote pilot at a ground station.

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Hand-to-Mouth: Rise in UK working poor as spending cuts bite [RT]

British GDP figures to confirm worst double-dip recession in 50 years [TheGuardian]

GDP figures to be released on Wednesday will paint a gloomy picture for Britain

GDP figures to be released on Wednesday will paint a gloomy picture for Britain. Photograph: EPA/Andy Rain

Britain’s longest double-dip recession for more than 50 years will be confirmed in official figures out on Wednesday.

Gross domestic product (GDP) – a broad measure for the total economy – is forecast to have shrunk by around 0.2% between April and June in its third straight quarter of contraction.

That would mark the longest double-dip recession since quarterly records began in 1955 and is believed to be the worst since the second world war.

The last double-dip recession was in the 1970s when the economy was hamstrung amid soaring oil prices and a miners’ strike, but that only lasted two quarters.

The latest decline is set to have been worsened by the extra bank holiday surrounding the Queen’s diamond jubilee and record rainfall in April and June.
Recent estimates from the Bank of England said the celebrations could wipe up to 0.5% from output, while its governor, Sir Mervyn King, has warned the special events including the jubilee and the Olympics will skew figures this year.

The figures from the Office for National Statistics (ONS) will be a preliminary estimate and be subject to revision.

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TAX AVOIDANCE: The case for giving governments a rude shock. [The Slog]

Blair, Cameron and Gaucke give a masterclass in brass neck on the subject of tax

The former safe pair of hands Tony Blair has been defending bankers this morning, which is not surprising given that a fair wedge of his astronomical income comes from Jamie Dimon’s JP Morgan. In 2008, thanks to New Labour’s love-affair with deregulation, British bank Northern Rock smashed to the floor and became a thousand worthless pebbles, plus a few golden nuggets. The British taxpayer then spent £80bn bailing it out….while Tony Blair, special JPM agent, cherry picked the nuggets in the customer base, and recommended his employer JP Morgan as the buyer.

£80 billion is £1400 for every UK citizen, the sort of sum Blair and his Bilderberger mates spend on lunch. But he says he agrees with David Cameron that everyone should pay their taxes in full, and that bankers get an unfair press.

“We must not start thinking that society will be better off if we hang 20 bankers at the end of the street’’, he tells Charles Moore in the Telegraph, bizarrely adding, “we didn’t supervise and regulate them properly. But we mustn’t go back to the state running everything.’’

Not quite sure where this ‘we’ comes from tannedface, but I’m here to inform the one-time Labour moderniser that there is quite a lot of territory between hanging bankers and giving everything back to the State. Also my dear Moral Tone, not everything in life is about being “better off”. If we hung all guilty bankers out to dry in high security prisons  following scrupulously fair trials for fraud, embezzlement, money-laundering, Libor fixing, and blackmail, the Rule of Law would be seen still to exist….an outcome far more important than any amount of money.

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UK GDP slump: Osborne’s blundering incompetence made the economy sicker [The Guardian]

George Osborne

The 0.7% second-quarter fall brings a calamitous verdict on George Osborne’s policy, with the UK economy now smaller than it was in 2010, and double-dip recession longer than in the 1970s. Photograph: Toby Melville/PA

Yes, it was raining. Yes, we had an extra day off to celebrate the Queen’s 60 years on the throne. Even so, news that the economy contracted by 0.7% in the second quarter of 2012 came as a real shock.

The City had been braced for bad news, but not this bad. Analysts had expected a 0.2% drop in output, and were taken aback by evidence that Britain’s double-dip recession has not only extended into a third quarter but is deepening as well. Bad was not really the right word to describe the figures. Catastrophic was better.

George Osborne will no doubt take comfort from the fact that growth is expected to bounce back in the third quarter as the lost production from the jubilee bank holiday is made up, and tourists flock to London from the Olympics. This, though, is clutching at straws.

Figures from the Office for National Statistics show that all three sectors of the economy are showing signs of weakness. Construction, where government cutbacks in infrastructure spending are really starting to bite, showed the biggest fall, but manufacturing also registered a hefty decline and there was a small drop in the service sector, which makes up 75% of the economy.

As a result, the economy is now 0.8% smaller than it was in the second quarter of 2011 and the double-dip recession is now longer than that which followed the oil shock of the 1970s, when UK inflation hit a peacetime record of 26%. Output has declined in five of the past seven quarters and has been going backwards since the autumn of 2010.

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Olympic False Flag Or Total Diversion–By Brigadier General Friend Retired [stevequayle]

Hi Steve,

By now you have heard the speculation regarding the possible false flag event at the London Olympics. You have also likely seen the Illuminati Card Game card referencing the attack.

