Unemployment Reaching 12% In Some States While China Suspects Fed Secretly Engineering Default on America’s Debt

Weather Report: Geo-Political–Pakistan Down?, The Economy–A Copper Standard?, Unemployment

Geo-Political–Pakistan Down?: “Pakistan in danger of fracturing into Islamist fiefdoms, U.S. experts say” is the title of Jonathan S. Landay’s 4/10/09 article from McClatchy Newspapers (www.centredaily.com). The article describes the current political/cultural situation in Pakistan; one of the two most politically unstable countries (the other is Mexico) in the world according to U.S. intelligence sources. Here are some key excerpts from the article:

• “A growing number of U.S. intelligence, defense and diplomatic officials have concluded that there’s little hope of preventing nuclear-armed Pakistan from disintegrating into fiefdoms controlled by Islamist warlords and terrorists, posing a greater threat to the U.S. than Afghanistan’s terrorist haven did before Sept. 11.”
• “Pakistan’s fragmentation into warlord-run fiefdoms that host al-Qaida and other terrorist groups would have grave implications for the security of its nuclear arsenal, for the U.S.-led effort to pacify Afghanistan; and for the security of India, the nearby oil-rich Persian Gulf and Central Asia, the U.S. and its allies.”
• The experts McClatchy Newspapers interviewed said their views aren’t a worse case scenario but a realistic expectation based on the militant’s gains and the failure of Pakistan’s civilian and military leadership to respond.”
• “The Taliban ‘have become a self-sustaining force,’ author Ahmed Rashid, an expert on the insurgency told a conference in Washington … . “They have an agenda for Pakistan, and that agenda is no less than to topple the government of Pakistan and ‘Talibanizing’ the entire country”

The Economy– A Copper Standard?: “ A ‘Copper Standard’ for the world’s currency system?” is the title of the Ambrose Evans-Pritchard article at Telegraph.co.uk via lifeaftertheoilcrash.net, 4/17/09. The article discusses China’s moving out of U.S. Treasury bonds to metals as a reserve. Here are some highlights from the article:

• “Nobu Su, head of Taiwan’s TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.”
• “China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”
• “The SRB has also been accumulating aluminum, zinc, nickel, and rarer metals…”
• “They (the Chinese) are definitely buying metals to diversify out of U.S. Treasuries and dollar holdings’ said Jim Lennon, head of commodities at Macquarie Bank.”
• * The Key – “One thing is clear: Beijing suspects that the U.S. Federal Reserve is engineering a covert default on America’s debt by printing money.”

The Economy–Unemployment: Aaron Smith’s article, “Oregon and Michigan push past 12% jobless”, at money.cnn.com on 4/17/09, highlights America’s rising unemployment problem. Here are some key points:

• “…the unemployment rate (is) rising in 46 states and Washington, D.C.”
• Other states with double-digit unemployment: NC @ 10.8%,RI @ 10.5%, NV @ 10.4%, and IN@ 10.0%. Nationwide unemployment = 8.5%/ March ’09’.

Until next time, keep your eyes on the horizon as the weather’s changing fast.