European Bloc Balks Over "Austerity"

by Alfred Adask

The New York Times reported in "Bloc in Europe Starts to Balk Over Austerity" that:

"European leaders arrived in Milan for a summit meeting . . . despite gloomy financial news this week of stock markets tumbling and borrowing costs shooting up . . . .

"In past years, theeurozone nations buckled under to German demands to slash budget deficits and roll back public services, and then watched in dismay as unemployment rates shot into the double digits and growth collapsed. Now, France, Italy and the European Central Bank (ECB) have coalesced into a bloc against Germany, and they are insisting that Berlin change course.

"The divisions between Europe's leaders, at a moment when unity would seem critical,   is one reason the markets are rattled-as well as the fact that policy makers still have not found a tool to revive growth in the face of staggering public debt." 

*  First, what does Germany mean by "austerity"?  It means governments (and individuals) being forced to live within their means.  Pay existing debt.  Going into no more debt.  No more borrowing.  No more trying to live on credit in the national equivalent of a man using his MasterCard to pay off his VISA to pay off his American Express. 

Critics describe the need to live within your means as "austerity" and make is sound draconian.  It's not.  It's simply a reasonable recommendation, demand or even inevitability that compels us all to live within our means.  

*  Second, "divisions between Europe's leaders" reported by the New York Times aren't between nations, per se, but rather between systems of values. 

Germany says people need to work hard, spend less than they earn, save and invest. Germany (which has prospered in large measure from a strong work ethic and inclination to produce and save) says the other nations must behave responsibly.

This is the fundamental idea behind "austerity":  each individual must work and pay his own bills; each generation must work to pay its own bills; each nation must work to pay its own bills. By "work," they mean productive work-not just make-work in some government bureaucracy-work that actually produces some tangible thing that is desired and valued by the public in the free market.

"Austerity":  each nation and individual should be responsible for his own bills.

Some European nations (including Italy, France and perhaps Spain) have become "Greece-i-fied" in that they reject the idea of personal or national responsibility.  They believe that they should be entitled to party hearty at someone else's expense.  They want an easy credit, easy money, high inflation monetary system that will allow them to spend currency that they haven't actually earned to live the "good life".  These nations have embraced a "welfare mentality" by which they feel "entitled" to live irresponsibly and on the basis of someone else's work-or at least on the basis of someone else's (ECB's) creation of fiat currency. 

Germany (a producer/creditor nation) won't lend any more money to Greece, Italy and France (consumer/debtor nations) at "easy money" rates.  The debtor nations are demanding that Germany give them something for nothing.  The resulting "divisions" between debtors and creditors won't be easily resolved. 

*  Third, what's caused the EU's economy to "stagger"? 

A:  According to the New York Times article, an enormous "public" or more generally, "government" debt.

Q:  Why did the EU have so much debt?

A: To allow liberal politicians to win election by persuading voters that they're "entitled" to live on welfare and/or subsidies provided by government.

What we're seeing in the EU is democracy in action-exactly as once described by Elmer t. Peterson: 

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.  After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy." 

Just as Mr. Peterson warned, nations that adopt democracy inevitably begin to vote themselves large, unearned subsidies.  Greece, Italy ,France-and the United States-have embraced democracy and reached the moment when, instead of working for a living, they vote for politicians who'll provide "free" welfare and subsidies.  If Mr. Peterson was right, the national economies of a number of western "democracies" are in the verge of collapse due to "loose fiscal policy" and there's a dictator in our future.

For example, in France laws have been in place for over a decade to encourage 35-hour workweeks and 1-hour lunches.  The French love it.  Like many Americans, they believe they have a moral right to however much credit is required to "shop 'til they drop".  They believe that their desire to consume entitles them to demand or even steal all they need from the members of society who can produce.

That attitude . . . that system of values . . . is being currently challenged in the EU by German notions of "austerity".  That challenge is being described as a "division" between the European "leaders" who believe in "austerity" (responsibility) and "consumerism" based on credit, inflation and leaving the bills to someone else to pay.  This "division" is really a conflict in values between consumers/debtors and producers/creditors.

