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In my readings and judgement of the outcome of the G20 Summit in Washington, I have to say that that there was alot of talk, regulatory promises and reportage etc, but was anything achieved ? Was anything signed off ? Nope. I guess Bush Jnr firmly expects that the world financial crisis can just wait for its own solution. Clearly leaders such as ex-UK Prime Minister Tony Blair, current UK Prime Minister Gordon Brown and French President Nicholas Sarkozy were, perhaps, a little disappointed at this lack of urgency and response to the financial crisis. Which is why Mr Sarkozy has decided to hold his own European crisis meeting on January 8, 2009.

I was particularly amused to read of this meeting in the NY Times, that well known bastion of truth and unbiased reporting, which contained the headline, “Sarkozy’s Fiscal Meeting Raises Diplomatic Hackles“. Dotted about their parlez were declarations such as:

“President Nicolas Sarkozy of France left the summit meeting on the financial crisis here last weekend in a triumphal mood, declaring that it had tamed the animal spirits of American capitalism. Then he went home and announced that he would hold his own summit meeting in a few weeks in Paris — on the same topic.”

“That has raised hackles in diplomatic circles, not just because the [European] meeting appears to compete with a planned gathering of 20 world leaders next April. Mr. Sarkozy’s aggressive statements have put American officials on edge, with some saying that he seemed determined to turn the global crisis into a referendum on the ills of untrammeled capitalism.”

In reports of this meeting by such as Reuters and the Washington Times, the headlines and assessments were somewhat less biased and stirring. These newspapers suggest that the future summit planned for the G8 on April 2009 wasn’t exactly a rush to inspire confidence or respond adequately to the current economic crisis.

Therefore, as to the reasons why European leaders  want to further address this financial crisis, these reasons are many. ALL governments have their own economic and political Think Tanks and advisers who are not stupid. Their only function must be to develop policies which aid their own country. Here, as a best guess, is what they have probably been pondering concerning the US Bailout Plans and the latter’s performance so far:

• At the recent G20 financial conference, President Bush Jr made damn sure nothing was signed. Plenty of talking and blabbing, but no urgency, no direct effective response. Bush Jr, evidently, doesn’t want any of the blame - he just wants to hand it off to President Obama.

• The US government’s Bailout response to the financial crisis, via the voodoo-thinking of the US Treasury and the Fed, can only be described as very ad hoc, messy, ill-thought out and verging on the incompetent. With something approaching 73 Treasury advisers - all ex-Wall Street, Paulson has been inexplicably saving more and more Wall Street Institutions. Therefore, his credibility as a neutral political player is very suspect. Perhaps Paulson’s so-called tenet of “Recapitalizing the banks” should be re-read as “Recapitalizing Wall Street” with taxpayers money.

• Just days before the $700 billion Bailout went into effect, Paulson bought $630 billion in credit default swaps in foreign currencies. This has caused the recent surge in the value of the US Dollar. When these swaps expire in early January 2009 - all these dollars will flood the currency markets once again and drag the dollar - and other currencies - down. Perhaps both Sarkozy and Gordon Brown have spotted this ruse, and perhaps they are aware of the currency problems that will occur in early January because of this heavy-handed play by Paulson.

• With her current Dollar problems, Energy problems, relationship problems with both China and Russia and a heavy, crippling Fiscal Debt, can the US government lead and focus effectively on the financial crisis in Global friendly terms, rather than eventually promoting its own isolationist and protectionist policies that would economically hurt both Asian and European economies and trade ?

• When Obama takes rein as the next US President, then Bush Jr, Paulson and Bernanke might well all be out of a job. Why should they care what happens in April at the the next slow-moving G8 Financial Summit ?

• With all the shadow agendas that have been perpetuated by the Bush Jr administration over the years, why should the stated economic intentions of either Paulson or Bernanke - both Bush’s main fiscal henchmen - be believed or trusted ?

• With the recent projected downgrade of America’s influence in both the global economic and political spheres by 2025 - according to a recent  US NIC Report - European Leaders should help contribute to take the lead in sorting out the current economic and financial mess.

These will be the passing thoughts of those leaders and economists concerned with the European Conference in January 2009. It’s certainly a warming thought to realize that at least a few World Leaders are intent on taking this international financial crisis seriously…

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References :

• The Fed’s Exploits: Fiscal Bust and the Dollar Go Boom…

• A Frightening Indictment from the Bailout

• As China Slowly Dumps the Dollar

• China and Russia Playing

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With all the current global problems, as the financial crisis continues to writhe, bleed and affect the global markets, as the oil price sinks inexplicably lower, with Peak Oil looming so close on the horizon, huge US Fiscal Debt problems, and China and Russia soon to unload their $ trillions - what chance the dollar ?

