Photo courtesy of Cahyo Bruri Sasmito/Indonesian State Secretariat/AP

Suicide bombers posing as guests attacked American luxury hotels in Indonesia's capital and set off a pair of blasts Friday that killed eight people and wounded more than 50. The bombings, which came two minutes apart, ended a four-year lull in terror attacks in the world's most populous Muslim nation. There were at least eight Americans among the wounded.

U.S. Secretary of State Hillary Rodham Clinton condemned the bombings as reflecting "the viciousness of violent extremists" and said they "remind us that the threat of terrorism remains very real." She said the United States was prepared to provide assistance if requested by the Indonesian government.¹

Iran's nuclear ambitions are the greatest current threat to global security, says Defense Secretary Robert Gates.

"Iran is the one that concerns me the most because there don't seem to be good options (or a scenario) where one can have any optimism that good options will be found," Gates told the Economic Club of Chicago.

The threat rests not only in Iran's apparent determination to seek a nuclear weapon, but in the "inability of the international community to affect their determination to do that," Gates said.

"All of the outcomes are negative," he said. "If they achieve one, the possibility of a nuclear arms race in the Middle East is very, very real. "If something is done to prevent them from getting one, the consequences of that are completely unpredictable and frankly, very bad."²

Newly re-elected President Mahmoud Ahmadinejad said on Thursday his next government "would bring down the global arrogance," signaling a tougher approach by Tehran toward the West after last month's disputed election.

"They should wait as a new wave of revolutionary thinking ... from the Iranian nation is on the way and we will not allow the arrogant (powers) to even have one night of good sleep," Ahmadinejad said, according to state broadcaster IRIB.

He also voiced continued defiance in a row over Iran's disputed nuclear ambitions, saying major powers "will not be able to take away the smallest amount of Iran's rights."³

Israeli and Egyptian officials said two ships had sailed through the Suez Canal into the Red Sea. Media reports in Israel said the two Saar-class missile ships had been sent as a "message" to the Tehran government, which has repeatedly issued threats against Israel and is developing nuclear technology believed by the West to be intended for atomic weapons program.

The Israeli government has reserved the right to carry out a first strike on Iran's nuclear facilities if the country continues to defy the international community and spreads instability in the Middle East.⁴

John Browne painted a scary picture of America’s economic future: California. In Mr. Browne’s commentary this week he writes:

“Last week, major banks announced they would no longer offer cash for the IOU’s written by the state of California. At the same time, China proposed that the U.S. dollar be replaced as the world’s official reserve currency. Although seemingly unrelated, these two developments have at their root the same issue: uneasy creditors.

Inspired by Washington’s profligacy, California’s Democratic majority long pursued a policy of populist politics, supercharged by referendums, which called for increasingly massive expenditures. Exploding deficits were the natural result. Now, it has reached the point where holders and potential buyers of California debt have lost confidence in the state’s ability to ever repay.

In imitating the example of Congress, California’s politicians made one crucial error. Like the Administration, they could tax and borrow. But unlike Washington, California could not print money.

Sacramento might have followed Washington down a blind alley, but it was first to hit the wall. When the central bank can no longer keep the federal government on life support, California’s troubles will be America’s. Watch the painful process of spending cuts that California is undertaking, as it portends our collective future.”⁵

How serious is this problem? Patrick Buchanan is trying to wake up America but the alarm bells seem to be falling on deaf ears. Mr. Buchanan wrote this week:

“All of this would have astounded and appalled the Founding Fathers, who after all, created America – as they declared loud and clear in the Constitution – "for ourselves and our posterity."

China saves, invests and grows at 8 percent. America, awash in debt, has a shrinking economy, a huge trade deficit, a gutted industrial base, an unemployment rate surging toward 10 percent and a money supply that's swollen to double its size in a year. The 20th century may have been the American Century. The 21st shows another pattern.

"The United States is declining as a nation and a world power with mostly sighs and shrugs to mark this seismic event," writes Les Gelb, president emeritus of the Council on Foreign Relations, in CFR's Foreign Affairs magazine. "Astonishingly, some people do not appear to realize that the situation is all that serious."⁶

The Vice President presented an interesting way for our country to avoid bankruptcy this week: “We have to go spend money to keep from going bankrupt.”

Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.⁷

At least he recognizes the truth that our country is headed towards bankruptcy…I just struggle with the concept of borrowing more money in order to spend more money in order to avoid bankruptcy. I wonder if we can use the same logic to solve America’s obesity problem? Maybe we should make more food so we can eat more food so we can lose weight. Who knows? It just might work.

China’s economic comeback is under way, towing along companies from Intel Corp. to Hyundai Motor Co. and starting to make up for weak demand in other major economies.

China is the only one of the 10 biggest economies that is expanding, highlighting the role the nation may play in easing the worst global recession since the Great Depression. The U.S. economy is still shrinking, five months after Congress agreed to President Barack Obama’s $787 billion stimulus package.⁸

Eighty percent (80%) of Americans now say Wall Street benefited more from the bailout of the financial industry than the average U.S. taxpayer.

Goldman Sachs, one of the Wall Street recipients of a bailout, repaid that money in June. The firm, which also has benefited from cheap government financing, is now reporting a record profit for the last quarter and has announced plans for billions in employee bonuses. Forty-one percent (41%) say Goldman Sachs’ record profit makes them less supportive of the federal bailout of the financial industry while only 16% say it makes them more supportive.⁹

Is Goldman Sachs running the federal government? Before you get too excited about the “record earnings” that are “beating analysts expectations” you need to understand that there is a wicked web of deception that is taking place right under our noses…most of us have just not noticed. I encourage you to watch Glenn Beck’s 10-minute explanation…it is worth your time.
Watch the video here.

