THE INTERNATIONAL FORECASTER

WEDNESDAY  112807(8)_IF

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 Addresses:

international_forecaster@yahoo.com

if_distctr@yahoo.com

CHECK OUT OUR WEBSITE

www.theinternationalforecaster.com

1-YEAR $159.95 U.S. Funds

US AND CANADIAN SUBSCRIBERS: 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.

Or:

We accept Visa and MasterCard charges.  Provide us with your card number and expiration date.  We will charge your card US$159.95 for a one-year subscription.

You can email us in two separate emails (1- the Credit Card Number with full name, address and your telephone number and (2- the Expiration date on the card.

NON US OR CANADIANS SUBSCRIBERS:

Due to the time that it takes for your mail to arrive to us from a foreign country, we would like for you to email us as above the CC information in two separate emails.

Note:  We publish twice a month by surface mail or twice a week by E-mail.

international_forecaster@yahoo.com or if_distctr@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

As the US dollar falls America and the economies of every country will suffer to some degree. Over the past several years the dollar has fallen from 120 on the USDX to about 75. The latest breakdown occurred recently when 26-year support was broken at 80. The US dollar index is computed using a trade weighted geometric average of six currencies. They are: the euro 57.6%, the yen 13.6%, the UK pound 11.9%, the Canadian dollar 9.1%, the Swedish krona 4.2% and the Swiss franc 3.6%.

The big losers are the American people and those nations holding the largest amount of dollars in their foreign exchange reserves. The big dollar holders are China, Japan, Russia, South Korea, Taiwan and OPEC members.

The manipulation of currencies by nations has been going on for some time so that their exports to the US would be lower-priced and competitive. They would accomplish this by printing their own currency, buying dollars and purchasing US securities, more often than not US Treasury and Agency securities. The US did not condemn the cheating, except in the case of China because these nations in this process were funding the US balance of payments deficit-the current account deficit.  Now that the dollar is in free fall we’d expect the US will have problems funding their account deficit. Now that the Bush administration has abandoned the dollar in order to try to save the US economy from depression we expect a currency war will ensue. At 72 to 75 on the USDX the second phase of the dollar collapse will have been completed, which we predicted in 2000. The third phase should take the dollar to somewhere between 40 and 55 and even then, dependent upon what transpires, that may not be the bottom.

We expect there is a good possibility that OPEC, in spite of their dollar denominated reserves, will in the New Year shift to a basket of currencies. That, of course, will drive the dollar lower. They are in a terribly uncomfortable position, especially the Gulf States. They are deeply concerned about their reserve dollar holdings, future dollar income, and the compromising of their protector the American Illuminists. We believe they have little choice but to be dollar sellers. On top of these problems is dollar price inflation of 5 to 15%. You put it all together and the dollar as a petro dollar is history and that means in a few years the dollar will not be the world’s reserve currency. The next move for most major central banks will be to do as they have been doing and that is lower interest rates and continue to increase double-digit money and credit. They all have to cover up their losses. This attempt to keep the party going, to take pressure off the dollar and to mask their terrible losses will keep these central banks printing money and credit.

As you have seen the yen is moving higher in leaps and bounds and the Swiss franc has just hit another new high. As you know for those of wealth and those who prefer liquidity and currency protection, we recommend Swiss franc government bonds. The Swiss franc is headed to 1 to 1 and you will soon see Switzerland reassert themselves as the financial center of the world. All the threats and demands by the US government to turn secret account information on Americans to the US government will end. The coercive power of the US government and the Illuminists who control it is in the process of ending. The center of financial power is shifting back to Europe after 62 years of American control. That will hurt the US financially as well as Japan. The US has just entered its twilight and most Americans just do not understand what is happening. The American empire is dead.

As you know, for those of you who have need for currency, we have recommended Swiss franc government bonds for the last few years. Those of you who in part have chosen that avenue you have been well rewarded. The franc has moved up some 15 BPS, the yield has moved up from 1.1% to 1.9%, and you have had the safety you have needed while having to be in a currency. We expect the euro will be used to a great extent as a dollar replacement due to its liquidity, but in time investors will realize that the euro has some of the main problems the dollar has. Eventually the Swiss franc will again be the best alternative to all currencies except gold. There is a professional and political conspiracy of silence regarding the franc and its future. As with gold and silver related assets the Swiss franc will do well for those who need it. In addition, in time, we believe there will again be a tax on deposit accounts in Swiss francs. That doesn’t affect the bonds, but it is something we believe will happen in 2008. How it works is instead of receiving 1% interest you will be taxed ½% just to have Swiss francs on deposit as a foreigner.

