The Coup in Honduras

Could the diplomatic thaw between Venezuela and the United States be coming to an abrupt end? At the recent Summit of the Americas held in Port of Spain, Barack Obama shook Venezuelan President Hugo Chávez’s hand and declared that he would pursue a less arrogant foreign policy towards Latin America. Building on that good will, Venezuela and the United States agreed to restore their ambassadors late last week. Such diplomatic overtures provided a stark contrast to the miserable state of relations during the Bush years: just nine months ago Venezuela expelled the U.S. envoy in a diplomatic tussle. At the time, Chávez said he kicked the U.S. ambassador out to demonstrate solidarity with left ally Bolivia, which had also expelled a top American diplomat after accusing him of blatant political interference in the Andean nation’s internal affairs.

Whatever goodwill existed last week however could now be undone by turbulent political events in Honduras. Following the military coup d’etat there on Sunday, Chávez accused the U.S. of helping to orchestrate the overthrow of Honduran President Manuel Zelaya. “Behind these soldiers are the Honduran bourgeois, the rich who converted Honduras into a Banana Republic, into a political and military base for North American imperialism,” Chávez thundered. The Venezuelan leader urged the Honduran military to return Zelaya to power and even threatened military action against the coup regime if Venezuela’s ambassador was killed or local troops entered the Venezuelan Embassy. Reportedly, Honduran soldiers beat the ambassador and left him on the side of a road in the course of the military coup. Tensions have ratcheted up to such an extent that Chávez has now placed his armed forces on alert.

Debt Deflation in the US

Happy-face media reporting of economic news is providing the usual upbeat spin on Friday’s debt-deflation statistics. The Commerce Department’s National Income and Product Accounts (NIPA) for May show that U.S. “savings” are now absorbing 6.9 percent of income.

I put the word “savings” in quotation marks because this 6.9% is not what most people think of as savings. It is not money in the bank to draw out on the “rainy day” when one is laid off as unemployment rates rise. The statistic means that 6.9% of national income is being earmarked to pay down debt – the highest saving rate in 15 years, up from actually negative rates (living on borrowed credit) just a few years ago. The only way in which these savings are “money in the bank” is that they are being paid by consumers to their banks and credit card companies.

Coup d’Etat Underway in Honduras: OBAMA’S FIRST COUP D’ETAT

by Eva Golinger

President Zelaya of Honduras has just been kidnapped, Sunday 28th June

[Note: As of 11:15am, Caracas time, President Zelaya is speaking live on Telesur from San Jose, Costa Rica. He has verified the soldiers entered his residence in the early morning hours, firing guns and threatening to kill him and his family if he resisted the coup. He was forced to go with the soldiers who took him to the air base and flew him to Costa Rica. He has requested the U.S. Government make a public statement condemning the coup, otherwise, it will indicate their compliance.]

Caracas, Venezuela – The text message that beeped on my cell phone this morning read “Alert, Zelaya has been kidnapped, coup d’etat underway in Honduras, spread the word.” It’s a rude awakening for a Sunday morning, especially for the millions of Hondurans that were preparing to exercise their sacred right to vote today for the first time on a consultative referendum concerning the future convening of a constitutional assembly to reform the constitution. Supposedly at the center of the controversary is today’s scheduled referendum, which is not a binding vote but merely an opinion poll to determine whether or not a majority of Hondurans desire to eventually enter into a process to modify their constitution.

Is the Fed Juicing the Stock Market?

Why has the stock market been on a 3-month tear when the economy is undergoing the worst economic contraction since the Great Depression? The S&P 500 has shot up 40% from its low on March 9 and the Dow Jones Industrials have followed close behind. Is this a typical bear market rally or is the invisible hand of the Fed goosing the markets?

Everyone seems to agree that the Fed’s multi-trillion dollar quantitative easing (QE) is the jet-fuel that’s put stocks into orbit. But how is the money filtering into the market?

