U.S. dollar facing imminent collapse?

Fed in bind as Paulsen, Bernanke head to China Alert Focus: Mammon / The Third Seal Revelation 18:17a for in one hour such great wealth has been laid waste!'... WORLDNETDAILY - By Jerome R. Corsi - December 10, 2006 -- Even as the stock market is hitting new record highs almost every day, the Federal Reserve and Treasury Department are quietly coordinating a devaluation of the dollar that the Bush administration hopes will be a slow decline rather than a dollar collapse. This week, in an unusual move, the Bush administration is sending virtually the entire economic "A-team" to visit China for a "strategic economic dialogue" in Beijing Dec. 14 and 15. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are leading the delegation, along with five other cabinet-level officials, including Secretary of Commerce Carlos Gutierrez. Also in the delegation will be Labor Secretary Elaine Chao, Health and Human Services Secretary Mike Leavitt, Energy Secretary Sam Bodman, and U.S. Trade Representative Susan Schwab. The Bush administration wants to get China's cooperation in preventing a dollar collapse. That's the conclusion of John Williams, an experienced professional econometrician, who writes the "Shadow Government Statistics" blog. Williams has re-created M3, a money-supply measure whose data the Federal Reserve simply stopped publishing after issuing a technically worded March 2006 announcement. Williams reports M3 is currently growing at close to a 9.6 percent rate and trending higher, compared with an 8 percent rate early this year, when the Fed quit reporting the measure. "The Fed is pumping liquidity into the U.S. economy," Williams told WND, "and the Fed evidently did not want the markets to follow too closely what the Fed was doing with the money supply." China today now is holding a historically unprecedented $1 trillion in foreign exchange reserves. During the Thanksgiving holiday, an announcement by China that their central bank planned to diversify foreign-exchange holding away from the dollar caused the dollar to drop in value on international currency markets. Since then, the dollar has hit a 20-month low against the euro. "This was almost an orchestrated announcement," Williams claimed. "Around Thanksgiving the markets were thinly traded. I'm not sure who was playing games there, but the signal was clearly heard." "You're dealing with mass psychology here," Williams argued. "The central bankers around the world know they are going to take a hit on their dollar holdings. None of the central bankers want to start a dollar panic, but none of the central bankers want to be the last out of the dollar, either." Williams explained that the Federal Reserve is in a bind. "Raising rates would kill any chance of avoiding a recession, but in terms of the dollar, we can't raise the rates fast enough when the dollar starts to slip quickly." Are we experiencing a dollar collapse? "Not yet," Williams answered. "I believe we're going to have a dollar collapse, but the Fed is going to do its best to slow play the dollar's decline in value, so that it takes a year or two for the dollar value to reach its low point." Williams explained the risk of collapse the dollar faces: "There will be a central bank, most probably in Asia, who will start the move away from the dollar and when it happens, you're going to see other central bankers covertly trying to follow. The move will magnify very quickly and it could become a full-fledged panic and a dollar collapse." The Fed is struggling right now to contain inflation and stimulate economic growth. All the Fed is doing right now with all their grand policy shifts is using a lot of propaganda and market massaging to try to prevent a financial panic." Recent reports have shown that U.S. gross domestic product growth slowed to 1.6% in the third quarter, the lowest in more than 3 years. Will a declining dollar help narrow the U.S. trade deficit with China? "You could take a 30 percent decline in the value of the dollar," Williams argued, "and it wouldn't make much of a dent in our trade deficit with China, not as long as Bush administration trade policy continues to be one-sided in favor of China." "The Fed is faced with an impossible circumstance with the trade and budget deficits being run by the Bush administration," Williams told WND, "and they are just playing games with the markets and the public by not publishing M3, the broadest measure of money supply and the best indicator we have of long-term activity." M3 is the broadest measure of the total money in the economy, including checking and savings accounts, cash, time deposits, and money-market funds. Economist Milton Friedman, one of the key economists contributing to the conservative theories that led to the development of "Reaganomics," argued that money supply is a key measure correlated both with economic growth and inflation. http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53311

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The Proposed Iranian Oil Bourse