Perhaps a wide variety of expert views might help - from people who have long experience and know the markets intimately and who are taken seriously, whenever they utter their opinions and truths. Many have been saying it - that the dollar is a flawed currency now, some say possibly doomed.

Warren Buffet says :

“The rest of this the world owns $10 trillion of us, or $3 trillion net.” That is, U.S. claims on foreign assets run to only $7 trillion. “If lots of people try to leave the market, we’ll have chaos because they won’t get through the door.” In a nutshell, the trade deficit is forcing foreign central banks to ingest U.S. currency at a rate approaching $2 billion a day. Buffett continues: “If we have the same policies, the dollar will go down.”

Peter Schiff in his articel “The Humpty Dumpty Economy” explains:

“Reminiscent of his Bazooka maneuver, quick draw Paulson reversed course quickly with his decision to not use any TARP funds to buy the assets that the plan was specifically funded to procure. Instead, he will simply dole out the loot to his buddies on Wall Street and use it for whatever seemingly worthy initiative strikes his fancy. Although Congress loves to grandstand about oversight, it has thus far shown no courage to interfere, or even question, the change in strategy. Paulson claims that he is simply rolling with the punches. The truth however, is that the original plan was flawed from inception, as I clearly pointed out in a string of commentaries following his proposal. How could the Treasury Department, with all its funding and PhD’s, not make similar predictions? Paulson is either a liar or completely incompetent. My guess is he is both.”

Marc Faber, a well known European market analyst, writes:

“Simply put, whereas in the past cash could be perceived as ‘reasonably’ safe, today cash may, courtesy of modern central banking under the auspices of the US Fed, actually have become quite a dangerous asset class due to its depreciation not only against asset prices but also against consumer prices, if these were measured properly by government agencies.”

In a recent interview from the Financial Times regarding the dollar and US Economy, Jim Rogers had this to say:

FT: It’s a year since we last interviewed you. You were aggressively bearish about the dollar, but you thought there would probably be a rebound and you would take that as an opportunity to get further out of the dollar. Have you made a further exit from the dollar?

JR: Not yet, no.And the reason I haven’t is because we’re in a period of forced liquidation of everything. We’ve had only eight or nine periods like this in the past 150 years, where everybody has to reverse their positions on everything.There is a gigantic short position in the dollar and they’re all having to cover as they reverse their positions, so this rout is going to go on much further than I would have expected - to my delight, because then I’ll get to sell at higher prices. I don’t know whether I’ll get out this month or this year even - maybe next year, but I do plan to get out of the rest of my US dollars, because this is an artificial rally caused purely by short covering.

FT: How will you tell when that deleveraging is finally over?

JR: I’m sure I won’t get it right, but I do hope that when there’s a lot of euphoria about the dollar and everybody’s saying, well, see, there’s no problem with the dollar . . . I hope I’m smart enough to recognise it and finally get out of the dollar, because it is a flawed and, maybe, even doomed currency.

FT: Do you see the sell-offs we’ve seen in commodities as a drastic correction?

JR: Well, we’re in a period of forced liquidation of all assets . . . we’re getting the business cycle effect on demand right now, certainly, but unless the world’s in perpetual economic decline, commodities are the only thing going to come out of this OK.

FT: Does this mean you’re actually buying back into commodities at the moment, or is this an area you’re standing clear of?

JR: No, no. In October when I started covering my shorts in the US stock market, I started buying Chinese shares, Taiwan shares. I started buying commodities again. No, no, I’ve added to those positions.

FT: What’s your strategy towards emerging market stocks?

JR: My hope is that I’m smart enough and brave enough at some point along the line to buy some of them back. But I’m not even thinking about it right now . . . The world’s financial situation is in a mess, and there are a lot of people who have to liquidate. I mean, we must have had 30,000 MBAs flying around the world looking for emerging markets. All of that money has got to come home.

FT: How do you think the world should go about redesigning the regulatory system, and are you worried that we’re going to end up with a swing towards over-regulation?

