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International Forecaster April, 2004 (#1) - Precious Metals & More

By: Bob Chapman, The International Forecaster



-- Posted Thursday, 1 April 2004 | Digg This ArticleDigg It!

THE INTERNATIONAL FORECASTER

APRIL 2004 (#1) Vol. 8 No. 4-1

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)

 

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.

 

                                                                        *****

 

Our favorite Internet sites for gold and silver information are Goldseek.com, Silverseek.com and CapitalUpdates.com.

 

                                                                                                *****

 

Col. Donn de Grand-Pre., US Army (Ret.), has written three books on 9/11 and we think you might be interested in reading them. They are: “Barbarians Inside the Gates”, “The Vipers Venom” and “The Rattler’s Revenge”.  They can be obtained by writing to P. O. Box 1124, Madison, Va 22727. Send in care of Grand-Pre Publishing, Ltd., include $30.00 each for the first two books and $45.00 for the third.

Incidentally, we have no financial back door arrangement with any publishers.

 

                                                                        *****

 

We now recommend the “Brotherhood of Darkness”, a fine book to add to your knowledge of the elitist conspiracy. We have known the author, Dr. Stan Monteith, for many years and believe this is another gem on the subject.

 

BROTHERHOOD OF DARKNESS

This unique book identifies the covert groups that rule the world, and the secret that has motivated them down through the centuries.

 

Call 877-479-8178 to order the book ($12.95), the video, ($19.95) or the audiotape. The Brotherhood of Darkness Special includes all three for $29.95.  Plus a free Silver Dollar is you order from this toll free number.

 

Listen to Radio Liberty roadcasts 5 hours weekdays at www.radioliberty.com, or to our shortwave broadcasts on WHRI at 5.745 MH weekdays from 3-5 pm and 8-10 pm Pacific Time. 

 

                                                                        *****

 

Have I got a book for you! You think you know all about money? Well, so did I – until I started reading The Creature from Jekyll Island; A Second Look at the Federal Reserve, by G. Edward Griffin. Sure, I had a good working knowledge of how our banking system functions and how money is created out of nothing to make loans, but I was blown away by the magnitude of the scam as it has evolved over the years. What a wild ride through history this is as the author reveals where money comes from, where it goes, and who makes it. The money magicians' secrets are unveiled, and you will get a close look at their mirrors and smoke machines, their pulleys, cogs, and wheels that create the grand illusion called money. A dry and boring subject? Just wait! You'll be hooked in five minutes. Reads like a detective story — which it really is. But it's all true: the cause of wars, boom-bust cycles, inflation, depression, prosperity. Your worldview will definitely change. This book is available on the Internet from The Reality Zone. The link is http://www.realityzone.com/creature.html.

 

Special Offer: You may also order it by calling Midas Resources Inc. at 877-479-8178. Midas Resources will give you a silver dollar from the early 1900s (a $12 value) just for purchasing the book at its normal price of $19.95.

 

 

US MARKETS

An ad was run in the NY Times by Business Leaders for Sensible Priorities likening President George W. Bush to a corrupt CEO who has forfeited public trust. They said Bush’s case for invasion “was built entirely out of falsehoods, and the ad stated,  “state sponsored deception” underpinning the conflict dwarfed the damage caused by the series of corporate scandals that recently rocked Wall Street.”

 

            Malcolm Knight of the BIS says global growth has been driven by the US’s expansionist fiscal policies, overall accommodative monetary polices around the globe and an unprecedented investment boom in China. He said, “Expansionary macroeconomic policies will at some point have to be reined in. China needs to moderate to avoid credit expansion that could create an inflationary boom and bust. How these adjustments evolve over the next few years will have a major influence on global bond markets, on asset prices in other financial markets and on financial institutions throughout the world.  It almost goes without saying that a long period of very low interest rates, like the one we’ve been experiencing, creates new types of risks in the financial system. One aspect of such risks is high leverage. There is evidence that carry-trades are indeed rising as various players take on increased duration risk. One piece of evidence that suggests that markets are to some extent driven by favorable liquidity conditions is the unusually high correlation of price movements across a very broad range of assets. Any sudden unwinding of positions by leveraged investors would itself accentuate volatility and perhaps trigger further adjustments by the wider investment community. Higher interest rates could well undermine present asset valuations. Debt service burdens of households and corporations could rise and lead to a deterioration of loan quality across the financial system.  Financial stability issues occupy a prominent place on the agenda of the central bank governors when they meet every other month at the BIS, right here in Basel. We believe the central bankers are getting very nervous.