Alert Focus: Mammon / The Third Seal / The prince of the kingdom of Persia Ezekiel 28:16a "By the abundance of your trade You were internally filled with violence,.... Editorial Note: This article originally appeared in the April 14, 2006 edition of Moriel's Be Alert! email newsletter. ENERGY BULLETIN - Published on January 18, 2006 - by Krassimir Petrov I. Economics of Empires A nation-state taxes its own citizens, while an empire taxes other nation-states. The history of empires, from Greek and Roman, to Ottoman and British, teaches that the economic foundation of every single empire is the taxation of other nations. The imperial ability to tax has always rested on a better and stronger economy, and as a consequence, a better and stronger military. One part of the subject taxes went to improve the living standards of the empire; the other part went to strengthen the military dominance necessary to enforce the collection of those taxes. Historically, taxing the subject state has been in various forms—usually gold and silver, where those were considered money, but also slaves, soldiers, crops, cattle, or other agricultural and natural resources, whatever economic goods the empire demanded and the subject-state could deliver. Historically, imperial taxation has always been direct: the subject state handed over the economic goods directly to the empire. For the first time in history, in the twentieth century, America was able to tax the world indirectly, through inflation. It did not enforce the direct payment of taxes like all of its predecessor empires did, but distributed instead its own fiat currency, the U.S. Dollar, to other nations in exchange for goods with the intended consequence of inflating and devaluing those dollars and paying back later each dollar with less economic goods—the difference capturing the U.S. imperial tax. Here is how this happened. Early in the 20th century, the U.S. economy began to dominate the world economy. The U.S. dollar was tied to gold, so that the value of the dollar neither increased, nor decreased, but remained the same amount of gold. The Great Depression, with its preceding inflation from 1921 to 1929 and its subsequent ballooning government deficits, had substantially increased the amount of currency in circulation, and thus rendered the backing of U.S. dollars by gold impossible. This led Roosevelt to decouple the dollar from gold in 1932. Up to this point, the U.S. may have well dominated the world economy, but from an economic point of view, it was not an empire. The fixed value of the dollar did not allow the Americans to extract economic benefits from other countries by supplying them with dollars convertible to gold. Economically, the American Empire was born with Bretton Woods in 1945. The U.S. dollar was not fully convertible to gold, but was made convertible to gold only to foreign governments. This established the dollar as the reserve currency of the world. It was possible, because during WWII, the United States had supplied its allies with provisions, demanding gold as payment, thus accumulating significant portion of the world’s gold. An Empire would not have been possible if, following the Bretton Woods arrangement, the dollar supply was kept limited and within the availability of gold, so as to fully exchange back dollars for gold. However, the guns-and-butter policy of the 1960’s was an imperial one: the dollar supply was relentlessly increased to finance Vietnam and LBJ’s Great Society. Most of those dollars were handed over to foreigners in exchange for economic goods, without the prospect of buying them back at the same value. The increase in dollar holdings of foreigners via persistent U.S. trade deficits was tantamount to a tax—the classical inflation tax that a country imposes on its own citizens, this time around an inflation tax that U.S. imposed on rest of the world. When in 1970-1971 foreigners demanded payment for their dollars in gold, The U.S. Government defaulted on its payment on August 15, 1971. While the popular spin told the story of “severing the link between the dollar and gold”, in reality the denial to pay back in gold was an act of bankruptcy by the U.S. Government. Essentially, the U.S. declared itself an Empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless to respond— the world was taxed and it could not do anything about it. From that point on, to sustain the American Empire and to continue to tax the rest of the world, the United States had to force the world to continue to accept ever-depreciating dollars in exchange for economic goods and to have the world hold more and more of those depreciating dollars. It had to give the world an economic reason to hold them, and that reason was oil. In 1971, as it became clearer and clearer that the U.S Government would not be able to buy back its dollars in gold, it made in 1972-73 an iron-clad arrangement with Saudi Arabia to support the power of the House of Saud in exchange for accepting only U.S. dollars for its oil. The rest of OPEC was to follow suit and also accept only dollars. Because the world had to buy oil from the Arab oil countries, it had the reason to hold dollars as payment for oil. Because the world needed ever increasing quantities of oil at ever increasing oil prices, the world’s demand for dollars could only increase. Even though dollars could no longer be exchanged for gold, they were now exchangeable for oil. The economic essence of this arrangement was that the dollar was now backed by oil. As long as that was the case, the world had to accumulate increasing amounts of dollars, because they needed those dollars to buy oil. As long as the dollar was the only acceptable payment for oil, its dominance in the world was assured, and the American Empire could continue to tax the rest of the world. If, for any reason, the dollar lost its oil backing, the American Empire would cease to exist. Thus, Imperial survival dictated that oil be sold only for dollars. It also dictated that oil reserves were spread around various sovereign states that weren’t strong enough, politically or militarily, to demand payment for oil in something else. If someone demanded a different payment, he had to be convinced, either by political pressure or military means, to change his mind. The man that actually did demand Euro for his oil was Saddam Hussein in 2000. At first, his demand was met with ridicule, later with neglect, but as it became clearer that he meant business, political pressure was exerted to change his mind. When other countries, like Iran, wanted payment in other currencies, most notably Euro and Yen, the danger to the dollar was clear and present, and a punitive action was in order. Bush’s Shock-and-Awe in Iraq was not about Saddam’s nuclear capabilities, about defending human rights, about spreading democracy, or even about seizing oil fields; it was about defending the dollar, ergo the American Empire. It was about setting an example that anyone who demanded payment in currencies other than U.S. Dollars would be likewise punished. Many have criticized Bush for staging the war in Iraq in order to seize Iraqi oil fields. However, those critics can’t explain why Bush would want to seize those fields—he could simply print dollars for nothing and use them to get all the oil in the world that he needs. He must have had some other reason to invade Iraq. History teaches that an empire should go to war for one of two reasons: (1) to defend itself or (2) benefit from war; if not, as Paul Kennedy illustrates in his magisterial The Rise and Fall of the Great Powers, a military overstretch will drain its economic resources and precipitate its collapse. Economically speaking, in order for an empire to initiate and conduct a war, its benefits must outweigh its military and social costs. Benefits from Iraqi oil fields are hardly worth the long-term, multi-year military cost. Instead, Bush must have went into Iraq to defend his Empire. Indeed, this is the case: two months after the United States invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold once again only for U.S. dollars. No longer could the world buy oil from Iraq with Euro. Global dollar supremacy was once again restored. Bush descended victoriously from a fighter jet and declared the mission accomplished—he had successfully defended the U.S. dollar, and thus the American Empire. II. Iranian Oil Bourse The Iranian government has finally developed the ultimate “nuclear” weapon that can swiftly destroy the financial system underpinning the American Empire. That weapon is the Iranian Oil Bourse slated to open in March 2006. It will be based on a euro-oil-trading mechanism that naturally implies payment for oil in Euro. In economic terms, this represents a much greater threat to the hegemony of the dollar than Saddam’s, because it will allow anyone willing either to buy or to sell oil for Euro to transact on the exchange, thus circumventing the U.S. dollar altogether. If so, then it is likely that almost everyone will eagerly adopt this euro oil system: · The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead pay with their own currencies. The adoption of the euro for oil transactions will provide the European currency with a reserve status that will benefit the European at the expense of the Americans. · The Chinese and the Japanese will be especially eager to adopt the new exchange, because it will allow them to drastically lower their enormous dollar reserves and diversify with Euros, thus protecting themselves against the depreciation of the dollar. One portion of their dollars they will still want to hold onto; a second portion of their dollar holdings they may decide to dump outright; a third portion of their dollars they will decide to use up for future payments without replenishing those dollar holdings, but building up instead their euro reserves. · The Russians have inherent economic interest in adopting the Euro – the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, the Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold. Russians have also revived their nationalism, and if embracing the Euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed. · The Arab oil-exporting countries will eagerly adopt the Euro as a means of diversifying against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk, not to mention their jihad against the Infidel Enemy. Only the British will find themselves between a rock and a hard place. They have had a strategic partnership with the U.S. forever, but have also had their natural pull from Europe. So far, they have had many reasons to stick with the winner. However, when they see their century-old partner falling, will they firmly stand behind him or will they deliver the coup de grace? Still, we should not forget that currently the two leading oil exchanges are the New York’s NYMEX and the London’s International Petroleum Exchange (IPE), even though both of them are effectively owned by the Americans. It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests. It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner. At any rate, no matter what the British decide, should the Iranian Oil Bourse accelerate, the interests that matter—those of Europeans, Chinese, Japanese, Russians, and Arabs—will eagerly adopt the Euro, thus sealing the fate of the dollar. Americans cannot allow this to happen, and if necessary, will use a vast array of strategies to halt or hobble the operation’s exchange: · Sabotaging the Exchange—this could be a computer virus, network, communications, or server attack, various server security breaches, or a 9-11-type attack on main and backup facilities. · Coup d’état—this is by far the best long-term strategy available to the Americans. · Negotiating Acceptable Terms & Limitations—this is another excellent solution to the Americans. Of course, a government coup is clearly the preferred strategy, for it will ensure that the exchange does not operate at all and does not threaten American interests. However, if an attempted sabotage or coup d’etat fails, then negotiation is clearly the second-best available option. · Joint U.N. War Resolution—this will be, no doubt, hard to secure given the interests of all other member-states of the Security Council. Feverish rhetoric about Iranians developing nuclear weapons undoubtedly serves to prepare this course of action. · Unilateral Nuclear Strike—this is a terrible strategic choice for all the reasons associated with the next strategy, the Unilateral Total War. The Americans will likely use Israel to do their dirty nuclear job. · Unilateral Total War—this is obviously the worst strategic choice. First, the U.S. military resources have been already depleted with two wars. Secondly, the Americans will further alienate other powerful nations. Third, major dollar-holding countries may decide to quietly retaliate by dumping their own mountains of dollars, thus preventing the U.S. from further financing its militant ambitions. Finally, Iran has strategic alliances with other powerful nations that may trigger their involvement in war; Iran reputedly has such alliance with China, India, and Russia, known as the Shanghai Cooperative Group, a.k.a. Shanghai Coop and a separate pact with Syria. Whatever the strategic choice, from a purely economic point of view, should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar. The collapsing dollar will dramatically accelerate U.S. inflation and will pressure upward U.S. long-term interest rates. At this point, the Fed will find itself between Scylla and Charybdis—between deflation and hyperinflation—it will be forced fast either to take its “classical medicine” by deflating, whereby it raises interest rates, thus inducing a major economic depression, a collapse in real estate, and an implosion in bond, stock, and derivative markets, with a total financial collapse, or alternatively, to take the Weimar way out by inflating, whereby it pegs the long-bond yield, raises the Helicopters and drowns the financial system in liquidity, bailing out numerous LTCMs and hyperinflating the economy. The Austrian theory of money, credit, and business cycles teaches us that there is no in-between Scylla and Charybdis. Sooner or later, the monetary system must swing one way or the other, forcing the Fed to make its choice. No doubt, Commander-in-Chief Ben Bernanke, a renowned scholar of the Great Depression and an adept Black Hawk pilot, will choose inflation. Helicopter Ben, oblivious to Rothbard’s America’s Great Depression, has nonetheless mastered the lessons of the Great Depression and the annihilating power of deflations. The Maestro has taught him the panacea of every single financial problem—to inflate, come hell or high water. He has even taught the Japanese his own ingenious unconventional ways to battle the deflationary liquidity trap. Like his mentor, he has dreamed of battling a Kondratieff Winter. To avoid deflation, he will resort to the printing presses; he will recall all helicopters from the 800 overseas U.S. military bases; and, if necessary, he will monetize everything in sight. His ultimate accomplishment will be the hyperinflationary destruction of the American currency and from its ashes will rise the next reserve currency of the world—that barbarous relic called gold. About the Author Krassimir Petrov (Krassimir_Petrov@hotmail.com) has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. http://www.energybulletin.net/12125.html FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Top-Level Insiders Selling Their Stock

