The economic recovery is fading and house prices have generally lost appreciation and in some of the hot areas, they are falling. Spending is still rising as is debt and savings are non-existent except among the rich. We already see near record political disaffection and it will get lots worse before the election. The social fabric is already stretching as income increases only come to the top 15% of earners and the wealthy. This is accompanied by the tempestuous issues of Iraq and illegal immigration. Wait until the public finds out our elitist masters want to merge us with Canada and Mexico into a North American Union, which will relieve us of our sovereignty. This will be the next big issue and it’s already upon us.

            Americans are finally noticing the great inequality between the rich and the rest of the population something Europeans have been very aware of for a long time. It really paints a stark picture for those without a high school education who can only compete at a very low level and among the uneducated illegal aliens. If that wasn’t bad enough, annual income of Americans with college degrees has fallen relative to that of high school graduates. Plus, the college graduates end up owing $25,000 net after they finish university. Their jobs and their future is being outsourced. It certainly makes our young think twice about spending four more years in school and creating that debt. The wealthy don’t have to worry about that. Americans in the middle are getting squeezed. The American dream no longer seems attainable to many. Since 1980 there has been a continuous trend of concentration of income at the top and it’s gotten much more obvious over the past six years. The share of aggregate income going to the highest earners has doubled from 8% in 1980 to 16% in 2004. That going to the top 1% has tripled from 2% in 1980 to 7% currently. And, that going to the top one-hundredth of 1% – the 14,000 taxpayers at the very top of the income ladder, has quadrupled from 0.65% in 1980 to 2.87% in 2004. We call this polarization and it is what starts revolutions – violent and non-violent.

            Unless free trade, globalization and unbridled illegal immigration are stopped, growing inequality will get worse. This is the key to stop America’s decline.

            No American can plan for the future anymore. His job may be outsourced to India or Ukraine tomorrow or his plant may be in China next week. His pay may go from $50 or $25-an hour to $10 overnight. There is no safety because our government has abandoned us for dreams of a New World Order and world government. Who wants to buy a house and lose it a year later? How can anyone save for anything anymore? From day to day workers and professionals don’t know if they’ll have a job tomorrow. An economy cannot persist under such a chaotic economic and social climate. It can only lead to chaos. If the wealthy one-worlders have their way, we’ll all become indentured slaves. Free trade, globalization and illegal immigration have fractured the traditional link between skills and wages and risk and reward.

            We are headed toward serious economic, social, financial and political problems. Americans had best wake up fast, and throw almost all the incumbents in Washington out of office in November. If they do not we are afraid this will all be settled in the streets.

            Our best estimate for the S&P 500 for 2007 is 935 and for the Dow 8400. That is barring some major event.

            You do not have to be a genius to predict higher interest rates. The BLS says inflation is 3 ½%. We and all informed economists and analysts know it is considerably higher than that. Mr. Bernanke, Chairman of the Federal Reserve, knows that as well. That is why at the IMF Conference of the American Bankers Association that he said, “We will be vigilant to ensure that the recent pattern of elevated monthly core inflation readings is not sustained.” That means higher interest rates, probably 5-½% by September and probably higher rates thereafter. The problem is those higher rates are not going to stop the climb in inflation unless the Fed stops increasing money and credit and that cannot happen because the economy will collapse.

            The fall in emerging stock and bond markets as of late has caused a surge in dollar repatriation, which has in turn strengthened the dollar. These were fear sales. A flight from risk into what American international investors perceive to be a safer dollar. Their confidence is misplaced because soon the dollar will fall again. Now you can better understand why the dollar over the past month rallied from 84 to 87 on the dollar index.

            The Fed and the dollar face a period of no less than one-year and probably 1 ½ years of ascending inflation just from what is already in the system in the form of excessive money and credit. This means the purchasing power and value of the dollar has to fall. It cannot be any other way. That means the value of everything denominated in dollars will fall, stocks, bonds, real estate, etc. We can see fear spreading through the international ranks. The ECB, the European Central Bank, say that hedge funds have created a major risk to global financial stability. Then there is the derivative bomb and the possibility of a bird flu epidemic. Who can handle a collapse in the $3.7 trillion derivative market? The only way to settle global imbalances caused by the US and the American economy is to allow everyone to take losses and few will want to do that.

            What we are witnessing is the end of the post WWII Britton Woods era and the collapse of the dollar as a world reserve currency. Our elitist leadership, through their greed, have destroyed the most productive, prosperous nation in history. We were once admired but now we are disliked and scorned because our elitists are financial predators, warmongers, torturers and murderers.

            The chosen vessel is casting upon rocky shoals and in full view of anyone who cares to watch, the Illuminists are panicking in full public view. They created this monster, they crippled the American warhorse in order to implement world government and now they are afraid it is out of control and won’t work. They are screaming out, how can we retrieve what we had? They can’t, and they know it, and if they are found out it won’t be simple exile – it will be the gallows.

            How can America service a debt of $6 trillion a year that is growing exponentially at $1 trillion a year? It can’t and that is just the service, the principal will never be paid and that means bankruptcy. That means you want to own gold – the only real money. All other creditor currencies will be hit by America’s bankruptcy as well, so their currencies in terms of gold will fall as well. America will no longer be buying all those goods and we’ll see massive unemployment throughout the world. That will finally be exacerbated by protective tariffs. The only difference between now and the 1930s is now it will be worse.