Three years ago we said the euro would move from $1.20 to $1.65, and as usual we were scorned and laughed at. The euro is now at $1.49 and the next leap will be to $1.65. That will cause great consternation in Europe because they have had the luxury of a very undervalued currency since its inception. The strong dollar policy of the past almost 20 years was a terrible mistake in retrospect. If the dollar had been allowed to gradually depreciate we wouldn’t have to contend with the correction we are seeing today.

Europe and England have the same high living structure that the US has, and if free trade continues on its present course, Europe will no longer be able to compete against Asian and other trade nations. They will continue to manipulate their currencies and do the same thing to Europe, England and Canada, which they have done to the US.

In England the economy has already turned down. Its recent success has been in good part the result of a baseless booming real estate market and they Ireland and Spain will all suffer the same fate as the US, in all probability borderline insolvency. In the case of the euro their problems will mitigate against holding euros. England, of course, has the pound but will eventually suffer the same fate. All these currencies will continue to fall against gold. Even the Swiss franc will but not to the extent of the dollar, pound and euro. These three countries have had casino currencies, excluding the franc, all the victims of cheap interest rates. A high price will be paid in time holding pounds and or euros. The collapses in England and Ireland will mostly be domestic because they are not large exporters. Spain has been, but the current account balance remains negative and will continue to be so. Both Ireland and Spain in the final analysis are the victims of the Eurozone concept of one currency and one interest rate fits all. This policy will eventually be the undoing of the Eurozone and the ECB, along with the subterfuge of an agreement that is supposed to substitute for a EU constitution. This was all ill conceived. The constitution should have come first, then monetary union and then different interest rates for each country to be set by the ECB. Europe’s black nobility still doesn’t understand that Europe consists of tribes thousands of years old, all of which evolved somewhat differently. By jamming them all together all you get is a short circuit and eventual breakdown. As an example, as you have seen, very few people have migrated from one country to another and that is because people generally want to live with their own people. The EU amalgamation is unnatural and in time will break apart.

The days of asset inflation are over. A big benefactor will be Germany, which never participated, but still has the enormous burden of holding up Europe. We believe they will tire of this and eventually will abandon the EU. When that happens the dreams of world government by the Illuminati will again collapse as another horrible mistake.

Through all these trials and tribulations only one asset will survive and that is gold, the only real money. You can dance around with other currencies, excepting the Swiss franc, but to no avail. All those who are not in gold will suffer monetary loss.

The major nations will all continue to increase money and credit and lower interest rates desperately trying to save their economies and banking systems. It will all be for naught. They are all going down. This collapse will be as bad as the collapse of the Lombard System in 1348. The Venetians and powers of Europe at that time banished those crooks to the Netherlands and Wales. Today there is no place to banish them too. The only alternative is incarceration or liquidation, something the Venetians should have done and had they we wouldn’t have the problems we have today.

In America and England the mainstay of their economies consumer spending is faltering. Sales increases of 1% or 2% are not enough to continue to carry the economies that are 70% dependent on consumerism.

In December and again in February, the Federal Reserve is expected to cut interest rates ¼% each time. The Bank of England and the European central banks will stupidly follow. That is because they coordinate what they do. All have increased money and credit together for over three years by some 14%. That just doesn’t happen by coincidence. They all have the same problem – failure due to their greed for money, power and world government. The flipside is the more money and credit they create and the lower interest rates go the higher gold and silver prices go. You might say we have a lock on preserving our assets and making lots of money. Shortly gold and silver related assets are going to be discovered by professionals and eventually by the public and those events in turn will push prices higher especially in the undervalued shares and in numismatic coins.

...

