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-- Posted 20 April, 2005 | | Source: SilverSeek.com
APRIL 2005 (#3) Vol. 9 No. 4-3 P. O. Box 510518, Punta Gorda, FL 33951An international financial, economic, political and social commentary. E-mail Addresses International_forecaster@yahoo.com (for correspondence) IF_distctr@yahoo.com (for information regarding your subscription or renewals) CHECK OUT OUR WEBSITE ADDRESS IS: US MARKETS What we are seeing today in the form of corporatist fascist policies and government began after WWII with the deliberate breakup of the colonial empires of England, the Netherlands, France, Germany, Belgium and Japan. Colonialism had become too expensive and the final phase was for free trade and globalization. That is why GATT was created in the early 1960s. While this was going on, the demise of the Bretton Woods System was in the process of being supplanted by a fiat money system. On 1/29/67 the British devalued the pound by 14%. This move caused the US to spend 20% of its gold reserve at that time to protect the $35 gold price against British speculators. As a result a two-tier pricing system was adopted. The official peg would remain at $35, but speculators would be allowed to trade freely in gold letting the market set the price. This was a prelude to divorce from the US gold standard. This led to an inevitable dollar crisis. In May 1971 a team under Paul Volcker at Treasury proposed a number of scenarios and among them was suspension of gold convertibility or the final breakup of the Bretton Woods system. Thus, George Schultz, Henry Kissinger, Paul Volcker and John Connally took down our monetary system. On 8/15/71 the peg of gold to the dollar was broken. This was essentially a unilateral move by the US because Europe, the heavy dollar holders, were very much against the breakup. In 6/72, Schultz replaced Connally as Treasury Secretary. The formal end of the system was put in place at Rambouillet in 1975. That is when free trade and globalization were designated as the future. Schultz said, “Markets rather than governments were explicitly in charge.” Now we had a fiat currency and it was every man for himself, except the cabal Schultz represented. They were positioning themselves to get richer and even more powerful. At about the same time, George Schultz took over Bechtel Corp a private company, which you have seen in the news over the past three years as being a major contractor during the neocon Iraq war. Schultz was and is the head of an IMF-linked international network of cartels, dedicated to looting and destroying targeted third world nations, by saddling them with debt that would be impossible to repay. In 1974 Kissinger promulgated a new national security doctrine, in which the US claimed American extra-territorial sovereignty over the strategic-raw-materials wealth of much of the developing sector, under the cloak of American responsibilities to defend the free world against the Soviet menace. Today the word Soviet has been replaced by terrorism. The Kissinger document, National Security Memorandum 200, defined economic development in the third world as a threat to US national security and set out radical population reduction goals for the third world. This was a declaration of war against the dark-skinned races. This is the genesis of today’s policy of Afghanistan and Iraq to steal their oil, subjugate them, depopulize the country and set a new geo-political position. The next move will be against South America, namely Venezuela. Under the foregoing dictum all natural resources in the third world belong to America elitists by divine right. Mr. Chavez should take notice because this is the basis for American foreign policy in his region and throughout the world. We can guarantee you the US will move against Venezuela unless President Chavez capitulates. ** Receive an Introductory Copy of the IF -- See Below ** Renewal of 16 key provisions of the Patriot Act will be a battle royal in Congress. The FBI led the Bush neocon attack recently by asking for even more powers without oversight. Congress is listening and they had better listen. Seventy-nine percent of Americans do not want renewal of these 16 issues. Five states and 373 towns and counties have already passed resolutions, ordinances or ballot initiatives to protect the civil liberties of their 57,000,591 residents against the unconstitutional Patriot Act. The very title Patriot Act enrages Rep. Ron Paul (R-TX). The title is an effort to stigmatize opponents as being unpatriotic if he is against the bill and its renewal. Paul says, the bill wasn’t even printed before the vote. He could not get a copy of it. He says the worst part of the bill is the increased ability of the Federal government to commit surveillance on all of us without proper search warrants. It is also known as sneak and peek. This is why Rep. Paul wrote the article, “Is America a Police State.” Your elected representatives are willing to listen on this one. Contact them and tell them not to renew the 16 items. The rest of the world is starting to run trade deficits with China and finally this may lead the EU and the UK to join the US in implementing trade restrictions. China had a trade surplus with the world of $33 billion in 2004. Chinas had 36% more exports in January and February, as China ran a $10.9 billion trade surplus versus a deficit of $7.9 billion in like months of 2004. Chinese exports to the US in January and February are up 36.8% as US exports to China fell 9.7%. China’s world imports only rose 8%. Exports to Britain rose 42%; Germany 44%; Canada and Italy 59% and to Spain and Indonesia 75%. Let us see how WTO squares trade barriers. Trade barriers, as we have said for 10 years, is the only way to combat China and other salve labor nation. Between late November and mid-January, NY. A.G. Eliot Spitzer received $18,500 from 16 different attorneys from the law firm of Paul, Weiss, Rifkind, Wharton & Tamison, which is employed by AIG, as council both in the investigation by the SEC and Spitzer. This, of course, is a clear conflict of interest. The question is who is regulating the regulator? Over the last five years inflation has risen at least three times as fast as wage increases. At the same time, corporate profits hit record highs as companies get more productivity out of old workers, while keeping pay rates down. That was accomplished by sending manufacturing out of the country, outsourcing and the