Most postulate that the attack is motivated by a desire to “clamp down on us further.” I’m not convinced about this though as the “clamping down” is occurring almost daily without any such draconian measures needed. Therefore, allow me to offer another possible motive….but to do so I need to remind you of a few pre-911 events.

1. Gold and silver bullion were removed from the World Trade Center vaults prior to the 911 attack….although amounts, values, & ownership have never been confirmed as far as I can tell.

2. Just weeks prior to the 911 attacks, Larry Silverstein took out $3.55 billion dollar insurance policy on the WTC which included terrorist attack provisions….although in fairness, not having sufficient insurance on such a large purchase, and not having “terrorist coverage” (after the 1993 WTC attacks) would have been imprudent and irresponsible.

3. Irregular short selling of stocks (in particular airline stocks) took place prior to 911.

The point of the above is to highlight that financial losses were minimized and some amazingly “prescient” speculative trades were rewarded as the result of 911.

Moving forward to today….what do we know for certain?

1. Last week the venerable 137-year-old London Metal Exchange was sold for $2.19 billion to the Chinese state-controlled Hong Kong Exchanges and Clearing (HKEx). The price was 134 times earnings (!)—a stunning number—but the purchase gives China insight into metals markets it never would have had otherwise.

2. London is the center of the physical gold world (not New York). The London Bullion Market is the biggest over the counter wholesale physical gold market the world….by far.

3. There are increasing complaints from investors that they cannot get their “allocated gold” delivered to them. (Remember, allocated gold is gold set aside by serial number, in a vault, in your name. It is not “unallocated” or “pooled” gold.)

4. Those who have gotten delivery of their allocated gold…usually after threat of legal action…say the bars they are receiving are not the bars they were told they had.

5. The LIBOR (London Inter-Bank Offer Rate) scandal affected trillions of dollars in the financial markets. Manipulation meant winning trades became losers and vice versa. Legal recourse measures are just beginning.

6. Stay with me on this one…..London Olympic Opening Ceremony Artistic Director Danny Boyle labeled the ceremony a reflection of “our green and pleasant land”—a reference to the song “Jerusalem” —-famously sung in the movies Chariots of Fire and also sung at Prince William’s wedding. The song uses the words of William Blake’s poem, which suggests the new Jerusalem would be in England. This fact will make sense in the bigger picture later in this email.

What we can only speculate on:

1. There is plenty of anecdotal evidence that large amounts (i.e. tons) of gold have moved from London to China and other points east.

2. There are rumors that “allocated gold” has been used to satisfy bigger (government) transfers and is therefore no longer available for delivery to the rightful owners.

3. The LIBOR scandal is so far-reaching it is impossible to estimate the damages to the banks involved.

What would a catastrophic “terrorist attack” (say a low-level nuclear blast in the London Underground (subway)) accomplish?

1. The theft of the allocated gold would be covered up. “We’re sorry, all that stored gold we had for you was destroyed in the blast.”

2. The LIBOR scandal goes away (all records destroyed)…. along with the current London Banking system. A new system will arise with the same leadership at the top.

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The Quantum of Quantitative Easing Inflation is Coming! [marketoracle]

The City of London is Imploding as a consequence of ever escalating shockwave’s mostly emanating from across the Atlantic as the United States goes into overdrive in attempts to wipe-out competition from London in terms of profiting from global financial market transactions.

First we saw the US dig out and focus on 4 year old LIBOR manipulation stories centred around the cesspit that goes by the name of Barclays Bank that looks set to devastate all of UK’s biggest banks, with the UK tax payer ultimately footing the bailout bill. I have covered this story at length that illustrate that everyone knew about LIBOR manipulation but now pretend that they only found out relatively recently – more here – RBS Chaos and Barclays Libor Cesspit Prompts Slow Motion Run on British Banks


And this week we have seen more convenient revelations out of the US dating back to 2007 that HSBC, Britain’s biggest bank that forces ordinary citizens to jump through hoops to transfer small amounts of currency abroad has been engaged in systematic money laundering for the Mexican drug cartels to the tune $7 billion with potentially far worse across the world as HSBC affiliates apparently did business with rogue nations and terror organisations.

The truth is that BOTH stories could equally apply to major U.S. Banks but U.S. politicians are choosing not to investigate / hold them to account. Compared to the master market manipulators such as JP Morgan and Goldman Sachs, the likes of Barclays is just a mere amateur. The reasons why US politicians are looking the other way are the same that UK politicians and the Bank of England have ignored the crimes of Britain’s biggest banks in that the politicians are in the back pockets of the bankster’s and that the truth risks shaking the confidence of an already fragile financial system.

So the real story is why are U.S. politicians not holding their own thieving criminal banks to account ?

