LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
International Forecaster February, 2004 (#2) - Precious Metals & More

By: Bob Chapman, The International Forecaster



-- Posted Thursday, 12 February 2004 | Digg This ArticleDigg It!

THE INTERNATIONAL FORECASTER

FEBRUARY 2004 (#2) Vol. 8 No. 2-2

P. O. Box 510518, Punta Gorda, FL 33951

E-mail Addresses

International_forecaster@yahoo.com

(for correspondence)

 

IF_distctr@yahoo.com 

(for information regarding your subscription or renewals)

 

Dear Subscriber,

Your help is required to help us get our urgent message to the millions of people in America that do not understand that we are facing very difficult financial times, Next year, financial and economic dislocation will begin and we need to reach the public. As you are well aware, we publish massive amounts of information each week, and even though our costs have increased substantially, we have not raised our prices in four years, and we do not want nor do we intend to raise prices, but we could use your help. If each subscriber could get us just one new subscriber, we would double the people we reach and the word of financial salvation would fall on many more ears.

 

The elitists want to implement a world currency and destroy gold and silver as a monetary metal forever. We have the Euro, next is to be the North American Currency Unit and then the Asian Currency Unit. Ultimately the World Currency Unit that will finally deprive us of our freedom and sovereignty. Then that will be followed by political and economic union and then world government, which will further eliminate borders and sovereignty. Once the world is unified, there is no escape. The power of the one-world government will be absolute – and because man remains sinful and corruptible, our new-world order will be tyrannical. Any world currency system means enslavement. That is why we ask you to help us expand our readership. You could save many people from financial destruction.

 

                                ** Receive an Introductory Copy of the IF -- See  Below ** 

 

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.

 

US MARKETS

There are rumors circulating around Washington that the economy is in dire straights and that contingency plans are being drawn up for when the market collapses. The talk is 401K’s and IRA’s could be confiscated by the federal government and exchanged for T-bills. That would give the government the funds to pay off the debt but as these savings vehicles are liquidated there would be a major collapse on Wall Street. The FED would then print endless amounts of money, which would destroy the purchasing power and value of the T-bills. Past performance lends credibility to such rumors. We consider this a real possibility. Our government is full of fraud, lying and corruption by bureaucrats and both political parties. This would fit easily into their venue.

 

            A former CIBC top executive was arrested Tuesday on charges he arranged for two hedge funds to engage in illegal late trading and deceptive market timing of mutual funds and with stealing $1 million by participating in the scheme. It’s about time.

 

            Thousands of illegal immigrants, mostly from Central and South America, are being released into the US almost immediately after they are picked up by the border patrol as part of a policy that US officials acknowledge represents a significant gap in Fatherland Security. Mexicans, some one million caught last year, are returned to Mexico. Central and South American governments refuse to accept groups of people for repatriation and there is limited money for cells for these felons. The result is they are released and 86% don’t show up for court hearings. The release program puts border towns at great risk and undermines security and leaves any terrorist a wide open hole to enter. The word is out in Central and South America and new massive waves of people from these countries are entering America like locusts. It has gotten so bad that these illegals intentionally surrender so they can quickly get notices to appear in court, then they move on to major cities. Our government does not have money to jail over 19,444 criminal aliens at $54 a day but has billions to throw away in Iraq. You can imagine how border patrol agents feel. They are trained to apprehend illegal felons, sometimes at the risk of their lives, and then the Bush Administration has given them orders to release them. Right now there are 400,000 fugitive illegal aliens that are being pursued after our government let them go. How’s that for insanity. This is by the same nutcase in the White House that wants to give 12 million felons amnesty so he can drive down wages so businesses can employ slave labor. Mind you we are right-wing conservatives and the law is the law at least until your Congressman and Senators agree with Bush and invite the whole world in. This is incredibly disgusting.

 

            In 2005, 12 million people filing tax returns will have to pay AMT, the Alternative Minimum Tax. If it were repealed it would cost the government $660 billion over the next 10 years.