GOLD, SILVER, PLATINUM, PALLADIUM AND URANIUM

While this past Friday was a day from Theatre Bizarre, we'll take it because gold and silver benefited greatly. The market action on Friday was full of contrasts to what normal expectations under similar circumstances would be based on past experience. These types of contrasts occur mainly when markets are assaulted with massive cartel-orchestrated manipulations.  Helping on the manipulation front was the thin trading on Black Friday, with abbreviated market periods and with many traders enjoying a four-day weekend by taking Friday off.  The first contrast is the rise of stock markets despite a strong yen as the PPT prevented carry trading large specs from gaining liquidity while simultaneously powering up the stock markets by brute force to stave off what could have quickly become a 1929 Stock Market Crash scenario. Apparently, the cartel wisely decided to support stock markets because they knew that the unwinding of the carry trade that has brought down markets lately to hit precious metals was once again threatening to spiral out of control as the Yen Death-Star started erupting with market-threatening foreboding.  This could also have been the PPT trying to "puff the fluff" into the stock markets to allow for a big day down later when they want to hit gold with a stock market crash that drains liquidity without going past the 10% correction level which was nearly reached on Wednesday of last week. It would also appear that the cartel does not realize that large specs now make money either way due to a balance of long stock positions and protective derivatives they have purchased so they can profit no matter which way the stock markets or the yen may go.  The next contrast is the rise in the dollar out of the blue based on little more than cartel manipulation despite a stronger yen and market expectations for a rate cut from the Fed in December, and despite an earlier rise of the euro to threaten 1.50, with the euro reaching 1.4966 before retreating slightly.  Yet a further, and perhaps the most shocking, contrast came from precious metals which soared despite a sudden dollar rally, most likely because of three factors.  First, everyone at this point realizes that all dollar rallies are bogus, manipulated events which are almost always reversed the next day.  Second, the Nikkei 225 took an incredible pounding early Friday morning, losing a whopping 323 points, so there may have been some safe-haven buying in Asia which drove gold to 816 in Tokyo, with gold moving once again contrary to stock markets, this time in the overseas markets.  This may have also accounted for some of the dollar rally as there are still morons out there who think dollar-denominated treasuries and money-market accounts are a safe-haven.  We believe that most traders know the dollar is no longer "safe" but use it for convenience sake, at their peril we might add.  Third, there was probably substantial short-covering for December gold and silver options which expire Tuesday, November 27, many of which are way underwater, which may have accounted for gold's strength in Friday's COMEX action with a cartel-ripping rise of 23.90 to a close of 821.60.

The cartel, the Fed and the PPT are now living in la-la land.  They think that they can knock the large specs out of their precious metals positions by hitting stock markets by unwinding the carry trades.  But gold now often moves contrary to the stock markets. This is because the cartel's Illuminists have scared people right into gold's waiting arms.  Traders are running to gold in terror as they realize that the dollar has been totally abandoned, that hyperinflation is on the horizon, that consumer spending is gasping its last breath, that risk reassessment is pushing rates up regardless of what the Fed does, that banks are hoarding cash and not loaning money to one another because of the ever-worsening credit-crunch which kills off every attempt by the Fed and other central banks to inject liquidity and that the only stock market rallies we will see between now and the end of the year will be short-squeezing rally-crashes aimed at the metals positions of large specs.  Trading is no longer just about investing long in stocks and waiting for the PPT to power them ever upward, as if propelled by some hidden anti-gravity machine.  The precious metals now stand in the way of all stock rallies because stock rallies can only be powered over the long term by use of a much weaker yen and a rewinding of the carry trade.  Every time the yen is weakened to provide more liquidity to carry traders, many of whom are large specs, gold and silver explode because the fundamentals supporting the metals leave traders no choice but to diversify some of their newly found carry trade liquidity into precious metals.  It would be totally foolish to do otherwise under the current and very frightening market circumstances.  What this means is that large specs are now diversifying their positions for a balance of long and short positions.  They sell stocks into PPT-provided strength, as stock markets are manipulated upward knowing that they will later be brought down anyway in ongoing, repetitive attempts to hit precious metals.  They use the proceeds from these sales to beef up their protective derivatives while the stock markets are rallying.  Then, when the almost inevitable stock crash comes to hit the metals, they pocket profits from the protective derivatives and use them to buy stocks while they are at bargain levels.  The large specs are just going back and forth in this manner because it is no longer about making profits from long stock positions but about surviving the cartel's manipulations long enough to make a fortune in precious metals, which is where the real money is now to be made unless and until the cartel loses the battle over precious metals.  Only when that battle is lost will the cartel weaken the yen and use hyperinflation to bring stock markets back up to a blow-off top so they can jump out the escape hatch using Project Turquoise as markets are topping.  Fortunately for us, and assuming they are even able to get this far with the stock markets which is now a pretty big assumption, when they jump out of the stock and bond markets they will have to buy precious metals at very highly elevated prices in order to protect themselves from the coming conflagration of financial markets which they have planned for some time now.  The precious metals could potentially serve as a store of value for the cartel's reprobates during the worst period of the current recession and during the almost certain depression which will follow.  After companies go bankrupt and their assets are sold for pennies on the dollar, and as values of assets decrease to a small percentage of their original value on account of the depression, the resident sociopaths of the cartel will use the value stored in their metals and commodities positions to scarf up everything in site, taking control over virtually every segment of the freshly-imploded economy and placing us all in a snakelike stranglehold.  At least that is what they have planned.  But, we have some rather bad news for them.  They are badly outnumbered, we have 450 million privately owned weapons and there will be enough wealth gained by godly and moral individuals from the coming precious metals rallies to throw a major wrench into the evil plans of the cartel.  As usual, the cartel has not thought things through, and their miscalculation may cost many of them their lives and their property after their machinations are made publicly known.

