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-- Posted Monday, 7 August 2006 | Digg This Article
The following are some snippets from the most recent issue of the International Forecaster. For the full 21 page issue, please see subscription information below. AUGUST 5, 2006 THE INTERNATIONAL FORECASTERAUGUST 2006 (#1) Vol. 10 No. 8-1 P. O. Box 510518, Punta Gorda, FL 33951-0518 An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman E-mail Address International_forecaster@yahoo.com CHECK OUT OUR WEBSITE www.theinternationalforecaster.com RADIO APPEARANCES: If you would like to access my recent interview and future interviews on GoldSeekRadio please go to the following sites: The Webpage: http://www.radio.goldseek.com/ The Realaudio link: http://www.radio.goldseek.com/shows/18.02.2006/broadband.rm The Mp3 link: http://www.radio.goldseek.com/shows/18.02.2006/chapmanchan.mp3 Latest radio program was just posted You might want to listen to it: http://news.goldseek.com/InternationalForecaster/1153791991.php ***** US MARKETS
Vehicle sales may have been up, but only because manufacturers are cutting profits. Lower profits mean lower earnings and a lower stock market. Auto and truck production have been in a bear market for 4 years and only giving vehicles away has kept assembly lines open. Lower profits lead to lower tax revenues and ever-higher deficits, both federal and state. Holding the dollar higher with higher interest rates is a lose-lose proposition. The rates allow the Fed to have some semblance of control in a market it no longer can totally control. The current account deficit is not going down, it is still going up and the Fed well knows that if that $3 billion doesn’t arrive every day the dollar is toast. That forces the Fed to buy more Treasury paper, monetizing those dollars and driving inflation higher immediately. As inflation increases so do wages and interest rates as well as gold and silver. Unfortunately, that is accompanied by a downward spiral into recession. That is then followed by a further spiral into deflation and depression exacerbated by unparalleled debt. While all this is transpiring we are losing the wars of occupation in Iraq and Afghanistan; Lebanon is in flames as its civilian population is exterminated and as the elitists plan to invade Iraq and Syria. Anyone who doesn’t believe gold and silver are going much higher is just plain dumb. The Department of Labor program does little to fund job training for the hundreds of thousands of workers affected by auto-industry layoffs and plant closings. What the Labor Department is doing is called “career advancement accounts” offering experimental grants to several states affected by the upcoming GM and Ford plant closings and shift reductions. This is so we can cut unemployment in India, China and Mexico. Under the grant program, workers would get $3,000 each, renewable once after a year, for job-related training and education. What a laugh - $3,000 isn’t nearly enough to move workers into quality long-term jobs, and would further erode an already weak system for reintegrating workers into the hollowed out economy. This is as cynical as it gets. Government simply washes their hands of a problem, which is part they fostered and created via free trade and globalization. What is even sleazier is that the announcement of the $3,000 payoffs comes just before the election. These people need counseling and re-education. They need a new trade or profession, not $3,000. What we are seeing is a play to dismantle established workforce-investment programs and slash $515 million for starters or 13% of their budget. This administration never ceases to amaze us. They are totally without feeling... The Fed has to have competitive interest rates to continue to draw $3 billion a day from foreigners to keep the US solvent. It was expected that the ECB would raise rates, but not the Bank of England. Those quarter point increased lend further weight to a ¼% Fed increase this month... In piecing M3 together it is not a pretty picture. When M3 disappeared in March, money supply was up 8% annualized. Over the past five months M3 is up 9.5%, plus credit creation that you see in each Saturday issue. That puts money and credit at 12% by our calculations. The Fed can read this and weep they haven’t hidden anything as far as our subscribers are concerned. All government agencies such as the SEC and CFTC, plus the privately owned Fed are acting to restrict the flow of information and that is a fact. John Williams, America’s best economist, says second quarter growth of 2.5% was really a minus 0.5%, when corrected for unusual inflation gimmicks used to understate GDP deflation. The production of statistics by government is a farce of lies based on rampant political manipulations... For the FOMC to stop raising rates for now this month in the face of continually higher inflation data is bound to seem to some policymakers like a big risk to take. We see another rise. If not, the dollar is headed to test 80 as the Fed has to increase money and credit even further... GOLD, SILVER, PLATINUM, PALADIUM AND DIAMONDS In the first half of the year Dubai gold sales fell 30% due to higher gold prices. 52% of retail jewelry sales are to tourists almost all from Asia. Indian gold sales in July fell 15% due to bomb blasts. People stayed home. As well, high prices entered into the equation. It looks like silver is the leader again, at least temporarily. It roared on Wednesday, up $0.51 to $12.17. We’ll feel better when we see it plow through $13.50. Gold was up strongly early on. They had it down to a plus $3, but it came back like a champion and held above $650 to close at $651.80, up $5.00. Gold and silver are the investments of a lifetime and interest stays flaccid. The dollar helped today by not staging a recovery rally and hanging at 84.83, unchanged. It won’t be long before we are at $730, and we can just short of guarantee you they won’t have another 500 tons for sale to smash the market with. One of the exciting things about silver is the drawdown in inventory, which is accelerating. On Wednesday another 838,801 ounces were withdrawn, leaving 99 million ounces. Dealers in the registered category gave up 631,727 from the registered category as 207,074 left the eligible stocks. Over the past two months 9 million ounces have disappeared. At the present rate of withdrawal Comex will be out of inventory by May 2007. Then there is no more. Gold open interest rose 2,051 contracts to 304,907. That is still a low figure. Silver open interest fell again, which denotes short covering on a price increase. It was off 457 contracts to 98,685. That is off 45,000 contracts from its high. Silver shorts are going to again have their heads handed to them. Finally overnight at Tocom open interest rose 1,078 contracts. Lots of short covering is going on in gold on Tocom, but even more so on the Comex. Tocom gold shorts added 2,727 contracts to 132,122 and in silver they reduced shorts 68 contracts to 4,046... SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to Robert Chapman (and NOT to International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. 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 US$129.95 for a one-year subscription. Note: We publish twice a month by surface mail or 3-4 times a month by E-mail. international_forecaster@yahoo.com Foreigners please use foreign U.S. dollar denominated checks or Money Orders.
-- Posted Monday, 7 August 2006 | Digg This Article
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