What the Big Banks Have Won And You Pay…

The trouble started 24 months ago, but the origins of the financial crisis are still disputed. The problems did not begin with subprime loans, lax lending standards or shoddy ratings agencies. The meltdown can be traced back to the activities of the big banks and their enablers at the Federal Reserve. The Fed’s artificially low interest rates provided a subsidy for risky speculation while deregulation allowed financial institutions to increase leverage to perilous levels, creating trillions of dollars of credit backed by insufficient capital reserves. When two Bear Stearns hedge funds defaulted in July 2007, the process of turbo-charging profits through massive credit expansion flipped into reverse sending the financial system into a downward spiral.

It is inaccurate to call the current slump a “recession”, which suggests a mismatch between supply and demand that is part of the normal business cycle. In truth, the economy has stumbled into a multi-trillion dollar capital hole that was created by the reckless actions of the nation’s largest financial institutions. The banks blew up the system and now the country has slipped into a depression.

Wary of dollar, China wants super-sovereign currency

* China’s central bank calls for super-sovereign currency

* Dollar’s dominance has intensified risk, worsened crisis

* IMF should manage part of its members’ FX reserves

China’s central bank renewed its call on Friday for the creation of a super-sovereign reserve currency to reduce the dollar’s global domination, which it said had worsened the financial crisis.

In its annual financial stability report, the central bank did not mention the dollar by name but said it was a serious defect that one currency should tower over all others.

The Source of the Current Economic Crisis

Worried about the global economic crisis? It’s all in your head, says a leading financial expert.

And that’s the problem, according to Jeff Gates, author of the highly-regarded Democracy at Risk: Rescuing Main Street from Wall Street, a sequel to The Ownership Solution: Toward a Shared Capitalism for the 21st Century, which was described by one reviewer as “the best book on economics for a generation,” and praised by Ralph Nader as “a Capitalist Manifesto, a blueprint for spreading the benefits of capitalism more equitably.”

Terrorists “Made in Miami, USA”

-The permanent anti-terror campaign launched after the 9/11 attacks in no way disturbs the terrorists in Miami. It seems that US ultra-right circles still believe those hirelings could help them in their fight against “alien” regimes in Cuba, Bolivia, Venezuela, Ecuador, Paraguay, Nicaragua and Salvador.

-It was exactly in Miami where the cream of the CIA, the FBI, the State Department and the Cuban mafia plotted John Kennedy’s assassination. The incumbent US President Barack Obama has been more than once criticized by the Miami extremists for not implementing a hard-line policy towards Cuba. So, who could guarantee security to Mr. Obama then?

Bank Rescue Costs EU States $5.3 Trillion, More Than German GDP

European governments have approved $5.3 trillion of aid, more than the annual gross domestic product of Germany, to support banks during the credit crunch, according to a European Union document.

The U.K. pledged 781.2 billion euros ($1.1 trillion) to restore confidence in its lenders, the most of any of the 27 EU members, according to a May 26 document prepared by officials from the European Commission, the European Central Bank and member states and obtained by Bloomberg News. Denmark, where 13 of the country’s 140 banks were bailed out by the central bank or bought by rivals last year, committed 593.9 billion euros.

The Coming Economic Apocalypse

Astonishing to me is the fact that no one seems to understand the ultimate result of the current policies and practices of Washington D.C. and the Federal Reserve Bank, the Fed. I have studied our economic situation for about 3 hours per day for the last 8 months and conclude that the US is bankrupt. Think about the facts.

Certainly most of the automobile industry, the airlines, 37 out of 50 states, are bankrupt. The lending industry, Fannie Mae, Freddie Mac are bankrupt. Insurance giant AIG, bankrupt. The Pension Benefit Guarantee Corporation, or PBGC, the Federal Deposit Insurance Corporation, or FDIC, Social Security including Medicare and Medicaid are rapidly approaching insolvency.

In 1929 personal and corporate debt had risen to 365% of Gross Domestic Product, or GDP, before the Crash. We are now at 375% of GDP. So all of this excessive credit got us into this mess in the first place, right?. And the government and Fed solution to this mess is to print up an extra trillion dollars or so, give it to the lending industry and yell “Lend!, Lend!”. That should work, right?.