 

            Companies cut 117,556 employees in January up 26% from December. That is down slightly from 132,222 a year ago. Cost cutting, mergers and outsourcing continue to rob Americans of their jobs.

            Once interest rates rise, borrowers will pay more in real terms, affecting consumption, home building, business investing and government deficits alike. The Treasury will sell about $58 to $60 billion of notes this week and they plan to borrow a net $177 billion from January to March, the most ever in a quarter, to finance a record budget deficit. The Treasury projects a $521 billion budget deficit, which we see at over $600 billion for this fiscal year. On top of that, Bugsy who lives in the White House, now wants to take us to the moon, mars and beyond. We are still looking for interest rates to rise between March and June or at the absolute latest by September.

 

            Total Credit Market Debt of the US economy is over 300% of GDP. The question is can the economy handle this and can it handle 300 to 400%? Or should we just drop money out of helicopters as we did in Afghanistan or as FED government Ben Bernanke has suggested? Well Virginia debt levels and debt ratios have limits and when interest rates rise the pain is something to behold. A financed based economy calculated to suppress deflation depends on the continually low-cost of money. Once that cheap money stops the merry-go-round stops. Had not long-term rates not dropped from 9% in 1980 to 2.5% today, consumption would have been stopped dead in its tracks. In fact, we would have had our recession and depression and had done with it. It all would have been much milder than what we face now. Now yields can’t go much lower and negative interest rates have to end like lower interest rates sooner or later. Once real short rates climb from negative to just slightly positive, the higher productivity of debt will end. Borrowers will pay more in real terms, reducing consumption and investing. The result is a slipping back into recession, lower stock and real estate prices and lower bond yields. If the FED overwhelms the economy with aggregates, inflation will ensue, a short-inflationary recession. We believe that a reflation attempt will be unsuccessful. In the meantime, those who must stay in dollars for residual funds should buy TIPS and add commodities and gold and silver related assets. The financed-based economy is leveraged to the eyeballs and once lenders demand a positive return the financial tables will be turned upside down. That means leverage will have to cease or the return will have to increase to cover the additional risk. These demands will send the economy into recession and ultimately into depression. A flight to quality will ensue into the only real money, gold.

 

            The President is asking for $401.7 billion in military spending in 2005, a 7% increase over 2004; that is 3.6% of GDP up from 2.9% in 2000. What is not included is another $50 billion for Iraq and Afghanistan. The question is how long can this amount of spending be sustainable, considering our already leveraged economy? This is not very encouraging.

 

            Hold on to your wallets. MBNA, the second largest credit card issuer, has raised its top late payment fee to $49 for certain customers on the Gold Option Program who carry past due balances over $1,000, which is typical of the majority of customers. That fee was $35.00 prior to June. The average in the industry is just over $30.00, a 56% jump since 1998. Chase, Cardweb.com customers who pay by phone pay a $14.95 fee. The average card balance at the end of $2003 was $9,340 up from $8,940 in 2002.

 

            One of the side affects of outsourcing and the movement of plants and businesses offshore is that low-tax countries allow corporations to significantly lower tax rates. That, of course, has become a priority for corporations. This allows these corporations all the other benefits of being an American Corporation and at the same time pay much less in US taxes and to assist in the transfer of wealth and living standards from America – the first world – to China, India and other third world countries. America is being stripped of its assets by its transnational conglomerates.

 

            Ford spent $2.8 billion for health care of employees, dependents and retirees in 2002 and now faces $30 billion in medical liabilities for retirees, which is double its unfounded pension benefit. The Kaiser Foundation says health-care cost premiums have surged 42% over the last three years for employees and families. Hewitt Associates says they see a further hike of 15% for 2004. The Bureau of Labor Statistics only shows 3.6% for 2003. Just more lies. Where is the media and Wall Street to unmask these lies? Congress is paid off to keep their mouth’s shut. This is outrageous, yet only a handful of newsletters carry the truth.

