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International Forecaster September 2008 (#6) - Gold, Silver, Economy + More

By: Bob Chapman, The International Forecaster



-- Posted Sunday, 21 September 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

The following are some snippets from the most recent issue of the International Forecaster.  For the full 28 page issue, please see subscription information below.

US MARKETS

 

          Forget about the metaphor of Hanky Panky Paulson firing countless rounds of high explosive moral hazard with depleted uranium Ponzi-tips from a bazooka with a glowing red barrel.  That bazooka got so hot that it melted from overuse, so Hanky Panky consulted with Defense Secretary Robert We-Can't-Find-Bin-Laden Gates to decide on some serious replacement weaponry that could really wipe out US taxpayers with super-toxic levels of moral hazard.  They opted for a battery of surface to surface ICBM missiles, complete with multiple warheads of thermonuclear moral hazard (forget that depleted uranium crap, we're going to use the real thing now), which are currently being programmed to take out the high density population centers of US taxpayers throughout the late, great, US of A.

 

          Hey, Mr. Mugabee, if you can't take the political heat in Zimbabwe any more, you might try moving to the US where all your backers and co-Marxists live, like Henry Kissinger.  Don't worry about getting homesick.  In two to three years, we can absolutely assure you that you are going to feel right at home!  Just think about the exciting times that lie ahead as Buck-Busting Ben drops bundles of Federal Reserve notes out of his cool helicopter so we can all have one last wild spending spree!  It appears that Helicopter Ben and Hanky Panky might be taking hints from your playbook, so think about all the advice you'll be able to give them on how to crucify the taxpayers.  They were going to ask Field Marshall Paul von Hindenberg, who was once President of Germany's former Weimar Republic, for some pointers about how post-WWI Germany got into its hyperinflationary nightmare in the 1920's, until they found out he was no longer with us, so they probably figure that you, being a contemporary, are the next best thing!  

 

          We recoil in disgust at the way these arrogant sociopaths, the henchmen of the Illuminati at the Fed and in our Treasury Department, led by Bernanke and Paulson, respectively, are taking the toxic waste losses of the Wall Street fraudsters and dumping them on the taxpayer sheople, while short-squeezing savvy investors by selectively prohibiting and prosecuting shorts of any kind for the stocks of about 800 financial institutions through early October, which all deserve to be shorted.  Between the Byzantine dollar rally, the Saudi crude oil assassination, the peppering of precious metals by pernicious paper-hangers (wasn't Adolf Hitler a paper-hanger at one time?) and the short-squeeze on financials, we wonder how many more hedge funds are going to go under, and take everyone else with them in the process, as Lehman gets cannibalized just in time to rack up mark-to-market losses for the sheople to eat in the latest bailout bonanza for the fraudsters, soon to be revealed as the Resolution Trust Company II solution?

 

          Bailing out the toxic mortgages found among the half of US real estate mortgages held or guaranteed by Phonie and Fraudie, some 5+ trillion worth, was not enough for them.  Now, they want to pawn the rest of the toxins from the other half of US mortgages, which they estimate will be about a half a trillion.  Gee, didn't they tell us the Iran War would cost 60 to 200 billion, only to find out later that when you add in future costs for veteran's disabilities and pensions, the cost could top 3 trillion?  And didn't Bernanke tell us that the fallout from the subprime situation was contained?  Of course, that was before we saw fraudsters around the world eat $350 billion and counting.  And didn't all the fraudster CEO's keep telling us that their walking dead zombie companies were sound and liquid right up to the time that their shareholders got vaporized?  Aren't you starting to get a little tired of all the lies?  Can we trust even a single word spoken by anyone from Wall Street, the Fed or our "beloved" Treasury Department anymore?  The Street, the Fed and our government now have ZERO credibility.  This loss of confidence is going to take the markets down no matter what these reprobate and sociopath elitists do.

