Given the vast size of the national debt and the hundreds of billions of dollars it takes each year just to finance it, many people expect that higher taxes will eventually become part of the fiscal landscape.

This will especially be the case if the government ever defaults on its obligations and is suddenly unable to borrow more money or is forced to do so at a higher cost.

With these things in mind, a recent Reuters report noted that Paul Volcker, a former Federal Reserve Chairman who advises President Barack Obama on economic issues, had recently warned that that higher taxes may be necessary to reduce the deficit at some point in the future.
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The national debt is expected to exceed $14 trillion this year due to a combination of factors such as reduced government revenues and increased spending for stimulus purposes. The sheer size of the debt has led to greater attention being focused on fiscal responsibility, but so far, tangible attempts at fiscal responsibility seem to have largely been lacking among the nation’s leaders.

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A report in London’s Evening Standard newspaper notes that many in the finance industry see proposals by President Barack Obama and British Prime Minister Gordon Brown as unnecessary and potentially burdensome to the industry.

One executive was quoted as saying that if the proposed rules, which in the UK include a tax on all financial market transactions, turn out not to work, the results could fall somewhere between stifled growth and “another crisis.”

Overall, such criticism is reflective of the general uncertainty and unease that surrounds the economic recovery, which in the U.S. has so far been a slow and jobless one. There is also concern that a double dip recession could become apparent in the coming months, largely due to factors like the unemployment situation.
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We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind. Many of us predicted $100 updays for gold, and we almost saw one. The wheels came off the US financial wagon long ago, but only now that fact is being recognized. The monetization largesse finally has gone beyond the corrupt bailouts of fraud kings on Wall Street. My longstanding forecast has been that when the monetary inflation machinery spits output beyond the sanctimonious walls of the Wall Street whorehouses, INTO THE MAINSTREAM, that the gold price would rise substantially. That process has begun, starting with Fannie Mae & Freddie Mac, and now moving to AIG. Only when phony money floods the system where people live, not where the elite conmen with strangehold control the counterfeit processes, will gold shine. So many unexpected upcoming events (more…)

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Market News

Financial fears, soaring inflation hit Wall St

Oil rises as dollar falls

WellCare shares jump on probe payment

More Business & Investing News…

By Jan Dahinten

SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

“The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say ‘the worst is to come’,” he told a financial conference.

“We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks,” said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund’s chief economist from 2001 to 2004.

“We have to see more consolidation (more…)

TGR: Where do you see the markets going between now and the end of the year?

RM: My opinion is that we’re headed for a major crash. I think the market will top in August and we will have a repeat of 1929. I believe in 1929 the very top was on September 5th. It declined into October and then crashed at the end of October. We are going to have a market crash between now and October. Reality is setting in; the smart money is bailing out of stocks.

TGR: Well, that‘s pretty dramatic. How do you view gold playing out in the same time period?

RM: First of all, gold is the ultimate money. It’s portable; it’s divisible; it’s rare; and it’s transferable. It’s the only asset that has no obligation whatsoever to anyone. If you pick up a $100 bill, you may think of it as an asset, but it’s actually a liability on the government. Gold has no liabilities; it is the safest of safe havens; it’s been that way for 5,000 years, and in my opinion, it’s going to be that way for the next three, five or twenty years.

TGR: Do you want to put a number on where you see gold going in October?

RM: That’s a trap that everybody falls into, and it’s a bad question. When you’re talking about the price of gold, you’re talking about two commodities—gold and the dollar.

Now, everybody thinks that gold has run up from $251, but it actually hasn’t gone up; the dollar’s gone down. So, the real question should be how much of a crash do you think there could be in the dollar. So, the real answer is there (more…)

$5bn loss adds to Merrill’s woes

Where next for sub-prime losses?

US bank Merrill Lynch has posted a $4.89bn (£2.49bn) loss in the three months to June due to heavy exposure to the sub-prime mortgage market.

