-- Posted 10 April, 2005 | | Source: SilverSeek.com
APRIL 2005 (#2) Vol. 9 No. 4-2
P. O. Box 510518, Punta Gorda, FL 33951
An international financial, economic, political and social commentary.
Published and Edited by: Bob Chapman
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Our President’s attack on Social Security is a looting operation that would destroy the system and give Wall Street over $1 trillion in income.
In 70 years of Social Security no other administration produced zero revenue growth as the neocons did in 2002-2003. In fact, the system only grew 5% between 2001-2004, rather than the normal 5-7%. This substandard growth was due to lack of employment, or put another way, via the movement of industry and outsourcing by US transnational elitist corporations. This fall in employment has affected productivity growth, caused wage stagnation and eventually will affect GDP growth. In spite of this, Social Security is on sounder footing than our federal budget deficit, consumer debt, our current account deficit, the housing bubble and a falling dollar. It is about time America got its priorities straight.
From 1985-2000, employment in the US labor force grew by 1.6% a year, or 27.7% over 15 years. Social Security tax revenue, a portion of GDP, grew .55% during that time from 4.7% to 5.25%. As of 2005, jobs growth of 1.5% means about 2 million new jobs a year.
In order to create new jobs to keep employment up and Social Security revenue up, some have called for a Marshal Plan for American infrastructure. That isn’t a bad idea, but a better idea is to stop free trade and globalization, leave WTO and NAFTA and do not create CAFTA and FTAA. Then erect tariffs for all the industry that has left America and upon all those that outsourced. That gives them the choice of paying the tariff or moving industry and jobs back to the US. That really is the answer. The unfortunate mitigating problem is that this transition will take place during a period of a falling dollar and world recession/depression. A Marshal Plan cannot work because we cannot compete with third world wages and we never will be able to. That means no rescue plan can work. We have to revert back to the system in place prior to 1965. We have transgressed into this area because employment is the key to the health of Social Security.
The system isn’t broken yet. For the past 15 years there has been 3.3 contributors to each beneficiary and Social Security has collected 130% of what it needs to pay benefits. If we can create net jobs at 1.5% annually, or better, that ratio would stay at 2.5 to 1. The money taken in by FICA should be invested in trading US government bonds. It should not be put in un-negotiable bonds and the money used by our politicians to balance the government’s fiscal budget. The actuary assumptions of the Bush administration are incorrect – deliberately incorrect. They are created to loot Social Security, not to save it. If we need more money in Social Security we’ll tax all the income of those making over $100,000 a year. We have been in both ends of this spectrum. We have lived in poverty and we have paid millions of dollars in taxes yearly. We have experienced the affect from both angles. Social Security is here to stay and stay solvent and we are not going to allow George W. Bush to destroy it to enrich Wall Street.
Our President has already spent or committed $400 billion to foreign wars to enrich America’s elitist corporations. His wars are despicable. Invading countries that cannot really defend themselves so we can control their heroin trade or their oil production. At home we need that wasted money for our own people. Imagine if we had spent that $400 billion on America’s infrastructure how much better our lives would be. Over 100,000 Iraqis and Afghanistanis and 4,000 American are dead, never mind the horribly wounded, that should have never happened. Thirty-five percent of America’s roads and highways are in just passable condition. Those conditions cost drivers $6 billion a year in repairs and many of our 13,800 highway fatalities each year. We could have spent $50 billion to correct that, but no, we spent it murdering people. Airport capacity has increased 1% in the last decade, while air traffic has increased 37%. Drinking water systems are short $11 billion a year; $300 billion is needed to upgrade those facilities alone. Then there are sewers, etc. What a terrible waste of money and people.
We know George and the neocons invaded Iraq to sell the oil production to US oil companies for $0.05 to $0.10 on the dollar, stop the sale of oil in euros, outflank Russia and China geopolitically and to create a diversion to overshadow America’s economic and financial problems. They also wanted to cause destruction, genocide, hunger, chaos, religious chaos and warfare, territorial fragmentation, etc. The reason why is that it provides a justification for imposing a world dictatorship, shattering order, to try to salvage and recycle the dying financial cartel that controls the nations of the world today.
Our government requested and won approval for a record number of special warrants for secret wiretaps and searches of suspected terrorists and spies, 75% more than in 2000. 2004’s total of 1,754 was up from 1,724 in 2003. The FBI has used such warrants to break into homes, offices, hotel rooms and automobiles, install hidden cameras, search luggage and eavesdrop on telephone conversations. They also have pried into safe deposit boxes, watched from afar with video cameras and binoculars and intercepted e-mails. Welcome to the new American police state.