The U.S. budget deficit topped $1 trillion for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy.

The shortfall for the fiscal year that began Oct. 1 totaled $1.1 trillion, the first time that the gap for the period surpassed $1 trillion, Treasury figures showed July 13 in Washington. The excess of spending over revenue for June was $94.3 billion, the first deficit for that month since 1991, according to data compiled by Bloomberg.

For the fiscal year that ends Sept. 30, the Office of Management and Budget forecasts the deficit to reach a record $1.841 trillion, more than four times the previous fiscal year’s $459 billion shortfall.¹⁰

Stocks negated the negative head and shoulders chart pattern and stampeded to the upside this week. The market was helped also by expiring options and better than expected earnings. It appears that the stock market will attempt to make another post recovery high. The breadth of the market was very solid and should lead to follow through buying over the next couple of weeks.

We will probably see a run to 9000-9400 on the Dow and close to 1000 on the S&P 500. After that rally is complete, I look for a severe downturn to ensue that should last into 2010.

Treasuries sold off hard this week as risk appetite grew and foreigners were net sellers according to the latest government numbers. This market remains a ticking time bomb as deficits and debts pile up. The only buying that comes is when stocks suffer a big sell off. This isn't exactly a solid foundation. What this means is when the treasuries do have their sell off, interest rates will rise. It is important to lock in your rates and take advantage of these low rates.

The dollar slid this week, as risk appetite for higher yielding currencies was front and center. The dollar appears to be ready to test it's June low. As I have repeated every week, the long-term fundamentals for the dollar are dire and it's a matter of when not if. Buy tangible assets now to protect yourself from the coming devaluation of the dollar.

Gold and silver were solidly bullish this week as these markets typically travel inverse to the dollar. The physical market continues to be robust and some places are experiencing more gold shortages. I bring up the physical markets because the Comex (where prices are set), changed a delivery rule recently. The Comex has decided that they can deliver shares of GLD (paper) instead of delivering the actual bullion. This is outrageous and a sham to say the very least. If they can't deliver the bullion, what good are their markets? Our entire system has become nothing but a constant manipulation to keep the system up and running. The system is broke and needs fixing.

As a trader in the business for 22 years, I could never have imagined the state our country is in right now. We have a bank that essentially runs the government and loots the taxpayer’s pockets on a daily basis. The news is getting out there but my concern is the apathetic condition that our country is in. Is it because we don't know what to do? Write a letter to your senators and representatives and voice your outrage. If they don't listen, we need to vote them out. We need representation. The other thing we can do is hit our knees and pray for this country. We need an intervention and the only cure is divine intervention.

NYT caption: "A boy rested on the mud in a dried-up section of the Euphrates River near Jubaish, Iraq, in June."

The front page of Tuesday morning’s New York Times had a stunning headline: “Iraq Suffers as the Euphrates River Dwindles.”

The drying up of this historic river in the land of ancient Babylon is so stunning, that even the Times had to note that Bible prophecy says this will happen in the “last days” of history, in the lead up to the apocalyptic battle of Armageddon described in the Book of Revelation. (Rev. 16:12)

Author Joel Rosenburg discusses this shocking headline in his blog here.

I do not believe we are on the threshold of the 70^th week of Daniel at this moment… but the headlines of our newspapers can sure cause a person to raise an eyebrow: wars, earthquakes, famine, world powers calling for the destruction of Israel, and now the Euphrates is drying up!

The Bible is very clear about what will be happening in the world in the last days:

But know this, that in the last days perilous times will come: For men will be lovers of themselves, lovers of money, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, unloving, unforgiving, slanderers, without self-control, brutal, despisers of good, traitors, headstrong, haughty, lovers of pleasure rather than lovers of God, having a form of godliness but denying its power. And from such people turn away! 1 Tim. 3:1-5

I don’t think there is any doubt but that we are in the last days. The time of Christ’s return is getting close. You can prepare for financial disaster…the collapse of an economy…a falling dollar…terrorism…war…or any other terrible thing the comes down the pike. But, if you have not prepared yourself spiritually by trusting Christ…what good will it do? Jesus said it best when He said…

For what profit is it to a man if he gains the whole world, and loses his own soul? Or what will a man give in exchange for his soul? Matthew 16:26

In all of your preparation, make sure you have prepared your soul…it has more value than any other thing you possess.

Editor’s note: Check out the Global Perspectives web site and see the new features, polls, news links, and past issues of the GPUpdate. (www.globalperspectives.info)

¹http://www.breitbart.com/article.php?id=D99G8JM02&show_article=1

²http://www.newsmax.com/insidecover/gates_iran_nuke_threat/2009/07/17/236842.html

³http://www.reuters.com/article/worldNews/idUSDAH65258120090716

⁴http://www.telegraph.co.uk/news/worldnews/middleeast/israel/5842963/Israeli-warships-rehearse-for-Iran-attack-in-Red-Sea.html

⁵http://www.europac.net/externalframeset.asp?from=home&id=16746&type=browne

⁶http://www.wnd.com/index.php?fa=PAGE.view&pageId=104226

⁷http://www.cnsnews.com/public/content/article.aspx?RsrcID=51162

⁸http://www.bloomberg.com/apps/news?pid=20601087&sid=a8jNygDI7Ih0

⁹http://www.rasmussenreports.com/public_content/business/federal_bailout/july_2009/80_say_wall_street_not_taxpayers_benefited_more_from_bailout_as_goldman_sachs_announces_record_profit

¹⁰http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a97j23CfZWIQ

¹¹Market commentary is provided by Mr. Steve Meyers of Grainbelt Commodities, Marco Island, FL