El Conquistqdor Francisco de Orellana

El Conquistqdor Francisco de Orellana
The Conquistador who put the Amazaon baisn "on the map"....Francisco Orellana

Thursday, December 22, 2011

Merry Christmas and ¡Feliz Navidad!

Although we understand that "Merry Christmas" has practically been outlawed in our former country....we are proud to maintain our heritage here in Ecaudor. We wish all of our readers and followers a Merry Christmas and  in these difficult and uncertain times to look beyond all the material anxieties the modern world inflicts on us and remember the real reason we celebrate this Season! Untill next year!

Obama Claims More Tyrannical Powers Than Hitler or Stalin

(While I strongly dislike Fox News and its barrage of disinformation, Judge Napolitano knows his constitutional law, and gives very hard-hitting analysis of the current state of the rule of law in America.)
Similarly, Chris Floyd wrote Monday in connection with the new indefinite detention bill:

And whatever the outcome of this particular bill, the reality will remain the same: the President of the United States will continue to claim — and exercise — absolute arbitrary power over the life [yes, the government has also claimed the power to assassinate American citizens without trial or even oversight] and liberty of every person on earth. As we’ve said here before, not even Adolf Hitler or Josef Stalin at their most megalomaniacal ever dreamed of asserting the kind of universal power now asserted by American presidents and the lickspittlish lackeys in the United States Congress.

In case you think I'm being hard on Obama, please remember that progressive constitutional lawyer Glenn Greenwald has long argued that Obama is even more brutal than Bush, and has trashed even more of the Constitution than Bush.
Of course, Obama - like Bush - claims that tyrannical measures are necessary to fight the war on terror. But FBI agents and CIA intelligence officials, constitutional law expert professor Jonathan Turley, Time Magazine, Keith Olbermann and the Washington Post have all said that U.S. government officials “were trying to create an atmosphere of fear in which the American people would give them more power”, and even former Secretary of Homeland Security – Tom Ridge – admits that he was pressured to raise terror alerts to help Bush win reelection.
And Hitler, Stalin and other strongmen throughout history have also claimed that tyrannical measures were necessary to fight their wars on terror:

“This and no other is the root from which a tyrant springs; when he first appears he is a protector.”
- Plato
“If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.”
- U.S. President James Madison
“Terrorism is the best political weapon for nothing drives people harder than a fear of sudden death”.
- Adolph Hitler
“Why of course the people don’t want war … But after all it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship … Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”
- Hermann Goering, Nazi leader.
“The easiest way to gain control of a population is to carry out acts of terror. [The public] will clamor for such laws if their personal security is threatened”.
- Josef Stalin

Tuesday, December 20, 2011

Mmmmmm….roasted Andean Rat(a.k.a Cuy)! Weird Ecuadorian Foods

Written by on December 19th, 2011

So the topics around the dinner table revolved around two topics: religion(Catholicism) and food(rodent). I was consuming a rather thick-cut of sirloin topped with blue cheese and mushrooms(yum) and the rest ate fish. It was a friday and guess who was the only non-practicing Catholic. Now religion is an easy topic to slip into. To paraphrase Dostoyevsky’s Grand Inquisitor from The Brother’s Karamosov, “give me a child for the first 6 years and I’ll have him for life.” Really, though, the only thing that could make me shudder more than sitting through another mass is of eating vermin. That being said, both the Catholic Mass and rodents are enjoyed everyday in this largely Catholic and Andean nation.

I’d like to think that I am adventuresome when it comes to travel, but rather on the strait and narrow when sampling local cuisine. But for those traveling in the Andean regions of Ecuador such as Banos, Cuenca and Otavalo, you will eventually see one of those oversized rats being skinned, butterfly split and skewered, roasting in the open air markets. I am referring to the Cuy(a Quechua word, pronounced Kwee) or as we call them, guinee pigs. Hailing from the same famed family of the fabled bringer of Dark age European population erosion, the black rat, these rodentia are so-called for their large incisors. The root of rodentia, rodere, literally means to gnaw. And so it is that when you see them skinless and brazen it is their white shiny incisors shinning out at you that will probably turn your head away and shy from adventuresome experimentation.
Now, I’ve been confronted with fertalized chicken eggs in Cambodia, crispy cockroaches in Thailand, raw chicken in Japan, from which I have always balked, so why back from a good system. Look, I know, meat is meat and the Donner party would not have shied away from eating these vermin, neither would your average starving Somalian. and neither would I if it came down to munching on rat or my the shank of my aunt or uncle. But should you want to partake and do as those Quechuans when in old Quechua, than just say the magic word: “Kwee, por favor!” And you’ll get led in the right direction.
Anyhow, when not being roasted, Cuays will be found roaming around the homes of Andean People. They are said to bring good luck, heal the sick and help keep the house warm. A survey amongst most who have eaten Cuy is that it tastes like(yes, you guessed it, chicken, albeit very oily and chewey chicken. A plate is popularly served up with potato and cholclo(corn) and the meat is actually very healthy and low in fat, though in some areas they do deep fry it.
A plate will set you back from 5 to 10$ whether you eat on the streets or in a restaurant

Christine Lagarde "And it’s about to get worse....."

Stock market volatility has been crazy lately!
Stocks dropped 21% from May to October of this year. But most of that drop happened within two to three weeks. That means investors saw 20% of their investment wealth disappear in a matter of days.
Why the market scare?
It’s the dreaded European debt crisis that keeps infecting markets from here to China. And it’s about to get worse, according to the head of the International Monetary Fund (IMF), Christine Lagarde.

IMF’s Lagarde Paints an
Ugly Picture of 2012

On Thursday, Christine Lagarde gave some alarming comments about where the market is heading. She said, “the European debt crisis is growing to the point that it won’t be solved by one group of countries.”
She went on to say that countries had better work together or “there is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis.”
I couldn’t have said it better myself.
It’s just one more sign that the volatility to stocks will likely get worse before it gets better as we head into 2012.
Sean Hyman
Editor, Currency Cross Trader

British Prepare Evacuation Plans Ahead of Spain and Portugal Collapse

Mac Slavo
December 19th, 2011
British Foreign Office personnel have proposed emergency evacuation plans for their citizens living throughout Europe, especially in Spain and Portugal. As tensions over the survivability of the Euro mount, the government warns that a collapse of the banking sector and the European monetary unit may make it impossible for those with assets in affected countries, including bank deposit accounts and homes, to access their funds and evacuate to Britain.

The drastic proposals emerged as a former Security Minister warned expats could be left stranded and destitute by the break-up of the single currency.
Brits who invested their savings in their adopted countries may not be able to withdraw cash and could even lose their homes if banks call in loans, worried ministers are warning.
The Foreign Office is preparing to bring them back from Spain and Portugal if the two countries are forced out of the euro, triggering a banking collapse.

Commenting on the evacuation plans, she added: “I think they are right to be doing that. I think this is a real contingency that they need to plan against – very, very worrying.”
Officials are braced for a nightmare scenario where thousands end up penniless and sleeping at airports with no means of getting home. Planes, ships and coaches could be sent, with some expats being brought out through Gibraltar.
The Foreign Office could offer small loans while piling pressure on the banks to give Brits access to their funds.
Spanish and Portuguese banks guarantee the first 100,000 euros deposited by savers but many put limits on withdrawals in a crisis.
Source: Mirror
Still think a European collapse is implausible?
The British would not be making these plans if they didn’t expect the entire system to devolve into chaos. We’re not just talking about inaccessible bank accounts here, but political and social upheaval. The kind that topples governments.
This is serious. Entire nations are collapsing.