Alert Focus: Mammon / The Third Seal Mark 12:17 And Jesus said to them, "Render to Caesar the things that are Caesar's, and to God the things that are God's." And they were amazed at Him. Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. NEW YORK POST - By Paul Tharp - December 7, 2006 -- America's corporate chiefs are unloading their own stocks at one of the boldest paces in 20 years. In cases of the very rich, such as Microsoft's Bill Gates and Google's top brass, the executives are selling a whopping $63 for each $1 of stock they bought, says a report by Bloomberg. In November alone, leaders of public companies dumped $8.4 billion worth of stock they owned as insiders, most of it awarded as compensation, bonuses or other management incentives. But the vast majority of the executives put their windfall cash to work elsewhere, with just $133 million being plowed back into purchases of more company stock. Analysts say a take-the-money-and-run flight from their own companies signals a growing lack of confidence in the economy's future course, as well as fears of a possible global meltdown if the Iraq crisis escalates across borders. It's also a good time to take profits, with the Dow Jones industrial average up nearly 15 percent this year, the S&P 500 ahead 13 percent, and the Nasdaq 11 percent higher. Wall Street investors are displaying fresh worries that the Federal Reserve might pull the trigger too quickly on hiking rates again, possibly plunging the U.S. into a recession as the Fed did in 2000. Just before the worst of the 2000 recession, insider sales were also at a near record. Leading the latest wave of insider selling is Microsoft, with $594.2 million of stock sold by insiders during November, with Gates unloading $581.1 million. Gates has been selling shares regularly - including $2.1 billion last year - as he whittles down his once mammoth stake, putting a big chunk of his wealth to work in a not-for-profit foundation that invests in a wide range of securities and other deals. Billionaire Paul Allen also sold off 28 percent of his stake last month in DreamWorks Animation SKG for $224.2 million, keeping about 21 million shares. Insiders at Seagate sold $311.8 million in November, while Google insiders unloaded $182.1 million in the four weeks. Google's CEO Eric Schmidt and its co-founders Sergey Brin and Larry Page have usually led the insider-selling parade with sales of hundreds of millions as the stock rose steadily to break the $500 mark http://www.nypost.com/seven/12072006/business/top_level_insiders_selling_their_stock_business_paul_tharp.htm FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Dollar's sharp fall revives fears of global economic imbalances

Alert Focus: Mammon / The Third Seal Proverbs 16:16 How much better it is to get wisdom than gold! And to get understanding is to be chosen above silver. Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. AGENCE FRANCE PRESSE - By Amelie Herenstein - December 4, 2006 -- PARIS - A sharp fall in the dollar over the past two weeks has revived fears among analysts that major imbalances in the gloabl economy could trigger a far-reaching financial crisis if they intensify. The dollar is on a slide against most of the developed world's principal currencies -- notably the euro, the pound sterling and the Swiss franc -- as well as gold. In Asian trading on Monday the euro surged to its strongest reading against the greenback -- 1.3367 dollars -- since March 2005. The single European currency has shot up 11 percent against the dollar since the start of the year. Antoine Brunet, an economist at the HSBC bank here, said the dollar's plunge suggested that "we have once again entered a dangerous turbulent zone on exchange markets". The weakening trend was in part triggered by comments last month from People's Bank of China governor Zhou Xiaochuan that were seen as heralding a possible shift in some of the bank's massive foreign currency reserve holdings away from the dollar. Adding to the pressure were indications of an economic slowdown in the United States, holding out prospects for a cut in US interest rates by the Federal Reserve at a time when rates are seen rising in the eurozone and Japan. Those factors have sparked heavy capital movement that is unfavorable to the dollar, according to analyst Olivier Bizimana at the French bank Credit Agricole. At the same time, he warned, there is a conviction that "current imbalances cannot continue", a reference to a situation in which countries such as Japan and China that have huge current account surpluses finance big current deficits carried by the United States. The current account is a broad measure covering a country's trade in goods and services as well as certain financial transfers. What economists fear in particular is that a deep-seated crisis of confidence in the dollar, as well as the US economy, could lead to a disruptive and dramatic sale of US assets by foreigners. That could prompt the US Federal Reserve to raise interest rates, thereby threatening economic recoveries in the United States and elsewhere.... http://news.yahoo.com/s/afp/20061204/ts_alt_afp/worldeconomyforex_061204140040 FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

US setbacks see dollar plunge to near 15-year low

Alert Focus: Mammon / The Third Seal Ecclesiastes 5:13 There is a grievous evil which I have seen under the sun: riches being hoarded by their owner to his hurt. Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. LONDON DAILY TELEGRAPH - By Ambrose Evans-Pritchard – November 29, 2006 -- The dollar tumbled to a near a 15-year low against sterling yesterday on fresh signs of economic trouble in the United States. An 8.3pc crash in US industrial orders and an admission by the Federal Reserve chairman that Washington does not know how bad housing really is set off another day of wild gyrations on the currency markets. US house prices fell 3.5pc to an average $221,000, the third month of declines. Stocks of unsold homes rose to 7.4 months' supply, the highest since 1993. The US consumer confidence index fell sharply to 102.9. The "truckers index" of tonnage shipped by US haulage companies was down 1.8pc in October, a leading indicator of contraction. Merrill Lynch called the fall "borderline recessionary". The dollar continued its slide against the euro, dropping to $1.3194 after the Federal Reserve chairman, Ben Bernanke, said the housing slump "would be a drag on economic growth into next year". Mr Bernanke said official figures did not pick up the "sharp increase" in cancellations on house deals and might understate the inventory glut. "Any significant effect on consumer spending arising from further weakness in housing would have important implications for the economy," he said. … [more] http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/29/cndollar29.xml FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Wall Street's wild windfall

Alert Focus: Mammon / The Third Seal Matthew 6:24 "No one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other. You cannot serve God and wealth. Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. Earnings help NYC cut estimated deficit as brokerages' $36B in bonuses prime pump for luxury-goods sales BLOOMBERG NEWS - November 7, 2006 -- Never in the history of Wall Street have so many earned so much in so little time. Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. are about to reward their 173,000 employees with $36 billion in bonuses. That's a 30 percent increase from last year's record, and it doesn't include the billions more that will be paid by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, as well as the hundreds of hedge funds and private-equity firms that constitute the financial industry. Enriched by the unprecedented value of takeovers, equity trading and credit derivatives, "this year will be the best ever for the major brokerage firms," said Brad Hintz, an analyst at Manhattan-based Sanford C. Bernstein & Co. The average windfall for each individual at the five largest U.S. securities firms will be enough to buy a $165,000 Bentley Continental GT, the two-door coupe favored by Paris Hilton and Cher. They'll have plenty of change for a box of Romeo y Julieta cigars and a case of Pol Roger champagne - the stuff enjoyed by Winston Churchill, Britain's prime minister in the 1940s and 1950s. Credit-default swap specialists, who speculate on companies' ability to repay debt, won't be the only winners this year. New York City cut the estimate for its budget deficit by 87 percent last week, in part because of the investment banks' better-than-expected earnings. The state comptroller's office said Oct. 17 that tax receipts from the financial industry's wages will rise 14 percent, to $2.4 billion in fiscal 2006. Dolly Lenz, Manhattan's doyenne of high-end properties, is timing some of her best listings to coincide with bonus season. Ever since the 1970s, the UJA-Federation of New York has held its annual bankers' fundraiser on the first Wednesday in December, the date when Bear Stearns told employees what their bonuses would be. "When Wall Street does well, we do well," said Richard Koppelman, owner of Greenwich, Conn.-based Miller Motorcars. Koppelman is readying a $150,000 red 2005 Ferrari 360 Modena F1 convertible for a customer who will be getting his first bonus since graduating two years ago from business school. Leveraged-buyout firms attracted more than $170 billion in new money this year, helping to drive $2.9 trillion in takeovers and a surge in loans, according to data compiled by Bloomberg and London-based Private Equity Intelligence Ltd. More than $110 billion poured into hedge funds in the first nine months, beating the last annual peak in 2002 and fueling demand for stocks, bonds, commodities and derivatives, which are used to hedge risks and for speculation. Combined, Goldman, Morgan Stanley, Merrill, Lehman and Bear Stearns earned $21.3billion in the first nine months of 2006, surpassing 2005's full-year record of $20.4 billion. Year-end rewards at top-5 firms The following table shows the calculations for total and average bonuses for each of the five biggest U.S. securities firms, based on estimated revenue, compensation and benefits, and number of employees. Firm Total Total Bonus Average Average revenue* compen pool* Employees Compensation Bonus sation* Goldman $35.7 $16.9 $10.2 25,647 $658,946 $397,707 Morgan $33.6 $14.0 $8.4 54,349 $257,594 $154,556 Merrill $32.5 $16.1 $9.7 55,300 $291,139 $174,683 Lehman $17.4 $8.7 $5.2 24,775 $351,160 $210,696 Bear $9.0 $4.4 $2.6 13,000 $338,462 $203,077 *(in billions) How the figures were calculated:Total revenue: Average estimate of analysts surveyed by Thomson Financial. Total compensation: Estimated revenue multiplied by the average ratio of compensation to revenue. Bonus pool: 60 percent of estimated total compensation. Employees: Total number of full-time employees reported at the end of the third quarter. Average compensation: Estimated compensation divided by total number of employees. Average bonus: Estimated bonus pool divided by total employees. SOURCE: BLOOMBERG NEWS Copyright 2006 Newsday Inc. http://www.newsday.com/business/ny-bzbonu074964689nov07,0,271479,print.story?coll=ny-business-print FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

