The Obama administration Ponzi schemes are ready to collapse any time China’s holders of American debt discover that Obama IOU’s, not the American taxpayer backs the dollar. While cash, not stocks, is a better choice at the moment, silver and gold will be seen as safe havens once currencies begin to collapse. When China finally realizes they bought into an Obama-Bernanke Ponzi scheme, they and other foreign debt holders will likely panic. It is most likely the next few days will see a stock market trap close. The trap may be executed by computer to first wipe out short sellers with an upward spike that draws in more buyers (that could have happened in the last few days). The collapse could then trap the buyers with 10% to 20% losses. Then a month or two later it will become a decent entry point as Americans go to the polls and remove Obama from office. If Obama wins re-election we expect a complete collapse of both the stock market and the US Dollar. That makes silver and gold more attractive.

Federal Reserve Chairman Ben S. Bernanke reiterated during his second day of testimony that the U.S. fiscal spending situation under Obama is “unsustainable.” It is a Ponzi scheme. Bernanke has lowered rates so that Obama’s debt is charged a lower rate and hence Obama has been able to load up with debt because Bernanke keeps the debt cost artificially low. The FED also pumps up bank earnings and bank purchases of Obama debt by offering Obama debt at an interest rate above the artificially low rate the banks pay to borrow from the FED. Then the FED allows the banks to turn around and borrow from the American taxpayer to buy the Obama debt that pays a slightly higher interest rate from the FED. This is and has been the outright obvious fraudulent and deceptive Obama/Bernanke FED Ponzi scheme run under the name “quantitative easing.” This Obama Ponzi scheme will also undermine the EU scheme as confidence in Socialist community activist deadbeats hits a new low. ObamaScare, no-work-welfare, housing assistance, and food stamps will have USA taxpayers $15 Trillion in debt if Obama is re-elected. Of course Obama doesn’t believe in term limits and thinks the president should serve as long as he gets re-elected by his deadbeat socialist constituency. That is what he told Venezuela’s Chavez who is one of Obama’s heroes. Of course Obama hates Churchill and sent his bust back to England.


Obama has the home building industry down only -66% from the normal level before he took office. It was worse for a while when it was down –78% under Obama. Obama has continued the liar loans and is still suing banks that do not give liar loans.

Even after the socialists in Congress on the Senate Banking Commission destroyed the American banking system 2004-2008 by requiring “Liar Loans” so that deadbeats can get equal opportunity to “good credit” home mortgages.… the Democrat-socialists add insult to injury and continue with Obama-Holder liar-loan fraud. The only way to give deadbeats a lower interest rate is to take the deadbeat at her word that she has sufficient income to make the mortgage payments. The “shame of socialism” is that very few male deadbeats have access to anything. Men living on the streets outnumber women by more than twenty to one. The Democrat-socialists make the system so biased against males that minority families have few stable father figures. The father figure has to disappear for the mother to get Obama-Holder welfare. Obama-Holder Socialism discriminates against father figures and allows deadbeats to get liar loans and sues banks who do not accept the lies required so that deadbeats can be qualified for lower interest rates.

“The Department of Justice Sues Mortgage Bankers for Violations of Fair Housing Act and Equal Credit Opportunity Act.

The Department of Justice filed a complaint against a mortgage banker alleging violations of the Fair Housing Act and Equal Credit Opportunity Act. The complaint alleges that defendant engaged in a pattern and practice of race and national origin discrimination by charging African American and Hispanic borrowers higher interest rates and fees on home mortgage loans compared to the rates and fees the defendant charged to similarly-situated non-Hispanic white borrowers. The Department of Justice alleged that in hundreds of instances African American and or Hispanic borrowers with similar credit and risk profiles as white borrowers, entering in the same type of home mortgage loan, paid higher interest rates and fees. Click here for the complaint.”
http://www.goodwinprocter.com/Publications/Newsletter-Articles/Consumer-Financial-Articles/2012_04/17_15.aspx

The position of this blog is that we first have to throw out Obama and then we need to let inflation rise to between 4% to 5% not the current 2.5% to put pressure on all governments to lower debts because interest rates always are charged higher than inflation. The 5%+ inflation rate would then help reduce world debt and would force corporations and people to stop hoarding cash, a practice that currently hurts investment… so that the returns are greater than the inflation rate. Today the  low interest rates allow incompetent governments and incompetent bank executives to have lower debt payments and grossly inflates financial sector profits because they pay close to 0% for the money they borrow from the fed. So they have a no-brain gain by borrowing tons at 0.25% interest from the fed to buy US government debt paying 2% interest. That is the game they have been playing for three years now. We have a disaster facing us now when this debt comes due.