 

          You will eat multiple trillions of dollars from each of the following:  (1) The phony War on Terror; (2) the loss in real estate values caused by record inventories that will be created by defaults and foreclosures resulting from rampant unemployment, loan fraud, over-leveraged consumers and ARM and Option ARM resets; (3) the combined bailout of Fannie's and Freddie's share of the toxic waste contained in the approximately half of all US mortgages which these cess pools have made or insured, plus the losses from the Resolution Trust Company II bailout of the toxic waste from the remaining half of US mortgages; (4) the shortage in the FDIC's insurance reserves that will be generated by losses incurred on account of what will be anywhere from 1,000 bank failures, as suggested by billionaire Wilber Ross, to perhaps as many as half of all banks in the US, as recently suggested by Ken Lewis, CEO of Bank of America; (5) the PBGC's funding shortage to cover losses suffered by pension plan beneficiaries on account of pension under-funding caused by what will be the loss of as much as half of the value of all US equity shares; (6) the bailouts likely to occur when the credit default swaps and interest rate swaps, along with the entire bond market, go under in what will be the greatest bear market of all time in both bonds and derivatives, which are guaranteed to occur based on the hyperinflation that will be caused by all the other bailouts just listed, as well as by our continually burgeoning budget and trade deficits, the resulting double digit interest rates which will become necessary in order to combat inflation and to properly reward risks, which are about to escalate in astronomical fashion, and to attract foreign investment, which will soon drop to nil based on negative rates of return; (7) the loss in purchasing power due to hyperinflation generated by 1 through 6 above; and (8) the new wars for profit that will be started in order to restart our vaporized economy in the wake of the death and destruction caused by 1 through 7, above, and you can also add in the costs associated with potential social unrest and revolution that are almost certain to occur.  When number 6 above comes to fruition, the entire world economy will implode and go into deep depression.  None will escape the coming juggernaut of losses when the glowing, quadrillion dollar Derivative Death-Star goes supernova.  The entire world economy will get sucked into the resulting financial black hole.   

 

          The Resolution Trust Company II will be rammed down the throats of Congress, just like (1) the Federal Reserve Act that has been used to inflate the middle class out of its wealth by imposing a stealth tax which is used to fund profligate government spending and enrich private banker's with their debt-based fractional reserve system of banking; (2) the passage of the US Income Tax, which is used to enslave and impoverish US citizens and to ensure payment of the US Treasury's debt to the Federal Reserve on its treasury paper; (3) the repeal of the Glass-Steagall Act by the Gramm, Leach, Bliley Act, which is what paved the way for the speculation, fraud and  conflicts of interest that always arise when commercial banks and investment banks are allowed to be merged under one entity, as we just saw happen with Bank of America when it bought out Merrill Lynch, and this poisonous piece of legislation is what allowed the Illuminist bankers to pawn off the toxic waste which their investment banking division created for its investment banking clients, after getting fraudulent AAA ratings from the ratings agencies, on their hapless, sucker-dupe commercial banking clients; (4) the passage of the toxic Commodity Futures Modernization Act, which freed the then fledgling OTC derivatives market, including credit default swaps and interest rate swaps, from the regulatory power of both the SEC or the CFTC, leading to an out-of-control, unregulated, under-collateralized, quadrillion dollar volcano of smoldering, molten risk that no one understands in terms of its scope, its interrelationships and its counterparty risks, and now these financial weapons of mass destruction threaten the worldwide financial system; (5) the passage of the Iran War resolution based on Bush Administration lies regarding Saddam Hussein's supposed weapons of mass destruction and involvement in 911, which has led us into yet another bloody war for profit under the guise of security, democracy and freedom, and which has resulted in the killing of millions of Iraqi civilians and thousands of our soldiers (move over Hitler, Mao and Stalin, the Illuminati and their neocon henchmen are just getting warmed up as they take their shenanigans to the Balkans); (6) the approval of both Patriot Acts to help us fight the evil Osama Bin Laden and the phony "War on Terror" while dismantling our Constitutional rights; (7) the approval of the Military Commissions Act which makes all dissenters into "enemy combatants" and takes away their right to habeas corpus; (8) the passage of the John W. Warner Defense Authorization Act of 2006, which repeals Posse Comitatus, meaning that our military forces can now be used against our own citizens for the first time in our history, and contrary to our Constitution; and (9) the Fannie and Freddie bailout, which was just authorized so the fraudsters can dump their slime on taxpayers in a futile attempt to save their precious system of Ponzi-schemes and insider trading which is becoming unraveled right before their eyes.  This is why all incumbents, except for Ron Paul, must be voted out in November.

