-- Posted Monday, 29 December 2003 | Digg This Article

WISHING YOU A HAPPY AND PROSPEROUS NEW YEAR

BOB, JUDY and JAN

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THE INTERNATIONAL FORECASTER

JANUARY 2004 (#1) Vol. 8 No. 1-1

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SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $99.95 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 $99.95 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.

For more than 3-years we have refrained from increasing our subscription rates when many other publications have raised theirs. In some instances other subscriptions are 50% to 400% the cost of ours, and many do not put out anywhere near the volume and variety we do.

We have no intention of raising our subscription prices, but we would like to request a favor. Our credit card rates have increased so we’d like to ask you if you would pay by check. It costs nothing for us to deposit a check. We appreciate your help very much and thanks for being loyal subscribers.

   Foreigners may use foreign U.S. dollar denominated checks or Money Orders.

                                                            *****

 I was a guest on the Stirling Faux Show on the Corus Radio Network in Canada - Saturday, December 6th. To listen to this interview go to www.HoweStreet.com then scroll down to the interview section.

US MARKETS

            The Bush Administration is taking the back door to trade agreements in Central America. The newest trade block is El Salvador, Guatemala, Honduras and Nicaragua, now called the Central American Free Trade Agreement or CAFTA. Costa Rica dropped out at the last minute after it objected to demands from US negotiators on insurance and telecommunications. The US Congress must now approve the deal. The deal protects US sugar growers. Neither the Dominican Republic nor Costa Rica is on the treaty. They represent 43% of GDP of the six countries and 52% of US exports. Costa Rica alone represents 25% of GDP and 31% of US exports. CAFTA would be a southern extension of NAFTA and would remove tariffs on 80% of all US exports to CAFTA and would eliminate almost all tariffs in 10 years.

            For decades, the brokerage industry has had the collective right to self-police its industry and they have failed miserably, especially the large brokerage houses. There has been an ethical failure. Up until recently there were no ethical failures that we knew about, yet now we have one scandal after another. This is because violators’ hands were slapped as the culprits neither admitted nor denied guilt. There has been a veil of secrecy and a conspiracy of silence since 1934.  Each year greed grew and ethics remained with only a handful of brokers, brokerage firms and funds. What is worse is these sociopaths do not believe they have done anything wrong.

            Two investment banking houses are at the core of the manipulation of the gold and silver market. They are Goldman Sachs and JP Morgan Chase, although there are others. Goldman has rigged these markets for at least the last nine years. Most of Wall Street is aware of it but no one dares talk about it. You all are very familiar with the scandals involving the NYSE and its fraudulent behavior, so the NYSE has a new permanent CEO. Guess where he’s from?  Goldman Sachs of course.  That person is John Thain, Goldman’s chief of operations, a vice-chairman and someone who was involved in the rigging of the gold market. The elitists must think we are either not watching or we are stupid. Unfortunately, a good part of Wall Street and the public investors do not have a clue as to what these people are up to. You just replace one crook with another crook.

            For the week ended 12/9/03 the 30-year fixed mortgage fell from 5.88% to 5.82% from the previous week. The 15-year fell to 5.14% from 5.24%. Mortgage applications increased 12.6%. Applications for home-purchase mortgages were up 9.4% and refinancing rose 16.8%.

            Two of Freddie Mac’s top executives must forfeit their bonuses and pay millions of dollars in fines in connection with false reporting and fraud. As you can notice no one went to jail. Elitists never go to jail.

            We live in a financial Disneyland. Consumers have no savings and they buy anything they want with credit. Home prices relentlessly rise yet most people can’t afford to buy. The stock market sells at 35 times earnings as commodity, gold and silver prices soar. We are told there is no inflation but the prices of most items are rising. Foreign central banks buy our Treasury paper so their currencies don’t appreciate knowing they face guaranteed losses. Does anyone really expect this can go on indefinitely? Do they really believe this false prosperity will last?

            George Ryan, who as governor of Illinois made history by empting the state’s death row, was indicted on charges of racketeering conspiracy, mail and tax fraud and lying to law enforcement officials. The criminality of politics, business and Wall Street goes on unabated.

            Conrad Black, former CEO of Hollinger International, is being investigated now by the SEC, the FBI and the US Attorney’s office. Let’s see if this elitist reaches jail.

            Former Fred Alger Management VP, James Connelly became the first mutual fund executive to land jail time for mutual fund fraud. He got one to three years. He is not an elitist.

            Janus Capital said it will repay $31.5 million in relation to trading fraud. It’s very interesting that some go to jail for trading fraud and others are allowed to buy their way out.

