Something big' transferred to Gaza Strip By Aaron Klein

JERUSALEM – Egypt and Israel have information a large quantity of weapons, including new and sophisticated firepower, was smuggled from Egypt into the Hamas-controlled Gaza Strip in the last two days, according to informed Middle East security officials.

Israeli security officials fear a growing state of anarchy exists along the Gaza-Egypt border, with Islamist groups there taking advantage of the chaos in Egypt amid mass protests threatening the regime of President Hosni Mubarak. Egyptian security forces have been focused largely on quelling the riots.

"Something big was brought into the Gaza Strip," said an informed security official.

The official said it was not known yet exactly what was transferred into Gaza, but he speculated it may have been a large quantity of antiaircraft missiles.

(Story continues below)

Today it was reported Israeli officials let Egypt move several hundred troops into the Sinai Peninsula for the first time since the countries signed a treaty three decades ago.

According to the 1979 peace treaty, Egypt had agreed to leave the area demilitarized.

The Sinai borders the Gaza Strip as well as Israel's southern border with Egypt.

Israeli officials say Israel agreed to allow the Egyptian army to move two battalions, or about 800 soldiers, into the Sharm el-Sheikh area on Sinai's southern tip, far from Israel.

Read more: 'Something big' transferred to Gaza Strip http://www.wnd.com/?pageId=257917#ixzz1CfXLikTJ

American Eulogy

At the outset of the last century America was still a vital, free, growing country on the rise. The song of the century began as a joyous ballad and ended as a funeral dirge. The creation of a Central Bank, which could create inflation on demand, and allowing politicians the ability to buy votes through pork spending, paid for with ever increasing taxation, have sucked the life out of the American Dream...The Federal Reserve has not been alone in killing the American Dream. Politicians since 1913 have done their part in suffocating the dream. The tax code consisted of 400 pages in 1913 and tax rates ranged from 1% to 7%. In less than a century politicians of both parties have carved out 70,000 pages of payoffs, entitlements, and bribes for their contributors and constituents. Tax rates now range from 10% to 35%. Those 70,000 pages of rules, regulations and tax breaks do not benefit the average middle class American. They benefit those who had the money and power to buy off a Congressman.The Federal Reserve and the US Tax Code bastardized the American Dream, created barriers to economic advancement, and supported the accumulation of wealth and power by a select few. The ruling elite have used their power and control over the media to convince the majority of Americans that the American Dream is about accumulating material possessions with debt. The American Dream no longer meant attaining the fullest measure of your capabilities, but living in the biggest McMansion, driving the nicest BMW, watching the biggest TV and wearing the latest fashions, all acquired with debt. America is dying.

Stuxnet returns to Bushehr reactor. Russia warns of nuclear explosion

iran's atomic energy chief Ali Akbar Salehi said on Jan. 29 that the Bushehr nuclear power plant would be connected to the national grid on April 9. He "forgot" about Tehran's promise to fully activate its first nuclear reactor Tuesday, Jan. 25. debkafile's intelligence and Moscow sources reveal that on that day, Iran's hand on the switch was held back at the last minute by Sergei Kiriyenko, chief of Rosatom (the Russian national nuclear energy commission which oversaw the reactor's construction. He came hurrying over to warn Tehran that Stuxnet was back and switching the reactor on could trigger a calamitous nuclear explosion that could cost a million Iranian lives and devastate neighboring populations. He complained to President Mahmoud Ahmadinejad that the Iranian nuclear and engineering staff were ignoring the presence of the malworm and must be stopped.

Kiriyenko told the Iranian president that the Russian engineers employed at the reactor notified Moscow that Stuxnet was again attacking the Bushehr systems after apparently taking a rest from its first onslaught last June. There was no telling which systems had been infected, because a key feature of the virus is that the systems' screens show they are working normally when in fact they have been fatally disarmed. Activating the reactor in these circumstances could cause an explosion far more powerful than the disaster at the Russian reactor at Chernobyl, Ukraine in April 1986, which released 400 times more radioactive material than the atomic bombing of Hiroshima.
The impression the Rosatom chief had gained from his staff at Bushehr was that the Iranian teams had been ordered to activate the reactor at any price to prove that the Islamic Republic had beaten Stuxnet. This concern overrode security. The consequences of ignoring this fearful hazard, said Kiriyenko, were unthinkable and would destroy the revolutionary Islamic regime in Tehran in their wake.
Kirienko began worrying when he heard the Iranian nuclear commission's spokesman Hamid Khadem-Qaemi claim on Jan. 17 that Bushehr had not been affected by Stuxnet.
Our Iranian sources report that, after seeing the Russian official off, Ahmadinejad ordered the reactor to stay shut down.

