The most highly indebted nation in the world, the USA, is running into a bulwark of resistence in its desire to record European bank transaction data, Austrian daily Kurier reported on Thursday. According to the report, the USA wants to access all money transfer data and snoop into European bank accounts, including data on domestic and international money transfers. The so called Swift agreement has now been rebuked by 4 European countries. Unfortunately Kurier failed to list the other 3 countries who say that if any such kind of agreement becomes reality, they want complete reciprocity, i.e. giving European authorities the same right to check out all US-based accounts.

The USA has illegally siphoned off data from Swift, Europe's biggest clearing house for money transfers, since 9/11 and now hopes to retroactively legalize its illegal snooping on innocent European account holders.

Leaving its key interest rate unchanged at 1% on Thursday, the European Central Bank (ECB) appears to remain in standby mode, keeping financial institutions flush with cheap liquidity. The only new twist in President Jean-Claude Trichet's repetitive flood of calming words came in the Q&A session as reported by the Wall Street Journal:

The European Central Bank will begin absorbing excess liquidity from its monetary stimulus programs in a "timely" fashion, ECB President Jean-Claude Trichet said Thursday.

The Federal Reserve is set to continue its ZIRP (zero interest rate policy) until spring 2010. According to the statement released after the latest 2-day meeting of the Federal Open Market Committee (FOMC) the Fed kept its key interest rate unchanged at the level of 0% to 0.25%. While the Fed sees the economy picking up I'm sticking with my opinion that U.S. GDP is actually still contracting but for the unlimited spending on killing devices.

Ben Still Doesn't Get It

The gold bull market becomes more interesting with every day. Based on disastrous economic fundamentals, it now seems to be able to withstand hits of any size.

In a surprising move the IMF announced on Tuesday that it had sold 200 metric tons of gold to India in the last two weeks, valuing the sale at $6.7 billion or 4.2 billion Special Drawing Rights (SDR).

As Obamacare dominates the American lamestream media, the fundamentally most important news for oil and the dollar was to be found first in the Tehran News on October 27. The Iranian Oil Bourse was finally inaugurated last Monday, after such a statement was already made in February 2008, leaving room for confusion.

According to the Tehran Times:

The latest FOMC Minutes from the September meeting of the Fed support my inflationary fears. While showing a rift between hawks and doves the Fed makes it clear that it will remain on the (fantasy) bid for whatever dead investment instrument comes along.

The Fed's staff forecasts is bullish as ever:

Rub your eyes and read this:

Astonishingly, given the ruin associated with his name, Karl Marx is back in fashion. The global economic downturn has spurred sales of "Das Kapital" to an all-time high; Michael Moore with his latest movie rivals the Original Communist in denouncing the evils of capitalism; and for the past year the news media seem to have delighted in running obituaries for the owners of the means of production. Michael Hardt and Antonio Negri, then, are nicely positioned to take advantage of Marx's revival with the publication of "Commonwealth," which re-imagines Marxism for the 21st century.

The German Bundesbank has announced it will sell a maximum of 6.5 tons of gold in the current fiscal year under the Central Bank Gold Sales Agreement (CBGSA).

Germany sits on a hoard of 3,408 tons, the second largest gold stash behind the USA.

Tired of the Simpsons on morning TV for a first shot of eye-blinking humour and irony? Well, then better change to the REAL REALITY LIVE TV: C-SPAN. Another good source for the best soundbites from idealess politicians is youtube.com. I normally see video as a time consuming habit. Better utilize time to read 3 hardcopy studies than listen to one of them.

Check out this video where Republican Congressman Alan Grayson slams Fed Attorney Alvarez for the Fed's apparent posture to block off any information claims and does not rule out that the Federal Reserve actively intervenes in all kinds of markets!

Never mind that you lost money in last year's market. So did Warren Buffett and many other investment legends, publishing losses in the >30% range. But there's always a good thing for some minority in every bear market. If you are European you are now on the top of the world as North America has fallen to #2 in the global comparison of wealth after all markets switched into bear mode after the official beginning of the credit crunch in 2007.