GAO Chief Warns Economic Disaster Looms

Alert Focus: Mammon / The Third Seal Matthew 6:19-20 "Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. "But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal;... Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. ASSOCIATED PRESS - By Matt Crenson - October 28, 2006 -- AUSTIN, Texas -- David M. Walker sure talks like he's running for office. "This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed." But Walker doesn't want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government. Basically, that makes Walker the nation's accountant-in-chief. And the accountant-in-chief's professional opinion is that the American public needs to tell Washington it's time to steer the nation off the path to financial ruin. From the hustings and the airwaves this campaign season, America's political class can be heard debating Capitol Hill sex scandals, the wisdom of the war in Iraq and which party is tougher on terror. Democrats and Republicans talk of cutting taxes to make life easier for the American people. What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it. There's a good reason politicians don't like to talk about the nation's long-term fiscal prospects. The subject is short on political theatrics and long on complicated economics, scary graphs and very big numbers. It reveals serious problems and offers no easy solutions. Anybody who wanted to deal with it seriously would have to talk about raising taxes and cutting benefits, nasty nostrums that might doom any candidate who prescribed them. "There's no sexiness to it," laments Leita Hart-Fanta, an accountant who has just heard Walker's pitch. She suggests recruiting a trusted celebrity - maybe Oprah - to sell fiscal responsibility to the American people. Walker doesn't want to make balancing the federal government's books sexy - he just wants to make it politically palatable. He has committed to touring the nation through the 2008 elections, talking to anybody who will listen about the fiscal black hole Washington has dug itself, the "demographic tsunami" that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government. "He can speak forthrightly and independently because his job is not in jeopardy if he tells the truth," said Isabel V. Sawhill, a senior fellow in economic studies at the Brookings Institution. Walker can talk in public about the nation's impending fiscal crisis because he has one of the most secure jobs in Washington. As comptroller general of the United States - basically, the government's chief accountant - he is serving a 15-year term that runs through 2013. This year Walker has spoken to the Union League Club of Chicago and the Rotary Club of Atlanta, the Sons of the American Revolution and the World Future Society. But the backbone of his campaign has been the Fiscal Wake-up Tour, a traveling roadshow of economists and budget analysts who share Walker's concern for the nation's budgetary future. "You can't solve a problem until the majority of the people believe you have a problem that needs to be solved," Walker says. Polls suggest that Americans have only a vague sense of their government's long-term fiscal prospects. When pollsters ask Americans to name the most important problem facing America today - as a CBS News/New York Times poll of 1,131 Americans did in September - issues such as the war in Iraq, terrorism, jobs and the economy are most frequently mentioned. The deficit doesn't even crack the top 10. Yet on the rare occasions that pollsters ask directly about the deficit, at least some people appear to recognize it as a problem. In a survey of 807 Americans last year by the Pew Center for the People and the Press, 42 percent of respondents said reducing the deficit should be a top priority; another 38 percent said it was important but a lower priority. So the majority of the public appears to agree with Walker that the deficit is a serious problem, but only when they're made to think about it. Walker's challenge is to get people not just to think about it, but to pressure politicians to make the hard choices that are needed to keep the situation from spiraling out of control. To show that the looming fiscal crisis is not a partisan issue, he brings along economists and budget analysts from across the political spectrum. In Austin, he's accompanied by Diane Lim Rogers, a liberal economist from the Brookings Institution, and Alison Acosta Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, a conservative think tank. "We all agree on what the choices are and what the numbers are," Fraser says. Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America - Bill Gates, Warren Buffett and those Google guys included. A hole that big could paralyze the U.S. economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today. And every year that nothing is done about it, Walker says, the problem grows by $2 trillion to $3 trillion. People who remember Ross Perot's rants in the 1992 presidential election may think of the federal debt as a problem of the past. But it never really went away after Perot made it an issue, it only took a breather. The federal government actually produced a surplus for a few years during the 1990s, thanks to a booming economy and fiscal restraint imposed by laws that were passed early in the decade. And though the federal debt has grown in dollar terms since 2001, it hasn't grown dramatically relative to the size of the economy. But that's about to change, thanks to the country's three big entitlement programs - Social Security, Medicaid and especially Medicare. Medicaid and Medicare have grown progressively more expensive as the cost of health care has dramatically outpaced inflation over the past 30 years, a trend that is expected to continue for at least another decade or two. And with the first baby boomers becoming eligible for Social Security in 2008 and for Medicare in 2011, the expenses of those two programs are about to increase dramatically due to demographic pressures. People are also living longer, which makes any program that provides benefits to retirees more expensive. Medicare already costs four times as much as it did in 1970, measured as a percentage of the nation's gross domestic product. It currently comprises 13 percent of federal spending; by 2030, the Congressional Budget Office projects it will consume nearly a quarter of the budget. Economists Jagadeesh Gokhale of the American Enterprise Institute and Kent Smetters of the University of Pennsylvania have an even scarier way of looking at Medicare. Their method calculates the program's long-term fiscal shortfall - the annual difference between its dedicated revenues and costs - over time. By 2030 they calculate Medicare will be about $5 trillion in the hole, measured in 2004 dollars. By 2080, the fiscal imbalance will have risen to $25 trillion. And when you project the gap out to an infinite time horizon, it reaches $60 trillion. Medicare so dominates the nation's fiscal future that some economists believe health care reform, rather than budget measures, is the best way to attack the problem. "Obviously health care is a mess," says Dean Baker, a liberal economist at the Center for Economic and Policy Research, a Washington think tank. "No one's been willing to touch it, but that's what I see as front and center." Social Security is a much less serious problem. The program currently pays for itself with a 12.4 percent payroll tax, and even produces a surplus that the government raids every year to pay other bills. But Social Security will begin to run deficits during the next century, and ultimately would need an infusion of $8 trillion if the government planned to keep its promises to every beneficiary. Calculations by Boston University economist Lawrence Kotlikoff indicate that closing those gaps - $8 trillion for Social Security, many times that for Medicare - and paying off the existing deficit would require either an immediate doubling of personal and corporate income taxes, a two-thirds cut in Social Security and Medicare benefits, or some combination of the two. Why is America so fiscally unprepared for the next century? Like many of its citizens, the United States has spent the last few years racking up debt instead of saving for the future. Foreign lenders - primarily the central banks of China, Japan and other big U.S. trading partners - have been eager to lend the government money at low interest rates, making the current $8.5-trillion deficit about as painful as a big balance on a zero-percent credit card. In her part of the fiscal wake-up tour presentation, Rogers tries to explain why that's a bad thing. For one thing, even when rates are low a bigger deficit means a greater portion of each tax dollar goes to interest payments rather than useful programs. And because foreigners now hold so much of the federal government's debt, those interest payments increasingly go overseas rather than to U.S. investors. More serious is the possibility that foreign lenders might lose their enthusiasm for lending money to the United States. Because treasury bills are sold at auction, that would mean paying higher interest rates in the future. And it wouldn't just be the government's problem. All interest rates would rise, making mortgages, car payments and student loans costlier, too. A modest rise in interest rates wouldn't necessarily be a bad thing, Rogers said. America's consumers have as much of a borrowing problem as their government does, so higher rates could moderate overconsumption and encourage consumer saving. But a big jump in interest rates could cause economic catastrophe. Some economists even predict the government would resort to printing money to pay off its debt, a risky strategy that could lead to runaway inflation. Macroeconomic meltdown is probably preventable, says Anjan Thakor, a professor of finance at Washington University in St. Louis. But to keep it at bay, he said, the government is essentially going to have to renegotiate some of the promises it has made to its citizens, probably by some combination of tax increases and benefit cuts. But there's no way to avoid what Rogers considers the worst result of racking up a big deficit - the outrage of making our children and grandchildren repay the debts of their elders. "It's an unfair burden for future generations," she says. You'd think young people would be riled up over this issue, since they're the ones who will foot the bill when they're out in the working world. But students take more interest in issues like the Iraq war and gay marriage than the federal government's finances, says Emma Vernon, a member of the University of Texas Young Democrats. "It's not something that can fire people up," she says. The current political climate doesn't help. Washington tends to keep its fiscal house in better order when one party controls Congress and the other is in the White House, says Sawhill. "It's kind of a paradoxical result. Your commonsense logic would tell you if one party is in control of everything they should be able to take action," Sawhill says. But the last six years of Republican rule have produced tax cuts, record spending increases and a Medicare prescription drug plan that has been widely criticized as fiscally unsound. When President Clinton faced a Republican Congress during the 1990s, spending limits and other legislative tools helped produce a surplus. So maybe a solution is at hand. "We're likely to have at least partially divided government again," Sawhill said, referring to predictions that the Democrats will capture the House, and possibly the Senate, in next month's elections. But Walker isn't optimistic that the government will be able to tackle its fiscal challenges so soon. "Realistically what we hope to accomplish through the fiscal wake-up tour is ensure that any serious candidate for the presidency in 2008 will be forced to deal with the issue," he says. "The best we're going to get in the next couple of years is to slow the bleeding." http://apnews.myway.com/article/20061028/D8L1OC5G0.html FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Investors warned of post-election disaster

