Friday, February 22, 2008

Russian NATO Envoy: Kosovo Independence Funded by Drug Money

Trend News
February 22, 2008

Russia’s envoy to NATO charged Friday that Kosovo’s independence fight was funded by local drug-lords as Moscow steps up last-ditch rhetoric aimed at warning the international community against recognising the independence of the former Serb province.

“Drug money is being used at present for development of a political strand on Kosovo’s independence,” said Russia’s newly appointed NATO ambassador Dmitry Rogozin on Friday.

The former firebrand nationalist lawmaker called recognition of Kosovo a “strategic mistake” and said the move would further complicate Russia’s relations with NATO.

Russian President Vladimir Putin is scheduled to be present at the next NATO summit in Romania in April, where the so-called “Kosovo Precedent” has taken centre stage over Russia’s opposition to a planned US missile-defence base in Eastern Europe and NATO’s eastward expansion.

Russia maintains that the Kosovo Precedent will lead to an eruption of separatist movements around the world, but analysts said Friday that Moscow also regrets its loss of influence in Serbia, with which it has long had close ties.

Rogozin said Thursday that Moscow was concerned over NATO overstepping its UN mandate in Kosovo and over reports that Kosovo had sealed its border with Serbia.

“Moscow is worried by the possibility of the appearance of alien military bases in the province,” Rogozin said via video link with Brussels.

NATO’s peacekeeping mission of over 16,000 troops holds responsibility for patrolling the border in Kosovo.

“If the European Union works out a single position and NATO goes beyond its current mandate in Kosovo, there will be a conflict between these organizations and the United Nations,” Russia’s NATO ambassador said.

Rogozin underlined that NATO must retain its “neutrality” and not get involved in “international politics.”

He complained that NATO and the European Union were breaking international law and ignoring Russia’s concerns about the move toward recognizing Kosovo.

“We, I think, will need to assume that in order to be respected we have to resort to brute military force,” Rogozin said Thursday, despite assurances that Russia would not initiate a confrontation with NATO.

Oil Prices Up on Turkish Invasion of Iraq

Associated Press
February 22, 2008

Oil prices extended their rise above $98 a barrel today amid worries about supplies as Turkish troops pursued separatist Kurdish rebels into northern Iraq.

The maneuvers raised concerns that about a wider conflict with the U.S.-backed Iraqi Kurds.

The rebound in prices followed a decline Thursday as a U.S. government report showed that domestic crude inventories rose last week.

Light, sweet crude for April delivery on the New York Mercantile Exchange rose 53 cents to $98.76 a barrel in electronic trading by the Friday afternoon in Europe. The contract fell $1.47 on Thursday to settle at $98.23 a barrel.

Earlier Friday, the April contract traded as low as $97.16 before traders began buying back into the market in expectation of further gains in the coming weeks.

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Russia Threatens Force Over Kosovo

CNN
February 22, 2008

(CNN) — Russia has not ruled out using force to resolve the dispute over Kosovo’s declaration of independence from Serbia if NATO forces breach the terms of their U.N. mandate, Moscow’s ambassador to NATO warned on Friday.
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“If the EU works out a single position or if NATO steps beyond its mandate in Kosovo, these organizations will be in conflict with the U.N., and then I think we will also begin operating under the assumption that in order to be respected, one needs to use force,” Dmitry Rogozin said, in comments carried by Russia’s Interfax news agency.

Following violent protests in the Serbian capital Belgrade on Thursday, culminating in an attack on the U.S. Embassy which left one person dead and dozens injured, a spokesman for Russia’s Foreign Ministry also warned that Kosovo’s declaration would have a “negative impact.”

“What happened in Belgrade yesterday is regrettable. But we would want to draw your attention to the fact that the forces that supported the unilateral recognition of Kosovo’s independence should have realized the effects of the move,” spokesman Mikhail Kamynin told Interfax.

Russia, which has close ties with Serbia, has refused to recognize Kosovo’s sovereignty, triggering a terse diplomatic standoff with the U.S. and several EU member states including the UK, France and Germany which have already recognized its independent status.

NATO has led a 15,000-strong peacekeeping operation — known as KFOR — in Kosovo since 1999 under the terms of a U.N. Security Council mandate authorized following a 78-day bombing campaign by the military alliance against Serbia.

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Former Congressman Warns Of Martial Law Camps In America

Steve Watson
Infowars.net
Thursday, Feb 21, 2008

An article co-written by a former Congressman and carried by the San Francisco Chronicle has gained much attention recently as it shines light on a coordinated federal government program to build detention camps at undisclosed locations within the United States.

"Since 9/11, and seemingly without the notice of most Americans, the federal government has assumed the authority to institute martial law, arrest a wide swath of dissidents (citizen and noncitizen alike), and detain people without legal or constitutional recourse in the event of an emergency influx of immigrants in the U.S., or to support the rapid development of new programs." write Lewis Seiler and former Congressman Dan Hamburg of the watchdog group Voice of the Environment, Inc.

Voice of the Environment’s mission is to educate the public regarding the transfer of public trust assets into private, mostly corporate, hands.

The article continues:

Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.

According to diplomat and author Peter Dale Scott, the KBR contract is part of a Homeland Security plan titled ENDGAME, which sets as its goal the removal of "all removable aliens" and "potential terrorists."

Seiler and Hamburg also warn of the alarming and numerous freedom killing pieces of legislation that have been passed recently, dovetailing with the build up of infrastructure of tyranny inside the US.

We have previously highlighted the shocking details behind this shining example of modern day corporate fascism.

The issue gained national attention two years ago when it was announced that Kellogg, Brown and Root had been awarded a $385 million dollar contract by Homeland Security to construct detention and processing facilities in the event of a national emergency.

The language of the preamble to the agreement veils the program with talk of temporary migrant holding centers, but it is made clear that the camps will also be used "as the development of a plan to react to a national emergency."

Following the story, first given wide attention by Prisonplanet.com, the Alternet website put together an alarming report that collated all the latest information on plans to initiate internment of political subversives and Muslims after the next major terror attack in the US.

The article highlighted the disturbing comments of Sen. Lindsey Graham, who encouraged torture supporting then Attorney General Alberto Gonzales to target, "Fifth Columnists" Americans who show disloyalty and sympathize with "the enemy," whoever that enemy may be.

It is important to stress that the historical precedent mirrors exactly what the Halliburton camp deal outlines. Oliver North’s Reagan era Rex 84 plan proposed rounding up 400,000 refugees, under FEMA, in the event of "uncontrolled population movements" over the Mexican border into the United States.

The real agenda, just as it is with Halliburton’s gulags, was to use the cover of rounding up immigrants and illegal aliens as a smokescreen for targeting political dissidents. From 1967 to 1971 the FBI kept a list of persons to be rounded up as subversive, dubbed the "ADEX" list.

According to author Naomi Wolf, the National Counterterrorism Center today holds the names of roughly 775,000 "terror suspects" with the number increasing by 20,000 per month.

Discussions of federal concentration camps are no longer the rhetoric of paranoid Internet conspiracy theorists, they are mainstream news.

Halliburton, through their KBR subsidiary, is the same company that built most of the major new detention camps in Iraq and Afghanistan. KBR have been embroiled in a human sex slave trade that their representatives have lobbied to continue.

We have a company that has been handed a contract to build prison camps in America that is engaged in trafficking young girls and women. Can this horror movie get any more frightening? Sadly, yes.

A much discussed and circulated report, the Pentagon’s Civilian Inmate Labor Program, has recently been updated and the revision details a "template for developing agreements" between the Army and corrections facilities for the use of civilian inmate labor on Army installations."

The plan is clearly to swallow up disenfranchised groups like prisoners, immigrants and Muslims at first and then extend the policy to include ‘Fifth Columnists,’ otherwise known as anyone who disagrees with the government or exercises their Constitutional rights.

Respected author Peter Dale Scott speculated that the "detention centers could be used to detain American citizens if the Bush administration were to declare martial law."

Daniel Ellsberg, former Special Assistant to Assistant Secretary of Defense, called the plan, "preparation for a roundup after the next 9/11 for Mid-Easterners, Muslims and possibly dissenters. They’ve already done this on a smaller scale, with the ’special registration’ detentions of immigrant men from Muslim countries, and with Guantanamo."

George Bush has declared himself to be dictator and to have supreme power over and above the limitations of the US Constitution. Bush administration officials like Alberto Gonzales have declared Bush to be "above the law." White House advisors are openly discussing the legality of crushing a child’s testicles as part of the war on terror. Preparation for the internment of thousands of Americans who are ‘disloyal’ in times of emergency are afoot.

Under the enemy combatant designation anyone at the behest of the US government, even if they are a US citizen, can be kidnapped and placed in an internment facility forever without trial. Jose Padilla, an American citizen, spent over four years in a Navy brig before being brought to trial.

In 2002, FEMA sought bids from major real estate and engineering firms to construct giant internment facilities in the case of a chemical, biological or nuclear attack or a natural disaster.

Okanogan County Commissioner Dave Schulz went public three years ago with his contention that his county was set to be a location for one of the camps.

Furthermore, in May 2006, we exposed the existence of a nationwide FEMA program which is training Pastors and other religious representatives to become secret police enforcers who teach their congregations to "obey the government" in preparation for the implementation of martial law, property and firearm seizures, mass vaccination programs and forced relocation.

A whistleblower who was secretly enrolled into the program told us that the feds were clandestinely recruiting religious leaders to help implement Homeland Security directives in anticipation of a potential bio-terrorist attack, any natural disaster or a nationally declared emergency.

The first directive was for Pastors to preach to their congregations Romans 13, the often taken out of context bible passage that was used by Hitler to hoodwink Christians into supporting him, in order to teach them to "obey the government" when martial law is declared.

It was related to the Pastors that quarantines, martial law and forced relocation were a problem for state authorities when enforcing federal mandates due to the "cowboy mentality" of citizens standing up for their property and second amendment rights as well as farmers defending their crops and livestock from seizure.

It was stressed that the Pastors needed to preach subservience to the authorities ahead of time in preparation for the round-ups and to make it clear to the congregation that "this is for their own good."

Pastors were told that they would be backed up by law enforcement in controlling uncooperative individuals and that they would even lead SWAT teams in attempting to quell resistance.





Though some doubted the accuracy of this report at the time due to its fundamentally disturbing implications, the story was later confirmed by a KSLA 12 news report, in which participating clergy and officials admitted to the existence of the program.

What could the government be contemplating that leads it to make contingency plans to detain without recourse millions of its own citizens? ask Lewis Seiler and Dan Hamburg in the conclusion to their article.

The answer clearly lies in the fact that over the past decade we have witnessed an extreme acceleration of the physical implementation of a framework and infrastructure ready to receive those who will not go along with a coordinated destruction of traditional American values and freedom.

NORTHCOM Furthers NAU Police State Agenda

Lee Rogers
Rogue Government
February 21, 2008

The criminals in the U.S. government are continuing the push for a militarized North American Union police state. According to an announcement on U.S. Northern Command’s web site, an agreement has been signed between U.S. Northern Command (USNORTHCOM) and Canada Command (CANADACOM) that allows the military from either nation to support the armed forces of the other during a civil emergency. This agreement helps to further erode the sovereignty of both nations by allowing a foreign military to support that nation’s military during any type of civil emergency. Essentially, Canadian military forces would be allowed to support U.S. military forces during a declaration of martial law. This is just another step towards the formation of a North American Union martial law apparatus which USNORTHCOM unveiled with the public release of their Vision 2020 document. The Vision 2020 document outlines plans for USNORTHCOM to seek closer ties with various military institutions, government bodies and private entities in the U.S., Canada and Mexico leading up until the year 2020.

Below is the press release from Northern Command in its entirety.

U.S. Air Force Gen. Gene Renuart, commander of North American Aerospace Defense Command and U.S. Northern Command, and Canadian Air Force Lt.-Gen. Marc Dumais, commander of Canada Command, have signed a Civil Assistance Plan that allows the military from one nation to support the armed forces of the other nation during a civil emergency.

“This document is a unique, bilateral military plan to align our respective national military plans to respond quickly to the other nation’s requests for military support of civil authorities,” Renuart said. “Unity of effort during bilateral support for civil support operations such as floods, forest fires, hurricanes, earthquakes and effects of a terrorist attack, in order to save lives, prevent human suffering and mitigate damage to property, is of the highest importance, and we need to be able to have forces that are flexible and adaptive to support rapid decision-making in a collaborative environment.”

“The signing of this plan is an important symbol of the already strong working relationship between Canada Command and U.S. Northern Command,” Dumais said. “Our commands were created by our respective governments to respond to the defense and security challenges of the twenty-first century, and we both realize that these and other challenges are best met through cooperation between friends.”

The plan recognizes the role of each nation’s lead federal agency for emergency preparedness, which in the United States is the Department of Homeland Security and in Canada is Public Safety Canada. The plan facilitates the military-to-military support of civil authorities once government authorities have agreed on an appropriate response. U.S. Northern Command was established on Oct. 1, 2002, to anticipate and conduct homeland defense and civil support operations within the assigned area of responsibility to defend, protect, and secure the United States and its interests.

Similarly, Canada Command was established on Feb. 1, 2006, to focus on domestic operations and to offer a single point of contact for all domestic and continental defense and security partners.

The two domestic commands established strong bilateral ties well before the signing of the Civil Assistance Plan. The two commanders and their staffs meet regularly, collaborate on contingency planning and participate in related annual exercises.

If the establishment was really supportive of protecting U.S. national sovereignty why on earth would they allow USNORTHCOM to establish an agreement with Canada that allows their military to support our military during civil emergencies? This is a direct violation of each nation’s sovereignty and another obvious step towards a North American Union.

Clearly, the U.S. government is ratcheting up their plans for martial law and using the phony threat of homegrown terrorism as an excuse to implement their militarized police state agenda. The threat of martial law is finally now being reported in the establishment media. The San Francisco Chronicle recently ran a report on plans for martial law which covers important issues such as Bush’s NSPD-51 which makes the president a dictator during a catastrophic emergency, HR 1955 which classifies thought crimes as potential terrorist acts, KBR detention centers, the Military Commission Act and more. We broke the NSPD-51 and HR 1955 stories last year and both have been major topics of conversation in the alternative media for quite sometime.

There is no question that the U.S. government is preparing for martial law domestically, but the long term goal is to establish a martial law apparatus for North America. They are merely beginning the implementation of what has been announced in the Vision 2020 document. There is little question that this deal between USNORTHCOM and CANADACOM is another step towards forming a North American Union that is ruled by a militarized police state.

Rule by fear or rule by law?

San Francisco Chronicle

"The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgment of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist."

- Winston Churchill, Nov. 21, 1943

Since 9/11, and seemingly without the notice of most Americans, the federal government has assumed the authority to institute martial law, arrest a wide swath of dissidents (citizen and noncitizen alike), and detain people without legal or constitutional recourse in the event of "an emergency influx of immigrants in the U.S., or to support the rapid development of new programs."

Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.

According to diplomat and author Peter Dale Scott, the KBR contract is part of a Homeland Security plan titled ENDGAME, which sets as its goal the removal of "all removable aliens" and "potential terrorists."

Fraud-busters such as Rep. Henry Waxman, D-Los Angeles, have complained about these contracts, saying that more taxpayer dollars should not go to taxpayer-gouging Halliburton. But the real question is: What kind of "new programs" require the construction and refurbishment of detention facilities in nearly every state of the union with the capacity to house perhaps millions of people?

Sect. 1042 of the 2007 National Defense Authorization Act (NDAA), "Use of the Armed Forces in Major Public Emergencies," gives the executive the power to invoke martial law. For the first time in more than a century, the president is now authorized to use the military in response to "a natural disaster, a disease outbreak, a terrorist attack or any other condition in which the President determines that domestic violence has occurred to the extent that state officials cannot maintain public order."

The Military Commissions Act of 2006, rammed through Congress just before the 2006 midterm elections, allows for the indefinite imprisonment of anyone who donates money to a charity that turns up on a list of "terrorist" organizations, or who speaks out against the government's policies. The law calls for secret trials for citizens and noncitizens alike.

Also in 2007, the White House quietly issued National Security Presidential Directive 51 (NSPD-51), to ensure "continuity of government" in the event of what the document vaguely calls a "catastrophic emergency." Should the president determine that such an emergency has occurred, he and he alone is empowered to do whatever he deems necessary to ensure "continuity of government." This could include everything from canceling elections to suspending the Constitution to launching a nuclear attack. Congress has yet to hold a single hearing on NSPD-51.

U.S. Rep. Jane Harman, D-Venice (Los Angeles County) has come up with a new way to expand the domestic "war on terror." Her Violent Radicalization and Homegrown Terrorism Prevention Act of 2007 (HR1955), which passed the House by the lopsided vote of 404-6, would set up a commission to "examine and report upon the facts and causes" of so-called violent radicalism and extremist ideology, then make legislative recommendations on combatting it.