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Hey, We Told You So! … Bank of England Head Demands Immediate and Far-Reaching Bank Reforms [DailyBell]

Bank of England head says banks must change culture … Sir Mervyn King: “Something went very wrong with the UK banking industry and we need to put it right.” Bank of England governor Sir Mervyn King has called for a change in the banking culture, saying that customers have received “shoddy” treatment. He added that bank leaders had “let down” the many honest and hard working people in the financial sector. Sir Mervyn’s comments come on the day banks were found to have mis-sold financial products to small businesses. – BBC

Dominant Social Theme: These banks are corrupt and the Bank of England has to do something about it.

Free-Market Analysis: We’ve been tracking this dominant social theme for more than a year now. The elites that want to run the world are focusing clearly on a replay of 1930s Pecora Hearings that gave us public markets, “self-regulatory” organizations and the SEC, CFTC, etc. For some of our articles on the subject, just search the ‘Net using “Daily Bell” and “Pecora.”

None of the “reforms” initiated by the Pecora Hearings did a thing to clean up an increasingly centralized and corrupt financial services industry. The Depression itself – which eventually went worldwide – was initiated by reckless overprinting of money by the newly founded US Federal Reserve.

The amount of money illegally printed by the Fed generated the Roaring 20s and then the great stock market crash – again a phenomenon that affected the world much as the US financial crisis of 2008 spread around the world.

As the effects of the 1929 stock market crash spread, Franklin Delano Roosevelt was faced with the possibility that savers would try to exchange their dollars for gold – that banks didn’t have. At this point, the rashness and illegality of what Fed governors had done would be found out.

The solution apparently was bank holidays. But it had to go further than that. Since the facility of central bankingitself could not be blamed, Roosevelt and his handlers decided to generate what came to be known as Pecora Hearings.

These hearings were intended to pin the blame for the stock crash and the Great Depression quite firmly where it didn’t belong – on the private sector rather than on the private/quasi-public Federal Reserve.

Accordingly, the Pecora Hearings were launched, precipitating the regulatory era under which the West now suffers.

Regulation by definition can do nothing ameliorate capitalist disasters within the context of monopoly-fiat money. The disease of central banking that has spread around the world in the past century is responsible. This is quite clear. Regulation – a backwards looking price fix – can never anticipate the next financial meltdown.

Nonetheless, the mechanism itself is fairly simple and repetitive. First central bankers print too much creating a boom and then much of the value that has been created in the boom disappears during the bust. In fact, much investment is found out to be mal-invested and the economy terribly distorted by the ongoing over-printing of money.

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RSA report damns the great UK pension fund rip-off [ArabianMoney]

Ever wondered who is paying for the shiny shoes and flash cars beloved by your pension adviser and the pension fund managers? Of course you always knew it was you. But a new RSA report has revealed that hidden fees can almost halve the value of your pension in the UK .

A 12-month study found that nine out of 10 pension fund managers fail to warn about these fees and noted that clients were routinely denied much simpler pension plans, presumably because they paid the managers less in fees.

Sub-par performance

In the go-go stock market boom years it was easy for such fees to be almost unnoticed as ever rising markets delivered performance that made pensions look a good investment. In the UK there are also tax breaks to encourage people to save for their retirement, indeed that is the backbone of the pension system.

But the report said pension charges accounted for up to 40 per cent of typical retirement savings, so that probably almost offset the tax saved in making contributions for many workers. It said the UK charges were excessive. In the Netherlands pensioners can expect a pension worth 50 per cent more than their British equivalent because the country has far simpler charges.

In the UK the number of people contributing to personal pensions is down from 400,000 to six million since 2008 and a new code of conduct was introduced for the sector a year ago. Pensioners have also been bitterly disappointed by annuity rates since then, the price of the Bank of England’s manipulation of interest rates to keep the economy afloat.


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Britain flooded with ‘brand police’ to protect sponsors [the independent]

Hundreds of uniformed Olympics officers will begin touring the country today enforcing sponsors’ multimillion-pound marketing deals, in a highly organised mission that contrasts with the scramble to find enough staff to secure Olympic sites.

Almost 300 enforcement officers will be seen across the country checking firms to ensure they are not staging “ambush marketing” or illegally associating themselves with the Games at the expense of official sponsors such as Adidas, McDonald’s, Coca-Cola and BP. The clampdown goes on while 3,500 soldiers on leave are brought in to bail out the security firm G4S which admitted it could not supply the numbers of security staff it had promised.

Yesterday, the Culture Secretary, Jeremy Hunt, refused to rule out that even more soldiers may be called upon to help with security, but dismissed the issue as merely a “hitch”. However, as well as the regular Army, the Olympic “brand army” will start its work with a vengeance today.

Wearing purple caps and tops, the experts in trading and advertising working for the Olympic Delivery Authority (ODA) are heading the biggest brand protection operation staged in the UK. Under legislation specially introduced for the London Games, they have the right to enter shops and offices and bring court action with fines of up to £20,000.

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