JR: Well, we probably will. The problem is that people like Alan Greenspan would never let the market work . . . For 15 years, under Greenspan, and now Bernanke, they would not let the market work. Had they let Long-Term Capital Management fail, back in 1998, we wouldn’t have these problems now, I assure you. Lehman Brothers would have been smashed. Goldman Sachs, Bear Stearns, would have been smashed. We wouldn’t have these problems now. That only happened because every time they turned around they propped these guys up, gave them more money, and that’s why we have the problem. . . . But now, of course, they’re going to blame it on other people and cause more regulations.

FT: You’re arguing we need to allow some more big institutions to fail?

JR: One failed. Why didn’t they let Fannie Mae and Freddie Mac? I mean, I was short Fannie Mae, and they should have let it fail, go zero. AIG - they should have let it fail. They should have let all of these guys fail, and we would clean out the system . . . What they’re doing is, they’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘OK, now you can compete with the competent people, with their money.’ I mean, this is terrible economics. This is outrageous economics.

The first assessments of the current G20 Financial Summit are out. And amid the muddle and fumblings of other countries as to what can be done, one leader seems to have quietly taken the reins of this gathering with a definitive plan. Gordon Brown, the current PM of UK, introduced this financial plan to the EU last month. A few European countries, then virtually all states decided to run with it because it was so good. Now he has introduced this plan to the G20 Meeting. I certainly don’t agree with all of his plan, but at least Mr Brown has brought the G20 together with a reasonably focused response. This, after all, is what a leader should do. President Bush is hosting the meeting - and reportedly all he brought to the meeting table was a neat haircut and a weary smile. He also served tea and coffee during the intervals (without any help at all, so they say). The following short article is from the UK Guardian, which includes quotes of high praise from Paul Krugman, the well known and highly respected US economist.

“From the way Gordon Brown was talking about the G20 summit at his Downing Street press conference this week, you could be forgiven for thinking that he sees it as his chance to audition for the role of chancellor of the exchequer for the world. But if that doesn’t work out, and if the voters boot him out at the general election, he has brilliant future as a university professor.

That’s not my verdict but Paul Krugman’s - and he’s just won the Nobel Prize for economics, so he should know. Krugman hailed Brown as the saviour of the world economy in a New York Times column last month and last night he and other economists met the prime minister after he arrived in New York for the G20 summit.

After the meeting, Krugman told the BBC’s Nick Robinson, for a Today programme interview, why he was so impressed by what Brown had done.

We had this completely muddle-headed response from the United States, the US Treasury: “Something must be done, the markets are frozen up.” But then the plan made no sense. It was really great confusion, and not much coming out of the eurozone. Then Gordon Brown comes along and says we are going to recapitalise the banks, which is what economists like myself had been saying. It provided the signal that we could do a straight-forward, well-focused response to this crisis. Britain is not one of the world’s biggest economies but Britain has ended up setting the template for everyone else’s response, which is quite amazing.

Then Robinson asked Krugman how Brown had gone down with the academics. Krugman was effusive.

He’s pretty good. If this prime minister thing doesn’t work out, he’s got a pretty good career as an academic [ahead of him]. It was amazing. The level of discussion was, particularly for someone accustomed to the US for the last few years, awesome.”

In 1910, in a quiet backwater in Georgia at The Jekyl Island Hunt Club, there was a meeting whose simple purpose was the formation of US The Federal Reserve. Those who attended were: Senator Nelson Aldrich (Nelson Rockefeller’s maternal grandfather); A. Piatt Andrew, Economist and Assistant Secretary of the Treasury; Frank Vanderlip, President of the National City Bank of New York; Henry P. Norton, President of Morgan’s First National Bank of New York; Paul Moritz Warburg, a German who was partner in the New York banking house of Kuhn, Loeb Co.; Benjamin Strong, an aid to J. P. Morgan.

The Federal Reserve was incorporated in 1913 and has been creating a completely unnecessary National Debt ever since. In simple terms, the Fed creates money as debt. They create money  and credit out of thin air by nothing more than the ruse of “fractional lending” and a book entry. Whenever the members of the Fed make any loans, that debt money is the US money supply.

THE TEN ORIGINAL MEMBER BANKS OF THE FEDERAL RESERVE

All owned by the Rothschilds

Rothschild Bank of London
Warburg Bank of Hamburg
Rothschild Bank of Berlin
Lehman Brothers of New York
Lazard Brothers of Paris
Kuhn Loeb Bank of New York
Israel Moses Seif Banks of Italy
Goldman, Sachs of New York
Warburg Bank of Amsterdam
Chase Manhattan Bank of New York

Please note that The Rothschild family owns and runs all the above so-called “American Banks”. Therefore you could safely assume that the Rothschild family both runs and controls the whole of the American Banking System. Indeed, Rothschilds is an old European family which has dominated the European banking system for centuries. So not even an American runs the US banking system - a European family cartel manipulates it completely with impunity.