Oblivious Because of Mainstream Media

By Greg Hunter’s USAWatchdog.com
 I think most people are simply oblivious to the enormous dangers the world economy faces.  Oh, I think we will all get through Christmas and New Years without a meltdown, but all bets are off in 2012.  A new acquaintance of mine told me last Friday, “Isn’t the economy getting better?”  I just looked at her and shook my head in the negative.  Then she said, “I guess if it was getting bad, the media wouldn’t tell us the truth.”  I shook my head in the affirmative.  My new friend is 75 years old and gets a Social Security check every month.  She’s pretty sharp, but I don’t blame her for being misinformed.  She gets her news the old fashioned way—from the mainstream media (MSM). 

There is no wonder so many are in the dark and completely unprepared for the next crash.  The front page of USA TODAY, last week, touted a headline that read: “Are We There Yet?”  The article said, “The economic signs are encouraging, but we’re a long way from a comeback.”  It covered recent upticks in auto and home sales.  It also said the unemployment rate recently fell to “8.6%.”  The USA TODAY story went on to say, “Although the decline was partly due to a 315,000 drop in the labor force as discouraged job seekers simply gave up, employment is up an average 321,000 a month since August, according to the Labor Department’s household survey. Most encouraging: Much of the hiring appears to be by small businesses, which typically fuel job growth in a recovery.”  Wow, the fact that 315,000 people “simply gave up” seemed completely glossed over.  Why did more than 300,000 people give up?  Maybe it’s because there are precious few jobs.  And what about the 400,000 people every week filing unemployment claims?  Never let the facts get in the way of positive spin to please the advertisers.  The USA TODAY story closes with a business professor who said, “I have a lot of confidence in the future.”  (Click here for the complete USA TODAY story.)     

I am happy for him, but for a little balance and more accurate reporting, maybe the newspaper could have also quoted an economist who wasn’t so optimistic?  John Williams of Shadowstats.com can provide that balance.  In his latest report, Williams calls the recent unemployment numbers “nonsensical hype,” and “. . . help-wanted advertising has been in monthly decline since May of this year.”  The report goes on to say, “November retail sales and industrial production both showed renewed faltering in the U.S. economy, reflecting the impact of the structural impairment of consumer liquidity.  Although the headline CPI inflation number was flat for November, underlying detail showed the still spreading impact of high oil prices.  Inflationary pressures continue to be from Federal Reserve polices, not from strong economic activity.  As the Fed increasingly is pushed to support the banking system, the central bank’s actions should accelerate the pace of U.S. dollar debasement, as well as the pace of rising U.S. inflation and precious metals prices.”  (Click here for the Shadowstats.com home page.)  Inflation, by the way, is running at 11% annually. (According to Williams, that would be the true inflation rate if it were calculated the way Bureau of Labor Statistics did it in 1980 or earlier.)

The economy is so weak, the Fed is going to be “pushed to support the banking system!”  That means the Fed will print money to continue bailing out the banks, and not just the banks here, but overseas as well.  The Fed recently opened up a new round of bailouts for European banks with what are called dollar swaps.  The head of the International Monetary Fund (IMF), Christine Lagarde, warned last week of the global damage that could happen if the sovereign debt crisis in the Eurozone spun out of control.  FT.com reported, “There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating.”  (Click here for the FT.com story.) 

One escalation could be the long rumored credit rating cut of French sovereign debt.  The Guardian UK reported over the weekend, “France could be stripped of its triple-A credit rating before Christmas, raising new doubts about the survival of the euro, analysts have predicted.  Standard & Poor’s – one of the three top rating agencies – is expected to cut France’s rating within days, in a move that would weaken its ability to raise funds on financial markets.”  (Click here for the Guardian UK story.)  A rating cut to Europe’s second largest economy is not a sign of a turnaround—quite the opposite.
Finally, the USA TODAY story mentioned housing making a significant comeback next year.  The story said, “After adding virtually nothing to — or subtracting from — economic growth in recent years, “You’re talking about housing finally being a meaningful contributor to the overall economy” in 2012, Mesirow Financial’s (Diane) Swonk says.”  I guess the editors didn’t think it was important to mention the gigantic ongoing foreclosure crisis in the U.S.  On the same day as the USA TODAY story was published, CNBC reported, “Despite a seasonal slowdown in overall foreclosure activity, and a process still bogged down and backed up by the “robo-signing” processing scandal, the U.S real estate market is about to be hit by another surge of bank repossessions, according to a new report from the online foreclosure sale site RealtyTrac. As banks resubmit millions of documents and courts begin hearing cases again, the backlog of over four million delinquent loans will start surging through the pipeline again.”  (Click here for the complete CNBC story.)  What effect will these foreclosures have on home prices and retail sales?  I’ll bet it will not be positive for new home sales.

Listen, there is nothing wrong with putting positive facts or quotes in a story, but when you ignore something as big as a foreclosure crisis with “more than four million delinquent loans,” you are not writing an unbiased story.  You are creating propaganda that gives a completely false picture of the economy.  If you are reporting the news, your job is not to make people feel good.  It is to give them the facts and analysis that delivers a clear picture of what is truly going on.  The MSM is simply not doing its job.  In the next meltdown, the excuse “Nobody saw this coming,” will not be credible and neither will the MSM.   After all, that was what they said in 2008.

Dwindling Freedom

How US Policymakers are Making It Hard to Live Almost Anywhere
“Poor America...” writes a French friend. “It’s not the land of the free anymore. Now, it’s the land of slaves.”
The FATCA law (Foreign Account Tax Compliance Act) will force banks across the globe to collaborate with the IRS. An explanation of the huge repercussions this legal precedent will have on banks and banking clients.

Once FATCA — Foreign Accounts Tax Compliance Act — is enacted on January 1, 2013, banks worldwide will find themselves subject to the American tax administration bureau known as the IRS (Internal Revenue Service). Adopted in March, 2010, FATCA is a facet of the broader Hiring Incentives to Restore Employment (HIRE) Act which is designed to promote employment opportunities in the United States. In order to finance the HIRE Act, fighting tax evasion is even more in the spotlight than it has been in the past and Washington wants to use its political clout to get its message across this time. What this really means is that foreign banks — or FFIs (Foreign Financial Institutions) — will be obliged to conform to a long series of procedures designed to identify US Persons (US citizens & Green Card holders) subject to American taxes. This naturally concerns American citizens but likewise extends to American nationals’ foreign spouses. However, the l ong arm of the US administration will even be going so far as to include foreigners residing outside American borders, some of whom may have never even set foot on US soil. This is due to the fact that non-American banks will be obligated to report portfolios which include American assets even if they belong to foreigners with no ties to the US.
“We used to be so happy when we got to the US,” said another European. “We felt we could breathe more freely. The country was so big...so prosperous...and so open.