            Obviously, the left segment of US elitists, like the European contingent, is not happy with the Bush policy machinations. Former Secretary of State Madeline Albright told Fox News analyst Martin Kondrcke that she suspects President Bush knows the whereabouts of Osama bin Laden and is simply waiting for the most politically expedient moment to announce his capture.

            On 12/9/03, Fatherland Security Secretary Tom Ridge called for amnesty for 12 million illegal aliens. They must be rewarded for breaking our laws. Of course, it’s incredible that this man who is supposed to secure our borders is willing to break our laws and cut a deal with millions of illegal aliens. He implies that American people are not willing to take menial jobs, which is an insult to the millions of Americans who can’t find jobs. We strongly urge that you contact your elected representatives and jump all over them. You can also ask them to co-sponsor HR946, the Mass Immigration Reduction Act of 2003, which demands a moratorium on all immigration in excess of 100,000 a year.

            In our last issue we reported on the new bullet manufactured by RBCD. A subscriber pointed out that if the bullet explodes in the body wouldn’t it be untraceable. We know lots about ballistics and if the bullet actually explodes then there would be little in the way of ballistics making it untraceable. That means it probably won’t be sold to the public, but it will be perfect for our private mercenaries to carry.

            Dan Gordon former head of Merrill Lynch’s global energy market group pleaded guilty to criminal charges of money-laundering and wire fraud and has agreed to forfeit $43 million in profits. He was charged with civil violations in the deal that inflated Enron’s income by $50 million. Mr. Gordon pleaded guilty to conspiracy to falsifying books and records. He faces a prison term of 55 years and fines $1.25 million. Our question is why wasn’t the remainder of Merrill’s management and directors charged? They all were a part of these scams.

            The Washington DC Metropolitan Police Department, the FBI and the Secret Service and the National Park Police, are the subject of a broad-based legal and political action campaign to win justice for those who have been the victims of police misconduct. The Partnership for Civil Justice has filed four lawsuits in Washington, DC over the past three years that have uncovered a body of evidence showing that law enforcement agencies have been engaged in systematic and coordinated efforts to sly on and disrupt political organizations engaged in First Amendment protected activities. Discovery shows police undercover operatives engaged in violent assaults against peaceful demonstrators protesting against George W. Bush during the 1/20/01 Inaugural Parade. This is like the 1960’s all over again. What we find of interest is that this spying and subjection began when George W. Bush began his presidency. What this is; is a war against dissent in Washington, DC by Mr. Bush and his neocons.

            Two of the biggest home loan providers in California and the nation have cut more than 6,500 jobs in recent months. Another 65,000 will also lose their jobs over the next year in the industry or 15% of 435,000 workers processing home loans. These figures do not include jobs at banks that don’t separate mortgage subsidies.

            Since 1990, we have written about the doctoring of government statistics. Here is a recent example. Michigan’s November unemployment numbers dropped from 7.6 to 7% as a result of 34,000 unemployed people supposedly leaving the workforce. Manufacturing jobs fell 5,000 in November and 250,000 jobs have been lost in Michigan over the past four years. In actuality, the numbers are really worse then they look because the state added 43,575. Thus, you cannot believe in anything government says.

            In spite of being a reelection year 2004 will not be without its surprises. The threat of terrorism still hangs over our heads. Korea continues to act aggressively. SARS keeps coming back and all prices could be interrupted in the Middle East by an extension of conflict. The dollar will continue its slide, the current account deficit and the fiscal deficit will worsen and foreigners will abandon the dollar in greater numbers. The outsourcing of companies and jobs will be a major issue as will protectionism. Trade war is escalating and can only get worse. The bright spot will be a stronger economy during the first half of the year, although by past standards it will be anemic. The requirement of foreign financing of the US current account deficit will grow to over $2 billion a day, which means if foreigners don’t fund it the FED will have to monetize it and the result will be inflation. This will add to global tensions as part of that inflation is distributed throughout the world. As a result, interest rates will begin to rise probably one to one and a half percent, which may slow the dollars fall but those higher rates will negatively affect economic performance. 2004 will be an attempt to climb out of the deflationary abyss, which unfortunately will not be successful. Super-low interest rates and the profligate creation of aggregates is not the solution, it’s only a holding action. Creating bubbles to offset bubbles doesn’t work. In all 2004 will be another year of steady deterioration and higher gold and silver prices, as a result of the artificial stimulation for 2004, the year 2005 will be disastrous.

            It’s been two years since NYC property taxes were increased. Since then municipal pension costs have more than doubled by over $1.3 billion, enough to consume the lion’s share of the tax increase. Between 2005 and 2007, contributions will jump again from $2.5 to $4.3 billion. This is happening all over America. This is not only a hangover from 1999-2000 but it’s the result of incompetence and an outmoded and inherently volatile pension structure, which obscures costs and wreaks havoc on long-term financial planning. Worse, the state constitution doesn’t allow pension benefits to be diminished or impaired for current public employees. Thus, you have a time bomb, which could have all the workers in the state working just so retirees could receive their benefits. From 2005 to 2010, investment returns will be negative, so we envision a cut of 60-65% by constitutional amendment. Otherwise, there’ll be financial chaos.