Alert Focus: Mammon / The Third Seal Revelation 6:5-6 When He broke the third seal, I heard the third living creature saying, "Come." I looked, and behold, a black horse; and he who sat on it had a pair of scales in his hand. And I heard something like a voice in the center of the four living creatures saying, "A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine." Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. Central banks caught in gold squeeze may crush dollar WORLDNETDAILY - By David Bradshaw - October 30, 2006 -- The founder the Gold Anti-Trust Action Committee says the U.S. government's so-called "Plunge Protection Team" is helping prop up the U.S. economy, dollar and stock market – until Election Day. Then, says Bill Murphy, "all hell could break loose" as the government's "strong-dollar policy" completely breaks down and is exposed as nothing more than a "keep-gold-weak policy." For the last seven years, Murphy says, GATA has pounded the table, insisting to the world the gold market is manipulated, but government leaders, the banking establishment and their captive financial press have refused to debate the issue, dismissing it as "conspiratorial" nonsense. But Murphy contends "GATA has proof on the public record that central bank gold reserves on deposit are only half of the 32,000 tons they officially claim to hold and are now starting to hit the wall as gold prices keep rising." Murphy sees a "convergence" coming in the gold market between the rising physical demand for gold and shrinking mining output and supply – with the gold price "management" by central banks caught in the squeeze. The Wall Street Journal reports, "Treasury Secretary Henry Paulson, a Wall Street veteran has reinvigorated the President's 'Working Group on Financial Markets' (PPT), which includes heads of the Fed, SEC and Commodity Futures Trading Commission." "Gold prices could double to $1,200 per ounce in the short term to then run up as high as $3,000 per ounce over the next five years," Murphy told WND founder Joseph Farah in an exclusive interview this week, now available to WND readers on CD. Hear a 90-second clip of the CD. http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=52650 FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Iran replaces dollar with euro in most oil dealings

Alert Focus: Mammon / The Third Seal / The prince of the kingdom of Persia Editorial Note: This article originally appeared in the December 9, 2006 edition of Moriel's Be Alert! email newsletter. MEHR NEWS AGENCY - December 5, 2006 -- TEHRAN — Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, an informed source with Iran’s Oil Ministry said here on Tuesday. Oil Ministry has taken the policy to substitute dollar with euro, and begun to implement it for most of its oil dealings, the source who spoke on the condition of anonymity told the Mehr News Agency. “This can maintain the real value of Iranian oil,” he added. The majority of Iran crude’s customers are Asian and European states, the source noted. Iran is the number two oil producing member of the Organization of the Petroleum Exporting Countries (OPEC). It also stands second behind Russia in terms of gas reserves in the world. http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=416994 FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