“That was what I remember from about 20 years ago. But now it is quite different. I dread coming to the US. We came through US customs in Atlanta a few weeks ago. My wife had a half-eaten sandwich in her bag...which she had forgotten about. They put us in a special room and treated us like we were criminals. It was ridiculous...and humiliating.

“But there’s always something. Someone is always yelling at you. Everything is illegal or forbidden. It just doesn’t seem like the same country it was a few years ago. So, we only come here when we have to for business reasons.”

*** “There goes the republic,” says an article at Truthdig, by Robert Scheer.
The defense authorization bill that Congress passed and President Obama had threatened to veto will soon become law, a fact that should be met with public outrage. Human Rights Watch Executive Director Kenneth Roth, responding to Obama’s craven collapse on the bill’s most controversial provision, said, “By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in US law.” On Wednesday, White House press secretary Jay Carney claimed “the most recent changes give the president additional discretion in determining how the law will be implemented, consistent with our values and the rule of law, which are at the heart of our country’s strength.”

What rubbish, coming from a president who taught constitutional law... Sadly, this flagrant subversion of the constitutionally guaranteed right to due process of law was opposed in the Senate by only seven senators, including libertarian Republican Rand Paul and progressive Independent Bernie Sanders.

Bill Bonner,
for The Daily Reckoning

Monday, December 19, 2011

Do you disqualify for health insurance in Ecuador? -

I've heard enough."

"There's no reason for us to keep talking to him." My friend said this week as we chatted with an insurance agent in Ecuador.

"If I can't get health insurance for myself and my wife, Ecuador's not an option."

Thing is, my friend who was looking for insurance is 70 years old (although he looks younger than me) and both he and his wife of 64 have some pre-existing health problems.

Most health insurance providers in Ecuador will only admit folks to new plans until age 65, like the agent we were talking to, effectively disqualifying my friend.

But we kept looking and looking, and we did find two insurance companies here that will accept you over age 65.

BMI and Cruz Blanca.  Now, both have several years in business in Ecuador with many affiliated clinics nationwide and have good reps locally.

In fact, Cruz Blanca is the ONLY insurance company I know that has no age limit on new applicants looking to get into a health care plan.

For my 70 year old friend and his wife the quoted cost of BMI insurance was $540 per month total to insurance both of them for $150,000 of coverage per year in mecical treatments and up to $15,000 a year in perscriptions and non-necessary medicial costs like check ups.  With a $200 deductible.

Cruz Blanca has health insurance plans for folks 65 + starting from $105 per person for full coverage against accidents and necessary medical treatments.

But you should know a few things about health insurance in Ecuador.

As for insurance companies in Ecuador, pre-existing conditions found in the initial medical exam and their subsequent treatments are not covered in a newly opened plan.

But your initial exam probably won't be too rigurous, or may not even be necessary, unless you are over 65.

For example, if you are detected to have a minor medical condition in the initial exam, meds and treatment for that ailment will not be covered.  And for several health issues, like Diabetes, most providers in Ecuador will simply disqualify you.

Now, Ecuador health care is CHEAP.

$20 for teeth cleaning.  $5 for a doctor check up.  $150 when you split your forehead open playing tackle football without pads (don't ask).

Some just pay as they go living without insurance, like me.

Others keep their US plans although they live in Ecuador.

For instance, Blue Cross Blue Shield on some plans covers half of all medical costs incurred when outside their "home" country.

Saludos until next week, feliz navidad!

Domenick Buonamici
Investor, Entrepreneur, Manager

Friday, December 16, 2011

Gold and Money in Extremis... One Man’s Story

By Rich Rabkin

My economics education was started as a child by my grandfather, Marion Szablicki, who was a living testimonial to the value of gold. Notably, toward the end of his life at 99 years of age in 2010, he felt there was simply too much debt, and that a long downward spiral was underway with difficult times ahead. He had lived through times of “extremis” and his account of fiat money, war, gold and survival should serve as a reminder to all people that those who choose to ignore history’s lessons do so at their own risk.

On September 17, 1939, Russia invaded Poland, and over the next year over 1.7 million Poles were deported to labor camps or sent into exile into Kazakhstan and Siberia. Their only crimes at the time were being Polish citizens. None of the land or homes taken by the Russians was ever returned to these Poles after the war, despite their release from the Gulag in 1941 to fight with distinction under the British army. Per the 1943 Tehran Declaration, post WWII, Eastern Poland remained a part of Russia. Winston Churchill said of Poland in 1946, “We who went to war on her behalf...watch with sorrow the strange outcome of our endeavors.”

Fiat currencies are particularly vulnerable during war and often become rapidly worthless as countries fail. Such was the case for my grandparents, who in 1939 resided in eastern Poland. This is their story as told to me by my grandfather, Marion Szablicki:

Early morning on September 18th, 1939, I learned the rumors of the Russian invasion of eastern Poland were true. Just three weeks prior, we had been attacked by Germany. Russia now attacked Poland from the east. In a matter of weeks, Poland was overrun. I had re- enlisted in the army after the Germans invaded, but upon hearing this news, those of us from the east were told to go home. I had a wife and a three-year-old daughter to protect. I left to go back to our village immediately, covering the 40- kilometer journey on foot in a day.

We lived near the Russian border and I knew the soldiers would arrive soon. I was a working-class man; however, my wife’s family were better off, and we had a very modest amount of gold and jewelry kept by her family. I hid it carefully in a hole in the ground. I knew our currency (the Zloty) would not last and I knew that gold would be the only money I would have to try and save us.

Poland’s great inflation (1923) happened when I was a boy and was concurrent with the Weimar hyperinflation in Germany. My father, brothers and I bartered for food, goods, services, and gold. Gold was preferred then to cash. My father was well versed in history, and often cited the great inflation in pre-revolutionary France. It was he who taught me that gold was the only money that knows no sovereign borders.

Russian soldiers arrived at our village two days later. Having been born in far eastern Siberia, and a boxer in Russia years earlier, I was fluent in Russian. I remembered the Russian revolution; anyone who was not a common peasant or was in any way educated was in danger. I spoke with many soldiers seeking clues about our fate.

Two weeks later, my wife’s father, a recently retired Polish officer and landowner, was arrested and taken away by the NKVD. We never saw him again. He was likely executed at the Katyn massacre, where thousands of other Polish officers were later found to have been killed.

I immediately sent my wife’s mother away. We would never see her again either.

Winter came in earnest with a scarcity of goods and whisperings of mass deportations. In February of 1940, policemen and landowners, and many educated people, were arrested and deported along with their relatives. Late one night I received a knock on my door. In walked four armed Russian soldiers. One of them was a man I had spoken with several times over the previous months. I greeted them all politely in Russian.

I was ordered to get my coat and accompany them. I was taken to a station and asked many questions. It was a stroke of luck for me that the Russian soldier to whom I had spoken in the past was here among them. After conferring with the others, he said: “Because you were born in Siberia, speak Russian, and you’re an uneducated worker — much like us — we will not detain you further. You may go for now.” He then gently grabbed my elbow and said very quietly, “Go back to your family, Marion. Get prepared for deportation to Siberia.” I ran home.

At dawn, I retrieved the gold and jewelry. I found my largest boots and heaviest jacket. I lined the bottom of my boots carefully with small coins and put leather over the insoles. I slit the heels, carefully hollowed out what I could and stuffed larger gold coins inside the cavities. Finally, I opened up various parts of my jacket and distributed more gold chain and coins in it — with great care so they did not rattle and were hard to detect.