*****

This is from a fellow subscriber:

“I was appointed by the Governor and served on the Draft Board. The board meets only a couple of times a year for about four hrs. It is managed by officers in the US Army Reserves. It is my understanding that as a draft board, we would only review cases that involve hardships, conscientious objector status, sole surviving son status, refusal to serve, etc. Draftees appearing before the board cannot have attorneys. All the other men that are drafted and willingly go off to serve never come before a draft board. The military people are trying to tie draft eligible young men to their drivers’ licenses. That is, if you are 18 and required to register for the draft, and do not, they want the state to pull your drivers license. Just another subtle form of intimidation. It seems to me that first it discriminates because women are not affected, secondly it will deny people civil rights, and thirdly without a DL many people cannot hold a job or get to a job. Why stop at the DL, next they will be denied the right to vote, own property, board an airplane, etc. This is getting to be a dangerous country for freedom lovers, and the two most dangerous people in America are Reichsfuhrer of Homeland Security Tom Ridge, and Oberlieutenant Attorney General John Ashcroft.”

 

                                                                        *****

Our President has signed HR2417 into law. It gives John Ashcroft the power to extend the Attorney General’s office collection of information on every possible financial record of an individual, from banks, credit card companies, travel agents, car dealers and casinos, etc. You do not have to be under investigation to have your personal financial data collected. You just have to be a person of interest. You can thank your Congressmen and Senators for this. If yours voted for this blasphemy, vote against them no matter who they are and get your friends and family to do so. The bill also continues to fund our failed drug war in Colombia. The drug problem is not in Colombia and Afghanistan but in American cities. HR2417 covers the CIA general intelligence operation, including signals intelligence, clandestine human-intelligence programs and analysis and covert action capabilities. It authorizes covert action programs, research and development. The expansion of the concept of financial institution is ridiculous. It shows the intent of the legislation is to spy on American citizens. Welcome to our fascist, police state.

 

On December 23, 1913, the Federal Reserve was created by world elitists. It was supposed to end recession and depression. Sixteen years later, the FED ushered in the worst depression in American history, followed by scores of recessions. After being directly and indirectly responsible for mega-aggregate creation during the 1920s, the FED shrank the money supply in 1930 by 30%. Over the last four years the FED directly and indirectly was responsible for an infusion of over $7 trillion into the economy and over the past four months has halted aggregate creation. Is this a replay of 1930? Can the FED hope to control money supply and interest rates simultaneously? Answer – this could well be a reply of the 1930’s and no the FED cannot do both at the same time. Low interest rates shrink the money supply. Spendable funds are removed from the system as yieldless money-market fund holders’ switch to Treasury notes and bonds. This course is a holding action in the short term. It means eventually that interest rates have to rise, because money supply will continue to shrink.

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GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS

Producer hedging and their use of gold derivatives continue to be a part of the overall gold short position, but its influence on gold is dwarfed by the central bank backed gold carry trade. The losses absorbed by those, we will call short collectively, over the past few months are massive. The losses have to be covered by the central banks. It can be no another way. The losses are just too great. Gold derivatives of US commercial banks rose in the second and third quarters by 1,000 tons. These increases occurred simultaneously with the increase in short positions on the Comex. In fact, they set a new record. That means to us that the commercial shorts and the carry trade are working together. In fact, they could to a great extent be the same parties, the bullion banks. We believe they are. We have been deeply involved in the gold and silver markets forty-four years and will continue to be involved in bringing gold back into our monetary system so that we can’t be cheated out of what we have worked for. Obviously what we’ve done has been effective because the elitists have tried to silence us a number of times, the latest being a year ago. You cannot have freedom and safety without gold backed currency and we will continue to strive to bring that about in spite of the sacrifices we’ll have to make. The elitists have to be exposed for the criminals they are and they must be punished for what have done to mankind.

 

            In spite of their evil machinations, gold continues to gather strength. During January, gold will be at 14-year high, as well silver, and the shares will gain back a good part of their losses. The physical market is simply on fire and it is feeding on itself. From November 28^th to December 10^th gold hit nine consecutive new highs and of course the media paid no attention nor did Wall Street. For the year, 2003 there were 24 new highs and the world could care less.