This week, Salehi, who is also Iran's foreign minister, hinted at the cause of the delay when he said: "The reactor has started its operation and the next step is to reach critical phase which will happen by the end of Bahman (February 20) in presence of Russians. We have said before that due to some tests, we may have to face delays but these delays are around a week or two." He added, "We aim at launching Bushehr nuclear reactor safely not to merely launch it."

In Jerusalem, Maj-Gen. Aviv Kohavi, the new head of IDF military intelligence - MI, who appeared before the Knesset Security and Foreign Affairs Committee for his first briefing on Jan. 25 said Bushehr could be quickly converted from producing electricity for civilian use to a military reactor and incorporated into Iran's weapons program.

The next day, Jan. 26, Moscow took the unusual step of demanding a NATO investigation into last year's computer attack on the Russian-built nuclear reactor in Iran.

Dmitry Rogozin, Russia's ambassador to the North Atlantic Treaty Organization, said: T"his virus, which is very toxic, very dangerous, could have very serious implications," he said, describing the virus's impact as being like "explosive mines".

"These 'mines' could lead to a new Chernobyl," he said.

A startling fact about Obama's State of the Union address

A long-standing colleague and reader sent this to me yesterday and it blew me away. Read on:

Obama’s State of the Union:

"Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again."

Herbert Hoover, May 1st 1930, U.S. Chamber of Commerce Meeting:

"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover."

Obama’s State of the Union:

"Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year."

Herbert Hoover, October 22, 1932, campaign speech in Detroit:

"It can be demonstrated that the tide has turned and that the gigantic forces of depression are today in retreat. Our measures and policies have demonstrated their effectiveness. They have preserved the American people from certain chaos. They have preserved a final fortress of stability in the world."

Obama’s State of the Union:

"But now that the worst of the recession is over..."

Herbert Hoover, June 1930, to a delegation requesting a public works project:

"Gentlemen, you have come sixty days too late. The depression is over."

Obama’s State of the Union:

"The steps we’ve taken over the last two years may have broken the back of this recession…"

Herbert Hoover, State of the Union, December 6, 1932:

"The unprecedented emergency measures enacted and policies adopted undoubtedly saved the country from economic disaster…"

Hello Ben Bernanke

Stephanie writes ....

Hello Mish,

I don't know if you give advice, but I heard you on Coast-To-Coast and you seem to know what you are talking about. I am 65 years old, get $938 from Social Security, and this is all I live on every month.

I have a CD that is about $16,000 now and is providing $75 a month. In about a year that will stop because the interest has gone down so much. If you were me, what would you invest in?

I lost $2,000 in the stock market a few years ago and the way it is now it is rather scary. I don't know what else to even consider and when I ask my banker he seems to be at a loss too.

Any help you could offer would be a blessing. Thank you for your consideration and kindness.

Stephanie - Somewhere, USA

Clobbered by the Fed

Hi Stephanie

You and many others are getting clobbered by the policies of the Fed. Not only did taxpayers bail out the banks at taxpayer expense, Bernanke and the Fed continues to do so.

By holding interest rates low, the Fed is hurting everyone on fixed income with savings in the bank or CDs. You get almost no interest on your savings, and that is robbing you and everyone else like you.

Bernanke is hoping people like you gamble and invest in risky assets. Indeed, he is doing everything he can to force people into taking more risk.

Don't do it. It is not a prudent thing to do.

The stock market is extremely overvalued here and could easily decline hard. Indeed, I think it will at some point.

Emergency Fund in Cash

My straight forward advice to everyone is to have an emergency fund of at least a year's worth of living expenses in the bank before they invest in stocks, bonds, gold or anything other than short-term CDs or treasuries.

It is obvious that Bernanke's concern is doing what is best for banks. He shows no concern about the damage he is causing elsewhere.