*  The EU's capacity for economic growth has been strangled by the "staggering public debt" rung up by EU politicians and consumers.  They've reached a point where they can't borrow enough money to sustain their "party".  They're left with two unpalatable choices:  They must either go back to work and produce at least as much as they spend, or they must starve.  

The debtor nations (Greece, Italy and France) who've nearly bankrupted themselves by spending most of their savings and exhausting much of their credit.  These debtor-nations are therefore trying to persuade some other productive fool (Germany) into providing more credit and/or welfare/subsidies to allow the debtors to continue to "party".  

The "consumer" nations criticize Germany for advocating "austerity" (living within their means). Germany criticizes the "consumers" for being irresponsible, immoral and perhaps even irrational in their insistence that they should be entitled to spend other people's money.

I'm betting that Germany won't play the fool and allow itself to be conned into supporting the parasites who insist on their right to live on credit.   I'm betting that Germany will insist that the debtor nations relearn the need to be self-supporting by means of individual work ethic and personal productivity. 

If my bet is right, the EU is headed into chaos.  There'll be no easy reconciliation between the needs of the consumers/debtors with the values of the producers/creditors.  In the end, the consumers/debtors will have to either go back to work or starve. 

The EU is on the verge of running out of "free lunches".

Investing in Growth

The New York Times article continued:

"We need to show that Europe is capable of investing in growth, and not only in rigor and austerity," said the Italian prime minister, Matteo Renzi, . . . .

What does Italian PM Renzi mean when he advocates "investing in growth"? 

He means that Europe should stimulate its economy by borrowing more currency from productive creditors to allow the unproductive consumers to "party on" by going deeper into debt.

But didn't The New York Times article begin by declaring that the EU's primary economic problem was a "staggering public debt"?

Indeed, it did.

So, can the EU reasonably expect to revive an economy crippled by "staggering public debt" by going even deeper into debt?

Of course not.

(In fact, the US gov-co's attempt to stimulate our overly-indebted US economy with more debt is also likely to fail.)

Deflationary Trap

"Financial investors who had seemingly forgotten about the European crises in 2008 and 2010 now again seem worried about the Continent's persistent lack of growth and the prospect of falling into a deflationary trap."

Note that the previous quote links "lack of growth" to "deflation".   It follows that the article implicitly links positive "growth" to "inflation". 

"Inflation" takes place when the value (purchasing power) of a currency decreases.  Inflation is great for debtors (like the US government) because it allows them to repay their debts with "cheaper" dollars).  More, governments love inflation because it encourages people to go into debt to spend more currency that will stimulate the economy.

But note that the EU's fundamental problem is allegedly a "staggering public debt" that's partially due to institutionalized inflation.  I.e., inflation is a primary incentive for borrowing and thereby increasing the total debt.

*  However, inflation robs creditors.  Creditors ultimately are, or represent, the productive members of society.  Inflation is a way for the debtor-consumers to rob the creditor-producers. 

Although inflation provides a great economic "party" and the temporary illusion of prosperity, it eventually bankrupts the creditors and producers.  Then there's no more real wealth to be lent-only the additional currency "spun" into circulation by the central bank.  As the supply or currency grows and productivity declines, prices soar because there's little left to buy.  Therefore, the "party" ends and the people have to go back to work or starve. 

Again, that's what's happening in the EU right now.  Debtor nations like Greece, Italy and France insist on their right to "party" at someone else's expense.  Creditor nations like Germany are saying, "No--let the debtors go back to work and pay for their own damn parties."

And thus we have a "division" within the EU between those nations that are predominately producer-creditors and those that are predominately consumer-debtors.

The fundamental difference between inflation and deflation is that inflation serves the immediate interests of consumers/borrowers/debtors and the deflation serves the immediate interests of producers/savers/creditors. 

But inflation and deflation are similar in that they're both forms of theft that allow either debtors to rob creditors (inflation) or allow creditors to rob debtors.  This kind of theft is easily achieved with a fiat currency, but would be far less likely to occur if the currency were backed by something tangible like gold or silver.

Expand the Budget & Cut Taxes?!

* The New York Times article continued:

"France, which has in modern times been Germany's indispensable partner in European crisis management, is now in near revolt, and President Francois Hollande has joined forces with Mr. Renzi, who has presented an expansionary 2015 budget that will cut taxes despite pressure from Brussels to meet deficit targets."