Several days later, we were awakened by a knock at 4 a.m. and told we were being deported to Siberia. We were given 15 minutes to gather any personal belongings needed for immediate use. Our land, homes, and possessions were now property of the Russian state. My wife, my three-year-old daughter, and I were put into a truck with a group of others and taken to a railroad station.

We would never see our parents, our siblings, nor set foot on Polish soil, again. I was greatly relieved that they did not check my jacket or my shoes. My small cache of gold was going with me.

When the train arrived many hours later, we were put into cattle cars. The trip to Siberia took almost three weeks. It was hellish: we were cramped in overcrowded cars with no toilet, and only a hole cut in the floor, with scarcely any food or water. We were given dark bread and water every few days. Many died, and they were simply thrown off the train, be they men, women or children. I recall the last time I wept during those years: a baby had been born in our boxcar during the journey; it had died and was cast off the train by the soldiers like rubbish.

We arrived in Kazakhstan, near the Siberian border, at a rundown village. This was to be our new home. The Poles could not leave under the penalty of death. It was freezing cold — 20 degrees below zero. The locals were told they must shelter us, but they were also very poor; the NKVD allocated three or four families to a house. The Russian people were as good as they could be to us under the circumstances.

I needed to use my gold immediately, as things were dire: I bartered with a man to acquire better living quarters; and then I exchanged, with another better off man, some gold chain links and coins for a fair sum of rubles. I used these to get bread and food for the remainder of that first brutal winter. I bought tools and worked cutting wood, fixing stairs, or any other odd jobs for a few rubles or just food. I sometimes went days without food, so that my daughter and wife could eat. We managed to survive winter and summer, despite my coming down with malaria and my wife nearly dying of typhus. We were able to get medicine and food from those who had it — as long as we had some gold. Polish currency (Zloty) was not accepted, Rubles were, but gold was now preferred over anything.

Finally, one day in 1941, the exiled Poles were summoned by the local NKVD. We were being released. Suddenly, we were free to go, but no reason was given. (Germany had attacked Russia on June 22, 1941 and the Poles by agreement were to be released from the gulag to form an army in Persia.)

I asked a Russian official I knew. He said, “Marion, get to the train station and get on a train as fast as possible before they change their minds.” We left within hours. Many were too weak to go anywhere and simply remained. At the station, we learned the Polish Army was being reformed, but the man in charge was telling everyone that the trains were already full.

I very quietly made my way to the man in charge and offered him three gold coins, among my last, one for each of us for passage on the next train. He agreed. When the train arrived, he quietly motioned us around to the far side, spoke with another official and they put us on the train citing “special orders”. We were finally on our way out of that terrible place and were now among thousands of exiled Poles all racing south as fast as possible to get into General Anders’ Polish Army.

We then crossed the Caspian Sea in a ship and arrived in Persia (Iran). We were lucky to be on that train, and hence on an early ship; as some later boats were turned back, the quota deemed filled, those aboard were turned back to Russia. We arrived in Persia emaciated. Local people took our family into their home during the first weeks and they nursed us back to health. They were among the kindest people I have ever met.

I joined the Polish Second Corps under General Anders. There was now a glimmer of hope for us. My wife and daughter were evacuated.

I thought they were on their way to South Africa, but instead they were sent to India. I didn’t see them again for six years. For a long while, neither of us knew the whereabouts of the other, or if we were dead or alive. I fought in Africa and Italy, and most notably at Monte Cassino. I have never witnessed so much blood and determination. We led the decisive final charge on the German-held Abbey. I was very proud to be a Pole on that day.

The war drew to a close and I found out my wife and daughter were alive and still in India, but that they would be moved somewhere near London. I would be going there, too, after I finished my service. When we were finally reunited in London two years later, it was a miracle. Thankfully, Mr. Churchill did not force repatriation upon the Poles. All of my brothers had died in the war in the Resistance. Without the knowledge of history and money imparted to me by my father, we would not have made it. I owe my life to a handful of gold coins and chains. Several days before we were to leave for Australia to emigrate, I received a call:

“Marion, we have an open slot for America — do you want it?”

I told him, “Yes.”

He said, “Then get here as soon as possible.” I ran the entire way.

Victoria Szablicki passed away on June 5, 2011. Marion passed away just 11 days later, on June 16, 2011, at 100 years of age and less than two years after receiving his last medal, the Siberian Cross, from the Polish government. They had been married for over 76 years.


Rich Rabkin
for The Daily Reckoning

Monday, December 12, 2011

Growing number of French miss the franc

By Joseph BAMAT
France 24

As President Sarkozy scrambles to convince international markets and rating agencies that the euro is on the path to recovery, the single currency is suffering from a growing lack of confidence among the French.

As French President Nicolas Sarkozy scrambles to avert a credit downgrade of eurozone countries and win back the confidence of international markets, the euro is facing sinking popularity among the French. A new study has revealed that one in three French people would like to restore the franc as the national currency.
“The survey shows a growing distrust of the effectiveness of the euro in overcoming the economic crisis,” said Vincent Dusseaux of the Ipsos Public Affairs polling agency which conducted the study. According to the poll, 36% want to abandon the euro, and 44% thought the euro was a handicap in dealing with Europe’s current credit crisis.
A majority of the French people surveyed - 60% - said they still favoured holding onto the euro, but this overall fading confidence in the single currency is unprecedented, Dusseaux stated. The amount of people who want to leave the euro has increased “by around ten percent in recent months,” Dusseaux told FRANCE 24 on Tuesday.
The survey also found that the desire to dump the euro was stronger among blue-collar workers (65%) than among managers and white-collar workers (12%). Conducted between November 18 and 19, the poll interviewed 941 voting-age individuals.
Dusseaux went on to explain that a small percentage of people have consistently expressed a desire to leave the euro since it was introduced over a decade ago, but that this idea has gained traction since the eurozone crisis began. A similar poll in the Netherlands last month found that a majority of Dutch think the country should have kept the guilder, its old currency.
Far-right gains legitimacy
Observers in France expressed concern that the study could lend credence to the far-right less than five months before presidential elections. Reinstating the franc has been a major party platform of National Front (FN) candidate Marine Le Pen. On Tuesday, her campaign spokesman repeated that it was time to “close the parentheses” on the “failed experiment” of the euro.