By 1850, the House of Rothschild represented more wealth than all the families of Europe. Shortly after William Patterson formed the Bank of England(est. 1695),  its control passed to Nathan Rothschild and here is how he did it:

Nathan Rothschild was an observer on the day the Duke of Wellington defeated Napoleon at Waterloo, Belgium. He knew that with this information he could make a fortune. He later paid a sailor a big fee to take him across the English Channel in bad weather. The news of Napoleon’s defeat would take a while to hit England. When Nathan arrived in London, he began selling securities and bonds in a panic. The other investors were deceived into believing that Napoleon won the war and was eyeing England so they began to sell their securities too. What they were unaware of is that Rothschild’s agents were buying all the securities that were being sold in panic. In one day, the Rothschild fortune grew by one million pounds. They literally bought control of England for a few cents on the dollar. The same way the Rockefeller’s went into Japan after World War 2 and bought everything 10 cents on the dollar. SONY=Standard Oil New York, a Rockefeller Company.

Nathan Mayer von Rothschild(1840-1915), 1st Baron Rothschild, once boasted:

“I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain’s money supply controls the British Empire, and I control the British money supply.”

Frederick Morton wrote in his book, The Rothschilds:

“…the wealth of the Rothschilds consists of the bankruptcy of nations.”

But the Fed staunchly maintains that they are a private institution who’s only function is to serve the US government and its citizens. Well of course they do !! So, purely out of interest, lets look at those Financial Institutions that Hank Paulson (ex-CEO of Goldman Sachs) and Ben Bernanke have “saved” in the recent TARP bail-out:

• Morgan Stanley
• Citibank
• Wells Fargo
  
• Goldman Sachs
• Bank of America
• Merrill Lynch
• State Street
• Bank of New York

Every single one of these institutions is either related or has interests and connections to the original Fed forming cartel of 1910, ultimately run by the Rothschilds family. These financial institutions have all been saved as a priority by their cartel buddies within the Fed brotherhood. How many Mainstreet banks (that’s ordinary non-Investment Banks) have been saved or helped by the Fed? I would suggest that the Fed brotherhood’s Wall Street tentacles and influence spreads long, dirty and deep into the very heart of the US political infrastructure - which is the only possible explanation that could adequately explain their inexplicable untouchableness and apparent freedom of agenda.

Now some other facts about the the Fed:

• The Fed, as a private US institution, pays no corporate or any other income tax at all to the US government.
• The Fed is allowed to look after US prices and the money supply - “at their own discretion”.
• The Fed charges interest to the US government for every single Federal Note it produces. This charge, in the form of seignorage, is then passed on to the US citizens as an invisible “inflation tax”.
• The Fed has NEVER been properly audited.
• At their top-level meetings, the Fed keeps no written records or memoranda.
• The Fed, as a private institution, is headed by an American banking cartel which, in turn, is under the complete influence of the European-based Rothschild banking family.

As a result of The Fed’s unstoppable financial activity and due to all the rash debt they have caused within America so consistently over the years, 22 cents in every single US dollar is now foreign owned through all their self-serving and mutifarious debt instruments. If these debt instruments were being used properly, then surely the US National Debt would be coming down wouldn’t it ?  But instead, it becomes painfully evident that the Fed uses these foreign loans, multiplied hugely by the practice of “Fractional Reserve Lending” to further create  credit, leading to unstable and untenable mountains of corporate, personal and financial debt. The US Fiscal Debt is currently running at about $60 trillion now, which is 6 X the reported National Debt and about 15 X GDP. These comparisons become even more ridiculous when compared against the dollar notes in circulation - which is approximately $600 billion. The Fiscal Debt is therefore 100 X more than the dollar notes in circulation !! Is this the measure of a strong economy ? Remember that  the total production of the world economy amounts to $60 trillion alone. David Walker, ex-Comptroller General of the government GAO has said that in order to pay back this US Fiscal Debt, every citizen in America would have to pay its government $480,000 just to break even.

In these current hard economic times, it seems that the forefathers of the  American Constitution had some real vision. In 1826, the second bank’s charter was soon to expire and presidential candidate Andrew Jackson - an avid and honest constitutionalist - campaigned fiercely against a central bank which was owned and operated by the international banking element. Here is Jackson’s opinion of those bankers:

“You are a den of vipers. I intend to wipe you out, and by the Eternal God I will rout you out…If people only understood the rank injustice of the money and banking system, there would be a revolution by morning.”