The plan to destroy America – via the dollar

Alert Focus: Mammon / The Third Seal Proverbs 13:7 There is one who pretends to be rich, but has nothing; Another pretends to be poor, but has great wealth. James 5:3 Your gold and your silver have rusted; and their rust will be a witness against you and will consume your flesh like fire. It is in the last days that you have stored up your treasure! WORLDNETDAILY - Commentary by Hal Lindsey - December 8, 2006 -- The value of the U.S. dollar on the international market is continuing to plummet, despite record growth in the US economy. Since October, the dollar has fallen 4 percent against both the euro and the Japanese yen. And this week, the dollar hit the lowest it has been against the euro since March 2005. With the Dow setting records every week and America creating more jobs than it can fill, why is the dollar falling? There are several reasons. Approximately 70 percent of all foreign-exchange currency is currently held in U.S. dollars. The U.S. then sells Treasury debt into that foreign exchange market. This is a bit complicated, but here's what that means. Each U.S. bill is a receipt for Treasury debt. Once accepted as "money" it has value to its bearer. But, it is debt to its issuer. The system relies on the global flow of U.S. dollars in and out of foreign currency reserves. A smaller foreign exchange holding in U.S. dollars means a smaller pool out of which to sell U.S. debt. This sets up a financial peril that is little understood by most Americans. It sets up a double threat to the dollar. It not only shrinks the dollar's value, but also raises both the trade deficit and the budget deficit. Now stay with me, here. This may be some of the most important information you will need to try and force Congress to do something – and also to take action to defend your own personal financial future. It has become apparent that there is a new strategy to destroy America. It is a new kind of warfare designed to destroy the value of American currency via a carefully coordinated attack against our dollar by a coalition of our enemies. And, based on the rapid shrinking of the dollar's worth, despite an economic boom, it appears to be working. Certain countries have begun quietly divesting themselves of U.S. foreign exchange holdings, converting them to euros. In 2004, the Switzerland-based Bank for International Settlement reported that the U.S. dollar-denominated deposits of OPEC countries fell from 75 percent of their total deposits in the third quarter of 2001 to 61.5 percent by the end of 2003. In the same period, the share of euro-denominated deposits of OPEC countries rose from 12 percent to 20 percent. OPEC member euro-denominated deposits reached 44 billion in June 2004, nearly double the 23.4 billion euros these countries held in the third quarter of 2001. In the same period of time, the dollar holdings of the OPEC member countries decreased from $145.3 billion to $132.1 billion. In 2005, China negotiated major oil and natural gas rights from Iran. For years, North Korea's Kim Jong-il has been flooding the global economy with so-called "supernotes" – counterfeit U.S. $100 bills so good even Secret Service agents can't tell the difference without conducting sophisticated tests. The 2005 arrests of major Asian crime figures in several U.S. cities led investigators straight to Pyongyang – and from there to Beijing. Experts now believe that a significant percentage of U.S. $100 bills now in circulation are counterfeit. The strategy is to flood the market with counterfeit dollars to deflate its value. Then to convert U.S. holdings to euros, thus pushing the dollar into a deflationary freefall. In January 2006, China announced an intention to reduce 75 percent of its foreign exchange reserves currently held in U.S. dollars. Since China is the world's second-largest holder of U.S. dollar-denominated foreign-exchange reserves, it has the power to create a catastrophe. At the same time, Venezuela and Iran are now demanding that all payments for oil shipments be paid for in euros – not dollars. In addition, both nations are planning regional central banking schemes designed to hold all foreign exchange holdings of participating countries in euros instead of dollars. This explains why enemy operators, spearheaded by members of the Saudi royal family, have flooded hundreds of millions of dollars into Venezuelan held bearer-bonds that are used to buy as many banks as possible throughout the Caribbean and South American areas. All these factors cannot be coincidence. They reveal a concerted, well-coordinated strategy to destroy America through economics. I believe oil is being used in this same overall strategy against America. Last October, OPEC agreed to reduce production to keep oil prices up near $60 per barrel. The price was suggested by Hugo Chavez after consultation with his friends in Tehran and Moscow and accepted by OPEC. With that one brilliant maneuver, Chavez cornered the global oil market. Venezuela has vast deposits of heavy oil in the Orinoco, but heavy oil is expensive to extract and refine at free-market prices. However, at $60 per barrel, the Orinoco reserves give Venezuela the largest proven oil reserves in the world. Not just larger than the vast reserves of Iran or Saudi Arabia, it is larger than both of them put together. In fact, it is bigger than all the proven oil reserves in the Middle East combined. Venezuela's deposits alone could extend the oil age for another 100 years. Hugo Chavez is raking in some $200 million a day in oil sales, most of it from the United States. If Chavez demands payment in euros, it will throw the whole U.S. economy into a crisis. Amazingly, Hugo Chavez has now become the go-to guy for all of OPEC. He's held audience with every oil sheik and dictator in the Middle East, including our "friends" the Saudis and Kuwaitis. With the recent re-election of Chavez, the U.S. is ringed by five of the most virulently anti-American leftist regimes in Latin America. http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53285 FAIR USE NOTICE: This blog contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of religious, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

Be Alert! Communiqué: Teen and TwentySomething Christians Falling Away

Alert Focus: The Falling Away / Deception

2 Timothy 4:3-4

For the time will come when they will not endure sound doctrine; but wanting to have their ears tickled, they will accumulate for themselves teachers in accordance to their own desires, and will turn away their ears from the truth and will turn aside to myths.

Matthew 24:11 "Many false prophets will arise and will mislead many.

Editorial Note: Some of these articles originally appeared in the December 11, 2006 edition of Moriel's Be Alert! email newsletter.

Most Twentysomethings Put Christianity on the Shelf Following Spiritually Active Teen Years THE BARNA RESEARCH GROUP - THE BARNA UPDATE - September 11, 2006 -- Ventura, CA – Transitions in life are rarely simple. Some of the most significant and complex shifts that people undergo occur during the transition from adolescence to early adulthood. An important part of that maturation is the refinement of people’s spiritual commitment and behavior. A new study by The Barna Group (Ventura, California) shows that despite strong levels of spiritual activity during the teen years, most twentysomethings disengage from active participation in the Christian faith during their young adult years – and often beyond that. In total, six out of ten twentysomethings were involved in a church during their teen years, but have failed to translate that into active spirituality during their early adulthood. Teens Embrace Spirituality… Teenagers thrive on fresh experiences and new perspectives. The spiritual dimension gives teens a fertile ground for their explorations. Half of teens attend a church-related service or activity in a typical week. More than three-quarters discuss matters of faith with peers and three out of five teens attend at least one youth group meeting at a church during a typical three month period. One-third of teenagers say they participate in a Christian club on campus at some point during a typical school year. There is also a substantial amount of unorthodox spiritual activity: three-quarters of America’s teenaged youths have engaged in at least one type of psychic or witchcraft-related activity during their teen years (not including reading horoscopes). Still, one of the most striking findings from the research is the broad base of opportunities that Christian churches in America have with to work with teenagers. Overall, more than four out of five teens say they have attended a church for a period of at least two months during their teenage years (81%). This represents substantial penetration and significant prospects for influencing the nation’s 24 million teens. …But Disengagement Happens At the same time, the Barna research underscores how fleeting that influence may be: twentysomethings continue to be the most spiritually independent and resistant age group in America. Most of them pull away from participation and engagement in Christian churches, particularly during the “college years.” The research shows that, compared to older adults, twentysomethings have significantly lower levels of church attendance, time spent alone studying and reading the Bible, volunteering to help churches, donations to churches, Sunday school and small group involvement, and use of Christian media (including television, radio and magazines). In fact, the most potent data regarding disengagement is that a majority of twentysomethings – 61% of today’s young adults – had been churched at one point during their teen years but they are now spiritually disengaged (i.e., not actively attending church, reading the Bible, or praying). Only one-fifth of twentysomethings (20%) have maintained a level of spiritual activity consistent with their high school experiences. Another one-fifth of teens (19%) were never significantly reached by a Christian community of faith during their teens and have remained disconnected from the Christian faith. For most adults, this pattern of disengagement is not merely a temporary phase in which they test the boundaries of independence, but is one that continues deeper into adulthood, with those in their thirties also less likely than older adults to be religiously active. Even the traditional impulse of parenthood – when people’s desire to supply spiritual guidance for their children pulls them back to church – is weakening. The new research pointed out that just one-third of twentysomethings who are parents regularly take their children to church, compared with two-fifths of parents in their thirties and half of parents who are 40-years-old or more.... Piecing Faith Together While twentysomethings often disengage from traditional religious expressions, faith and spirituality are hardly absent from their lives. The research also examined a number of significant realities about the spiritual journeys of young adults: - As for religious identity, most twentysomethings maintain outward allegiance to Christianity: 78% of twentysomethings say they are Christians, compared with 83% of teenagers. Although they are less likely than older generations to feel this way, most twentysomethings describe themselves as “deeply spiritual.” - Loyalty to congregations is one of the casualties of young adulthood: twentysomethings were nearly 70% more likely than older adults to strongly assert that if they “cannot find a local church that will help them become more like Christ, then they will find people and groups that will, and connect with them instead of a local church.” They are also significantly less likely to believe that “a person’s faith in God is meant to be developed by involvement in a local church.” - These attitudes explain other anomalies of twentysomething spirituality. Much of the activity of young adults, such as it is, takes place outside congregations. Young adults were just as likely as older Americans to attend special worship events not sponsored by a local church, to participate in a spiritually oriented small group at work, to have a conversation with someone else who holds them accountable for living faith principles, and to attend a house church not associated with a conventional church. Interestingly, there was one area in which the spiritual activities of twentysomethings outpaced their predecessors: visiting faith-related websites. ... http://www.barna.org/FlexPage.aspx?Page=BarnaUpdate&BarnaUpdateID=245