“Until now the [FN] has lacked a certain credibility in the areas of economic and public policy. Le Pen constantly predicts the collapse of Europe’s economy, but she is not capable of explaining the reasons,” said Sylvain Crepon, a professor of Sociology at Paris 10 University and an expert on the far-right in France. “This could lend her a legitimacy she has not been able to establish by any other means.”
Another presidential candidate, Nicolas Dupont-Aignan, publicly joined Le Pen’s anti-euro position on Monday. In an opinion piece in the leading French daily Le Monde Dupont-Aignan, a staunchly conservative MP representing Essone near Paris, said the euro was not worth rescuing. While the presidential hopeful has less than one percent support among French voters, his call to quit the euro means Le Pen is no longer isolated on the issue.
Marine Le Pen polled 17% in a December opinion poll published by Ipsos, putting her third in the race behind Socialist Party frontrunner Francois Hollande (32%) and incumbent president Nicolas Sarkozy (25.5%).
Confidence in EU strong
After bitter criticism from politicians and economists, Le Pen recently re-evaluated her position on completely quitting the euro. Speaking on a French radio talk-show on November 27, Le Pen insisted she wanted to return to the franc, but also adopt a parallel “common EU currency” to replace the current single currency.
According to leading economists, if the franc returned with an exchange rate lower than the euro, the hypothetical scenario would be dangerous for France’s economy. “France’s bank debts, contracted in euros, would be worth much more,” explained Jennifer McKeown of Capital Economics, a research consultancy in London. Consumer purchasing power in France, which heavily imports goods, would also likely take a hit.
While the euro’s support in France is falling, few analysts think returning to the franc is a possibility. “Politically it is a very difficult position to defend. France has sided very closely with Germany in defending the eurozone,” McKeown added.
Paradoxically, the Ipsos survey on the euro also revealed that a majority of French continue to express confidence in European institutions. Forty-nine percent of those surveyed said they favoured extending political and financial powers to the EU, while 39% said they wanted to increase the powers of individual states.

Americans leaving US in record numbers

Reuters 12 October, 2011

Ever dream of leaving it all behind and heading out of America? You’re not the only one. A new study shows that more US citizens than ever before are living outside of the country.

According to statistics from the US State Department, around 6.4 million Americans are either working or studying overseas, which Gallup says is the largest number ever for such statistic.

The polling organization came across the number after conducting surveys in 135 outside nations and the information behind the numbers reveal that this isn’t exactly a longtime coming either — numbers have skyrocketed only in recent years. In the 24 months before polling began, the number of Americans between the ages of 25 and 34 living abroad managed to surge from barely 1 percent to over 5.1 percent. For those under the age span wishing to move overseas, the percentage has jumped in the same amount of time from 15 percent to 40.

While the United States of America was at one point (and largely still is) a magnet for foreigners in search of work, the statistics makes it clear that an opposite trend is quickly picking up steam.

"There's a feeling among more entrepreneurial Americans that if you really want to get anything done, you have to get out of country and away from the depressing atmosphere," Bob Adams of America Wave tells Reuters. “There's a sense of lost direction, so more people are looking for locations that offer more hope about the future."

Many of those leaving the US have job skills that would transfer quite well in the American market. Instead, however, they chose to bring those out of the States, attracted instead to opportunities elsewhere.
While America offers some employment opportunities unmatched outside of the United States, the country has also seen dire economic statistics since the dawn of the Obama administration, with jobless benefit claims soaring in recent months, and only last week did the Department of Labor reveal an unemployment statistic below 9 percent. On the contrary, the number of Americans that want full-time work and have given up on finding it or unable to locate it is closer to double that figure, while at the same time many of America’s largest employers have outsourced positions across the globe. Banking giant Goldman Sachs announced earlier this year that in the wake of a recession, they would finally be creating 1,000 new positions, yet making them available only to workers in Singapore. Other industries, significantly American, have been relocated as well; the ending of NASA’s space shuttle program this year left many intelligent US citizens with little choice but to continue in their field outside of the States.

“We’ve pretty much outsourced everything else,” aerospace technician Giovanni Pinzon tells RT. He was left scrambling for a job after years working in America’s space program.

America Wave’s Adams adds to Reuters that the statistics prove surprising to him, but noted that it doesn’t exactly make sense to think that it is a fluke.

“They're looking for work because of the sluggish economy, and they've lost confidence that the U.S. is going anywhere,” says Adams.

Rare 1787 gold coin fetches $7.4M

NEW ORLEANS (AP) — An exceedingly rare 1787 gold Brasher doubloon has been sold for $7.4 million, one of the highest prices ever paid for a gold coin.
Blanchard and Co., the New Orleans-based coin and precious metals company that brokered the deal, said the doubloon was purchased by a Wall Street investment firm. Identities of the buyer and seller were not disclosed.
Minted by Ephraim Brasher, a goldsmith and neighbor of George Washington, the coin contains 26.66 grams of gold — slightly less than an ounce. Worth about $15 when it was minted, the gold value today would be more than $1,500.
The Brasher doubloon is considered the first American-made gold coin denominated in dollars; the U.S. Mint in Philadelphia didn't begin striking coins until the 1790s.

Sunday, December 11, 2011

Getting to know all of Quito

Tourists come to Quito, visit the central historical district, the Mariscal, and some of the other attractions around the city (mostly in the northern part of the city) and they leave thinking they have seen Quito.  But what they have seen, really, is a small slice of the urban pie, while the largest part of Quito -  the rural area– goes unnoticed and unexplored.

The city of Quito is larger than most people realize.   Most think of Quito in an urban context, but that really is only half the story.  Quito, in its entirety, is divided into eight district zones.  Those zones are further subdivided into administrative areas known as parishes (parroquias, in Spanish).  Together, 32 urban parishes and 33 rural parishes comprise the Metropolitan District of Quito.   Rural Quito is really larger than urban Quito.

The tourism division of the Metropolitan District of Quito, known as the Empresa Metropolitano Quito Turismo, began a process several years ago of incorporating the 33 rural parishes into their tourism strategic planning. Known as the "Plan de Desarollo Turistico Parroquia," Quito Turismo provides training and technical assistance to each parish to help strengthen tourism in these outlying areas, all of which have a rich biodiversity and the potential to develop sustainable tourism projects.

Additionally, all 33 rural parishes have benefited from the intervention of the Instituto Metropolitano de Patrimonio Cultural - formerly known as the Fondo de Salvamento Del Patrimonio Cultural – and commonly referred to as FONSAL.  Over the past decade FONSAL, now the Metropolitan Institute of Patrimony (IMPQ), has intervened to improve and renovate the churches, parks, squares, and infrastructure of each parish.  In all, $17 million was invested, to the benefit of half a million residents throughout the rural parishes of Quito.

Some of the rural parishes, such as Guayllabamba and Pasachoa, have been recognized as great day-trip destinations for families for years, while other areas are just now gaining attention.

Lloa, 11km south and west of Quito, benefited from a $350K investment FONSAL in 2007 which gave the central square and surrounding houses a face lift.  The square is merely a point of departure to discover the other destinations throughout the parish including hostels, hacienda farms, nature trails, panoramic vistas, natural hot springs, and small cheese factories.

Nono, 15km northwest of Quito, is one of the oldest parishes in Quito with a population of 1,500.  It sits along the Ecoroute, an alternative road that connects Quito with the Parish of Mindo, and passes through the Tandayapa Valley, one of the primary bird-watching spots in the Ecuadorean Andes.

And Nanegalito, 70km west of Quito, is the location of the museum and archeological site of Tulipe, a series of pools and structures from the Yumbo culture which inhabited the region 1,200 years ago.  FONSAL invested more than a million dollars in restoring, investigating, and preserving the site in the past decade.

So if you think you are well-acquainted with Quito, but you have not visited Lloa, Nono, Nanegalito or the other 30 rural parishes, then we suggest an escape to re-discover the capitol of Ecuador.

Overstaying your visa in Ecuador - The Ecuador Insider

3 months, non-renewable.

That's how long you get on a tourist visa when you enter Ecuador with only your American/Canadian/European passport.