According to commentary in the Baltimore Sun, Rep. Harman and her colleagues from both sides of the aisle believe the country faces a native brand of terrorism, and needs a commission with sweeping investigative power to combat it.

A clue as to where Harman's commission might be aiming is the Animal Enterprise Terrorism Act, a law that labels those who "engage in sit-ins, civil disobedience, trespass, or any other crime in the name of animal rights" as terrorists. Other groups in the crosshairs could be anti-abortion protesters, anti-tax agitators, immigration activists, environmentalists, peace demonstrators, Second Amendment rights supporters ... the list goes on and on. According to author Naomi Wolf, the National Counterterrorism Center holds the names of roughly 775,000 "terror suspects" with the number increasing by 20,000 per month.

What could the government be contemplating that leads it to make contingency plans to detain without recourse millions of its own citizens?

The Constitution does not allow the executive to have unchecked power under any circumstances. The people must not allow the president to use the war on terrorism to rule by fear instead of by law.

Lewis Seiler is the president of Voice of the Environment, Inc. Dan Hamburg, a former congressman, is executive director.

That ’70s Look: Stagflation

Lately, many people are hearing an echo — faintly perhaps but distinctly audible — of the stagflation of the 1970s.

Even as economic growth sags, oil and gasoline prices are surging to new heights. Gold is on the rise, along with the prices of such basic commodities as wheat and steel. And on Wednesday, with the latest government report on consumer prices, there are signs that overall inflation, after years of only modest increases, may be breaking out of its box.

For the Federal Reserve and its chairman, Ben S. Bernanke, all this could not come at a worse time. With the credit markets in disarray from the collapse of the housing bubble, Mr. Bernanke is cutting rates in a headlong rush to blunt the risks of recession.

But in putting its emphasis above all on reviving growth, America’s central bank, according to some economists and even a few Fed officials, may face a bigger inflation problem down the road.

“They are cutting rates with a bill to be paid later," said John Ryding, chief United States economist at Bear Stearns. “The question is not, will we get inflation, but how much will it cost to stuff the genie back in the bottle. This has the feel of 1970s stagflation.”

Over the last 12 months, consumer prices are up 4.3 percent on average, according to the Labor Department. The core index of consumer price inflation, which excludes food and oil, was 2.5 percent higher in January than a year earlier, significantly above the Fed’s unofficial comfort zone of a 1 to 2 percent underlying inflation rate. That’s a far cry from the double-digit inflation rates that battered the economy at times in the 1970s, but still worrisome.

Analysts like Mr. Ryding say that by tolerating such price rises and maybe even allowing them to escalate, the Federal Reserve is risking its hard-won credibility as an inflation fighter, which will ultimately require it to push up interest rates higher than otherwise to contain the damage.

Most economists still expect the Fed’s policy-making committee to cut interest rates again when it meets on March 18, engineering its sixth reduction since September. But the fears of a revival of inflation underline the difficult decisions it now faces.

Like the Fed, economists generally remain more concerned about the immediate threat of recession than the more distant fear of higher inflation. Recent data suggests an economy that may be in a downturn or close to it. The consensus view is that the expected slowdown is likely to create enough spare capacity to suck inflationary pressures out of the economy.

Moreover, even if some additional inflation is a side effect of the Fed’s prescription, many economists say, it sure beats the alternative. Once the interest rate cuts have nursed the economy through the next few difficult quarters, they say, the Fed can easily raise rates again to respond to any pickup in inflation.

“They are going to fix the wound now,” said David Durst, chief investment strategist of the Global Wealth Management Group of Morgan Stanley. “They are going to take care of the growth situation and then fight inflation when the economy gets stronger.”

Reinforcing this view, there are few signs that inflation is seeping into the labor market and pushing up wages in anticipation of higher prices to come.

That may be comforting to the Fed, but keeping inflation contained still may not be easy. In recent days some officials at the central bank have gone out of their way to warn that they are not prepared to let down their guard — even if it means that the Fed has to be less aggressive about cutting interest rates.

In a speech this month, Richard W. Fisher, president of the Federal Reserve Bank of Dallas, said “the Fed has to be very careful now to add just the right amount of stimulus to the punch bowl without mixing in the potential to juice up inflation once the effect of the new punch kicks in.”

Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia, echoed that view, saying in a speech that “we cannot be confident that a slow-growing economy in early 2008 will by itself reduce inflation.”

“As we learned from the experience of the 1970s,” Mr. Plosser added, “once the public loses confidence in the Fed’s commitment to price stability, it is very costly to the economy for the Fed to regain that confidence.”

In a telephone interview, Mr. Plosser explained that the Fed seemed to be making progress against inflation in the first half of 2007 but he started to become more worried during the second half.

“Since the summer almost all of the measures of inflation that we look at have begun to accelerate again, and in some cases pretty sharply,” Mr. Plosser said. “Perhaps the inflationary pressures are more broad-based than just energy.”

While Mr. Plosser said he hoped that inflation was about to moderate on its own, “we do have a dual mandate after all — one is price stability and the other is growth.”

“We can’t just throw one out of the window when it is convenient.”

To Bernard Baumohl, managing director of the Economic Outlook Group, such talk is seen on Wall Street as a clever tactic intended to help jawbone inflationary expectations downward while the Fed continues to cut rates for at least a while longer.

“We expect Fed officials will ramp up their rhetoric in speeches and in testimony that they will work diligently to keep inflation expectations under control,” Mr. Baumohl wrote to clients after the latest consumer price figures were released Wednesday. “Mere words, to be sure. But it would be a mistake to construe them as hollow.”

Zach Pandl, an economist at Lehman Brothers, said that the statements so far have been by less important Fed officials and that the Fed’s real views should be measured by its actions, which are to cut rates aggressively with less concern about inflation.

Those actions have led a number of economists to warn that the Fed’s aggressive easing moves, combined with the strong demand for industrial and agricultural commodities from emerging global economic powers like China and India, may be laying the groundwork for a new era of rising inflation.

“The period of falling inflation that we have been in for all the ‘80s and ‘90s and early 2000s has come to an end,” said Michael Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “That is over.”

Mr. Darda points to the surge in commodity prices, including food and oil. Long-term rates are rising in the bond market, reflecting the view that both growth and inflation may pick up later this year and into 2009, as well as fears about bad debt.

And, according to Mr. Pandl, a measure of investors’ inflation expectations provided by the difference between the yield on normal Treasury securities and Treasury inflation-protected securities “spiked quite a bit higher” after the Fed cut rates in January even though it “has been trading lower since then.”

Then there is gold, which has historically been a refuge for investors seeking protection from eroding currencies.

Gold “has risen a lot since the Fed began lowering rates,” Mr. Darda said. “That’s an ominous sign. Once we are in 2009 and 2010, we are going to figure out that inflation is far less benign.”

Dollar Heads for Weekly Loss on Concern U.S. Growth Has Stalled

By Kim-Mai Cutler and Stanley White

Feb. 22 (Bloomberg) -- The dollar traded near a three-week low against the euro, headed for a second weekly decline, on speculation the Federal Reserve will cut borrowing costs to stave off a recession while European policy makers keep rates on hold.

The U.S. currency fell against 14 of its 16 most-active counterparts after manufacturing in the Philadelphia area shrank the most in seven years. The Australian and New Zealand dollars climbed as gold surged and prices of oil, grains and other commodities rose to records. The Brazilian real advanced to the highest in almost nine years and Singapore's dollar reached a decade high.

``The dollar is generally coming under pressure because of the divergence we're seeing among central bank policy approaches to the current environment,'' said Ian Stannard, a London-based currency strategist at BNP Paribas SA, France's largest bank. ``The Fed has demonstrated that it's very much focused on growth concerns while the European Central Bank is likely to continue with quite hawkish comments.''

The dollar fell to $1.4828 per euro at 7:09 a.m. New York, the weakest since Feb. 5, from $1.4814 yesterday. The currency lost 1 percent against the euro since the end of last week and dropped 0.8 percent to 107.02 yen. The euro was at 158.69 yen, from 158.25 on Feb. 15, paring a weekly gain to 0.3 percent.

The euro extended its advance against the dollar after an industry report showed growth in European service industries accelerated more than forecast in February.

