American’s have lost control of their government. They no longer have any voice on how their government operates. Ninety percent of our House and Senate and our executive branch do not have our best interests at heart.
All branches of government are run as secretly as possible and some in complete secrecy to the detriment of our people. Our government is run by a shadow government from behind the scenes as Dan Smoot said so many years ago. Perfect examples are the CIA and FEMA. Back in 1979 President Carter instituted an executive order, which rolled many of the disaster agencies into FEMA. Today it is a 7,500 member agency including disaster-ready reservists. Its new role, in addition to disaster relief, is related to terrorism and civil unrest. Now its new duty is to assume the safety of our government. If their performances in the hurricane region are an example, we can kiss our government goodbye. What FEMA has the power to do is take over the reins of government and implement a dictatorship. You name it and they can do it. Worse yet, FEMA’s powers did not come from Congress; they came from an elitist President via executive order. This turkey farm is run by unelected officials who happen to be political trash. These political appointees can become dictators. Of course, the shadow government behind them all is really pulling the strings. Thus you have to observe their every action to determine what they are really up to. Needless to say FEMA is no longer a disaster agency. It is where political favors are dumped and it is a housing for dictatorship whenever the elitists decide to make that move. It is also being used for clandestine operations and preparing for that national emergency that was planned many years ago. Why is our Congress sitting on its hands when FEMA spends over $1 billion a year on operations they won’t explain? That is because our Congress responds to the highest bidder and the elitists have an endless supply of money. Americans know very little about FEMA and that is deliberate. The media hides FEMA by not talking about it and its executive mandate of control. For 25 years FEMA has tried to overturn the Posse Comitatus Act by using the military in domestic law enforcement. A good example was recently in New Orleans when FEMA tried to force Governor Blanco to give control over to law-enforcement and the National Guard and Reserves. FEMA held up aid to the hurricane region for four days trying to get the governor to succumb. She did not and FEMA and the people of Louisiana were the losers. How dastardly can you get?
FEMA is a backup government for elitists. It was created to control the American public. It is the enemy.
The economy has begun to slow as real estate for sale inventory rises. Until at least next June the economy faces not just this natural slowing but also higher energy prices, increased interest rate costs and 14 million taxpayers who will be hit with the AMT, the Alternative Minimum Tax on 1/1/06 for an average of $2,000 per household. During that period inflation will rise and wages will remain stagnant. That also means higher unemployment and lower house prices. All of the above are going to take a toll on consumer spending, thus we expect the economy to slow over the next nine months. We see GDP slipping to 2.75% growth, which is just above recession level. We will update in a couple of months.
Consumers are scrambling to lock in energy costs even at these elevated levels. In New England heating oil is $2.61 a gallon up from just $2.00 a week ago and $1.00 higher than a year ago. Energy costs are going to cost the consumer dearly this winter and it will affect the economy.
The Administration has gotten nowhere trying to get the Europeans to help form a worldwide coalition to stop Iran’s pursuit of nuclear power. India, Russia and China have rebuffed a Bush proposal to bring the issue before the UN Security Council for possible sanctions. Iran has not broken any agreements and is operating within guidelines. Many are concerned that a few years down the line, when they can, they will go in the direction of nuclear weapons.
Not only has our President by executive order allowed contractors to pay below prevailing wages in the crisis torn hurricane region, but also they have suspended normal federal contracting rules. Hundreds of millions of dollars in no-bid contracts have already been let out and millions more are to flow to the private sector in the weeks and months to come. Leading the charge are Halliburton, Bechtel and Fluor. The Feds, FEMA are shoveling money out the door and the lobbyists and connected companies will make a fortune. When all is said and done more than $150 billion of taxpayers’ funds will have been spent. The bulk of the contracts will go to elitist connected companies and campaign contributors. They will make fortunes.
There is no question in our minds that non-action and obstruction by FEMA was part of a plan to exert complete federal power over operations. We mentioned that last week when FEMA-Bush and the neocons tried to force Louisiana’s Governor to allow FEMA to take over and control all law enforcement. This would set a precedent for violating the Posse Comitatus Act. They also wanted the American public to accept the concept of total federal control as the only answer to disasters or the control of civil unrest.
Mr. Bush expressed his height of arrogance when he said he would personally lead an investigation to see what went wrong in the aftermath of Katrina. We wonder does he fashion himself as Caligula or Nero?
What do you do if you believe that interest rates will be substantially higher in five years as we do? You certainly do not buy bonds. Inflation will be substantially higher so, again you do not buy bonds nor stocks nor real estate. What you do is buy commodities and gold and silver just like you did in 1976. People do not get it yet. They do not believe the rigged BLS CPI figures but they want to believe. Inflation is already higher than what we are told it is. It is a fraud and people are finally realizing it. That is why people are losing confidence in their government. The only way to describe what is going to happen to gold and silver related assets is exponential. You are not going to believe what you are going to see.
