The first phase of the collapse is nearly complete. The stock market tumbled near the 7000 point mark giving the government an opening to force through bailout legislation increasing government spending and the national debt to levels never before seen in history, while the private Federal Reserve has been quietly injecting fiat capital (no one knows exactly how much) into numerous domestic and foreign banks, the names of which the Fed has as yet refused to disclose. Some estimates, including that of Bloomberg, place the Federal Reserve’s money creation at around $24 trillion.

This massive level of printing press inflation has created a kind of new “Sucker’s Rally,” the likes of which has not been seen since the bullet-train rally of 1930 that eventually heralded the train wreck of the Great Depression. Banks, instead of using the bailout money to increase loans and unfreeze credit mechanisms as it was intended, have decided it would be better to bet the bag on the stock market roulette wheel. Trillions of taxpayer dollars have thus been thrust into the markets, creating the illusion of an investor resurgence. This is why the Dow has gained to nearly 10,000 points while the rest of the economy continues to sink into the quicksand.

In response to these inflationary practices (and as we predicted in 2008), the dollar has begun to tumble versus other national currencies, and gold has surged to a record high of over $1040 an ounce!

By Rowena Mason
Last Updated: 5:50PM BST 24 Oct 2008

WASHINGTON -- The Senate handily passed a controversial financial rescue package Wednesday, giving the bill its first legislative victory but adding provisions that could complicate efforts to push the $700 billion plan through the House of Representatives.

The compromise bill represented a marriage of the rescue proposal with a host of measures designed to win the support of reluctant lawmakers. Additions include an increase in bank deposit insurance limits, a suggested change to accounting rules, and a $150.5 billion package of unrelated personal and corporate tax cuts.

By Neil Irwin

 http://www.msnbc.msn.com/id/25836850

Fear, anger rising as damage spreads from falling prices, credit crisis

By Allison Linn
Senior writer
MSNBC
updated 10:47 a.m. ET, Fri., July. 25, 2008

When Brian Buckmaster first started hearing the reports of foreclosures and other housing woes, he was incredulous that so many people would get themselves into that sort of financial trouble.

Then the 57-year-old software engineer got worried.

“My second feeling was fear that those of us that chose to live within our means and be somewhat conservative with our finances will have to end up, in some way, bailing out those folks who made those mistakes,” he said.

It turns out that the Fountain Hills, Ariz., resident had good reason to be concerned. As the nation’s housing crisis continues to ensnare hundreds and thousands of Americans, even those who have done nothing wrong are starting to feel, and fret about, the repercussions.

WASHINGTON - Consumer prices shot up in June at the second fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices.

The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.

The big rise in prices cut deeply into consumers'' earning power with average weekly wages, after adjusting for inflation, dropping by 0.9 percent in June, the biggest monthly decline since 1984.

"I was out and noticed a line out of my local WAMU branch this morning. I then drove a few miles away and saw another branch with many people in line. I talked to someone there and they said the lines started before the bank opened and many people are sweeping their accounts. They did not say ‘everyone’ but they did say ‘many people are sweeping their accounts’."

1:01pm PST Update - MORE BANK OF AMERICA NEWS. My friend just left another local BofA branch in more of an industrial area of Oakland, CA and this branch had significant deposits pulled by noon.  To counter people pulling money, they are advising people to split up deposits into different family member’s names and SSN’s in order to be covered by the FDIC insurance and nobody went for it. Again, this one small BofA branch lost serious 6-figures in a single morning and I was told this never happens.