According to a report in EUobserver, my favorite news site for critical EU reporting, Valentina Pop came up with this trend-changing report headlined "Crisis makes Europe richest region in the world, study says." From the article:

On Tuesday the IMF published a research paper that states "Euro Area Monetary Policy in Uncharted Waters".

It is time to ring the bell for the Euro system when the IMF manages to publish a 36-page paper without a single absolute € figure of the size of the mass-printing actions of the European Central Bank (ECB).

Currently being absolutely devastated that a friend spilled his orange juice a week ago on my MacBookPro, blogging will remain rather light until I get a replacement which may take up to 6 weeks for the new matt screens on the 15-inch Mac laptop. As I only have a HP (HPQ) 9000 with next no software on it, earlier downgraded from Vista (a complete disaster from my view) to XP, after days of playing around with system software - which doestn`make handling a SoftMicro system exactly easier - I take the freedom to reduce my web presence as a watcher, not blogger.

Ironically Bill Gates praised Apple (AAPL) as the best machine he had ever seen and this is the year I was initiated to become an Apple devotee. But first listen to Microsoft Founder Bill Gates before you read on.

Ben Bernanke did not have time to celebrate his reappointment for another 4 years as Federal Reserve chairman on Tuesday. The day before, US president Barack Obama decided to keep Bernanke as Fed head information provider Bloomberg dropped a new bombshell regarding a lawsuit initiated by the news agency under the Freedom of Information Act (FOIA) against the Fed.

Bloomberg required the Fed to publish who got the $2 Trillion in bank aid. Find all the details of the pending lawsuit in this post from November 7, 2008. The Fed appealed this FOIA request last December, citing concerns that this information would endanger the borrowers of the $2 Trillion.

As I still have not come across any temptations - except a table full of Beijing Duck without oyster sauce (!) - to visit China and take in state sponsored growth on steroids (bad loans), Hedge Fund Manager Hugh Hendry Brief of Eclectica Asset Management has done some on-the-ground-research. Don't mistake it for Atlanta or Miami, this video was done in one of these southeastern China metropolises Westerners may have known until now as the figurehead of limitless Chinese economic growth.

Unicredit analysts have compiled a detailed study on the Central Eastern European (CEE) banking sector (HT Ed Hugh). While I cannot share their wishful thinking in terms of a speedy recovery, this is nevertheless a compact first-hand guide to the area that will decide the fate of Austria's major banks.

I recommend you download the 46-page PDF here as it has a valuable annex on the top players by country. This is a good base to estimate foreign banks' risk regionally.

Gotcha! Stop immediately playing Klondike while waiting for the release of the Federal Reserve's Open Market Committee (FOMC) statement later on Wednesday.

Here comes a version that was not agreed on next to the fireplace in the FOMC meeting salon but that may be as non-committal as the official version will be.

Fighting a harder Yuan while increasing domestic lending may pose new problems for China's central bank, The PBoC. The Chinese central bank promised in a press conference last Friday to keep monetary policy loose.

From Chinadaily:

The ECB on Friday released the extension of its central bank gold sales agreement (CBGSA) for another 5 years while cutting back planned sales from 500 to 400 tons annually. Maybe central banks have rediscovered that gold reserves are undoubtedly the best performing asset class on their balance sheets. The CBGSA, or Washington Agreement, was signed by 18 central banks, with the Federal Reserve being absent like in the decade before.

From the ECB release (HT Beans, Rice and Gold):

Official Chinese TV announced last week that silver bullion is now available for the investing public. China, once on a silver standard where nobody knows today what happened to the hoard, now offers 500 gram, 1-, 2- and 5 kilo bars. The newslady alluded that silver is comparatively cheap to gold, citing the current gold-silver ratio of 1:70.

All money figures have become irrelevant as Treasury secretary Tim Geithner needs to come up with historic record amounts necessary to finance a $1.3 trillion - others say $1.84 trillion - budget deficit.

Watching America's economic disaster from a car window may be a better guidance than many other lagging indicators.