Q:  How will France "expand" next year's budget at the same time it "cuts taxes"? 

A:  They must either borrow the extra money they want to spend or the ECB must print the extra currency they want to spend.  Either way, France will go deeper into debt.

Q:  But what did The New York Times article allege is the EU's primary problem?

A:  A "staggering" public debt.

So, can France realistically hope to solve their current debt problem by going more deeply into debt?

Of course not.  The most France can do is "kick the can down the road" and buy (actually, "borrow") a little more time before they have to concede that the consumers'/debtors' "party" is over.  France will be forced to admit that it can't afford 1-hour lunches, early retirement and overly generous pensions.  The spoiled French consumers will scream, shout and riot.  We could see a revolution. 

But the French will eventually learn that they aren't entitled to a single euro that they haven't earned by means of their own productive effort.  Consumers won't like the lesson.  It may take a generation or more for the lesson to be accepted.  Once that lesson is learned, the French may return to some semblance of prosperity-but not until.

Q:  If "staggering public debt" is the EU's primary problem, why would France be dumb enough "expand" next year's budget by going further into debt?

A:  Because:  1) they are desperate; and 2) there's nothing else they can do

France is headed for big trouble.  So is the EU.  So is the US.  Politicians know it.  They must also know that there's nothing they can do to prevent that trouble other than borrow enough currency to postpone it for a while longer.

*  "Mario Draghi, the president of the European Central Bank, has pressed Germany to temper its insistence on budgetary discipline ["austerity"; living within your means] and to spend more on public works to stimulate the eurozoneeconomy. The French have cheered him on. German leaders have resisted, while making clear their opposition to the more powerful stimulus measures that analysts expect the European Central Bank to deploy soon."

The ECB plans to print more euros and inject them into the EU economy.  If they do, the value of the euro should fall to inflation, creditors will be robbed, and consumers will be placated with a fresh supply of seemingly "free lunches".

The "teeter-totter" relationship between the value of the euro and the value of the dollar suggests that as the euro loses value to inflation, the US dollar will gain value and tend to deflate-which is typically a hallmark of economic depression. 

This implies that if the ECB tries to "stimulate" the EU economy by printing more euros and inflating their currency, one result may be increased deflation for the fiat dollar and an increased tendency for the US economy to slide into depression.

I can't prove that there's a direct relationship between euro inflation, dollar deflation and a US economic depression-but intuition suggests that such relationship probably exists.

More, I can see that after several years of the Federal Reserve's QE1, QE2 and QE3 policies of injecting trillions of fiat dollars into the US economy, the value of the dollar declined due to inflation, the value of the euro increased (deflated) and the EU economy moved to the verge of an economic depression.  Again, these events might be only coincidental-but they at least seem consistent with the possibility that the Fed's QE "stimulation" polices caused inflation in the US and deflation in the EU-and the ECB's upcoming "stimulus" policy of euro inflation could help precipitate US deflation and even depression.

Majority Rules-but Minority Provides?

*  We live in a world where there are far more consumers/spenders/debtors than there are producers/savers/creditors. 

In fact, we are all "consumers" in the sense that we must all "consume" food, water, goods and services each day to survive.  But only some of us are "producers".  That minority is necessary to support those of us who are net "consumers".

We all know that "consumers" make up 70% of the US economy.  We can presume that "consumers" also make up at least 70% of the electorate. 

Therefore, politicians recognize that the "consumers" are the political majority and cater to their desires by fostering inflation (legalized theft of the productive creditors).  Unfortunately, the political choice to foster inflation can only continue until we run out of producers and the remaining consumers are left to predate on themselves to survive.  Such predation is typically portrayed as a "mob".  That predation can sometimes be as violent and self-destructive as the Russian Revolution of A.D. 1917-23. 

We may see that kind of predation break loose in southern Europe in the next year or two.

Soon after, and for the very same reasons, we may see that same kind of predation in the US.

Like the EU, US debt is also "staggering" and unpayable.  We're no longer sufficiently productive to pay for our "party".  We've exhausted our savings and our credit is almost gone.  Nothing can postpone an economic crash other than printing more fiat dollars.  The US is fast approaching the "work or starve" moment. 

Faced with that choice, I'll bet that at least 30% of Americans can't or won't work.  More importantly, I'll bet that the 70% who can and will work are so broke that they'll refuse to support those who can't or won't.

Then what?

Obama has awakened the sleeping giant - American Women

ON OCTOBER 22ND, 2014 BY: LAURIE ROTH

It is out all over the place now. Polls are showing that women don't feel safe with Obama and now prefer Republicans. This has to be a huge slap upside the head to Obama that he doesn't own the female block anymore. Actually, he never did own most of us nor impress us with his tongue. Moms, workers, Grandmas, business owners and generic 'girlfriends' knew the difference between fiction and non-fiction - lies and truth.

Most of us women haven't survived marriage with a guy we would like to clock once in awhile, negotiated the mind field of raising kids in this compromised society, or built a business without being able to recognize a liar when we see one. I think women understand more than most men when someone is about to rob them or is trying to deceive them. God made most of us women with natural gifts in the areas of intuition, creative ability, sensitivity, discipline and old fashion courage. We show up, stay there and endure until the mission is done, the dishes are cleaned and bills are paid.

Have you ever seen a woman deal with pain and then a man deal with pain? Any questions? We love our men and need them to be in our lives. They are not beneath us, nor are we beneath them. However, I dare say...women have a higher pain tolerance than most men which is yet another gift God has given us. Yell at me if you wish, but I think I am right.

I vividly recall after my near fatal motorcycle wreck, getting out of bed each day dealing with pain, dizziness and drool as I drug myself down the hall. Regardless, I showed up until things got better. I got the kids to school, made the meals, did the laundry, cleaned the house, wrote my articles and did my radio show each day. Things weren't perfect, I wouldn't have impressed many but I did what most women will do...trust in God, struggle through and try their hardest...without the fanfare.

Women of America...it looks like more of you are finally listening to your intuition and that inner, God given ability to identify smooth talking liars. You finally realize that Obama is not making you feel safer and you trust Republicans more. I sure wouldn't trust the GOP much more but they are the folks that must get in the ring at this crucial time and act. Vote and vote right.

Obama and the desperate Democrats, who are shunning Obama with their re election attempts, must find a way to put out enough blame and lies about the other side to hopefully win in 2014. They won't win and the GOP will get back the Senate. It will be up to the conservative - freedom-loving masses to stay on them about their real priorities.

Obama and the Democrats have always believed that women, Hispanics and blacks are stupid - controllable slaves stuck in the 'glue trap' of Obama's agenda. They are not unique, individual or able to make up their own minds.

Looking at the last two presidential elections. It does appear like way too many females, blacks and Hispanics got totally stuck in the Obama's goo while believing for a long while they were sitting in a cozy spa with their honey. Granted, they couldn't move but they thought they saw steam and a wine glass next to them. What they saw was themselves being used as political widgets to discard when Obama was done with them.

Real women in America want freedom, God in charge; opportunity to thrive with their business ideas; a safe place to raise their children; schools that are reliable - protected from intruders and don't rewrite history while pushing sex agendas. Women want our borders protected, radical Islam pushed back and fascist/Marxist/communist agendas destroyed. Real women want Christian values and morals leading in America again...not Islam, New world order or other socialist/communist bull rot.

Real women in America want God fearing, Constitution and freedom loving servants serving in the HOUSE and SENATE. We are sick of the egomaniac who has taken over the White House. We demand that real men be real men...not this fake 'metro-sexual' garbage. Real men are not sound bite experts. They don't say the perfect thing at the perfect time. They don't always smell right, look right are act right but they 99,9% of the time do right. Women want men with integrity, grit, and courage and yes...honor who love right and fight right.

Sorry Obama...you don't own the real women in America. Sorry again...way more of the women who have been in emotional intensive care for the last many years have ripped the IV out of their arms and are boldly walking out of the Obama psych ward.

Would you like another cigarette Obama? It looks like your nerves may need one.

Women join me. Lets bring back America and boot the leftist - progressive Democrats and 'America transformers' out on their backsides.

