As you all know, we have a lunatic in the White House, but what are we going to trade him for? John Kerry is unfit to be president, just as George W. Bush is unfit to serve. Regarding Kerry, just ask the Swift Boat Veterans for Truth. It consists of 19 of 23 officers who served with Kerry. His detractors range from seamen to admirals. Kerry seems to be as universally despised as George W. Bush is.

A major move is on by the elitists to get Americans to trade liberty for security. As we predicted months ago, officials are discussing the postponement of the next election in the event of a terrorist attack. Fatherland Security will be the moving party. We told you if George and the neocons were either close or behind in the elections they would declare martial law due to a terrorist event that they planned and executed. Just like Pearl Harbor and the burning of the Reichstag. The man who “brought” the issue to the attention of Fatherland Security, Secretary Tom Ridge, was De Forest Soaries, Jr., Chairman of the US Election Assistance Commission. These and other Republicans see this as a prudent effort to plan for doomsday scenarios. Of course, no matter what the conditions, these statutory elections should go ahead on schedule. They should not be changed. Both Soaries and Ridge are mouthpieces for Bush. The cancellation of elections would be a prelude to dictatorship. The absence of elections would send the dollar lower due to the inherent problems engendered in such a situation and, of course, gold would head higher.

Interest rates, as we predicted months ago, will climb at least four percent perhaps five percent. A four percent increase would put the Fed funds rate at five or six percent. That would put US 10-year Treasury notes at 8-1/2 to 9-1/2%, and that would put 30-year fixed rate mortgages at 10 to 11%, up from 6% presently. We hear all these stories as to why this could not happen. We have news for the experts: the Fed in time will not be able to control interest rates as foreigners finally sell US debt. Even mainline media cannot hide the facts on statistics, particularly inflation. Business Week tells us, “The percentage of companies paying higher prices rose 88% in April.” The Kiplinger Report says, “Building supplies has also escalated with the average cost of materials adding as much as $7,000 to the price of a new home. These readings are the highest since the 1970s, when the economy was beset by surging inflation.” Forbes says, “73% of all corporate purchasing agents report that the prices of the goods they buy are rising.” Many companies are just now passing along higher commodity prices on to consumers. As you can see, inflation is far higher than the government admits. Almost 70% of Americans own homes. If they fall just 10% in value, consumers will quickly cut back on spending and that correction will feed on itself. Whoops, there goes the housing bubble. Once companies and consumers start anticipating rising prices, they will act in ways that will feed the inflationary spiral. Then we have to consider the unwinding of the carry trade as a result of higher interest rates; as that unwinds it will force rates even higher. A prime example is Fannie Mae and Freddie Mac, which control 72% of the mortgage market. How will they fare as rates rise? We believe they could well collapse. What about the highly leveraged funds? Many of them could go under. There are so many problems waiting in the wings it is overwhelming. Interest rates and a falling dollar are a gigantic problem, but inflation is now the most immediate problem, and the Fed has not been doing what it should have been doing for almost a year. From here on out inflation will be on everyone’s lips. It will stagger the economy and the financial system, and it will now be the major force that drives gold. Investors are about to find out over the next couple of years that the gold bull market is for real, and they had best join us or pay the consequences.

            Piper Jaffray was fined $2.4 million by the NASD for defrauding the public by “spinning” hot IPOs between 1999 and 2002 and offering those shares to special insiders and 22 corporate executives who, in turn, kicked back investment banking business. The 22 corporate crooks made $2.4 million in profits.

Since coming to office, George and the neocons have increased Treasury debt by 26.5% monthly, and in addition, consumers borrowed $879.9 billion in 2003, $775.7 billion in 2002 and in the first 22 weeks of 2004, the Fed created $501.9 billion. Over $150 billion was created in May alone. Annualized federal debt is increasing at an 11.6% rate, state and local debt at 9.6%, household debt at 10.999% and business debt at 4.1%. Household debt is now $1.1 trillion. As a result, the CPI is up 7.2% annualized and the PPI is almost at double digits. Credit market debt increased $2.733 trillion in just one year to $34.625 trillion. Since 1998, borrowings are up 255% of GDP to 302%. Total US mortgage debt is $9.618 trillion with annual borrowings of $2.733 trillion. The US must borrow 25% of its GDP just to stand still. If it stops, it falls into depression. If it keeps borrowing, it will collapse. This means ultimately that the creditor and the debtor both will collapse. As long as the Fed continues to feed money and credit into the system the elevation of interest rates won’t be effective until they are at least four points higher. Never before has the Fed ever created so many aggregates while it supposedly is slowing the economy with higher interest rates. Presently, it looks like Sir Alan Greenspan will continue this exercise until the monetary system collapses.

Tony Blair based his claim on WMDs in Iraq on the assessment of MI 6, which has since taken the rare step of withdrawing the intelligence assessment that underpinned that claim. The intelligence was unreliable. Why didn’t Mr. Blair tell the public this? That means the whole basis for Blair’s involvement in the invasion of Iraq no longer exists. It could and should mean Blair would resign. We know he previously wanted to resign but his wife, Cheri Blair, insisted he stay on. We reported 1-1/2 years ago he had been paid billions by the Bush faction to go along with the war. Evidently, the money is not Cherie’s motivation, but then again she is an attorney.

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