This week Croatian police netted an impressive haul at a customs post on the border with Serbia. A Norwegian man driving into the country was arrested with 88.6 kilograms of heroin stored away in his vehicle, along with over a thousand boxes of cigarettes. The value of the narcotics amounts to 3.7 million Euros, about 4.75 million dollars. The suspect was looking to bring the drugs into the European Union with his family in tow. Apparently having the wife and three kids along for the trip was supposed to draw attention away from the 200-pound payload of heroin stuffed into his car. This may well have been a reasonable calculation on the Norwegian’s part, since the great majority of narcotics flowing from east to west do indeed reach their intended destination in Europe’s cities.

It is still undisclosed where the courier received the drugs, but we can make some reasonable conclusions about the shipment’s journey westward and who facilitated it. The logistics comprise the infamous Balkan Route.

"Tyler Durden" of Zero Hedge says we already got 'em!

It couldn't have happened to a nicer country. On March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration's millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions - Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation's domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It's the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose - the law now says so. Capital Controls are now here and are now fully enforced by the law.

In the remainder of the blog, Tyler breaks down what was actually inside that "jobs" bill  (though this section is only recommended for those who speak legalese.) He also gets it right in terms of where all this is heading -- towards shifting Americans' wealth into long-term treasuries in order to fund the goverment, maybe even in the form of transforming 401ks into annuities.  

Pakistan has appointed a new acting minister of finance- Abdul Hafeez Shaikh. His title will be "chief of the Finance Ministry". He wasn't appointed "minister" because he isn't yet a member of parliament, so presumably the "chief" title is a way of getting around the law until a willing constituency can be found.

Past finance ministers have also had a knack for law-avoidance. Shaukat Aziz, the finance minister from 1999-2007 left a sparkling career at Citibank's New York office to take up the drudgery of public service. The only odd thing about his departure was its timing: he left when Citi NYC was being investigated for laundering Mexican drug money.

Yeah, that bad. An unusually large surplus (US$ 3 billion) at the Dallas Federal Reserve helped law enforcement uncover a laundering ring. During the investigation, Citibank's alleged money-laundering on behalf of the (then) Mexican first family, Raul and Carlos Salinas, were of particular interest to the congressional committee.

Shaukat went on to become Pakistan's prime minister- and the first one to complete a full term in office.

Since Shaukat's advancement, the position of "finance minister" has been a hot potato. His successor, Ishaq Dar, lasted less than two months. The following minister, Naveed Qamar, did better with five months' tenure.

Shaukat Turin was the next man to hold office more than half a year. Turin, who is also a veteran of Citibank, seems to have had less finesse than his predecessor Aziz. He wasn't a member of parliament when he was appointed as an adviser to the government, but that was fixed by July 2009. Seven months later he resigned.

So, Dr. Abdul Hafeez Shaikh- who is described as a non-controversial World Bank technocrat- has big oven-mits to fill. I'm sure Mr. Geithner feels his pain.

-- Evie

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The budget deficit is much worse than you've heard, says Bud Conrad of Casey Research:

Yesterday, however, I came upon a surprising measure that is as simple as it is effective in helping to understand just how extraordinary today’s deficits are. The measure calculates how big the deficit is, expressed in “constant” dollars – dollars that have the same purchasing power over time.

Using that measure, the current deficit ($1.4 trillion) is a surprising 260% of what the government deficit was in the worst years of WWII, the biggest war we as a nation have ever fought.

The comparison to WWII is relevant and important, because the effort for that war turned this country completely upside down and saw the government commandeer the levers of industry, for example auto makers and refrigerator plants, to make tanks, airplanes, bullets, and bombs. At its peak, the war effort consumed 90% of government spending.

But there’s a crucial difference between then and today: back then we knew that, in time, the war would end and the elevated government spending would be reduced. Today, however, while the cost of military is a still high 20% of federal spending, the vast majority of our government’s expenses are for non-discretionary items, such as Social Security and Medicare, that aren’t expected to be cut. In fact, they are only going to go higher from here.

Marc Faber on China as a bubble and gold.

 

Madoff whistleblower Harry Markopolos on the "total corruption of the Federal Reserve."

 

Peter Schiff: "The American people are spending again -- but where did they get the money!?!"

Update: Marc Faber on paper and gold:

The past quarter century of "socialism for the rich" -- easy money booms and busts, privatize the profits, socialize the losses -- has been very good for some. Indeed, the centralization of wealth within the financial sector can lay to being one of the dominate social phenomena of our time. Tyler Durden at Zero Hedge maps it out: