During 2003, the US dollar lost the following values versus these currencies. Canadian dollar up 21%; Australian dollar 34%; South African rand 28%; Chilean peso 22%; Swedish korona 21%; euro 20% and the Brazilian real up 22%. Gold was up 20% versus the US dollar to a 14-year high.

            A miracle, we received the PPI, the Producer Price Index, a month and a half after it was due. Producer prices rose 0.6% in January, which is a gross falsification. The core rate was 0.3%; it was up 0.2% in December. Intermediate goods prices rose 0.8% and core goods prices 0.8%. Crude goods prices rose 2.8%.

Fannie Mae only lost $10 billion last year on derivatives.

            Bank of America is only gong to cut 13,000 jobs as a result of its merger with Fleet Boston Financial. That is 7% of their combined workforce.

The IRS reported 139,379 audits of taxpayers earning $100,000 or more in fiscal 2003, up 24% from the previous year. For all taxpayers total audits were 849,296,up 14%. The emphasis by the IRS is on small businesses and the wealthy, as corporate America goes virtually untouched.

            Old friend and workhorse Joe Granville says, “Now the market is being set up for a big drop. Take every opportunity to go into cash!” We agree with Joe but we prefer gold and silver assets. The last time Joe and we were together is when we made our historic recommendation on 4/15/00 to get out of the market and buy gold and silver related assets. This is the second leg down in the bear market, which will see the 4500-5500 levels on the Dow challenged. Get out.

            It won’t be long before professions realize that wholesale price index’s are bogus, such as the PPI. Once that sets in interest rates will rise. That will slow down the economy and unemployment will rise. It is now only a matter of when.

            On CNBC, Jan Hatzius, Senior Economist with Goldman Sachs said US GDP growth may have been significantly overstated in 2003. He said it doesn’t match up that the US is the only country seeing strong GDP growth without any job growth. The main evidence that GDP may be overstated, Mr. Hatzius said, is because the numbers don’t match up with the Federal Reserve’s industrial production numbers. In other words, the Bush neo cons are lying.

            On CNBC, former presidential advisor, Richard Clark, tore George W. Bush a new one. He said, “I find it outrageous that the President is running for reelection on the grounds he’s done such great things about terrorism. He ignored it.” He ignored terrorism for months, when maybe we could have done something to stop 9/11 maybe. Well we’ll never know. Clarke is trying to tell us it was a set up. Bush did not want to know because the neo cons had planned the whole event. This is devastating. If we lose Bush we get another illuminist – how terrible. There is no question that Bush and the neo cons are totally out of control. Clarke, the man designated by the neo cons to combat terrorism, has exposed it all from the inside. This, of course, is great for precious metals because it was part of our story, and that is the gold and silver prices have been rigged. When that is exposed their prices will explode. And, it will be exposed.

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GOLD, SILVER, PLATINUM, PALADIUM AND DIAMONDS

De-hedging is expected to be 11 million ounces this year versus 10 million ounces last year. Many producers who are locked into contracts to sell gold at lower-than-market prices are unwinding these positions, de-hedging. Hedging has depressed gold prices since 1987 and now that the metal has to be bought back or delivered into, producers are losing profits. Even the de-hedging of 11 million ounces is inadequate. They are still tending to play the short side of the market on balance. Seventy percent of the de-hedging has been done by Newmont, caused by acquisitions, Anglogold, Barrick Gold and Placer Dome. Conversely, these and other hedgers, forced into hedging due to financers, could add two million ounces to the global hedge book this year. How this works is a producer goes to a bank or investment-banking house for money to start or continue a project. The lender says fine, but to protect us you have to sell forward production now, otherwise you do not get the money. We do not believe the de-hedging figures because the figures on the books of bullion banks are staying the same or rising. Again GFMS and Anglo are lying.

            As we predicted there is little silver for sale and there is big money looking for delivery. The stage has been in the process of being set since last fall. As deliveries come due, as the year wears on, pressure for higher prices will be dominant. The government manipulation and fraud will be exposed over the next year. Price increases will be relentless. Fund activity has actually been waning and liquidation of long positions has brought their total down to about 1,700 contracts. In their place commercials have set over 2,200 new long positions. The funds will be in on the long side again driving prices higher and the commercials are hedging for delivery by setting long positions. The commercials are terrified and you can bet they will be big buyers all the way up. Their terror is professional, they are not taking the losses, our government, that is you and we are. The upside will be a tug of war with the longs winning again and again. This is not going to end. The demand for silver is relatively inelastic and there is little or no physical inventory. The commercial short position is almost at the high, set last fall and we see some covering as they set longs. The losses being taken are large. We wonder what the Treasury thinks of that. They cannot be too happy. If they are not happy now wait until they see what is in store for them. There is no physical inventory. Our predictions’ years ago were spot on and they will continue to be correct. Worse yet, rumors abound that the Chinese have tied up 75% of the world’s 2005 silver production. This is explosive if true. They certainly need the silver, but they also want to dump dollars. We are getting closer and closer to a silver explosion. Backwardization is just around the corner. May silver will soon start to trade over December. When that happens silver will accelerate to the upside. Many of the precious metals sites on the Internet, who have been so wrong about both silver and gold, are going to lose their credibility and viewership. We recommend Goldseek.com and Silverseek.com. These are the best sources for true unbiased information. There is absolutely no question that silver will test its 1980 high next year and many investors will get wealthy in the process.

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-- Posted Thursday, 25 March 2004 | Digg This Article