Thursday, 7 October 2010






Update – Goldman Sachs Sued by German Bank over Davis Square VI, an AIG CDO Bailed Out by Taxpayers








Report: Debtor Prisons on the Rise

New reports by the ACLU and the Brennan Center for Justice have found a sharp rise in debtor prisons across the country. Poor defendants are being jailed for failing to pay legal debts. In Ohio, a man named Howard Webb, who earns $7 an hour as a dishwasher, has served two stints in jail totaling over 300 days for being unable to pay nearly $3,000 in fines and costs from various criminal and traffic cases. In Michigan, a twenty-five-year-old single mother named Kawana Young has been jailed five times for being unable to afford to pay a few minor traffic tickets. Eric Balaban of the ACLU said, “Incarcerating people simply because they cannot afford to pay their legal debts is not only unconstitutional but also has a devastating impact upon men and women, whose only crime is that they are poor.”


Does the Bundesbank have any Gold in its vaults?

Lars Schall: One topic that is widely discussed among gold bugs in Germany is the question where Germany’s gold reserves are located at. May I ask you what you believe is meant by the 1.700 tons of gold in the US bullion depositories under such terms like “Custodial Gold” and “Deep Storage Gold”?

James Turk: I believe that the Bundesbank’s vaults are empty or nearly so. When Germany accumulated its 3400t of gold reserves in the 1950s and 1960s, most of it was held abroad in the US and UK. This was standard procedure at the time because it avoided the cost of shipping the gold to the Bundesbank. Also, back then gold stored in the Federal Reserve or the Bank of England was considered to be safe because central banks did not lend gold to bullion banks, which for the most part only began in the 1980s.

Eventually, however, bullion lending became active central bank policy, and even the Bundesbank’s balance sheet shows that it is now participating in this activity. When the Bundesbank lends gold, the gold is removed from the vault and given to a bullion bank, which then sells the gold, receiving dollars as proceeds from the sale. The bullion bank then invests these dollars in assets with yields higher than its cost of borrowing the gold in order to earn this spread, which is the so-called “carry trade”.

Because of its misleading accounting as I explained earlier, we just don’t know how much of Germany’s gold the Bundesbank has loaned. My guess though is that they have loaned all of it, which is why I believe its vault is basically empty. One half or 1700t was loaned directly by the Bundesbank to the big bullion banks like JP Morgan Chase and Deutschebank. And there is enough circumstantial evidence to suggest that the remaining 1700t was loaned to the US government, which in turn loaned this amount to various bullion banks. The record keeping for this transaction results in the change in accounting terms that you mention. This of course is a serious matter, and there is an important point here.


Uh-Oh: A Russian Tycoon Is Not Pleased About Getting Stiffed For $200 Million By Ireland


The Massive Mortgage Mess as we affectionately call it seems to be getting new names with each passing day – the latest one is, quite appropriately, RoboSigning Scandal (funny how after the stock market, “robotic” technology will soon becoming equated with the biggest mortgage scam in history).More

October 5th, 2010 by maxkeiser
Respond

Keiser: Well, it has become a farce really because just this past week the Irish government was on the phone to institutional investors and hedge funds was trying to sell them some new Irish government bonds. And the hedge funds were openly mocking the Irish government. They were making monkey sounds, they were saying ‘dive dive dive,’ they were making fun of the Irish government and of course this is on top of last week’s news where the Prime Minster was on TV trying to describe the financial crisis and he was obviously drunk. So, it is a complete shamble in Ireland and they are trying to sell bonds; the only place they get to buy their bonds is from the European Central Bank. More




Posted by Britannia Radio at 17:15