Under the No Child Left Behind Act, the federally financed tutoring industry has become a $2 billion-a-year industry. Tutors are paid as much as $1,997 per child. Due to poor quality teachers and the dumbest children in the history of our country, the potential for a $50 billion industry is within reason. The services already are being aggressively marketed. Many of those being tutored do not speak English nor do their parents and they are illegally in the country. In NYC alone 81,700 students are being tutored. You might call it the dumb capital of the country. Chicago is tutoring 14,000. Worse yet, the standards for tutors are lower than that of the teachers they assist and many of those teachers are incompetent. What we have is a new government-sponsored racket.
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Concentration gets larger in the elitist oil industry; Chevron Texaco has agreed to acquire Unocal for $18 billion in stock and cash.
Chevron Texaco’s Venezuela affiliate signed a Letter of Intent with Spain’s Repsol YPF to pursue with the government new joint development activities in Venezuela’s prolific Orinoco Belt. These activities will fall under current hydrocarbon laws and energy policy and will use the latest technologies. There are now four international oil company partnerships with PDVSA to develop the Orinoco Belt.
June will bring a showdown regarding the dollar-oil equation. Iran will begin trading oil in dollars and euros. There is also talk about pegging the Venezuelan Bolivar to the euro. If both events occurred, the euro would rise and the dollar would fall. Oil would be less expensive in Europe in relative terms, while in dollar terms it would become more expensive. From Venezuela’s view point, Venezuela would diversify their purchases reducing its dependency on dollar manufactured goods. US foreign policy has been a disaster and unless they want to take on the whole world, they had best back off. American elitist duplicity is about to end and with it the dream of one-world empire.
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GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
The German Finance Minister Hans Eichel has joined the elitist choir and is pushing IMF gold sales to help ease the debt of the world’s poorest nations. Elitists around the world are supporting the sales because the US cannot do so. If the Administration did so the Democrats would be all over them. The cabal is building an overwhelming force of world elitists to come out in favor of the sales – for the poor. That makes it easy for the Bushites to say yes.
Silver for sale in the Comex Registered category has recently dropped 40 million ounces, which leaves 40 million ounces in warehouse. There is also 62 million ounces eligible but not for sale.
As you know, last week the ECB announced they had sold 47 tons of gold into the market. Our question is why was it dumped in the short time frame of less than 45 days and why was it sold at all? The Central Bank Gold Agreement was designed to prevent such concentrated selling, which negatively affected gold prices. If the ECB had not been a seller, gold may have moved up to $480 to $512 an ounce.
Thus, we can only come to the conclusion that the sales were made to deliberately suppress gold prices. Then again, it was a bullion bank stuck in a short of could not redeliver leased gold. Then again, it may have been soldto weaken the euro by selling off some of the 15% gold backing. Whatever prompted the sale is secret. So much for transparency and truth; the bottom line is gold suppression and the rejection of all currencies. You can invest in currencies now but we are sure next year we will be recommending only gold and silver related assets, nothing else.
A Bundesbank spokesman says the IMF should not sell or revalue its gold reserves to fund debt relief for poor countries. “We have always indicated the IMF is not a development organization and that its general reserves, which come from central bank stocks, should not be used for development aid. The high unrealized gains of the IMF’s reserves were important to give extra security to IMF creditors and allowed donor countries to give additional resources. A continuing erosion of unrealized gains must inevitably have negative consequences for the future financing ability of central banks. If the IMF proposal goes ahead, it raises fears that the whole unrealized value of the gold reserves could be used up within a few years.”
Here is a good reason why you do not invest in mining ventures in China or Mongolia. And, we do not care what they have in the ground. The former Communists had a grip on every one of the 76 parliamentary seats until last June. These are the people you would have had to pay off if you wanted to maintain your property. They now have 37 seats against a group of parties that have 34 seats. Minority parties have the five remaining seats. The Mongolians are now complaining about Chinese and Western involvement in the mining sector. One of the leading contenders for president, who is a member of parliament, if elected is proposing changing tax laws and mining laws. Rumor has it the changes are already in draft form, title acquisition will be changed and a 50% tax or royalty will be charged. If so, it will make it very difficult to make money after having plowed in millions of dollars. Most of these people have known nothing but communism, so you can expect the worst. We do not recommend stocks in Mongolia, China, South Africa, Russia or any of the CIS republics. If you own them, sell them.
The Bush neocons say they are not convinced the IMF should sell some of its gold reserves. The Administration has its own debt relief proposal that can be embraced immediately by other nations, said the Treasury Department.
Rep. Jim Sexton (R-NJ), Chairman of Congress’ Joint Economic Committee said any movement by the IMF toward gold sales will be stopped by Congress and the Bush Administration. He said the sales were a way of covering the bad loans it has made to impoverished borrowers, now unable or unwilling to pay them back. He also noted that congressional approval would be required. I believe Congress has an obligation to protect the taxpayers and reject any proposed IMF gold sales. The Bush Administration has taken the right position in opposing the IMF on this matter and deserves congressional support. There are better ways of financing debt relief then drilling the taxpayer yet again.
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-- Posted 10 April, 2005 | |
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