Join me each day on my national radio show from 7-10pm PAC. Listen at: www.ksbn.net Or, listen later on my archives anytime at: www.therothshow.com

Obama has awakened the sleeping giant - American women It is out all over the place now. Polls are showing that women don't feel safe with Obama and now prefer Republicans. This has to be a huge slap upside the head to Obama that he doesn't own the female block anymore. Actually, he never did own most of us nor impress us with his tongue. Moms, workers, Grandmas, business owners and generic 'girlfriends' knew the difference between fiction and non-fiction - lies and truth. Most of us women haven't survived marriage with a guy we would like to clock once in awhile, negotiated the mind field of raising kids in this compromised society, or built a business without being able to recognize a liar when we see one. I think women understand more than most men when someone is about to rob them or is trying to deceive them. God made most of us women with natural gifts in the areas of intuition, creative ability, sensitivity, discipline and old fashion courage. We show up, stay there and endure until the mission is done, the dishes are cleaned and bills are paid. Have you ever seen a woman deal with pain and then a man deal with pain? Any questions? We love our men and need them to be in our lives. They are not beneath us, nor are we beneath them. However, I dare say...women have a higher pain tolerance than most men which is yet another gift God has given us. Yell at me if you wish, but I think I am right. I vividly recall after my near fatal motorcycle wreck, getting out of bed each day dealing with pain, dizziness and drool as I drug myself down the hall. Regardless, I showed up until things got better. I got the kids to school, made the meals, did the laundry, cleaned the house, wrote my articles and did my radio show each day. Things weren't perfect, I wouldn't have impressed many but I did what most women will do...trust in God, struggle through and try their hardest...without the fanfare. Women of America...it looks like more of you are finally listening to your intuition and that inner, God given ability to identify smooth talking liars. You finally realize that Obama is not making you feel safer and you trust Republicans more. I sure wouldn't trust the GOP much more but they are the folks that must get in the ring at this crucial time and act. Vote and vote right. Obama and the desperate Democrats, who are shunning Obama with their re election attempts, must find a way to put out enough blame and lies about the other side to hopefully win in 2014. They won't win and the GOP will get back the Senate. It will be up to the conservative - freedom-loving masses to stay on them about their real priorities. Obama and the Democrats have always believed that women, Hispanics and blacks are stupid - controllable slaves stuck in the 'glue trap' of Obama's agenda. They are not unique, individual or able to make up their own minds. Looking at the last two presidential elections. It does appear like way too many females, blacks and Hispanics got totally stuck in the Obama's goo while believing for a long while they were sitting in a cozy spa with their honey. Granted, they couldn't move but they thought they saw steam and a wine glass next to them. What they saw was themselves being used as political widgets to discard when Obama was done with them. Real women in America want freedom, God in charge; opportunity to thrive with their business ideas; a safe place to raise their children; schools that are reliable - protected from intruders and don't rewrite history while pushing sex agendas. Women want our borders protected, radical Islam pushed back and fascist/Marxist/communist agendas destroyed. Real women want Christian values and morals leading in America again...not Islam, New world order or other socialist/communist bull rot. Real women in America want God fearing, Constitution and freedom loving servants serving in the HOUSE and SENATE. We are sick of the egomaniac who has taken over the White House. We demand that real men be real men...not this fake 'metro-sexual' garbage. Real men are not sound bite experts. They don't say the perfect thing at the perfect time. They don't always smell right, look right are act right but they 99,9% of the time do right. Women want men with integrity, grit, and courage and yes...honor who love right and fight right. Sorry Obama...you don't own the real women in America. Sorry again...way more of the women who have been in emotional intensive care for the last many years have ripped the IV out of their arms and are boldly walking out of the Obama psych ward. Would you like another cigarette Obama? It looks like your nerves may need one. Women join me. Lets bring back America and boot the leftist - progressive Democrats and 'America transformers' out on their backsides. Join me each day on my national radio show from 7-10pm PAC. Listen at: www.ksbn.net Or, listen later on my archives anytime at: www.therothshow.com

SALES OF NEW HOMES were nearly flat in September, after the government sharply revised downward what was initially an August surge in buying.  New-home sales edged up 0.2 percent last month to a seasonally adjusted annual rate of 467,000, the Commerce Department reported Friday.