 

          The House Finance Committee, headed by Rep. Barney Frank, and the Senate Finance Committee, headed by Sen. Christopher Dodd, will give it their usual Boo-Boo, response: "I don't know, Yogi," in order to give the clueless sheople the appearance that they are going to protect taxpayers from the slimy bankers, when the reality is, it is already a done deal and has been planned long in advance, probably for many months, if not years, just like the Patriot Acts.  What you are seeing happen right before your eyes is the revenge of the Illuminati for the passage of the Glass-Steagall Act.  Not only have they repealed that act, but now they have reverted our system back to the way it was when the Stock Market Crash of 1929 occurred.  This is why Bank of America jumped all over Merrill Lynch, and why you are hearing continual overtures for Goldman Sachs and Morgan Stanley to do the same, with claims that their business models are flawed.  The fane-stream media now tells us that we need such combinations to give our financial institutions greater strength and staying power in the face of a crisis, when it is such combinations that are responsible for creating the crisis in the first place.  This is the classic Hegelian Dialectic on steroids: first create the crisis, and then propose the predetermined solutions, stuffing them down everyone's throats, if necessary.  If you want to see institutions that will automatically be deemed to be too big to fail the next time they defraud the public, just check out the gargantuan financial behemoths that will emerge out of the current crisis!

 

          Note how this was all set up.  First, all the legislation was put into place.  Then the system is brought into a crisis situation, which was easily accomplished through deregulation, in order to propel us into a situation where the Illuminists are allowed to consolidate their power with the full blessing of the dopey sheople.  Note how Bear Stearns was assassinated just before the Fed opened up its Primary Dealer Credit Facility and its Term Securities Lending Facility, which could have saved BS.  They arranged to have BS's clients abandon them and withdrew BS liquidity and credit, and down they went, payback for not helping in the LTCM bailout and for not joining the Illuminist club.  Then they string out all the other big commercial and investment banks, to see which ones would turn out to be the keepers, because the carnage was so bad and so widely spread that no one could tell which of the big commercial and investment banks might survive, if any.  They needed time to figure out who the survivors would be.  Hence, all the desperate bailouts dripping with moral hazard were made to keep them all afloat while they were attempting to make this determination.  They decide to let Lehman fail because their condition is irredeemable and it looks like criminal charges may come up at some point due to shenanigans that management committed against their employee's pension money, making them a hot potato.  They pair up Bank of America with Merrill Lynch, and we see JP Morgan Chase and possibly Wachovia pairing up with Goldman Sachs and Morgan Stanley, respectively.  Wachovia and Morgan Stanley are already in talks for a merger.  AIG is being preserved to see if they can be fit into the consolidation scheme once all their problems have been sorted out.

 

          To support the survivors, they then announce the Resolution Trust Company II bailout, kill all shorting of over 800 financial companies, and then spew out money and credit throughout the international banking system in amounts that are nothing short of spectacular.  This is an outrageous, unbelievable, unprecedented consolidation of power, which flies in the face of free markets and paves the way for an ever-burgeoning corporatist, fascist police state.  Hanky Panky wants to give the Fed sweeping regulatory power over this new group of behemoths who will control everything, while occasionally allowing crumbs to fall off their table for the little guys to gobble up.  And there will be far fewer of the little guys to worry about after the carnage in the banking sector has finally ceased.  The police state will get underway when the next false-flag attacks are leveled against us and we get dragged kicking and screaming to WWIII, while everyone gets to do some compulsory service in the military.  If this doesn't scare you, nothing will!