And then we're told we can only be in Ecuador for 90 days per year as a tourist.

Truth is, once in Ecuador towards the end of your initial 90 day stay, you can extend your time for 3-6 months with a 12-9 Turismo-Comercio (Tourism-Comerce) Visa paying $230 at any of the Ministerio de Relaciones Exteriores (Ministry of Foreign Relations) Offices throughout Ecuador.

How to get 6 instead of 3 months?

From what I've seen, it helps a lot to show more money (at least $5000) on the print out of your bank account they ask for when applying.  Also, specifically ask for a 6 month extension in the solicitation letter they ask you to write.

Now, what really happens if you OVERSTAY your visa?

Well, I'm not proud of it, but I overstayed my visa last year, in 2010, by 9 months.

When I left I paid the same $250 fine I would have paid if I left one day past my visa expiration.  I was also told I could not re-enter Ecuador for 9 months without getting a visa in a consulate prior to arrival.

I didn't test it.  I came back a few months ago, almost exactly 9 months after I left (I had some things to do in China).

This week, in the immigration office of Guayaquil, a city on the southern coast of Ecuador, I confirmed the rumor was true that as of this year Ecuador has abolished the fine for foreigners overstaying their visas.

No more fine.

Not even a slap on the hand.

Just show up at the airport and CHAO.  

The only sanction is that you can not re-enter for 9 months without getting a visa prior to coming back.

Of course, I recommend staying legal if you can, it just makes life simpler, but the choice is yours now that you know what really happens.

Domenick Buonamici
Entrepreneur, Traveler, General Manager

Expat Hotspots in Ecuador


"If you told me ten years ago that I would live in Ecuador one day, I would have told you that you were crazy," says Sharon Monroe, a 64-year-old grandmother and retired restaurateur from Redwood City, California. "At that point in my life, I couldn't imagine living anywhere else but in the United States."

Monroe was in Quito earlier this month to attend International Living's Live and Invest in Ecuador conference and, like the other attendees, mostly from North America, she is seriously considering relocating to South America.

Monroe is motivated by financial considerations. In 1996, she and husband sold a chain of California restaurants. "We did well with the sale and thought we were all set for retirement," she says. "Unfortunately, our savings were decimated by the recession and, almost out of desperation, we started looking around for countries with a low cost of living and good quality of life." After visiting Mexico, Belize and Panama, they focused on Ecuador.

Another factor for Monroe and others attending the Ecuador conference was a fear of political and economic instability in the U.S. "I hope I'm wrong, but I think the United States is headed for bad times. I believe we're losing many of our civil liberties," she says. "I also think the financial crisis will get worse."

Whatever the reason, Ecuador's popularity with potential expats is growing. The numbers tell the story: This month's International Living Ecuador conference drew 240 attendees, while the last conference, in 2006, had 25.

Donna DeRemigis, International Living events coordinator, says that she has seen rapid growth in the interest of North Americans moving overseas since she joined the organization in 2008. "The increase in attendance at our seminars has been phenomenal," she says. In addition to Ecuador, International Living also hosts country seminars in Panama, Costa Rica and Mexico. "Right now, Ecuador is hot," DeRemigis adds.

Ireland-based International Living has been a driving force behind Ecuador's popularity with foreigners. The company, which hosts conferences, publishes country reports and boasts a circulation of 350,000 for its daily e-letter, has named Ecuador the top choice in its Global Retirement Index for three years running. Results of the index, which rate countries on such factors as cost of living, safety, infrastructure and culture, have been widely reported by the media. In addition to Ecuador's number-one ranking, International Living has singled out Cuenca as the world's best destination for retirees.

It is difficult to get exact numbers of English-speaking foreigners living in Ecuador. In 2002, the U.S. State Department estimated that there were 27,000 U.S. citizens in Ecuador, but this included everyone from travelers to residents. According to a spokesman, the State Department no longer compiles such estimates. "They were just educated guesses anyway, and because they included temporary workers, students and teachers, as well as permanent residents, we decided that they didn't really serve a useful purpose."

Ecuadorian immigration and census numbers offer more detailed information. But because of the difficulty of sorting the various types of visas and the nationalities of visa and residency holders, exact numbers are impossible to come by. An employee in the Quito immigration office, who asked not to be identified, says that 5,000 to 7,000 North Americans have been granted residency since 2010. "Five years ago, there were less than 1,000 a year, so the numbers are definitely heading up," he said.

Although current expats say the low cost of living is important, they warn that it should not be the only consideration for moving to Ecuador. "It's great that my costs are thirty percent of what they were back home and that I don't have to spend time worrying about paying my bills, but this country has so much more to offer than that," says Mike Sager, a resident of the southern coastal town of Playas.  "The most important thing is that this is a great place to live," he says. "It's a land of opportunity, like the U.S. was fifty years ago."

Lee Harrision, a speaker at the International Living conference, agrees. "Your main purpose for coming to Ecuador might be to live cheaply. But you also have to embrace the culture to really appreciate it." Like others, Harrison points out the benefits of healthy living. "The stress level is low, the food is fresh and locally grown, and the weather is great. These are things that might not be readily available back home."

Although expats live all over Ecuador, they tend to concentrate in five areas.

With its designation as the top retirement city in the world, Cuenca is far and away the most popular destination for expats. Drawn by the city's colonial history and architecture, rich culture, quality health care and good infrastructure, Cuenca has seen the number of expats increase from approximately 200 in 2008 to more than 1,400 today. Add long-term visa holders, such as students, teachers and missionaries, and the total of English-speakers approaches 2,500. Fortunately, the growing number of foreigners has not had a serious impact on the city's character; with a metropolitan population of 500,000, Cuenca has comfortably absorbed the influx.

Vilcabamba, just north of Ecuador's border with Peru, has the highest per capita concentration of expats in the country, with an estimated 200 residents and long-term visa holders in a population of about 2,000. The idyllic village, at 5,000 feet elevation, boasts what many claim to be the perfect climate. Local expats, many with a decidedly counter-culture bent, enjoy a laid-back life style, breathtaking scenery, opportunities for outdoor activities such as hiking and horseback riding, and hanging out in the cafés surrounding the picturesque village square.

Located two hours north of Quito, Cotacachi has claimed a top spot on the list of expat towns in recent years. Known as a center for leather goods, the town's main street is lined with dozens of shops selling jackets, vests, purses, wallets, and belts. In addition, Cotacachi is notable for its proximity to Otavalo, Ecuador's largest crafts market. Immigration officials estimate that 150 permanent residents, and dozens more part-timers, live in the area. Cotacachi is one of the few locations in Ecuador with primarily gringo housing developments.

The southern coast, including the resorts of Salinas and Playas and the beach towns of Montañita, Olon and Puerto Lopez, has proven a strong draw for beach lovers. Often referred to as the "Little Miami Beach' for its phalanx of high-rise condos ringing the town harbor, Salinas attracts both full- and part-time foreigners and offers a vibrant resort atmosphere with good restaurants and nightlife. An hour north of Salinas, Montañita has earned the reputation as Ecuador's surfer capital and offers a vibrant international youth culture. Another hour's drive to the north, Puerto Lopez is a bustling fishing town best known for humpback whale watching May through October.