The report also revised down the August sales rate to 466,000 from 504,000. The pace of sales for newly built homes has improved a mere 1.7 percent so far this year compared to 2013. Only the South has experienced gains in buying year-to-date, while purchases have fallen in the Northeast, Midwest and West.

Housing has struggled to fully rebound since the recession ended more than five years ago. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing houses instead of upgrading.

Sears is closing 77 Sears and Kmart stores and cutting 5,300 jobs. And that's not even the worst news.

The fact that most of these stores will close before Christmas is akin to raising a white flag, since holiday sales are the lynchpin for any retailer's entire year.

"They're not giving anybody confidence that they're going to be around long-term," said Allan Ellinger is senior managing partner at MMG Advisors, an investment bank that specializes in fashion and retailing. "It's sad, these were once among the industry's leading brands."

Even the stores that won't close until after the holidays are already holding going out of business sales rather than gearing up for seasonal promotions.

Related: Awkward - Sears borrows $400M from its CEO

Fitch recently downgraded Sears Holdings to just above default status, suggesting the company may not have cash to continue beyond 2016.

Forty six Kmart stores will close while the Sears brand will shutter 31 locations, including those that have both a Sears store and Sears auto.

The company reported that it had nearly 1,900 U.S. stores between the two brands as of the end of August, down 166 from a year earlier.

China's president on Friday pledged to provide $81 million in aid to help fight Ebola in the three West African countries at the heart of the crisis. President Xi Jinping made the announcement in a meeting in Beijing with the visiting president of Tanzania, Jakaya Kikwete, the Foreign Ministry said in a statement. The 500 million yuan ($81 million) will be used for emergency goods, to help set up a treatment center in Liberia, and to send additional Chinese medical staff and quarantine experts to Guinea, Liberia and Sierra Leone. China has already sent nearly 200 medical staff to West Africa and provided other humanitarian aid. In August, it delivered aid worth 30 million yuan (almost $5 million), according to authorities. China, the world's No. 2 economy, is beginning to make larger contributions to international aid efforts. China is also Africa's largest trading partner.

SALES AMERICAN EAGLES

Cumulative 2014 sales have reached 36,066,000 of the American Eagle silver bullion coins.

The Mint's authorized purchasers ordered another 715,000 coins Oct. 21, bringing the monthly sales total so far in October to 3,815,000 coins.

The Mint has been averaging monthly sales topping 3.6 million coins.

If the Mint maintains the monthly sales pace, the calendar year 2014 sales total could break 43 million coins.

The Mint established its annual sales record in 2013 with 42,675,000 coins recorded sold.

The U.S. Mint plans to begin sales of 2015-dated coins sometime during the first two weeks of January.

SWISS REFERENDUM

Everyone is talking about the swiss gold referedum and the impact it could have on the price of gold.

A slim majority of Swiss citizens said they would vote yes to force the Swiss National Bank to increase and hold on to their gold reserves, according to the country's first opinion poll.

On Tuesday, Switzerland's biggest daily newspaper, released the results of its online survey. According to the poll, which was conducted on Oct. 15 and had more than 13,000 respondents, 45% to 39% said they would support the "Save Our Gold" initiative. However, according to media reports, the survey also showed a high number of undecided voters. 

At the end of November, Swiss citizens will go to the polls to vote on three areas: whether or not the Swiss National Bank should increase its gold reserves to 20%, that the central bank should stop selling its precious metals and that all its gold should be held within the country.

Although Switzerland's first opinion poll regarding the Nov. 30 referendum was positive, some analysts are hesitant to declare a clear victory for the "yes" side. 

Barclays added that even if the referendum does win the popular vote, the initiative still has to be passed by the majority of 26 Swiss Cantons - the different regions in Switzerland. The analysts said because of the government's and central bank's opposition to the gold initiative, it is unlikely to break this "insurmountable barrier."(meaning it doesn't really matter what the vote is) 

Supporters of the referendum face a difficult opposition. The government and Swiss National Bank have been urging people to vote against the referendum, saying that it would impede the central bank's monetary policy.

In a research note released earlier this month, analysts at UBS said that if the referendum passed, the SNB would have to purchase about 1,500 tons of gold over the next five years. Currency analysts added that it would cost the central between $67 and $83 billion.