The year-end Obama mandated “fiscal cliff” would damage the GDP recovery by as much as –5%, Bernanke said. Obama demanded that budget cuts be put off until after the November 2012 election as punishment for the vast majority of Americans who will vote Obama out of office. Then Obama can blame his Obama Depression on Mitt Romney.

The Aerospace Industries Association, presented a study predicting the across-the-board Obama Military cuts in federal programs may cost 2.14 million private industry jobs and reduce the gross domestic product by $215 billion next year. Former Vice President Dick Cheney said at a private meeting with Senate Republicans yesterday that the projected cuts totaling $500 billion could be “devastating” to military modernization and planning. The problem arose when Defense Secretary Leon Panetta was snookered and came up with an additional $400 Billion cuts for Obama after a similar size cut was already set to go into effect in January 2013.

Goldman Sachs Group Inc's quarterly profit fell 12 percent as investment income plunged.

State Street Corp.'s second-quarter earnings fell 4.5% on lower foreign exchange trading revenue and lower fees from investment management and servicing.

Alcatel-Lucent warned on Tuesday that it expects to post a second-quarter operating loss and miss a key performance goal as demand continues to slump in Europe.

There are reports that Microsoft may be illegally corrupting and thereby shutting down decade old software which owners are legally allowed to continue to use as they upgrade their computers. The problem may involve illegal access and disruption of user work. If Microsoft is involved then they will become liable for $billions in damages. Users who trust Microsoft and use their fault reporting may be most vulnerable.

Citigroup Inc said on Monday that quarterly earnings fell 12 percent as it was stung by losses from the liar-loan credit crisis-era assets, but the bank's results were better than many analysts expected after low-balling to try to give Obama a boos in the polls.

Facebook stock fell 8.1 percent to $28.25 at 4 p.m. in New York. It is down 26 percent since May when the California company sold shares in an initial public offering.

The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney stuck at 47% of the vote, while President Obama earns support from 46%. http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
When currencies collapse then commodities and gold and silver set new highs. We are seeing signs of that beginning now. It is exacerbated by international instability when empires collapse and massive uncontrollable migrations of people occur to escape increasing hardships.

Britain had a bigger budget deficit than economists forecast in June, casting fresh doubt on whether Britain can meet his full- year fiscal goals.

Nokia Oyj’s debt, already at junk status was lowered further by two steps at Fitch Ratings after the Finnish mobile- phone maker’s second-quarter loss widened.

North Korea said it is reviewing the “nuclear issue” to counter the U.S., days after Kim Jong Un consolidated his power by taking the nation’s top military rank and removing the army chief.

Sales of offshore wind turbines collapsed 75% in the first half of 2012, a sign the power industry and its financiers are struggling in Germany and Britain. U.K. inflation unexpectedly fell to 2.4%, its lowest rate in 2 1/2 years

The International Monetary Fund on Monday cut its forecast for global economic growth and warned that the outlook could dim further if socialists in Europe do not act with enough force and speed to end their welfare states and go back to the free enterprise system.

London home sellers cut prices by a record 3.6 percent for the month of July from June as an increase in supply added to pressure on the property market during the traditional summer lull.

Peugeot Citroen plunged to a new 23-year low over concerns that socialist Holland will interfere after they announced plans to close a factory and cut some jobs to save the company.

Emerging markets faltered. News falsely reported Monday that they just had a six-week run-up and you can see they went down again in that time period. However, they will still do better than American stocks unless Obama is given the heave-ho.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefine

Germany faltering below the recent high but 20% higher than last year’s low: Choose 2 or 5 years. The DAX can’t even keep up with the DJI!
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart2:symbol=^gdaxi;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

The Swiss Markets are testing highs. It gave a sell signal last year.
http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#chart1:symbol=^ssmi;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined



American Economy

Four American cities went bankrupt this month.

Squawk Box said hedge funds are rife with Ponzi schemes again that will go bankrupt soon.

J.P. Morgan 2Q Profit fell and reported earnings that were down 9% from a year ago, as it struggles to bounce back from a $6 Billion loss on a bad hedging bet.