 

There supposedly is no inflation, but even if you take the government’s bogus figures you have 1.7% and if you add in food and energy you have 3.7%. That is real inflation and we can assure you it is going to get much worse as the increases in commodity prices work their way through the pipeline. Our figure on inflation is 8%. This will increase as the cost’s rise on airline tickets, gasoline, autos and trucks, industrial equipment and capital goods. The reality of the CPI point out how ludicrous the index is; what a lie it is. In addition, as the dollar falls imports become more expensive creating more inflation. In turn, domestic companies will raise prices. You are already seeing that in steel, rubber and other commodities.

 

            Former Treasury Secretary Lawrence Summers says, “the US is increasingly jeopardized by mounting debts that make America dependent on Asia to fund its spending. There surely is something odd about the world’s greatest power being the world’s greatest debtors.” He suggested the Bush administration, which has focused on cutting taxes as deficits soar, was putting off a day of reckoning for America that will make the process of dealing with it all the more painful and expensive. We can promise you tax increases are on the way if the Democrats are put into power. Interest rates should rise in 4-5 months.

 

            Credit card delinquencies rose to a 4.43% on all accounts in the three-month period from 4.09% in the third quarter. Delinquencies on other types of consumer loans fell to their lowest level since 1995.

 

            Microsoft was ordered to pay $609 million, license secret programming information to competitors and offer a version of Windows without its digital music and video player. The European Competition commission has finally held Microsoft to account for operating a monopoly.

 

            The Pentagon has drafted plans to withdraw 50% of its forces in Europe or 71,000 troops based in Germany and it is about time. Since 1992, there has been no reason to keep them there. W must say though it was great duty. Instead, bases would be moved to Bulgaria and Romania. Bases have been newly set up in Uzbekistan, Tajikistan, Kyrgyzstan and Afghanistan to protect the oil interests of George W. Bush and his elitists. The idea is to have skeleton bases and use rapid deployment forces.

 

The Central Fund of Canada holds 16.83 tons of gold and 841.5 tons of silver, which is probably the second largest private silver hoard.

 

            We are on the radio frequently and people ask why are gold and silver going up? That is simple, the dollar has fallen 30% in two years and has another 40% to go on the downside or from euro $1.22 to euro $1.60 to $1.70. We have gigantic current account and fiscal deficits; mortgage defaults at record levels; terrorism at our doorstep; a massive exodus of companies and jobs from our country via free trade globalization and outsourcing; factory jobs are bleeding to death; record mortgage defaults; personal bankruptcies and credit card failures. Consumer debt is unbelievable and the quagmire knew as Iraq is costing America a fortune. How is that for a start?

 

            Gold open interest is now 294,000 contracts. We are poised to make a run at $430. Silver is $7.90 as we head to $10.00. The markets are telling people the government, Wall Street and your media is lying to you. Silver’s strength is relentless and gold is falling right in line. Open interest is 118,426 contracts. 

 

            It is expected that Vietnam will consume 62 tons of gold this year.

 

More for subscribers....

 

GOLD, SILVER, PLATINIUM, PALLADIUM AND DIAMONDS

 

            The gold market has entered a new phase. Both physical buyers, funds and speculators now know the gold cartels’ days are numbered and the cartel is very well aware that their demise awaits them in the immediate future. As we get nearer to the end of the cartel’s rein volatility will increase dramatically. We are starting to see that happen more frequently during the trading day. Perhaps on any given day gold should have been up $10.00 or silver $0.20, yet from the bashing they are exposed to gold only rises $3.00 to $5.00 and silver $0.10. That is okay because every day we take hunks out of their armor and their reserves. Eventually we will have our way with the cartel and it won’t be pretty. Gold is now moving on its own. It has cut loose of the specific dollar ties. This will become more evident as gold breaks out in other currencies. Once the market believes there is no safe currency play gold will fly.