Singapore Dollar

Singapore's dollar advanced 0.5 percent this week to S$1.4060 per dollar, the highest since January 1997, before a government report Feb. 25 forecast to show consumer prices climbed the most in a quarter century. The Brazilian real rose to 1.7009 yesterday, the highest level since May 1999.

The Australian and New Zealand dollars headed for a second weekly gain on speculation the interest-rate advantage of the two nations over the U.S. will widen, bolstering demand for their higher-yielding assets. The Australian dollar rose 1.6 percent to 92.32 U.S. cents and the New Zealand dollar gained 2.1 percent to 80.68 U.S. cents.

Futures on the Chicago Board of Trade show odds of a half- point cut in the Fed's target rate to 2.5 percent on March 18 have risen to 92 percent, from 66 percent last week. Traders increased bets Australia's central bank will raise borrowing costs a quarter point to 7.25 percent next month. New Zealand's key rate is a record high 8.25 percent.

The dollar fell the most against the euro in four weeks after a report yesterday showed manufacturing in the Philadelphia region, seen as a proxy for other areas in the U.S., had the biggest contraction since 2001 in February.

Fed Forecasts

The Fed has lowered its main rate to 3 percent from 5.25 percent since Sept. 18 to avert the first recession since 2001. That has eroded the appeal of U.S. assets as accelerating inflation in Europe prompted investors to reduce expectations for lower ECB interest rates.

Fed officials cut their 2008 U.S. growth forecasts for a third time on Feb. 20 and said in the minutes of their last meeting rates should be held down ``for a time.'' They now expect the economy to expand by 1.3 percent to 2 percent, compared with the 1.8 percent to 2.5 percent predicted in October.

Some members noted ``when prospects for growth had improved, a reversal of a portion of the recent easing actions, possibly even a rapid reversal, might be appropriate.''

U.S. Recovery

``If you take the view that the U.S. is going to have a strong V-shaped recovery, then the euro at $1.48 starts to look pretty exposed,'' said Gerry Celaya, chief strategist at Redtower Ltd. in Aberdeen, Scotland in a television interview. ``That's the view we're taking, that the Fed will have to raise rates before 2009.''

The dollar may rebound to $1.40 against the euro by year- end, according to the median forecast of 39 analysts surveyed by Bloomberg.

Currencies from Norway and Sweden, two commodity exporters, tend to ``perform best'' when inflation expectations rise, said Deutsche Bank AG, the world's largest currency trader. The krone may rise to 7.83 and the krona may advance to 9.11 in three months, Deutsche Bank forecast.

The Norwegian krone traded at 7.8930 per euro and the Swedish krona was at 9.3062.

Ten-year Treasuries yielded 2.35 percentage points more than similar-maturity Treasury Inflation Protected Securities, the rate of consumer price increases investors expect for the next decade, compared with 2.2 percentage points a month ago.

Breakeven Rate

The so-called breakeven rate will widen for major economies, Bilal Hafeez, London-based global head of currency strategy at Deutsche Bank, wrote in a research note today. Norway's and Sweden's central banks are likely to raise interest rates, boosting their currencies, the report said.

The yen rose versus eight of the 16 most-active currencies this week including the rand and Canadian dollar as falling stock prices prompted traders to shun higher-yielding assets funded by loans in Japan, or carry trades.

Japan's currency rose 1.6 percent this week against the South African rand to 13.8287 and advanced 1 percent to 106.02 per Canadian dollar. Japan's benchmark interest rate of 0.5 percent, the lowest among developed nations, compares with 11 percent in South Africa and 4 percent in Canada.

Stocks in Europe and Asia fell. The MSCI Asia-Pacific Index dropped 0.6 percent and Europe's Dow Jones Stoxx 600 Index declined 0.5 percent.

Stocks, Correlation

The Nikkei 225 Stock Average fell 1.4 percent today following the biggest decline in a week on the Standard & Poor's 500 Index. The dollar-yen's correlation with the Nikkei 225 was 0.95 in the past year, according to data compiled by Bloomberg. A value of 1 means the two variables move in lockstep.

``The yen's fate is dependent on the stock markets,'' said Tokichi Ito, deputy general manager of foreign exchange in Tokyo at Trust & Custody Services Bank Ltd., a unit of Japan's second- largest publicly traded lender. ``Almost every time equities sell off, people get nervous about carry trades and buy yen.''

In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between them. The risk is that currency moves erase those profits.