Bernanke is a Coward Hiding Behind Mathematical Formulas

I wish I could get Bernanke in a room with you and everyone in your position, and take questions from you.

Bernanke will not do that because he is a coward. He hides behind mathematical formulas, the same ones I might point out that told him housing was not in a bubble, there was no risk of recession, and that the unemployment rate would not top 8%.

He did not know what he was doing then, and he certainly does not understand the risks now.

Moreover, his "Quantitative Easing" policies have helped fuel speculation in commodities, especially food and gasoline. That speculation is contributing not only to rising prices in the US, but even more so globally.

To be fair, there are some severe weather problems in other parts of the world that affect growing conditions and thus food prices. In addition, there is massive credit expansion in China and India that puts upward pressure on food and energy.

However, there is also little doubt that Bernanke has fueled commodity speculation with his low interest rate policies and that too has pushed prices higher.

Believe it or not, Bernanke is worried that prices might fall. I suspect you would love to see prices fall, and so would everyone else in your situation.

Unfortunately, Bernanke intends to keep interest rates low until prices go up to his liking, and then when prices do start rising, interest you earn on your CD will not keep up with prices.

Bear in mind, that the Fed excludes food and energy from the prices they monitor. They desperately want housing prices to rise. However, the Fed can make money available, but it cannot control where that money goes.

Serial Bubble Blowing

The Fed's loose money policies fueled a housing bubble last time, now money is pouring into commodities, junk bonds, and leveraged buyouts (once again). This is bound to end badly once again.

Meanwhile, the unemployment rates is still 9.4% officially, and much higher unofficially.

Fed's Policy Is Theft

Stephanie, it's a little known fact that inflation benefits those with first access to money, such as the banks, the wealthy (via rising asset prices), and the government (think rising sales taxes and property taxes when prices go up).

Everyone else gets screwed. You are right in the middle of the pack of those most hurt by the serial bubble blowing policies of the Fed.

Viewed this way, Bernanke's policies are nothing but theft, robbing the poor, for the benefit of banks and the wealthy.

This is why I support Congressman Ron Paul's effort to end the Fed.

No Good Solutions for Those on Fixed Income

Your dilemma is 1-year treasuries yield a mere .23%.

Unfortunately, I have no good investment solutions for you, because there are none. You are not suited for stock market risks, and if there is any chance you will need to use your savings any time soon, you cannot afford to risk being in long-term CDs.

Arguably the best thing for you to do is find a bank that has 1% or higher rates on savings accounts.

Avoid Fees

There are some other common-sense things you can do. For example, it is critical for you to avoid all fees. If you have fees on your checking account now, find a place that does not have them. Bankrate can help on CD rates, savings rates, and checking account rates.

Invest in a Freezer

I do not know whether you have a home or an apartment, but if you have room, get a suitably-sized freezer and only buy meat on sale. The price of meat on sale is frequently 50% or less of meat not on sale.

Wrapped properly, many food items will last a year or longer. Use freezer paper for roasts and date every package. Packaged bacon also freezes well. I only buy bacon when it is 2 for 1. If you are nimble, learn to cut your own chicken. If not, buy the cuts you like on sale and freeze those.

Buy ground beef on sale and make patties the size you like and freeze those. Pork chops freeze well too. I use good quality plastic wrap doubled up. Costco has excellent quality wrap in a large spool that will last a very long time. Get all the air pockets out or you will get freezer burn.

Vacuum packaged cheese also stores well. It needs to be refrigerated and can be frozen, but does not have to be frozen.

Buy storable commodities such as spaghetti, pinto beans, brown rice, etc. on sale. Try not to buy anything unless it is on sale. Then buy large quantities.

Complain to the Fed

If I had an email or Fax number for Ben Bernanke or the Fed I would post it. Unfortunately all I have is a link to a contact form. You can use that form to Contact Ben Bernanke and give him a piece of your mind.

Change the button on the form to "Comment for Board Members" and blast away. It will not do any good because the Fed does not care about the plight of those on fixed income, but it might make you feel better.

I hope some of these ideas help. Best wishes.

Good luck to you Stephanie.