extensive use of illegal aliens as slave labor. In addition, there has been a weak job market, rising health care premiums and persistent inflationary pressures. If you include those who have dropped out of the labor market, unemployment is 13-1/2% not 5.2%. Government says wages are increasing at 2.4%, yet inflation is increasing at 9-1/2%. Health care has eroded the wage base and as the greed in the medical field grows, there is no end in sight to the staggering increases in costs. It is no wonder most Americans are living from paycheck to paycheck. We must add a historic observation here and that is that soon wages will catch up and when that happens, inflation will get a big noticeable boost. Thus, wages will rise as the inflationary fallout from higher energy costs hits. Consumer spending is continuing to rise, as is debt. As soon as house prices descend, the cushion is threatened and panic will set in. Again, get out of credit card and revolving debt and pay off your vehicles. There is a good chance that next year one of you two breadwinners will be out of work. We are in for a long period where inflation-adjusted wages will be under acute pressure and inflation will always run far ahead of wage increases. The situation is far terser than official figures show. Off shoring over the next five years will devastate employment in white-collar jobs unless tariff structures can be erected. There is no possible way Americans can compete with foreign wages and a falling dollar is not going to help. Nine-five percent of workers are losing five percent of their purchasing power annually. That cannot continue. In addition, free trade and globalization are ripping the heart out of our economy. Congress may be finally getting the message. Let’s hope so. More for subscribers.... GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS South African gold production fell 8.8% to 342.7 tons in 2004, the lowest since 1931. This was due to a strong rand and rising costs. Gold sold for $410.00 an ounce on average last year and production cost was $361 an ounce in the fourth quarter. That is 43% more than the global average. Thousands of jobs are being cut. Anglo Gold CEO Bobby Godsell said he expected gold to soon trade as high as $500 an ounce because of a weak US dollar and high jewelry demand. We see the issue of the gold-oil ratio is in the news as it hits a 29-year high. It further shows up the manipulation of both oil and gold. Gold supposedly under-priced by $372.00, which means it should be selling around $800.00 an ounce. That is a correct assumption, thus you can see the distortion that has been caused by central bank selling and leasing. The coming constitutional referendums in France and Holland, which probably won’t pass, have put pressure on the euro versus the dollar, whereas the euro should have rallied by now. In euro terms, gold is up to 332.25 headed for a 350 breakout. If that occurs, gold will appreciate in other currencies irrespective of dollar/gold manipulation. The recent euro reserve gold sale certainly did not help the value of the euro either. If France and the Netherlands reject the EU Constitution there will be a return to gold from dollars and euros and other currencies. All currencies will be less attractive. By July we should see some action by China in regard to the revaluation of their currency by 5 to 15%. If that happens they will no longer be buying US Treasury and agency paper, they will be sellers. That means higher interest rates and it also means much higher inflation in the US for goods. On the other hand, if China doesn’t budge and we and Europe implement trade tariffs, China will stop buying US paper and become a seller sending interest rates higher. Either way gold and silver will climb in the months ahead. There is no way back and we must suffer through the worst financial and economic purge in many years. Barrick Gold lost another round in the suit bought against it and JP Morgan Chase. The federal judge rejected their request to introduce trial interviews conducted in its Canadian libel suit against Blanchard, because the libel case evidence could be shared improperly with JP Morgan Chase, which is not part of the Canadian suit. The judge said, “What Barrick suggests here is patently unfair. Barrick wants to conduct a fishing expedition in the Canadian libel action discovery pool.” More for subscribers.... AFRICA South Africa cut the repo rate 1/2% this week. This should tend to weaken the strong rand. It could also cause a pickup in the economy. The prison population in South Africa is about the same as in the US, which means per capita, they have seven times as many criminals as the US. In addition, most criminals are not caught. If the criminal justice system worked there would be over one million in prison. The country already has a prison population three times higher than the world average. Correctional capacity is for 113,825 inmates, yet the population is 187,446. That is one out of every 1,000 South Africans are in jail. Do not invest in South Africa and if you live there leave while you still can. You have seen what has happened in Zimbabwe over the past 20 years. You are next. Close to 800 murder suspects in Malawi have been awaiting trial for a long time, some of them for as long as 15 years. Talk about a gross violation of human rights. The government has made no effort to finance the trial of homicide cases. The prisons are built to accommodate 4,500 prisoners and currently contain 9,220. We have been to Malawi many times; a lovely country where chaos and AIDS reigns. South African gold and foreign exchange reserves have doubled since 2003, but 70% of those reserves are in US dollars. That means they have already lost about 25-30% of their reserve assets in a dollar depreciation. There reserves are still relatively meager compared with other emerging market economies. More for subscribers.... SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to Robert Chapman (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Note: We publish twice a month by surface mail or 3-4 times a month by E-mail. Correspondence to Bob Chapman international_forecaster@yahoo.com, or for subscription information IF_distctr@yahoo.com Foreigners please use foreign U.S. dollar denominated checks or Money Orders.
-- Posted 20 April, 2005 | |
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International Forecaster April, 2005 (#3) - Gold, Silver, Economy + More