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References:

The Federal Reserve History and Conspiracy

The Federal Reserve: History of Lies, Thievery, and Deceit

David Walker Interview on CBS(Youtube)

From the above chart it appears that - after the Carter administration - the Republicans in majority just love to spend and accumulate debt. And the Bush family seem particularly adept at spending freely. While the Democrats in power always worked to pay back the debt. It seems the Republicans follow the Keynesian and Chicago Economic School tenets of Debt and Consumerism is a good thing in a strong economy. However, the Democrats seem to follow Hayek’s principles from the sterner Austrian School of Economics - whose main precept is that a strong, rich country can only be measured from its Savings and Productivity. I’ll leave it up to you to decide which of these economic methods is madness and which is sensible in the current US economy.

In my research for this article, I really found it hard to find believable figures from the US government websites. They just didn’t seem right. Then I stumbled across a website called shadowstats.com and saw the real figures and charts. This site is run by John Williams, who writes most of the articles. Mr Williams is quite simply dedicated to accuracy, he is logical and painfully meticulous in his interpretation of the charts, he even describes the history of biased government reporting of statistics - President by President from Kennedy right up until Bush Jnr. From his article “Government Economic Reports: Things You’ve Suspected but were Afraid to Ask!”,  John Williams says this:

ShadowStats.com” href=”http://www.shadowstats.com”>

· During the Kennedy administration, unemployment was redefined with the concept of “discouraged workers” so as to reduce the popularly followed unemployment rate.

· If Lyndon Johnson didn’t like the growth that was going to be reported in the GNP, he sent it back to the Commerce Department, and he kept doing so until Commerce got it right. The Johnson administration also was responsible for gimmicking the accounting that hides most of the federal deficit.

· Richard Nixon had a highly publicized war with the Bureau of Labor Statistics on the unemployment data. Nixon wanted to report the unemployment rate as the lower of the seasonally adjusted or unadjusted number, at any given time, but not specify same to the public. While that approach was unconscionable at the time and never used, basically the same methodology was introduced in 2004 as “state-of-the-art” by the current Bush administration.

ShadowStats.com” href=”http://www.shadowstats.com”>

· The Carter administration was caught deliberately understating inflation.

· Systemic changes were introduced during the Reagan administration to boost reported GNP/GDP growth on a regular basis. The wildest manipulations, however, happened at the time of the 1987 liquidity panic. In addition to intervention in the futures markets by the New York Fed to help prop the stock market after the October 19th crash, direct and heavy manipulation of the trade deficit data, under the direction of the Federal Reserve and U.S. Treasury, was used in conjunction with massive currency intervention to help bottom the dollar and to contain the currency panic at year-end 1987.

· The first Bush Administration began efforts at the systematic reduction of the reported rate of CPI inflation, and worked an outside-the-system GDP manipulation aimed at helping with the failed 1992 reelection bid.

ShadowStats.com” href=”http://www.shadowstats.com”>

· As former Labor Secretary Bob Reich explained in his memoirs, the Clinton administration had found in its public polling that if the government inflated economic reporting, enough people would believe it to swing a close election. Accordingly, whatever integrity had survived in the economic reporting system disappeared during the Clinton years. Unemployment was redefined to eliminate five million discouraged workers and to lower the unemployment rate; methodologies were changed to reduce poverty reporting, to reduce reported CPI inflation, to inflate reported GDP growth, among others.

ShadowStats.com” href=”http://www.shadowstats.com”>
· The current Bush administration has expanded upon the Clinton era initiatives, particularly in setting the stage for the adoption of a new and lower-inflation CPI and in further redefining the GDP and the concept of seasonal adjustment.

As a result of the systemic manipulations, if the GDP methodology of 1980 were applied to today’s data, the second quarter’s annualized inflation-adjusted GDP growth of 3.0% would be roughly three percent lower (effectively netting to zero percent or below). In like manner, current annual CPI inflation is understated by about 2.7% against the pre-Clinton CPI methodology (would be about 5.7%), and the unemployment rate is understated by about seven percent against its original design and what many people would consider to be actual unemployment (would be about 12.5%).

As to the financial results of federal operations, the application of accrual accounting and generally accepted accounting principles to federal operations shows an actual fiscal year 2003 deficit of $3.7 trillion, as reported by the U.S. Treasury, versus the reported cash-basis $374 billion.