It was the fourth quarterly loss in a row for Wall Street’s third-largest investment bank and was far bigger than analysts had expected.

Merrill announced it would write-down $9.4bn because of US mortgage market and other high risk investments.

It must now sell billions of dollars of assets to shore up its finances.

The new charges come on top of nearly $29bn in write-downs that the brokerage had already taken because of tightening credit markets.

In April, Merrill announced it would cut about 4,000 jobs worldwide.

Global banks and brokerages have been forced to take some $300bn of write-downs in the past year. Please, Run for safety and hedge your dollars by making GOLD your portfolio’s BEST FRIEND. Call The Superior Gold Group at 888-969-6465 and take physical possesion of your precious metals NOW!

Analysts were surprised by the quarterly loss which compares with a profit of $2bn the period last year.

Chief executive John Thain called the quarter “difficult and disappointing.”

The financial group also said it had agreed to sell its 20% stake in news and data provider Bloomberg for $4.43bn and selling its controlling stake in Financial Data S

Mon Jun 16, 2008 4:58am EDT

TEHRAN (Reuters) - Iran has withdrawn around $75 billion from Europe to prevent the assets from being blocked under threatened new sanctions over Tehran’s disputed nuclear ambitions, an Iranian weekly said.

Western powers are warning the Islamic Republic of more punitive measures if it rejects an incentives offer and presses on with sensitive nuclear work, but the world’s fourth-largest oil exporter is showing no sign of backing down.

“Part of Iran’s assets in European banks have been converted to gold and shares and another part has been transferred to Asian banks,” Mohsen Talaie, deputy foreign minister in charge of economic affairs, was quoted as saying.That is why smart money investor’s are purchasing and transitioning their assets and personal wealth into protection now by securing GOLD and precious metals in their portfolio. Call The Superior Gold Group now and inquire as to how you can do the same by Building Wealth You can touch with People you can Trust at 888-969-6465.

Iranian officials were not immediately available to comment on the report in Shahrvand-e Emrouz, a moderate weekly, which did not specify the time period for the withdrawals which it said were ordered by President Mahmoud Ahmadinejad.

“About $75 billion of Iran’s foreign assets which were under threat of being blocked were wired back to Iran based on Ahmadinejad’s order,” the weekly said.

Iran’s Etemad-e Melli newspaper, also quoting Talai, last week also reported the country was withdrawing assets from European banks but did not give any figures.

On Saturday, Iran again ruled out suspending uranium enrichment despite the offer by six world powers of help in developing a civilian nuclear program if it stopped activities the United States and others suspect are designed to make bombs.

The offer — agreed last month by the United States, Britain, Russia, China, Germany and France — is a revised version of one rejected by Tehran two years ago.

Iran’s refusal to suspend nuclear enrichment, which can provide fuel for power plants or material for weapons if refined much more, has drawn three rounds of U.N. sanctions since 2006. Tehran says it aims only to generate electricity. (more…)

Gold

What is the biggest mistake you can make with your money in 2008? Ignoring gold, silver and their related inflation hedges can lose you more money than all the other mistakes you can make put together, except for playing the roulette table in Vegas.

Once in a lifetime, there comes a chance to turn a relatively small amount of money into a fortune, and this is one of them. We are in the early stages of a massive multi-year bull market in the metals. The supply-demand situation beggars belief. This is as close to riskless as anything I have ever recommended in 31 years of publishing The Ruff Times.  When the wind blows, even the turkeys fly. Of course you can make lot more money picking the sheep from the goats, and that is what the Ruff Times is for, separating the biggest winners from the holes in the ground surrounded by liars. Call The Superior Gold Group and start Building Wealth You can TOUCH with People You CAN TRUST at 888-969-6465 and get started with your precious metals purchase today.

A word of caution: all my words of advice are for the long term only. In the short term, gold and silver can do anything, go anywhere. In the last bull market of the ‘70s-‘80s gold went from $120 to $850, (more…)