 

            Silver has gone into backwardization in London and that is a very important event. London is scrambling for silver bullion for delivery. Every day new large buyers show up in the silver market and we expect that to increase as time goes on.

 

            We have continued bombings in Iraq, bombings in Spain, attempted assassinations in Taiwan, violence in Kosovo and the dollar rises slightly. The real recipient, for the first time in almost 20 years, has been gold, up seven days in a row. Gold has again become the safe haven currency. As long as American foreign policy pursues greed, profit and control, these kinds of events will continue and gold will become a stronger currency and a place of refuge.

 

            Platinum hit $924.00, its highest level since March 1980 when the metal touched $1,047.50.

 

            The rupee value of gold and silver imports from April through November rose 42%, passing machinery to become the country’s third largest import.

 

            Gold consumption of the United Arab Emirates is expected to increase by 10% in 2004 over last year. That is about 100 tons up from 90.3 tons.

 

            Japan’s gold imports surged 319% in January from a year earlier, posting sharp gains for the third consecutive month.

 

            Last week’s gold close was the second highest in 15 years despite commodities correcting for two days in a row. More important, and as we predicted, the price of gold broke out to 349.5 euros, a new 15 year high. Once it breaks out against all currencies gold will be traveling on its own. Gold rose in spite of silver being hit by a 2.5 million ounce sell order emanating from Russia. Silver was up $0.13 after having been up $0.17. That is mega strong in the face of that large sell order. The week ended with gold open interest at 283,000 contracts and silver at almost 120,000 contracts. Traders in silver and the market makers are in denial. Silver for delivery is almost unattainable. Silver made another weekly high close. We are going to have the silver shorts for lunch as we predicted long ago. The dollar is topping out again and on April 5th we believe both gold and silver will begin major rallies. The only resistance is the gold and silver cartel and the market will simply sweep them aside. That is why you miss too many opportunities trading these markets. Get long, stay long, and stop listening to these newsletter writers and market timers. Both gold and silver are going up on higher volume than they recently went down on. We are seeing sizeable buy side orders in both metals. It is finally getting exciting.

 

            Vanguard Precious Metals fund has announced plans to reopen the $615 million fund and broaden its investments to include firms in non-precious metals or minerals. That would include nickel, copper and zinc, etc. The minimum investment is $10,000. This is probably just the beginning of fund expansion in this bull market that could last 6 to 20 years.

 

More for subscribers....

 

 

JAPAN

            Japan’s debt outlook was raised by S&P on AA- to stable from negative, which is a farce. They printed enough yen to buy $280 billion in the market in the past 14 months and they have 4400 billion more to spend to support the dollar if they choose. We see that as far from stable. In addition, they have a public debt of 144% of GDP, which is far from stabilizing. We believe our government had something to do with this decision by S&P because the change was not warranted.

 

            Japan’s trade surplus rose 14.6% in February or $11.76 billion. 

 

Japan and China are the main recipients of US tax cuts and monetary stimulation. Japan is surging ahead so fast that we could shortly see the yen at 100 to the dollar. After the fiscal year ends on 3/31/04 the government will defend the yen at 100. All of you who went long the yen at 109 just two weeks ago will have big smiles. The rising yen will cut the price of imported materials, particularly commodities, which are sold in dollars. Monetary authorities are starting to exit from their massive intervention policy, and they will sell the yen only to slow rapid gains. They cannot continue to support the dollar and China is a seller, which means April is going to be a disaster for the dollar. No one has ever devalued there way to prosperity but the fundamentals for the dollar are simply terrible. Finance ministers and central bank governors meet in  Washington next month and we believe they will keep quiet and let the dollar do what it is going to do, which means fall. That means $512 gold and $10 to $12 silver. China will continue to get rid of dollars by buying things and they will not revalue the yuan in the foreseeable future.

 

                         ** 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, 1 April 2004 | Digg This Article



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