When you read conclusive evidence that virtually every US President since the early ’60s has lied to their trusting electorate, what hope is there ? And if you trust Obama or McCain blindly to be honest in reporting dire economic figures correctly, I urge you to think again carefully. The fact is, nothing will change - the US political status quo will continue, undisturbed, uncaring and rotten to the core, and these economic lies will always flow and persist - unchallenged.

References

All charts are borrowed from WhiteHouse.gov or ShadowStats.Com

I don’t know enough about the markets to comment at length about what’s going on on Wall Street, but I do have the ability to sense trouble when it’s here. And reading this from NY Times’ columnist Roger Cohen has me positively frightened (not as frightened as by this , but still). I excerpt:

Asked about the crisis, Luiz Inácio Lula da Silva , the Brazilian president, said: “What crisis? Go ask Bush.”Thanks, Lula. Brazil is sitting on $208 billion of its own in reserves, so perhaps Lula would say his flippancy is justified. But I don’t think it is.

Remember the last financial crisis in 1998? With the Russian economy in a freefall, Moscow officials scurried to the U.S. Treasury to secure vital American support for $17.1 billion in new International Monetary Fund loans. That steadied things.

The world has changed in the past decade. There’s been a steady transfer of wealth away from the United States in a shift most Americans have not yet grasped. But there has been no accompanying transfer of responsibility. New powers are free-riding as if it were still the American century.

This is not exactly a new theme. We’ve been hearing about a world power shift for a while now, from America to not-America, and the Democrats have used it as a sort of rallying cry for their campaign (not quite phrased as “America’s decline,” of course). But what are truly the ramifications of a new world where America doesn’t have the strongest voice?

We can speculate for hours. But here’s one thing that must end, and might under a Democrat in the White House: American hubris. I’ll end on a quote from a Democrat in the House of Representatives, from Cohen’s column:

“I think it’s a perverse pride thing,” he said. “We don’t ask for help. We’re the big, strong father figure. But let’s be realistic: we’re no longer the dominant world power.”

Cohen’s column brings up China on more than one occasion. Well worth a read.

UPDATE, 9/24: China Vortex says if America’s financial system goes down, so does China’s .

NOTE: This was originally posted on 9/24/08.

Quick. Which nation is a terror threat: Iceland or North Korea? If you answered North Korea, you’re sane, but, unfortunately, wrong. At least if you ask the US or UK governments. Yep, while the US government has removed North Korea from the list of state sponsors of terrorism, the UK government has used anti-terrorism laws to seize some of its UK-based banking assets and legally punish the Icelandic government for “completely unacceptable behaviour“. The world has truly gone mad as both world powers seek to maintain their respective positions of global dominance through threats and coercion.

Poor Iceland. It seems like only yesterday that the UN named it the most developed nation on Earth, sliding past Norway to claim the number one spot on the UN Human Development Index (HDI) for 2007/08. Suddenly a financial crisis in which somehow tiny Iceland is caught on the fault line, exposing giant cracks in its over-extended banking system. The Icelandic government has been forced to take control of three of the nations banks in the past week: Kaupthing, Landsbanki and Glitnir. In doing so, the government has guaranteed the deposits of its citizens, but in a move that the UK finds unacceptable, they have failed to guarantee the several billion pounds of British deposits and investments. So, because the Icelandic government won’t promise to refund investment losses of British citizens and companies, the UK government has responded by invoking the Anti-Terrorism Crime and Security Act 2001 to freeze the British assets of Landsbanki, estimated to be about £7 billion. Why stop there? The government is contemplating freezing all Icelandic investments. Faced with a loss in confidence in their currency, the Icelandic government is seeking a reported €4 billion loan from Russia to help avoid national bankruptcy and the Brits expect them to guarantee £8 billion of deposits for foreigners! Referring to the move by the Brits, the Prime Minister of Iceland, Geir Haarde said, “I told the chancellor that we consider this to be a completely unfriendly act.” Understatement.

Meanwhile, North Korea, a country which exploded a nuclear bomb a couple years ago, is no longer being called a terrorist, by the US government, this week anyway. The removal fulfills a promise the American administration made to Pyongyang over a year ago but is obviously highly contentious. Critics include John Bolton, members of the office of Vice President Dick Cheney, and even some members of the State Department’s verification and compliance office. But, at least Dubya and Condi can say they did something, right? So, what is today’s lesson? You got it, blow up bombs and threaten the very existence of the world, but never, ever mess with someone’s money!