Crude Oil Futures Drop From One-Week High



Past Week

US Retail Sales decline 0.5% in June falling for a third month in a row as small companies refuse to hire until they are certain the Obama Scare will not go into effect. The limited employment gains took a toll on consumers.

20% of the unemployed are not counted (the blue line) because they have given up on socialism and have joined John Gault in retirement.
http://www.martincapital.com/index.php?page=graph&view=unemployment

Retail Sales ex-auto Jun were down again by -0.4%

Empire Manufacturing Jul 7.improved slightly to 7.4

Business Inventories rose again in May this time by 0.3%. Inventory build-up means production must be cut.

CPI Jun 0.0% up from -0.3% ok

Core CPI Jun 0.2% was.2% ok

Net Long-Term TIC Flows May $55.0 bln up from $25.6B the world is still buying our runaway debt

Industrial Production Jun 0.4% up from -0.1% good

Capacity Utilization Jun 78.9% declined from 79.0% bad

NAHB Housing Market Index Jul 35 was 29 This is complete fabrication

MBA Mortgage Index 07/14 +16.9up from -2.1% Good indication of some clearing of inventory.

Housing Starts Jun 760K up from 711K Improved from –78% to only -67% since Obama liar loans went into effect. Obama has continued the liar loans and is still suing banks that do not give liar loans.

Building Permits Jun 755K down from 784K not good for jobs but good since there are too many homes

Crude Inventories 07/14 -0.809M down from -4.696M, not good

Yesterday
Initial Claims 07/14 386K up sharply from 350K Bad

Continuing Claims 07/07 3314K up from 3304K Bad

Existing Home Sales Jun 4.37M down from 4.55M Bad
We want home sales. What is not helpful is building new homes when we currently have over 1% of homes occupied by Obama-Holder liar loan deadbeats who cannot afford them and almost 1% vacant.

Philadelphia Fed Jul -12.9 bad again -16.6 Bad
Leading Indicators Jun -0.3% sharp downturn from 0.3% Bad

Market outlook July 20, 2012
Microsoft’s ill-fated acquisition of an online advertising business led to its first ever loss this last quarter, its first in more than two decades as a public company. We anticipate a market collapse within days similar to the one we saw starting in August of last year. Cash is better than being fully invested in stocks right now until Obama is out of office. But if Obama is re-elected currencies will begin to collapse and people will stop accumulating them. At some point China will panic and dump falling currencies. In summary, if Obama wins we expect a complete collapse of both the stock market and the US Dollar.

The market is hitting upper resistance levels again. The stock market rally since 2009 was based on assumed economic recovery. We produced a stock market recovery that is entirely hollow and no economic recovery. The recovery is based on artificially low FED rates that are dangerous enablers of socialism and socialist debt and also the enablers of financial institutions borrowing excessively from the FED at low rates to make artificially high profits while squandering the future livelihoods of our children.

As of the end of the 3rd quarter 2011, Wall’s Street estimated for 2nd quarter 2012 S&P 500 earnings would increase of 14.3% and that was the basis for the market rally. The estimates have now plunged to consensus expectations of a rise of only 5.8% less than half the number used to justify this current market level.

We now expect the stock market will soon slump for at least two months or more. The market will likely continue to slump further if Obama is re-elected. It is too close to call just how bad it will be. It could get worse than in September of 2008 when Obama was first elected after he announced America was in a Great Depression.

Examine the last 5 years of the NYSE. Obama could easily be taking America into a profoundly deep depression breaking 2009 lows if he is re-elected.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=5y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

The Dow Theory Industrials and Rails sell signal of August 2, 2011 still holds. The Rails failed again to meet even the last shoulder of the head and shoulder sell signal.
http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=5y;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

The market sell signal is also seen in 3-month market cyclic data.
http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=2y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

The VIX says the market is now extremely complacent and extremely dangerous.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=m&q=l&c=

The Baltic Dry Index is already anemic and now is turning lower again. World trade has now almost completely collapsed with just having Obama malaise, without tariffs that were the blame for the collapse during FDR’s socialist experimentation that resulted in the last Great Depression. Clearly it is the corruption of socialism and its crony capitalism, not rigorous free enterprise, that always ends in collapse of production and then economic depression.
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were down last night. China down -0.8%, Hong Kong up 0.4%, India down -0.7%, Singapore down –0.4%, Japan down -1.4%.

European markets were down half way through their day in a range of -0.3% to -1%

American market futures are down about -0.3% in after