For everyone else ... This does not change my stance on deflation. I think round II of a major credit crunch is likely. All of the structural problems remain and the global economy is at least as unbalanced as before, possibly more so. On a credit basis (which is what matters to those not retired and struggling on fixed income), I expect the US to dip in and out of deflation over a number of years as did Japan.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Bank Bailouts Explained

http://www.youtube.com/watch?v=yipV_pK6HXw&feature=player_embedded

How To Destabilize A Region

First, you must sell allegedly "friendly" governments lots of weapons. You know, aircraft, missiles, guns, ammunition, that sort of stuff. It helps a lot if the governments have money, and it helps even more if you can convince them to peg their currencies in some way to yours, and they have something you want (think oil.)

Next, having accomplished the currency peg and sales of arms, you then allow your banks to engage in rampant speculation and fraud. You let them counterfeit your currency with impunity by issuing credit unbacked by anything (which spends exactly the same as does currency, and thus is an effective naked short upon it), so long as they bribe Congress sufficiently with "campaign contributions." This is all legal, of course, and where it isn't you change the law (such as through the CFMA) so it becomes legal.

Having done that, you let your Central Bank pontificate about how "rising stock prices" are good for the economy and "animal spirits." You intentionally fail to mention, however, that speculative price and value are not the same thing, and that said companies are drowning in debt to the point that you now need to pay $12 for $1 worth of actual underlying assets, after debt is subtracted. This, incidentally, is three times the level of speculative premium you had in 2007, just before the market blew up.

In order to support this speculative bubble (which your President is dumb enough to crow about in his "State of the Union" speech) you intentionally flood the market with "liquidity" (that's a fancy name for "cheap loans.") Speculators figure this game out immedaitely and start driving up the price of everything - not just stocks. Cotton quadruples in price. Wheat, corn, oats, copper, oil - all have a rocket strapped to their ass and lit.

Of course producers and processors of food and other items can only pass through those price increases or eat them. They can't eat them beyond their margin and remain in business, so this starts to leak into the real economy. The currency pegs mean that most of the inflationary pressure you're creating doesn't hit your nation, it's exported to others. That exactly how you like it, because you can claim "inflation expectations are well-anchored." Perhaps they are in your nation, but in other places they're extremely unanchored and are not only expectations, they're realized facts as the basic cost of life spirals up out of control.

This, in turn, provokes food riots in these less-well-endowed nations that you managed to dupe into participating in your outrageous scheme.

After all, there's only one thing worse than a hungry man.

That's a man who used to be well-fed and now he's both hungry and ****ed, along with being unemployed.

When his belly growls loudly enough, he riots.

And so do his similarly-situated neighbors.

That's when you find out what the balance of power really looks like between government and the people. Even in a monstrously-repressive regime such as Egypt, the fact remains that when the people have had enough, the government is fooked.

We should send our entire banking and scamming apparatus - every one of the people responsible for the bubbles and asset-stripping over the previous 20 years and all the policy wonks who have allowed and even encouraged the currency pegs and similar intentional distortions - over to Cairo on a nice Air Force airplane and turn them over to the people.

Let them hold the trial and determine what justice might dictate. Put it on pay-per-view and have the proceeds go to paying down the national debt.

We won't, of course. We'll claim we're not responsible in any way. The bankers will have none of this adhere to them, including Bernanke. Congress will, for its part, duck the responsibility that it has, in that it has continually allowed the bad debt to be hidden with outrageous actions like demanding that FASB change mark-to-market, bailing out insolvent banks, bailing out Fannie and Freddie and allowing Bernanke to claim that he "would not monetize the debt" - while he was doing so, and then allow him to do so - in the open, naked, without so much as a peep or legislation (or a contempt of Congress charge) to stop him.

This unrest is likely to spread, because unrest means disruption of supply lines, which in turn means prices go even higher. The same problems that caused this load of crap to happen are being made worse by it, and yet there's not one peep in the mainstream media nor among Congress as to what actually caused all of this to occur, or any calls for those responsible to be forced to stop it.

There's an implicit warning in what's going on over in Egypt today, as if this spreads through the Middle East, and it very well may, and radical elements get their hands on all the nice weapons we sold these nations under the premise of being a "friend" to America, you might want to think about what happens if the Middle East oil conduits get shut down, and whether that might create some "interesting" dynamics HERE in the United States.