 

            Demand for business loans increased for the first time since 2000, while home mortgages cooled. More than 20% of domestic banks said demand had increased for business loans from small firms and 11% from larger firms. Almost 40% of domestic banks said demand for mortgages to buy homes had deteriorated significantly as well as refinancing. Fifteen percent of banks reported weaker demand for all types of consumer loans over the past three months, the largest since the fourth quarter of 2001. The MBA said its market index, a gauge of new requests for loans to buy homes, fell 1.7% to 444.0. The refinancing index fell 1.4% from the previous week as 30-year mortgage rates rose .05% to 5.63%. Refinancing accounted for 50% of activity. Thanks to zero down or 3% mortgages, home ownership hit a new high of 68.6% at the end of 2003.

 

            Challenger, Gray and Christmas said past-holiday job cuts were 117,556 in January surpassing the 100,000 threshold for the first time since last October as jobs moved to India, China and the Philippines. Job creation is a major problem for George W. Bush so you can expect improvement as our government lies about the figures.

 

            General Mills and its two top executives received Wells notices from the SEC for accounting irregularities.

 

            This week the Treasury will sell $16 billion in 10-year notes, $16 billion in five-year notes and $24 billion in three-year notes to refund $26.6 billion in maturing notes as part of its quarterly refinancing of about $58 to $60 billion.

 

            Lies, lies and more lies. The FED Governor Ben Bernanke tells us a drop in the dollar’s value on foreign exchange markets will help cut the US trade deficit and was not sparking inflation. A drop in the dollar’s value is inflationary. It makes goods more expensive entering the country and because we manufacture so little anymore it will do little to help our balance of trade and current account. As far as inflation is concerned it is 7-1/2-8% but through rigging-hedonics the government tells us it is 2%. The constant government, media, Wall Street and FED commentary on a healthy economy is so much disinformation. The effects of tax cuts are in the process of wearing off and by June their affect will be history. Borrowing debt is not going away, it is increasing. Employment will get worse not better. Whole industries are being destroyed by China not only in the US but in other countries as well. Next year the Chinese through cheap loans and tax incentives will destroy the chip industry through over capacity. Supply and capacity has been increasing in China in every industry. That means China and the world are headed for trouble. Credit inflation will eventually get completely out of control and any central banker with half a brain knows the instability that will be caused by any further interest rate cuts. It is bad enough some central banks are buying dollars and their dollar assets to keep their currencies from appreciating. The longer the FED and the administration continue to add massive stimulus to the economy the longer and deeper the US dollar will fall. The FED in its open market operations continues to issue funds that don’t have to be repaid. Coupon passes and interest payments that don’t have to be repaid. There presence is immediately inflationary as they have the same affect as infusions of hot money. This is how the FED helps the Plunge Protection Team manipulate the stock market. The FED arbitrarily supplies the funds to the banking system on a daily basis making those funds available to the market.

 

More for subscribers....

 

GOLD, SILVER, PLATINUM AND PALLADIUM

As we predicted the head of the South African Revenue Service (SARS), Sechaba Nkosi, says gold firms paid too little tax due to a special regime and went so far as to say, “the effective tax rate of certain sectors of the economy remains immorally and unacceptably low.” Under a tax system established in 1935 firms mining gold in South Africa can offset losses or capital investments on specific mines when they make a profit. Presently mines are paying very little taxation due to the retracement and appreciation of the rand.  This has the government hopping mad and their Marxist minds can not handle the fact there are good times and bad times in mining and everything else in life for that matter. The government probably won’t change the tax system now, but that does not mean they do not want to.

 

            The shortage of silver is becoming acute all over the world. We have been hearing stories about delivery problems or no silver for sale. The demand and supply situation gets tighter every day. We projected six years ago that the fall of 2004 would bring a silver shortage and so it has. We believe there is little inventory available. Production is about 585 million ounces a year. Scrap is 185 million ounces. That is 770 million ounces available for sale. Demand is 860 million ounces leaving a net deficit of 90 million ounces. Some say the inventory is 200 million ounces. No matter which way you cut it, silver is in short-supply and no matter what the manipulators try to do, silver is going higher. Silver could again also become a monetary metal. The elitists began propaganda to destroy silver as a monetary metal in 1967 and they have been leaning on it ever since. We caught the first big move from $.29 an ounce to $2.50 in those days and our clients made lots of money.