Bible-Based Youth Ministry Bumps Out Pop Culture THE CHRISTIAN POST - By Lillian Kwon - November 16, 2006 -- Sugarcoated, MTV-style youth ministry is over, Time magazine reported. The current trend that is packing teens in pews: Bible-based worship. Youth ministers have tried to engage teens in the church with a message wrapped in pop-culture packaging to initially attract the young crowd. The approach has successfully drawn a large number of youths to the pews. But it has failed to keep them there. Research groups have tracked a dropping percentage of young adults still participating in church activities or attending church at all since their teenage years. A Barna survey showed 61 percent of people in the 20-29 age group had participated in church activities as teens but are now disengaged. Youth Transition Network coordinator Jeff Schadt preaches an even higher proportion of youths - as high as 88 percent - falling away from the church, especially when leaving the nest for college. The sugarcoated Christianity that was popular in the past few decades was found to be causing growing numbers of kids to turn away from youth-fellowship activities and the Christian faith altogether, according to Time. "The vast majority of teens who call themselves Christians haven't been well educated in religious doctrine and therefore don't really know what they believe," Christian Smith, a University of Notre Dame sociologist and author of Soul Searching: The Religious and Spiritual Lives of American Teenagers, told the magazine. "With all the competing demands on their time, religion becomes a low priority, and so they practice their faith in shallow ways." Teen Mania, one of the nation's largest youth organizations, openly rejects the MTV culture. More than 200,000 teens just this year attended the organization's new Battle Cry stadium-worship events that feature top Christian music artists while grounding teens in Scripture. Stadium events run like a Christian Lollapalooza, as Time described it, but founder Ron Luce knows the significance of a strong foundation in Scriptural teachings. He aims to raise up "serious followers of Christ" and his approach has been a huge success with teens and youth leaders. Today's teens are more drawn to Scripture and desire to get a better understanding of what they believe. One surprising finding that Fuller Seminary's Center for Youth and Family Ministry revealed in an ongoing study was that teens attend youth group because they like their youth pastor and to learn about God. Those reasons were listed by the majority of the surveyed students. The Barna Group found the top reason listed among teens for attending church was to "understand better what I believe." Students also said they wanted to have more time for deep conversation and also desired more accountability in their youth groups. Games or other activities were not a desired priority. Time reported churches now focusing more on Scripture and less on entertainment are actually growing. Youth attendance numbers are at least doubling at such churches as Shoreline Christian Center in Austin, Texas and Covenant Life Church in Gaithersburg, Md. And teens are happy with the traditional approach as they're understanding what it means to be a Christian. http://www.christianpost.com/article/20061116/23499.htm

Study: State of High School Seniors Today THE CHRISTIAN POST - By Lillian Kwon - October 24, 2006 -- Fuller Seminary's Center for Youth and Family Ministry (CYFM) released results from its first wave in a three-year longitudinal study surveying high school seniors going off to college. Studying the current state of seniors and the type of students youth ministries are developing today, the College Transition Project received responses from high school students around the country for wave one of the milestone study. Surprisingly, the top reason students go to youth group is because of their youth pastor. According to the responses received, 162 of which were usable, 68 percent said it is "very true" or "completely true" they go to youth group because they like their youth pastor. The second most popular reason was "I learn about God there," which was followed by 58 percent who said "It's fun." Other reasons listed as "very true" or "completely true" by at least 50 percent of the students included "I feel comfortable there," "I've always gone to church/youth group," "It's a place where I can learn to serve," and "It feels like a real community." Some youth workers expressed ambivalence about the top reason students listed but they also raised the question if it's possible that the students have become "too dependent" on their youth pastors. "Interestingly, seniors' connections with their friends at youth group don't rank as highly as many would have guessed," noted the report. "By average score, seniors ranked the options regarding community and a sense of belonging seventh, eighth, and tenth." The least likely reason students listed was that their parents make them go or that they feel guilty if they don't go. Students were also asked what they wanted to see more of in youth ministry. At the top was the desire for more service projects. Following that, 70 percent of the respondents wanted more or much more time for deep conversation; 65 wanted more mission trips; 65 percent wanted more accountability; and 58 percent wanted more time to worship. Ranked last was the desire for more games. "The major theme of these seniors’ responses is a desire for deeper responsibility and interaction; they want to express themselves and their faith through service and mission trips, and they want deeper interaction through conversation, accountability, and alone time with leaders," stated the study. "The vast majority do not want more games." Although 56 percent said they wanted more Bible study, the study highlighted its lower ranking among the listed changes and pointed to the little time seniors spend on reading the Bible on their own. A separated questionnaire had indicated that the seniors read the Bible by themselves an average of 2 to 3 times per month. On an additional note, involvement in Sunday youth group gatherings was found to have a significant relationship with seniors' choices on such risk behaviors as drinking alcohol and sexual activity. Earlier results from the project's first pilot phase had found that 100 percent of students who graduated from youth ministry had engaged in risk behaviors. However, the more activities, such as Bible reading or youth ministry works, students engaged in, the greater effect it had on their faith and life choices. A third question in the study asked seniors about their feelings toward their adult youth leaders. Youth leaders were looked to as a greater source of support than fellow peers or "other students" in their youth group. "Overall, this is encouraging news for youth leaders," the report highlighted. "Seniors feel supported, valued, and appreciated by youth ministry adults. Perhaps surprisingly, seniors’ perceived levels of support from other students in their youth groups pales in comparison to the support they receive from their adult leaders." Their perception of being supported by their youth group leaders also made a difference in their choosing to or not to drink alcohol. It had no effect on their levels of sexual activity. Having discussions with parents was also found to make a significant difference on students and the choices they make. When it came to integrating their faith into their life choices, 85.1 percent agreed that it is important that God be pleased with their dating relationship; 81.5 percent agreed that they try to see setbacks and crises as part of God's larger plan; 75.9 percent said it is important that their future career somehow embody a calling from God; and 72.2 percent said it was important to them to seek God's will in choosing what college to attend. "The good news is that students’ faith makes a difference in their perspective on dating, crises, college selection, and future career," the study noted. "The bad news is that students’ faith has far less impact on their choices related to money and schedule." One college sophomore described, “In high school, everything was scheduled. In college, every choice is up to you, and you set your own schedule. You can do whatever you want.” Wave one of the College Transition Project collected data from 162 high school seniors through online and paper surveys. The majority of the respondents were female, had a GPA of 3.0 or above, live with both parents, and said they were involved in student leadership or leadership training at their churches. http://www.christianpost.com/article/20061024/23143.htm