 

            The German Bundesbank has warned that the US current account deficit could lead to abrupt movements on foreign exchange markets. They warn of excess liquidity and price inflation as interest rates start to rise. Economies that could be particularly vulnerable are those with over-headed real estate markets on top of high levels of private indebtedness that could lead to negative consequences. They point out that US household indebtedness is 110% of disposable income, which presents financial vulnerability. Americans, America is incapable of producing for its own existence and foreigners won’t take fiat dollars forever. Once they stop doing so in a major way, there will be a systemic breakdown of the dollar reserve standard and gold will again become the world currency.

 

            For the week ended 12/20/03 Turkey reported gold imports were 3.65 tons, the highest in almost two months. Gold trading volume was up 31% over last week’s volume. Evidently there is increased buying from Iraq because the Iraqis are unhappy with a falling dollar.

 

            The Chinese gold mining firm Fujian Zijin mining industry said its IPO was 744 times subscribed and priced at the top of an indicated range. It increased the retail portion of its offering from 10% to 50%. They raised $147.44 million by selling 348.3 million shares.

 

            The investment community has laughed at us for 44 years. Most of those who laughed are long gone from the industry. When we started in 1960 the average broker lasted seven and one-half years, today they last six months. This is the seventh gold market we’ve had in 44 years. They still think we are crazy, but that’s fine because we are winners. This past year the average precious metals fund blew away the conventional fund with some 64% gains. Latin America was a distant second up 55.1% and technology was third at 42.3%. Over three years the average precious metals funds gained 44.4% a year. Over the same period the average stock fund lost 6.6% a year and the average intermediate bond fund gained 6.4%. That’s pretty spectacular for those who bought and held from April 2000 when we said to buy gold and silver related assets with both hands. The exciting thing is we haven’t even ended phase one of four phases yet. We still have three to five years to go. This can be the most exciting part of your life.

 

            We can promise you a few years from now the elitists will miraculously discover the gold standard. We are hearing whispers at the highest levels that this will be the next step by elitists. That is a natural step, particularly if the US still has its gold in place. We can also promise you the elitists have been accumulating gold as they suppressed its price. What better way to buy all you want cheaply.

 

            Doesn’t anyone find it odd and unexplainable that gold and silver are the only two markets still not trading at normal pre-9/11 hours? You might contact the CFTC and your elected representatives and ask why.

 

            Via the modification of the Financial Privacy Act of 1978 by HR2417, the Patriot Act II sections 1115-1117 redefine financial institutions. It means and includes a dealer in precious metals, stones or jewels. It is possible this could be a prelude to our FDR-style outlawing of gold possession. We need more professional input, but as you have seen our current fascist government does as it pleases, so anything can happen. Again, don’t have any financial records on your gold and silver coins and bullion nor registration of any kind of your weapons and keep them close by and if need be buried. Don’t let anyone know you have them, just in case the Gestapo comes banging at your door at 3:00 a.m.  We now live in a land where political and economic leaders are no longer held accountable for criminal acts. Basic human decency no longer exists. We have allowed a conspiracy to totally run our lives and totally usurp political and economic power. The dollar is collapsing and the elitists tell us there is nothing to worry about. There is plenty to worry about and the most important thing we have just lost is our freedom and now you’ll have to fight to get it back.

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ASIA

            China’s current boom is unsustainable because it is based on a massive extension of credit. Over the past year, M2 is up 21.6%. The growth of fixed assets was 23% in 2003, contributing 60-70% of GDP. Government expenditures accounted for only 2% and domestic private capital investment rose to $640 billion. Part of this investment will increase auto production by 30% by 2007. China will grow in leaps and bounds but inflation is on its way up.

            The crisis engulfing South Korea’s debt-laden credit card sector has worsened. The largest issuer, LG Card, was granted an extra $250 million in emergency loans and its third biggest issuer, KEB Credit suspended cash advances. The $250 million is on top of $1.7 billion in emergency loans they were granted last month. LG Card has 30% of South Koreans as customers. They were forced to cut off cash advances last week. South Korean lenders have the same problem US lenders have only worse. Citizens have several credit cards and many of them pay off other card bills with cash advances. Ten percent are unable to repay loans and credit card debts are 14 percent of GDP.

 

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SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $99.95 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 $99.95 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.

 

For more than 3-years we have refrained from increasing our subscription rates when many other publications have raised theirs. In some instances other subscriptions are 50% to 400% the cost of ours, and many do not put out anywhere near the volume and variety we do.

 

We have no intention of raising our subscription prices, but we would like to request a favor. Our credit card rates have increased so we’d like to ask you if you would pay by check. It costs nothing for us to deposit a check. We appreciate your help very much and thanks for being loyal subscribers.

   Foreigners may use foreign U.S. dollar denominated checks or Money Orders.

 

-- Posted Monday, 29 December 2003 | Digg This Article

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