 

            From a demand perspective we see three very strong ongoing factors for gold. Growth in both China and India this year of over 8%. India is the world’s biggest buyer and will continue to be and China’s buying is really just getting underway. China also has a history of large gold consumption. We add to those two the buying by the Islamic world and the valuation of the gold dinar. We mention these factors because what happens in the physical market today is far more important than any other factor including the value of the dollar. The game is beginning to change and physical buying has become the lead factor. This is something that eventually the gold cartel can not overcome. They do not have enough gold left to do so. If you add in the net physical shortfall of production to fabrication demand and investment demand you have a powerful source for winning. Presently versus the dollar, gold is off 6% more and the shares even more. At this area of around $400.00 gold and $6.00 silver there are some wonderful opportunities. Remember you should get long and stay long. Trading these markets is very difficult even for the pros. The volatility and emotional ups and downs are very difficult to handle.

 

            We have been in the gold and silver markets for 44 years, and in every market when interest rates rose gold prices rose and silver followed upward. Conversely bonds fell, the market fell, real estate fell and commodities rose. That leaves only gold and silver as viable alternatives. Rising rates are accompanied by inflation and FED aggregate creation. Bankruptcies increase, earnings fall, costs of carrying debt increases and these factors will drive the dollar lower forcing foreigners to sell falling dollar assets. That will be followed by a liquidity crises and debt default. Then something is going to happen that we have not experienced since the 1930’s when FDR stole our gold and that is the ultimate flight to quality. The only monetary unit of value and for 6,000 years the only real money.

 

            Canada has been selling off its citizens’ gold for 20 years and now it’s all gone except 100,000 ounces of gold coins in reserves in Ottawa. They’ll sell them and that will be end of it. The funds probably will be used to make life easier for native Canadians.

 

            The NYC, AG, Eliot Spitzer’s office is being deluged with letters, calls and E-mails regarding the silver manipulation that has been going on since the early 1980’s. As we have said over and over again, the SEC, NASD, CFTC and other law enforcement agencies have simply refused to investigate this crime. As we said, the SEC, NASD & CFTC only pursue small brokers, brokerage houses and penny stocks but can not enforce the rules on silver and gold. Our country is run by criminals who should be dragged from office and shot, summarily.

 

More for subscribers....

 

MIDDLE EAST

            Europe is suffering an oil shortage because Russian exports through the B0sphorus Straight have been reduced due to weather and the enforcement of strict regulations. European oil sources suspect the real reason is an effort to reduce traffic over-time because it competes with the US-backed pipeline being laid between Baku in Azerbaijan, through Tbilisi, Georgia to Turkey’s loading terminal at Ceyhan on the Mediterranean. This may in part explain why Exxon Mobil and Chevron Texaco lost that lease in Sakhalin. The new pipeline run by BP will pump one million barrels of oil a day. Tankers have been waiting weeks to transit oil and of 1.8 million tons only 300,000 tons was allowed to move. If this escalates it could lead to war with Russia.

 

Afghanistan’s finance minister has asked G-7 representatives for $28 billion as his country supplies 70% of the world’s heroin.

 

 

CHINA

            The People’s Daily in Beijing reports China might revalue its currency in March, lifting the value of the ranminbi by 5% against the dollar. That means they’ll be buying less Treasury paper and inflation will rise in the US because Chinese goods will be more expensive in the US.

 

JAPAN

            Lawmakers authorized $200 billion in yen to intervene and support the US dollar.

 

More for subscribers....

 

                                     ** Receive an Introductory Copy of the IF -- See  Below **

                Full 30-page issue of this newsletter available to subscribers only

 

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.

                                                            *****


-- Posted Thursday, 12 February 2004 | Digg This Article



Special Offer:
CGI Central - custom CGI and PHP scripts

** Receive an Introductory Copy of the IF -- Please Use the Form Below**

Required Fields marked with *
*Name
Please enter your first & last name.
*Email
E-mail where free issue will be sent


Please allow 24 hours for a response to your request.



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.