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-- Posted Sunday, 10 September 2006 | Digg This Article
The following are some snippets from the most recent issue of the International Forecaster. For the full 17 page issue, please see subscription information below. SATURDAY SEPTEMBER 9, 2006THE INTERNATIONAL FORECASTERSEPTEMBER 2006 (#2) Vol. 10 No. 9-2 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
SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95 U.S. Funds. Make check payable to Robert Chapman (NOT 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. Foreigners please use foreign U.S. dollar denominated checks or Money Orders. Note: We publish twice a month by surface mail or twice a week by E-mail. international_forecaster@yahoo.com ***** RADIO APPEARANCES: To check out all of our radio appearances click on this link below: http://www.theinternationalforecaster.com/radio.php US MARKETS For the last 1-1/2 years housing headlines have been dominating the news in the same way the Nasdaq did in the late 1990s. Successive years of sizzling sales and appreciation have begun to be followed by massive inventory increases and flattening to falling prices. Affordability has plunged as well. Housing prices may never match Nasdaq’s 78% decline, but they are in decline and their ill fortune will affect the entire economy. The debate is how far down. Residential real estate accounts for 5% of GDP and has accounted for 40% of economic growth over the past five years. As prices begin to fall equity extraction will end. That should begin next year. By then speculators and second homebuyers should have all left the scene. They have been 35% of the buying market. We are now in a phase where adjustable rate, option and interest only mortgage rollover buyers are meeting negative equity. Late payments on present ARMS are running at about 13% and the delinquency for these borrowers with poor credit histories was the highest in two years. Just a year ago prices were rising at a 17% rate. In July, they rose 1%. The fall in house building, sales and prices will cut 0.5% off of GDP for the second half of the year and 2% in both in 2006 and 2007. Single-family housing starts over that period should fall 50%. As we mentioned recently, since recent new legislation, Dupont has been the first major corporation to walk away from its pensions. This portends major problems for 20% of retirees. The pension kept the employee with the employer. The plan costs were borne by the employer and that cut profits. In as much as most stock is owned by the rich they were much more interested in the corporate bottom line and share price than they are in employee benefits and longevity. Most plans will be discarded and the worker using defined contribution plans will have to manage his or her retirement, which will be disastrous for the worker who has no financial training. He might just as well go to Las Vegas for results. This is just another way of taking America financially to its knees. The elitists have more control this way and proves to you exactly where they are headed... When American and European illuminist bankers pitched Congress in 1913 on the creation of the Federal Reserve their main talking point was they would prevent boom and bust cycles. As we know they did not in any sense do that. Through their machinations and manipulations they have created one recession and depression after another, which long ago should have led to their termination. That hasn’t happened because they were always able to blackmail or payoff politicians. Having studied their history we have been able to pick tops and bottoms of markets. After awhile it got easy. You just had to train yourself to think like a criminal. In recent years we were able to pick the top in the stock market in early April of 2000 at the Chicago Precious Metals Conference. We picked the bottom of the gold and silver market shortly thereafter and we recently picked the top of the real estate market in June 2005. We believe the recession that is now underway began this past January. Just two weeks ago at $73.00 we said the price of oil would fall to $65 and maybe to $60, to bring gasoline down to $2.50 a gallon, so that incumbents, especially Republicans could get reelected. Wholesale gasoline has already fallen from $2.12 to $1.65. It only has $0.15 to go on the downside. This is pure manipulation by major oil companies that control the forward markets in gas and oil and are part of the elitist structure. As you all know we have been short the housing stocks and generally speaking they are off 50%. They probably have another 25% to go on the downside. Housing led the economy up and it is leading it down. There won’t be another bubble for some time to come. Anyone who is left on the long side of the general market should have sold or be selling. If you have retirement funds that you can direct or sell, go to a money market fund or something in gold and silver related assets if available. Force yourself to make the changes. The “new era” – the “goldilocks” markets are finished for some time to come. The economy is in a precarious and perilous situation. Interest rates are rising to combat rampant inflation and to keep their economies from collapsing. Central banks are increasing money and credit by 9% to 10%. In six years $4.6 trillion in equity has been withdrawn from real estate. Most of that money has been spent and savings are -1.7%. That was quite a spree. Consumption went mad and there is nothing left for a rainy day. We can thank the Fed for this performance and we can also thank them for the coming depression. Isn’t it about time we got rid of the Fed and sentenced it to the scrap heap of history? It sure is. What is the answer? It’s gold and silver related assets, being short the market, long commodities and for those with large amounts of money be long Treasury notes of