 

          This is not a sure thing for them.  The fraudsters remaining, even the big guys, could still fail, that is how bad this situation has become.  The Illuminati are quaking with terror that they have overdone things and that they could end up destroying the whole system irreparably.  That is why we are having all these bailouts stuffed down our throats.

 

          Gold and silver went on a moon shot this week, with gold setting a new all-time record for a one-day increase in value.  That is what happens when you keep pressing on the lid of a pressure cooker, trying to keep boiling, molten precious metals from escaping.  Aiding gold and silver was the unraveling of longs in the USDX futures market, who were forced to cover because they had pushed the dollar up as far as it could go.  Suddenly, the 93,701 contracts of open interest on Tuesday were reduced to 52,872, being cut virtually in half.  That means the dollar rally is over and the ever more desperate bailouts are going to undermine confidence in the dollar.  Soon, all these trillions in bailouts may lead to a downgrade of our treasuries, as our debt load will soon reach unsustainable levels, no matter how much the PPT tries to manipulate the markets.  The stupidest dolt should be able to figure out that much.

...

GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS

 

          The Comex division of the New York Mercantile Exchange raised margin payments on gold and silver futures by as much as 47 percent after price swings accelerated.

 

          The margin rate for Comex members advances to $5,500 a gold contract from today, from $3,750, the exchange said in an e- mailed statement late yesterday. The new rate for non-members is $7,425, from $5,063. One contract represents 100 ounces.

 

          For silver futures, members will pay a margin rate of $6,000, compared with $5,000 previously. Non-members will pay $8,100, from $6,750. One silver contract represents 5,000 ounces.

 

          The rates represent the cash traders must put aside when buying and selling the commodities. Gold surged the most in nine years on Sept. 17 while silver rose the most since 1979.

 

We haven’t seen a day like this since 10/18/87. On Wednesday spot gold closed up $69.30 and silver rose $1.11 to $11.59. In the access market gold traded $18.00 and silver traded $0.41 higher. There is an excellent chance both will trade higher on Thursday morning. Remember, we told you it soon would be that gold would trade up and down $50 to $100 a day and silver $0.50 to $1.50 higher and lower and that is what has begun to happen. As we told you over and over again, the fundamentals always win out in the end. How can you have physical demand go ballistic and futures falling for any period of time? When AU and AG were making their moves early on the dollar was strong. Eventually the other currencies followed gold and silver upward. The yen rose .0057 to $1.0521; the euro up .0223 to $1.4374; the pound up a whopping .0378 to $1.8241; the Swiss franc up a strong .0170 to $1.0999; the Canadian dollar up .0011 to $.9373 and the USDX, dollar index, up .80 to 78.27. It looks like the pros are finally realizing that all these bailouts cause monetization and that means much higher inflation. Maybe they got spooked today when they found out our president will no longer make a statement after meeting with his “Working Group on Financial Markets.” When asked why his spokesman said, we decided it would be best to limit public comment about markets.” Could this also be the reason for today’s superlative action? Could the Illuminists be losing control of the gold and silver suppression? After JP Morgan and Goldman refused to bail out AIG could it be that it is now every man for himself? This is the best trading day in gold since 1987. Could it be the derivative debacle standing in the wings? All we can say is why did it take so long to happen? With the market falling investors are looking for a winner. Gold and silver investments are way under-priced and they will become the go to investment. Tonight when Tocom opens the shorts will get slaughtered unless they covered earlier on Comex. Our day is here. The greatest bull market of all time is back on track.

...

THE INTERNATIONAL FORECASTER

SATURDAY, September 20, 2008  -  092008(6)_IF

P. O. Box 510518, Punta Gorda, FL 33951-0518

An international financial, economic, political and social commentary.

 

Published and Edited by: Bob Chapman

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-- Posted Sunday, 21 September 2008 | Digg This Article | Source: GoldSeek.com



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