The north-central coast, dominated by the growing port city of Manta, is another hot spot for expats. With a population of more than a quarter-million, Manta's modern infrastructure, fine dining and shopping options have attracted many foreigners. Expats prefer to live in beach condos just outside of the city. North of Manta, Bahia de Caraquez, Crucita, Jama and Canoa also boast a growing expat population, mostly drawn by the casual Margaritaville beachcomber atmosphere. Road and bridge-expansion projects in the area have made the area increasingly accessible to both Ecuadorians and foreigners.

Wherever they decide to settle, Ecuador's newcomers arrive with high expectations. "I'm looking for a new adventure," says Monroe.

Thursday, December 8, 2011

Ecuador Beach Rentals From $200 a Month

By Suzan Haskins

A couple of years ago a friend came to visit us in Ecuador. Once here, he realized that the biggest expense of his trip was his airfare. With nice hotel rooms priced at $30 a night (including breakfast); full meals, including beverage, for $2.50; and beers for $1 or a glass of wine for $2, he was hardly spending anything to kick around the country.
(Public bus transportation is inexpensive, too—you can figure costs at about $1 an hour…it’s just 25 cents for the 15 to 20-minute ride to a nearby town, for example.)
Ecuador is so inexpensive, in fact, our friend realized that he could spend a month here for about the same amount of money as a one-month utility bill back home in California. So the next year, he came back for two months, and this time he rented a fully furnished and outfitted apartment (with Wifi Internet) in Quito’s popular Mariscal district for $400 a month.
This year, he plans to return to Ecuador…but he’ll rent an apartment on the beach this time. He’s not sure yet which beach town he’ll choose. He’s spoiled for choice, although he won’t find anything like Mexico’s glitzy beach resorts. Ecuador’s beaches are low key and sparsely habited…there are long stretches of coast where you’ll have the beach entirely, peacefully to yourself
The largest beach towns with any kind of amenities…such as shopping, restaurants, etc….are Salinas in the south and Manta and Bahia de Caráquez farther north. Quito residents have long had an affinity for towns like Atacames and Tonsupa, even farther north on the coast, although that’s changing now that a new bridge at Bahia de Caraquez has made the mid-north beaches near the small, pretty towns of Canoa and Jama more accessible.
How much might you expect to pay for a rental on the coast? Far less than you might expect.
In trendy Salinas, a furnished two-bedroom condo with a community pool rents for $450 a month in the low season or $600 a month in the high season. In the quiet community of Punta Blanca, just 20 minutes north of Salinas, a spacious four-bedroom house with a private pool rents for $1,000 a month.
Manta is the largest coastal city in Ecuador. There, you can typically rent a modern three-bedroom, two-bath home (unfurnished) or apartment for $330 a month. A furnished luxury apartment with four bedrooms, four-and-a-half baths, and a balconied terrace right on the beach…and with a social area that includes a gym, pool, sauna and Jacuzzi, is just $1,500 a month. (Don’t be afraid to negotiate.)
It’s becoming more difficult to find an apartment for rent in Bahia de Caraquez, thanks to that new bridge I mentioned. More and more people are choosing to rent in Bahia while they build their beach homes farther north along the beach. But it is still possible to rent a furnished house or apartment for $200 a month and up…I found a small cottage, owned by a European artist, with spectacular ocean views for just that price. Billed as the “perfect artist’s retreat,” it's probably a bit rustic for most of us. Expect to pay closer to $500 a month for a nice two-bedroom apartment in a high-rise condo in Bahia de Caraquez with an ocean-view balcony.
Keep in mind that most rentals you’ll find on the Internet are vacation rentals—being let short-term to the holiday crowd. The best bargains will be found through word-of-mouth and via post-it-notes on coffee shop bulletin boards (not electronic versions but the old cork kind) and in ads in the classified sections of local newspapers.
And keep in mind that once you get here, your rent will be your largest monthly expense. When public transportation rarely costs more than a dollar, a fine eat-your-fill seafood dinner costs $3 or $4 and a beer sets you back a buck, it’s hard to spend more than $1,000 a month total here.

Wednesday, December 7, 2011

Rent for $100 a Month in Ecuador

By Suzan Haskins

Rent before you buy. That’s good advice for anyone looking to try a new country on for size. Despite its incredibly low real estate costs, Ecuador is no exception.
(After all, not everybody wants to buy a two-bedroom beach condo or an apartment in an historic World Heritage city for less than $50,000.)
Fortunately, rental costs in Ecuador are very affordable, too.
In Cotacachi—the sweet Andean artisan village where I live—an expat who has decided to move to the coast, recently sent out this e-mail: “I have an apartment for rent that, for the money, is a great deal. It is a completely bare, one- bedroom place (no fridge, stove or anything else), but for $100 a month it is a great space.”
Of course, an unfurnished apartment means you’ll need to buy furniture. But still, an apartment with a monthly price tag that’s the cost of a fancy meal back home? Not a bad deal.
Admittedly, furnished rentals are harder to come by here in Cotacachi, thanks to the growing number of expats coming to check out the lifestyle options of our quiet little village. Still, we know of furnished rentals available for about $200 a month. And it’s possible to sublet a home or apartment short-term from a fellow expat who’s going back to the States or Canada for a visit.
Like this one I learned of in another e-mail: “Two-bedroom/two bathrooms, beautifully furnished condo for rent...Dec. 1-Jan 2/2012. Internet, propane/electric all included. Cleaning provided weekly at my cost. Rental for the period: $550.”
In larger cities, like cosmopolitan Quito or popular Cuenca, you may pay more. But not a lot. A quick search finds a furnished three-bedroom apartment for rent in central Quito for $500 a month. In one of my favorite upscale city neighborhoods, near sprawling Carolina Park, a nicely furnished three-bedroom apartment is renting for $600 a month.
In Cuenca, an unfurnished two-bedroom/two-bath apartment near the river rents for just $370 a month. A three-bedroom house is available with a one-year lease for $400 a month.
In rural Vilcabamba in southern Ecuador…at a lower elevation and therefore warmer than Quito, Cuenca or Cotacachi…an expat couple has renovated a 6,000-square-foot house and is offering fully furnished and equipped apartments for rent. You can rent a room with a shared kitchen for $180 a month or a three-bedroom apart ment for $550 a month.
So what are you waiting for? Daily living costs here are so affordable…even more so when you have a kitchen to cook in. At the local farmers’ markets you can buy enough fresh produce for $5 to last you a week or more. Bakeries sell fresh bread hot from the oven for 50 cents or less. Delicious 22-ounce bottles of Pilsener beer sell for 75 cents. You can get your haircut for $3, hire someone to clean your apartment for $5 or $10, take the bus anywhere in the country for about $1 an hour…
Whether it’s for a month or a year or forever…now is the time to check out Ecuador.

Tuesday, December 6, 2011


All central banks are desperate to stop stress from building in the global banking system. Despite what they say, job No. 1 of every central bank is to do whatever it takes to prevent a disorderly collapse of banks caused by “bank runs.” These central bankers are crazy, and nothing will stop them from supporting the status quo.

A group of the largest central banks in the world announced a coordinated easing program on Wednesday morning. This will involve printing more of their home currencies and lending these currencies to other central banks, which, in turn, will re-lend these currencies to local banks.