This past Wednesday and this Monday were a perfect example of the massive stock market crashes which the cartel has orchestrated, with the big day down we had anticipated after the Dow's rise on Friday of 182 points coming the following trading day right on schedule to hit gold by causing stock margin calls to drain liquidity in the hopes that metals positions would be liquidated as the December gold and silver options were expiring.  On Monday, right off the rip, central bank sales came suddenly out of the woodwork in the later portion of London trading and again just as the COMEX opened, with these diabolical sales continuing throughout the entire COMEX session which ended just as a yen-hit started to crash stock markets in afternoon trading on the NYSE to keep up margin calls and liquidation pressure in support of December gold puts expiring on the following day, Tuesday.  This is how gold, which had risen to a blazing 837 in late Asian and early London trading, was taken back down to as low as 822 before recovering to 828 and closing at 826.30.

 The yen strengthened all day long on Monday to pressure precious metals, going from 108.464 yen per dollar and 161.245 yen per euro at about 5:40 am EDT to 107.433 and 159.796 at about 7:40 pm EDT.  The PPT held the stock markets up against the yen pressure earlier in the day in the hopes that the central bank sales and strong yen would take the wind out of gold's sails, but when they only managed to bring gold to a close that was a mere $10/oz. below its peak for the day, they decided to bring the stock markets down as well to keep the pressure on the large specs and other metals traders.

Note also the ridiculously precise manner by which the Dow corrected this past Wednesday and Monday, making absolutely sure not to go past a 10% correction to avoid causing panic and losing yet another 10% as terrified traders might have lost all confidence at that point and bailed, with the imbecilic black boxes adding to everyone's woes as the precise 10% mark was breached.  To show you just how precisely the crashing of the markets was accomplished in order to avoid going beyond a 10% correction, let's do the math.  First, note that the intra-day all-time high for the Dow came on October 11, at 14,198.10.  Ninety percent of 14,198.10 is 12,778.29.  The intra-day low during Wednesday's crash was 12,786.52, only 8 points above the precise 10% correction mark.  This was an abysmally low intra-day level not seen since August 16, 2007.  Now let's look at the Dow's closing all-time high which came on October 9, at 14,164.53.  Ninety percent of 14,164.53 is 12,748.07.  The closing on Monday was 12,743.44, less than 5 points below the precise 10% correction mark. This was a gut-wrenching level not seen since April 16, 2007, over seven months ago.  Free markets do not act with this kind of precision.  Only highly manipulated markets can explain such precise market behavior.  The cartel has now shot its load as far as stock market crashing is concerned.  We ask what they will do for an encore?  Will we go the 1929 route just to save the gold and silver futures next? Count on a mid-December rally-crash just ahead of the expiration of December stock index options. The large specs will crush this manipulation also the way they did in November.

We would also like to point out to subscribers how the theory that gold and silver were just following the stock markets up and down has once again been totally blown out of the water over the past week or so.  On Friday, November 16, the Dow closed at 13,176.79, and spot gold closed at 785.40.  This Monday, the Dow closed at 12,743.44, while spot gold closed at 826.30.  So the Dow was down a mind-blowing 433 points while gold was up a cartel-smashing $41 dollars per ounce.  Dow down 3.29%.  Gold up 5.21%.  Theory down in flames.  This is because safe-haven gold now stands directly in the way of all stock market rallies for the reasons set forth above, with the exception of a potential rally-crash.  In addition, over the same period, silver rose 2.63%, the XAU lost only 1.83%, and the HUI gained .95%.  This shows you that the contrast between the general stock markets and the precious metals and their related stocks is across the board as the cartel suffers yet another myocardial infarction which the yen nitro pill will no longer help.  The final implosion of the commercials on their December shorts on gold futures now grows closer every day as the only real money appreciates no matter which way the cartel takes the general stock markets.

...

-- Posted Wednesday, 28 November 2007 | Digg This Article