A New Generation of Adults Bends Moral and Sexual Rules to Their Liking THE BARNA RESEARCH GROUP - THE BARNA UPDATE - October 31, 2006 - Ventura, CA – Do Americans share much common ground when it comes to defining appropriate moral behavior and attitudes? Most Americans say they are concerned about the moral condition of the country and the vast majority of adults describe themselves as moral people. But the nation’s residents have difficulty agreeing on what a “moral” life should look like – much less how to make ethical decisions or how to define moral standards. A new nationwide survey from The Barna Group examines one of the largest gaps in the moral persuasions of Americans: the difference between those in their twenties and thirties (an age group comprised primarily of the so-called “Buster” generation) and those over the age of 40. The new study shows a significant divide between the nation’s young adults and its older residents. The project analyzed 16 different areas of moral and sexual behavior and found that Busters’ lifestyles took a less traditional – some would say less moral – path on 12 of those 16 areas. The study also explored 16 different perspectives regarding morality and sexuality, finding that Busters’ views are less conventional than that of their predecessors in 13 areas. In none of the 32 facets of lifestyle or attitude were Busters more likely to possess a conventional moral position when compared with the older crowd of “pre-Busters.” Sexuality Perhaps no moral dimension has changed as much as Americans’ perspectives and behaviors related to sexuality. Among the 32 factors examined in the research, eight of them related to such topics as extramarital sex, pornography, homosexuality, and sexual fantasies. In all eight of these areas, Busters were significantly different from older Americans. Some of these differences show up in the sexual activities engaged in during the past month. Busters were twice as likely to have viewed sexually explicit movies or videos; two and a half times more likely to report having had a sexual encounter outside of marriage; and three times more likely to have viewed sexually graphic content online. But many Busters also defy sexual convention in their attitudes. For instance, more than two-thirds of the generation said that cohabitation and sexual fantasies are morally acceptable behaviors, compared with half of older adults. Most young adults contended that engaging in sex outside of marriage and viewing pornography are not morally problematic, while only one-third of pre-Busters agreed. Almost half of Busters believed that sexual relationships between people of the same sex are acceptable, compared with one-quarter of older adults. Other Behaviors Moral experimentation is often most evident at a young age. Perhaps it is not surprising, then, that Busters were more likely than older adults to say that in the past month they had used illegal drugs and had gotten drunk. (Smoking rates, however, were comparable between the generations.) But on a deeper level, the new rules of morality affect how young adults interact with others, creating less civility, respect, or patience. Busters were twice as likely as their parents’ generation to use profanity in public, to say mean things about others behind their back, to tell something to another person that was not true, to do something to get back at someone who hurt or offended them, to take something that didn’t belong to them, and to physically fight or abuse someone. Given their familiarity with and access to technology, the study also showed that young adults – especially twentysomethings – were ten times more likely than older adults to download or trade music online illegally. While some of that gap can be attributed to the relative comfort of the younger adults with the technologies involved, a considerable degree of the gap must be credited to the different moral standards of the two adult segments. The lifestyles of young and old were indistinguishable in a few ways. Out of the 16 areas of moral behavior, adults across the generations were equally likely to have given someone “the finger” while driving, to smoke, to buy a lottery ticket, and to place a bet or gamble. Views about Morality People’s actions are guided by their values and the research showed that Busters’ opinions about morality were also distinct from those of their predecessors. Young adults were significantly more likely to accept gambling, profanity, intoxication, and illegal drug use as morally acceptable behaviors. Busters’ perspectives were no different from that of their elders on three issues: the acceptability of abortion, allowing the “f-word” on broadcast television, and deeming divorce not to be a sin. However, other large generational gaps emerged when the survey explored how people decide what is right and wrong. Nearly half of all pre-Busters said they view moral truth as absolute, but only three out of 10 Busters embraced the concept of absolute truth. Two-thirds of those over 40 said humans should determine what is right and wrong morally by examining God’s principles; less than half of Busters felt this way. Instead, nearly half of Busters said that ethics and morals are based on “what is right for the person,” compared with just one-quarter of pre-Busters. This mindset helps to explain why Busters are more likely to embrace a pragmatic, individualized form of moral decision-making. When asked to describe how they make moral and ethical choices, a majority of pre-Busters said they follow a set of principles or guidelines, while less than half of Busters (including just one-third of those in their twenties) said they follow such external ideals. A Christian Distinctive? To what extent does faith make a difference among Busters? The research shows that born again Busters – a group defined not based upon self-identification with the “born again” label but based upon their beliefs about Jesus Christ and regarding life after death – were different from non-born again young adults on some issues. Born again Busters were somewhat less likely to illegally download music, to smoke, to view pornography, to purchase a lottery ticket, or to use profanity. However, young believers were actually more likely than non-believers to try to get back at someone and to have stolen something. Moreover, on eight of the 16 behaviors, the profile of born again Busters was virtually identical to that of non-born again Busters. The research also compared born again Christians across age groups. Born again Busters were much less likely to act in a “moral” manner than were born again adults over 40. On nine of the 16 activities, young believers were less conventional than older believers, while engagement in the other seven activities was indistinguishable between the generations.... The director of the research, David Kinnaman, pointed out, “The research shows that people’s moral profile is more likely to resemble that of their peer group than it is to take shape around the tenets of a person’s faith. This research paints a compelling picture that moral values are shifting very quickly and significantly within the Christian community as well as outside of it.” ... http://www.barna.org/FlexPage.aspx?Page=BarnaUpdate&BarnaUpdateID=249

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Church Growth Hormone - a Biblically Banned Substance

Alert Focus: The Falling Away / Deception Colossians 2:8 See to it that no one takes you captive through philosophy and empty deception, according to the tradition of men, according to the elementary principles of the world, rather than according to Christ. By Ray Baumann - December 7, 2006 -- I used to be a Church Growth Hormone addict. For my first eight years in the ministry, I was on a daily diet of books and videos centered around the latest church fads and trends that focused on church growth. I was on the cutting edge of ministry thinking, learning more and more about marketing and the psychology of connecting people. I believed that numbers equaled success, even if that meant changing the name of the church, offering self-help programs, or implementing any other sort of method I thought would help to boost the numbers. Like many pastors, I could be compared to a professional athlete when it comes to how we view success and how we perceive we are valued. For an athlete, the math is pretty simple; if you score goals, hit home runs, and nail the three point shot, its all about the numbers. The more successful you are in making the score, in essence, hitting your numbers, the greater your worth. For pastors, it’s the number of people that are sitting in the seats that seems to be the measure of success. This is something, however misguided it may be, that we all strive to obtain. Now, more than ever before, there are numerous books that place emphasis on the subject of church growth and there seems to be a greater desire to be a mega church. This desire then facilitates the thought pattern of, “If I grow the church, I’m doing more for God than the next guy.” What we have seen in recent news is that many professional athletes have been taking illegal substances to build muscle and strength to improve their performance. These players will do whatever it takes to bump up the numbers that they think give them value. To these players, the end result justifies the means no matter what the side effects. Pastors around the world have come to believe that church growth equals success. Thousands have attended conference after conference, read book after book, and are even listening to audio messages regarding church growth. Just like the professional athlete on steroids, pastors have been caught taking Church Growth Hormones for growth’s sake. Many have seen the fast, “successful” results and have signed on, thus endorsing this dangerous pill. They have improved their performances on Sundays and Wednesdays to attract people. The Church Growth Hormone contains some very ugly ingredients. Let’s take a look. The ingredients are as follows: man-centered theology, relevant messages that solve people’s problems by meeting their needs, events and programs that reach out to the community, and music that is contemporary and entertaining. For best results, remove pews, dress casual, and install a 5000 lumen projector. If taken weekly and if you follow a regimented marketing strategy, you are guaranteed growth. The side effects may include unbelievers in leadership, false converts, uncommitted members, and shallow minds. On my own, there is no way that I could see the damaging effects of what I was participating in. To top it off, I was encouraged in this sin by many people. If anyone asked how the church was doing, what they really wanted to know was how our attendance numbers were, not how God was working or what He was doing in our congregation. My world view was filled with garbage and I was blinded. My flesh was in constant need to be validated, which was coming directly from numbers and growth instead of how God was moving. That’s right, I said flesh, and this was my first problem. It was all about me. When I took me out of the equation, my sight started becoming clearer. The Word had to become my number one reference for all things. After some study, I actually began to be discerning. Those many books that I owned went right into the trash and I learned how to inductively study the Bible. When it came down to it, Jesus basically rewrote the hard drive of my mind. Steering away from a numbers-driven thought process, growing the church was no longer my focus. Now my focus is about training the believer. "There is a way that seemeth right unto a man, but the end thereof are the ways of death." – Proverbs 16:25 ---------- Wearing many hats typically come easy to a minister. Such is the case with Ray Baumann. Youth Pastor, Associate Pastor, Coach, Husband, and Father, Ray wears them all, while continually trying on more. Ray is a former emergent, postmodern relevant, purpose-driven church growth thinker that God has dramatically transformed. Currently serving as Associate Pastor at First Assembly of God in Belleville, IL, Ray is a 10-year youth ministry veteran turned family pastor. While he spent the first eight years of his ministry focused on growing the church, Ray has recently changed his focus to growing the believer. Coupled with a passion for speaking on youth culture and church issues, Ray enjoys coaching and training high school soccer players at Belleville East High School year round. Juggling ministry, coaching, and family isn’t always easy, but Ray’s easy going personality, quick wit, and his desire to disciple students are truly God-given gifts, gifts that God has used to bless Ray in both his ministry and his family. Ray and his wife Kristi have four children and have taken on the challenge of working to home school their children, all the while teaching them of the importance of leading Christ centered lives. Their active, lively household is located in Shiloh, IL. http://www.worldviewweekend.com/secure/cwnetwork/article.php?ArticleID=1336%0A