Many European banks have, essentially, been cut off from borrowing in the private credit markets. So central banks are going to ignore the fact that most of these European banks are insolvent and offer them easier and easier access to long-term funding in whichever currency they need to borrow.

The entirely predictable result will be similar to what we see in the US: zombie banks whose assets will feature fewer and fewer private-sector loans and more and more government bonds.

How is this supposed to foster global economic recovery? It seems like a perfect accelerant for global stagflation.

In other words, the world will have plenty of consumers, financed by government budgets, which are, in turn, financed by both compliant private banks and central banks. But will the world have enough producers?

The Fed and most of the other central banks believe the Western economies suffer from “deficient demand” and, therefore face the risk of “deflation.” But I disagree...vehemently. Bad credit needs to default and infirm corporations need to perish if the Western economies are to have any chance of beginning a new phase of renewal and growth.

But that’s not the plan that’s on the table. “Plan A,” in the modern playbook of central banking is to artificially support asset prices and to bail out sickly too-big-to-fail banks. The plan sounds like it could be relatively painless, but it will be extremely painful.

In the end, savers of paper money will pick up the tab — over a multiyear period — for all of these government- and banking-created disasters. The system of government, banking and central banking, as it’s currently configured, will force the responsible to bail out the irresponsible...once again.

Once central banks start lending to insolvent banks, there can be no orderly exit. When sovereign defaults occur — and they will, in Greece and Portugal, and probably Italy and Spain — there will be an acceleration of money-printing to keep the system propped up.

We may even see the Fed and the ECB lend to the IMF, which will re- lend cash to the PIIGS in the form of a “debtor in possession” loan that will, effectively, allow European banks to keep pretending that they have no losses on PIIGS bonds.

Here’s a fun game: Try to imagine your own fiat-money-driven, rule- changing scenario for “rescuing” the Western financial system. There’s a pretty decent chance the central bankers will try it at some point.

But there’s a big difference between press releases that goose the stock market and policies that foster genuine economic growth. This week, for example, the public in Greece and Italy are likely to be furious when their “technocratic” leaders from the banking establishment sign away their sovereignty to the EU and the IMF at this week’s summit. There will be more riots and strikes, which will make the goals of budget austerity even less likely than they are already.

Despite the obvious state of unavoidable depression in the PIIGS economies, the EU and ECB will get more and more radical in their tactics to protect the core EU banking system from collapsing under the weight of credit exposure to the PIIGS. All of this action is being done to protect banks, and as a result, will steadily suck the lifeblood from the private sector.

In short, I am not optimistic.

Therefore, my strategy at the Strategic Short Report remains the same: Identify the likeliest victims of the ongoing credit contraction in the private sector. American Airlines (AMR), a company I urged my subscribers to sell short several months ago was a classic example. AMR just filed for bankruptcy. There will be many more.


Dan Amoss,
for The Daily Reckoning

Sunday, December 4, 2011

SBM — Sweet Disposition — Seeks Loving Home

We’ve spent the last few months in search of a corner of the country to call home. A place that has it all, as far as our particular idiom was concerned...

Someplace urban enough...but not too urban...someplace pleasant and full of nice architecture...preferably, someplace we would only need a car every great once in a while...
We have repeatedly expressed our commitment to finding our personal Shangri-La within the borders of the United States. But just before Thanksgiving, we found ourselves wondering if it didn’t make sense to get ourselves — and our gold and silver — out of Dodge while the getting was still good — and possible!

We sent our concerns to fellow Agora Financial managing editor, Joel Bowman, of The Daily Reckoning. Joel is from Australia, but has hopped the globe a bit and is currently making his home in the continent below our own.

“Go where you’re treated best,” he counseled. “And when that changes,” he continued, “go somewhere else.”

We took a look around and figured that we’re still being treated pretty well here...despite ominous developments...

But a few days ago, Joel sent us an article that reminded us that nowhere in the world is truly safe from the wild, desperate grasps of our dying empire. From Infowars:

The Senate is set to vote on a bill today that would define the whole of the United States as a ‘battlefield’ and allow the US Military to arrest American citizens in their own backyard without charge or trial.

“The Senate is going to vote on whether Congress will give this president — and every future president — the power to order the military to pick up and imprison without charge or trial civilians anywhere in the world. The power is so broad that even US citizens could be swept up by the military, and the military could be used far from any battlefield, even within the United States itself,” writes Chris Anders of the ACLU Washington Legislative Office.

Under the ‘worldwide indefinite detention without charge or trial’ provision of S.1867, the National Defense Authorization Act bill, which is set to be up for a vote on the Senate floor this week, the legislation will ‘basically, say in law, for the first time, that the homeland is part of the battlefield,’ said Sen. Lindsey Graham (R-S.C.), who supports the bill.

The bill was drafted in secret by Senators Carl Levin (D-Mich.) and John McCain (R-Ariz.) before being passed in a closed-door committee meeting without any kind of hearing. The language appears in sections 1031 and 1032 of the NDAA bill.

“I would also point out that these provisions raise serious questions as to who we are as a society and what our Constitution seeks to protect,” Colorado Sen. Mark Udall said in a speech last week. ‘One section of these provisions, section 1031, would be interpreted as allowing the military to capture and indefinitely detain American citizens on US soil. Section 1031, essentially, repeals the Posse Comitatus Act of 1878 by authorizing the US military to perform law enforcement functions on American soil. That alone should alarm my colleagues on both sides of the aisle, but there are other problems with these provisions that must be resolved.’

This means Americans could be declared domestic terrorists and thrown in a military brig with no recourse whatsoever. Given that the Department of Homeland Security has characterized behavior such as buying gold, owning guns, using a watch or binoculars, donating to charity, using the telephone or email to find information, using cash and all manner of mundane behaviors as potential indicators of domestic terrorism, such a provision would be wide open to abuse.

“American citizens and people picked up on American or Canadian or British streets being sent to military prisons indefinitely, without even being charged with a crime. Really? Does anyone think this is a good idea? And why now?” asks Anders.

The ACLU is urging citizens to call their senators and demand that the Udall Amendment be added to the bill, a change that would at least act as a check to prevent Americans being snatched off the streets without some form of congressional oversight.

We have been warning for over a decade that Americans would become the target of laws supposedly aimed at terrorists and enemy combatants. Alex Jones personally documented how US troops were being trained to arrest US citizens, in the event of martial law, during urban warfare training drills back in the ’90s. Under the National Defense Authorization Act bill, no declaration of martial law would be necessary, since Americans would now be subject to the same treatment as suspected insurgents in places like Afghanistan and Iraq.

If you thought that the executive assassination of American citizens abroad was bad enough, now similar powers will be extended to the ‘homeland,’ in other words, your town, your community, your backyard.
Yet it’s not as easy as leaving the borders of the United States. The empire, in its hubris, believes the entire world lies within its jurisdiction. The American president recently assassinated an American citizen, whose words supposedly constituted a threat to the United States...

How long will it be before dollar-ditching expatriates are declared “deserters,” “traitors”...whose very actions undermine the United States...and who must be dealt with as examples?

If this doesn’t make you want to run for the hills, we don’t know what will. But if you hope to make it to the hills, walk; don’t run. By running, you may appear to be a domestic terrorist, deserving incarceration.


Gary Gibson,
for The Daily Reckoning