Switzerland and Canada... GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS Gold tried all day Wednesday to end up on the plus side, but it wasn’t to be. It held at -$2.80 for some time, but got hit on the end. We find that very odd with silver, palladium, copper and platinum all higher. This was even stranger considering the dreadful unit labor cost numbers and terrible productivity results. The conclusion is our government is incapable of stopping its criminal behavior. Gold ended the day down $5.00 at $633.40 and silver kept moving ahead. It was up $0.21 early on, but ended the day up $0.06 to $13.03. There was an increase of 8,900 gold contracts to 319,998. Silver open interest fell 375 contracts to 108,132. Overnight Tocom was higher. The big shorts again increased their total short position by 7,407 contracts to 159,964. Goldman increased their shorts by 1,133 contracts to 39,443. They also increased their shorts 361 to 2,820 contracts. The XAU lost 1.62 to 150.20 and the HUI lost 3.30 to 362.17. The access aftermarket in gold rose $1.60. The Dow fell 63 to 11,406. Nasdaq fell 228 Dow points and the S&P 117 Dow points. Copper rose $0.04 to $3.69. Oil closed at $67.50, -$1.10, but the access aftermarket traded $0.11 higher. Gasoline was unchanged at $1.64. The dollar rose .07 to 85.04. The euro was 1.2818 and the pound 1.8839, both were off all day. The Canadian dollar reversed yesterday’s losses, up .47 to 90.44. The 2-year Treasury was 4.82% and the 10-year 4.80% still in inversion. Stagflation is on the way and few care, but they will in time. Gold was $634.00 early in London. It was off $2.40 pre-Comex opening and then the blast as almost all currencies fell against the dollar with minor exception. The market got bombed, interest rates rose, so gold and silver had to be slaughtered. All in the name of a Republican victory in November. Remember that when you go to the polls, vote every incumbent out. Gold finished down $15.30 at $618.10 and silver was down $0.47 to $12.56. As usual Wall Street was silent as was CNBC. They are all in on it. They know what is going on. Gold open interest on Thursday was up 2,381 contracts to 322,379. There was lots of fund buying at closing levels. Silver open interest rose 820 contracts to 108,952. Silver closed in London at $13.06. Tocom closed higher before the onslaught. Wednesday’s Comex open interest rose 2,381 lots. Market management was the mode of the day. The Dow, S&P and Nasdaq fell as did gold, silver, commodities and bonds and the dollar. In perfect neocon harmony. That sort of action is what we have become used too. The big Tocom shorts increased their net short position by 1,946 contracts to 169,910. Goldman increased shorts 710 contracts to 40,153. Silver shorts increased their position by 305 contracts to 3,125. The question regarding leased gold is intriguing because at such low lease rates we believe gold is not actually being lent. It is credited that way, but we believe only the money is credited to the leasees account at the very low interest rate and those leasees are told what to do with the funds by the central banks. When they complete the operation the funds are credited back to the central bank. If there is a profit the leasee keeps it, if there is a loss the central bank gets billed or its netted out. This is what I believe the banks and the central banks may be doing. The XAU fell 5.25 to 144.65 and the HUI was down 14.25 to 347.92. As you can see under current manipulations, charts, waves and cycles are next to useless. Just remember your government is your enemy. Unfortunately, you have nowhere to hide. The market is out, bonds and real estate are out and so isn’t dollar denominated assets. You really have no place to go except gold and silver, so you have to live with it until you can change the government or take power away from the elitists. All in all Thursday was a lousy day for everything except the dollar. The Dow fell 75 points to 11,221. The S&P lost 56 Dow points and Nasdaq lost 75 Dow points. Oil fell $0.18 to $67.32, natural gas lost $0.28 to $5.72 and gasoline was unchanged at $1.64. The dollar index rose $0.43 to $85.47, the euro fell $0.91 to $1.2725, the pound fell $1.06 to $1.87874 and the Canadian dollar fell $0.35 to $90.07. Gold in the access market fell $1.10; copper rose $0.04 to $3.67. On Friday, the dollar soared as the Fed’s repo pool stoked the fires and gold and silver were pounded. This is part of the plan to keep gold near $600 and silver near $12.00 in anticipation of the election. They also hold interest rates in this zone and the Dow within 600 points. Investors are being insulated from the consequences of risk by intervention. That leads them to come into the market again and again. This is the concept of moral hazard or the Greenspan put. This is the tactic of the expectation of official intervention. This only happens in corporatist fascist and communist societies. This is also called private counterparty surveillance, which brings in hedge funds and other corporate funds at a moments notice. This includes the use of derivatives, which have doubled in the past four years. This is moral decay or institutionalized theft. It is rationalized by the thought process that intones who is better than us to make the decisions for those who don’t understand. US anointed ones, us illuminated ones. The public is being sucked dry in a rigged game. Wall Street, the banks, insurance companies, corporations and government are all in on the rigging of the markets. They have a license to steal. Even most of the funds and hedge funds are being taken to the cleaners. What goes on in government and corporate America is meaningless when this elitist cabal has control of the markets. We can promise you this can only end in tears...
-- Posted Sunday, 10 September 2006 | Digg This Article
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