Lo and behold the Federal Reserve Bank of Pittsburgh says it will restate over four years of financial results, mainly due to derivatives accounting errors, reducing earnings by some $21 million. Six of the twelve FHLB regional member banks are now restating earnings for similar reasons.
We do not see how we can avoid a credit derivatives event. The bubble has become too large for transparency of any kind and no one fully understands exactly what the counter party risk really is. Part of the time people do not even know who they are dealing with.
On Wednesday the Fed added $6 billion in repurchase agreements causing the repo pool to increase to $93.792 billion. That gives the Fed’s agents about $135 billion to play with for the day. This means if the Fed wants the market to stay at 10,600 or 10,700 it will stay there. If they want to manage it back to 10,300 they’ll do that. What you must understand is that the markets are totally manipulated. The problem for the Fed and the Working Group on Financial Markets is they cannot do this indefinitely - too many people are going to find out and leave the market. There is also talk of impeachment of President George Bush by the Democrats. If that goes forward the management-manipulation could very well be exposed. A financial event like another derivative crisis could also trigger exposure of the manipulation. The newsletter writers, 98% of which do not believe in manipulation and a good part of Wall Street, cannot make any kind of informed decisions. They do not understand what is being done to the markets. When the fundamentals and technicals don’t mean anything anymore it’s all psychological warfare, and we know all about that game.
GE is set to spin-off its industrial businesses. They intend to blow-off parts of the GE brand name, which employs 100,000 Americans. This is in spite of a 24% increase in income in these divisions. It is dump time. The manufacturing divisions are being sold to then ship them to China. Americans when are you going to wake up?
Ford has taken back 23 Visteon factories and offices and is preparing them for sale. All production and jobs will eventually be shipped to China.
The budget deficit for August was $50 billion up from $41 billion in 2004. Receipts rose 12.9% but outlays increased 14.8%. The 11-month cumulative deficit was $352.6 billion, down from $437.5 billion. That is with income tax receipts up 15.3% and corporate income taxes up 41.3%.
GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
We gave two signals on April 12, 2000. One to exit the stock market and the other was to buy gold and silver related assets. That puts us in the sixth year of a bear market in stocks and a bull market in gold and silver. Most market players are still down 40% and most gold and silver asset buyers are way ahead.
Investors are finally getting the message; gold is a real currency not fiat money. If you want to preserve economic value you buy gold and silver.
Market sentiment is expected to continue to erode as it becomes more obvious that our stock market is being manipulated by the Working Group on Financial Markets and the FED. Since 2000 the DOW is off 5% and gold is up 60%. Phase one of the gold and silver bull market has not as yet been completed and we believe as phases two and three are completed gold and silver will reach towering heights.
Not only will physical demand continue to accelerate but gold is about to be viewed as an alternative investment. There is a gradual decay in sentiment for fiat currency investments, which is giving an important lift to gold. Us debt has reached 320% of GDP, a level that surpasses what we saw prior to the onset of the Great Depression. The continued 12% increases in money and credit cannot help but devalue the dollar and increase the value of gold. Unfortunately, there is no alternative currency to the dollar except gold. The rest are various forms of fiat currency.
Sweden says it will sell 10 tons of gold over the next 12 months and reinvest the proceeds in securities dominated in foreign currencies. This is what England and others have done and as a result they have lost billions of dollars. The sale will take place between September 27, 2005 and September 26, 2006. The bank said it has sold 15 tons of its gold reserves over the past 12 months. We find this unsurprising.
Goldman Sachs, gold suppression cartel member has left its average gold price of $430.00 for the year intact but says gold will trade between $425 and $475 an ounce. This result is based on a lower dollar.
The latest from GFMS is that gold should be $500 over the next six months due to record low gold production in South Africa probably below 300 tons.
Scotia bank says following record-setting demand for physical bullion in the spring, the summer slowdown was expected to be a welcome relief to traders. Price stability between $417 to $445 over the past several months has created a positive frame of mind and confidence to buy at any signs of weakness. Asia and the Middle East were very active and their best season is in front of them. In Iran there has been better buying due to higher oil prices. In Iraq it is a flight to quality and safety. Thai markets are driven by rumors of a clampdown on gold imports. China plugs along and India is a giant and will be even better in the final quarter of the year. Ramadan the holy month will soon be upon us with the celebration of the post-monsoon festival season.
The gold market in Saudi Arabia is robust and moving upward. It is rated good to excellent. Bullion imports are climbing strongly and jewelry shipments from Dubai are increasing. Saudi Arabia’s GDP growth is up 25% and inflation is 1%. Due to higher oil prices for several years out we expect volume of gold purchases to soar.
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