Currently, according to data compiled by the World Gold Council, Switzerland holds 1,040 metric tons of gold, about 7.8% of its foreign reserves.

James Bullard, the St. Louis Fed president, told Bloomberg News the Fed should weigh delaying the end to quantitative easing, the bond-buying experiment that has helped send stocks to record highs.

"This big flip flop from the guy I refer to as 'the Godfather of QE' is a game changer," Michael Block, chief strategist at Rhino Trading Partners, wrote in a note to clients. "This is a powerful signal that the Fed remains accommodative and is concerned with asset prices and volatility enough to consider the seemingly unthinkable step of continuing and even growing QE from current levels.

China's economy expanded by 7.3 percent in the third quarter from a year earlier. Although growth slowed slightly from the previous quarter's 7.5 percent, analysts had expected a more marked slowdown, to 6.9 percent. China has been a worry spot for investors for many weeks, and has been a key reason why financial markets have been volatile lately. Signs of a slowdown in Europe have also been worrying investors.

 China economic growth falls to five-year low of 7.3%: govt

 China's gross domestic product (GDP) expanded in the third quarter at its slowest pace since the depths of the global financial crisis, . . .  but analysts said the world's second-largest economy may have bottomed out.

The 7.3 percent year-on-year increase in July-September was lower than the 7.5 percent expansion in the previous three months, the National Bureau of Statistics (NBS) said, and the slowest since the 6.6 percent in the first quarter of 2009.

President Barack Obama announced a government plan to tighten security for the debit cards that transmit federal benefits like Social Security to millions of Americans.

Cards issued by the federal government will now have an internal chip replacing magnetic strips to reduce the potential for fraud.

Concern is growing over the security of Americans' financial data, with an estimated 100 million people having been affected by breaches in the past year, including at big retailers like Target and Home Depot.

 In addition, the government will apply the security chips and personal identification numbers, called PINS, that replace signatures to all existing and newly issued government credit cards, Obama said. Payment terminals at federal government facilities will be equipped to handle cards with the new technology.

Silver-Market Manipulator Nelson Bunker Hunt Dies At 88;

Nelson Bunker Hunt, one of the two Hunt brothers who tried to corner the silver market between 1979-80, died Tuesday at age 88, according to the Associated Press.

Nelson Hunt died in Dallas following a battle with Alzheimer disease, AP said Wednesday, citing his brother, W. Herbert Hunt.

The Hunt family initially made their money in oil.

In 1979-1980 the Hunt Brothers tried to corner the silver market and pushed up prices from about $6 an ounce to over $48 before the Comex exchange changed the rules on leverage and put heavy restrictions on commodities bought on margin. The Hunt brothers lost over $1 billion in the incident.

In 1985 the Commodity Futures Trading Commission accused the Hunt brothers, along with others, of illegally manipulating silver prices during 1979 and 1980. At the time they denied wrongdoing, but in 1989 they agreed to pay up to $10 million in penalties and accept a ban from trading commodities.

George Gero, vice president with RBC Capital Markets Global Futures, was a floor broker at the time in the Comex."It was interesting because whenever we saw brokers from ContiCommodities come into the ring, the silver price would go up a few pennies. Just as they were coming into the ring it would go up just a few pennies. Even before they started buying," Gero said.

ContiCommodities was the firm that handled the Hunt Brothers trading. It was also charged by the CFTC and is no longer operating

One of the biggest gold nuggets found in modern times in Northern California's historic Gold Country is going up for sale. Weighing in at more than 6 pounds, the Butte Nugget is expected to carry a price tag of $350,000. The San Francisco Chronicle reported Wednesday (http://bit.ly/1sNy00B ) that the nugget's owner asked dealer Don Kagin to keep his name and the location of the discovery secret. What's known is that a gold hunter found it in July on public land in the Butte County mountains. David McCarthy, a coin and rare-minerals expert, told the Chronicle that he took a blindfolded ride to the site of the discovery so he would be satisfied the nugget was genuine. The gold chunk will be unveiled Thursday at the San Francisco Fall Antiques Show.

TRANSITION TECHNOLOGY

 by Herbalist Wendy Wilson