            The downward slope of the American economy has begun with falling house prices and a falling demand for manufactured goods. Consumption continues to rise as savings fall to -1.7%. America is borrowing 80% of the world’s excess savings and they are not capable of paying those debts back. The third and second worlds are keeping Americans living in a style to which they have become accustomed. Then again, what’s a trillion here or a trillion there? Sooner or later some foreigners will smarten up and withdraw their loans and convert out of the dollar into gold and other currencies. There is no solution and there is no turning back. The elitists know this and the best they can hope for is a slow disintegration of the dollar. Most people do not realize it, particularly Americans, but since 2002 when the dollar index was at 120, it has lost about 30% of its value at the current level of 86. All elitist international institutions now tell us the dollar has to fall; the only question is how far and how fast? When the dollar breaks 80 and goes into free fall, the stock, bond and real estate markets will do the same as gold and silver skyrocket. 

            At 80 the dollar will have had a 30% correction. It has 30% to 70% to go. Thus far, the only place Americans have felt it is in energy products. That will soon change as nations who export to the US stop buying dollars and allow their currencies to appreciate. They do not want any more dollars if they can help it. Those more expensive exporter currencies mean fewer goods will be purchased at higher prices, which means more American inflation. In just 4 ½ years Americans have had a drastic fall in global living standards and they really haven’t seen anything yet...

GOLD, SILVER, PLATINUM, PALADIUM AND DIAMONDS

 

            Yes, the members of the Central Bank Gold agreement could sell 209 tons of gold between now and September 30^th, although we do not believe they want to be sellers. If they wanted to be they could have sold near recent highs. Even if they sold in concert the Chinese, Iranians and Russians would be waiting with open arms.

 

            The biggest sellers this year were France, the Netherlands and the European Central Bank, which no longer has 15% gold backing on their euro.

 

            We also see Middle East governments and investors adding to their gold investments. In the first quarter gold purchased for investment was almost 200 tons, with industrial and dental at 105 tons and jewelry at 535 tons. We see a larger interest in investment demand as India and others diversify from jewelry.

 

            Now that the Indian government allows gold bullion to be purchased people are quickly purchasing just in case the government changes the law again. Many investors also believe gold is headed higher, especially after a $180 correction in the space of two weeks. The difference in the cost of jewelry can vary from 4% to 20%, and there are large buyers who do not want to pay that premium for fabrication and artistic qualities. In addition, there are now three commodity exchanges that trade in gold futures contracts. There has been substantial delivery based on these contracts. Many are buying the gold ETF’s through their offshore banking accounts. We see this trend in gold bullion investment continuing, especially now that gold has had a large correction.

 

            The Golden Buffalo, the legendary symbol of the American West, will soon roam again, this time as the nation’s first pure gold coin. This week purchases of proofs went on sale.

 

            The coin will contain 1-ounce of gold and will be designated a $50-gold piece.

 

            This is the same design that is on the Buffalo nickel minted from 1913-1938. An Indian Chief will be on the opposite side.

 

            This is a 22-karat coin. The American Eagle is a 22-karat coin. The 24-karat coin is 9.99% gold and the 22-karat is 91.67 ounce of gold.

 

            It has been the pattern of commercials in the gold pits to sell with determination into rising prices as they attempt to cap the price rise and thwart the upward progress of gold. Once these pros see long and short term buying has been exhausted they launch a heavy attack to begin momentum to drive gold prices back down. This effort usually feeds upon itself and the shorts cover with profits. What is very unusual, and we pointed this out two weeks ago, that the commercials increased their shorts all the way down instead of covering. We have seen about 50,000 contracts covered but that is small so far. The specs and trading funds also bought on the way down in a small way, which is something that has not occurred before as well. The net effect on the way down was an addition of 700 shorts and 4,000 new longs. On an overall net basis 5,282 shorts were added. When commercials do this it is not normal. Profits are not the objective. They are acting under orders of the US government to bury the market. As we pointed out in earlier issues a number of commercial short attacks occurred in thin and illiquid conditions in the access aftermarket in an effort to affect Tocom. Overall sell orders usually come in lots of 100 or less, but not this time. There were orders all the way up to over 900 contracts. This action is meant to halt the upward movement of gold, which is mirroring the problems of the world monetary system. As we mentioned last week, this attack was initiated by the Bank of England to bail out short commercials in gold, silver and in commodities, as they were verging on bankruptcy. These events were coordinated with all participating central banks and their agents. The intent was to bail out the London commercials on the edge of default and to completely discourage investors from buying gold. Next came the PR, media, disinformation campaign, the calls for $350 gold, etc. Their plan worked well and you’ll see it used again. The 500 tons of gold sold from the IMF, belonging to American citizens, via the Bank of England shows you who the ringleader of this criminal enterprise is, your government, your enemy. On the other side of the issue are the big buyers who have a great opportunity to buy more gold cheaply. Next comes the consolidation and then the powerful moves back up again.

 

            One of the largest diamond firms in the US, Fabrikant, is said to be in danger of collapse and insolvency. They have annual sales of $1 billion. They owe $200 million to banks and $200 million to suppliers. In Israel, Fabrikant owns 50% of Fabrikant and Salant. The other 50% is owned by the Avner & Yigal Salant families. It is number 4 in the industry in Israel.

 

            It is now a proven fact that either the US government is a subsidiary of Goldman Sachs or vice versa. We believe it is Goldman that will be running the government, not the neocon branch of the Illuminati...

 

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-- Posted Sunday, 25 June 2006 | Digg This Article

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