Lord Conrad M. Black and other top corporate officers stole money from Hollinger International. We are mystified as to why a federal judge would throw out Hollinger International’s $1.25 billion RICO lawsuit against these crooks. The company will pursue a civil lawsuit but that is not the point. Again, we are faced with two sets of laws, one for elitists and one for us. Lord Black and his fellow thieves were running a “corporate Kleptocracy” between 1997 and 2003 during which time they stole $400 million. This is an example of what is wrong with America. The elitists do as they please and we get little or no protection from the law.
You all know about government statistics being bogus and that millions of jobs have disappeared since the current administration took office. That is dispiriting to Americas and it is one of the reasons G. W. Bush will not return to office. We find it humorous that mainstream writers have to remain within the confines that have been laid out for them by the elitists. They know the truth but are too terrified to report it. They have allowed themselves to become part of the problem. Confidence is slipping as we approach the election. It will not be restored for a long time. The economy, as we knew it prior to 2000, will not be restored. The US and world economies will not strengthen and recover. Our GDP growth rate peaked a year ago. We long ago won the war and we have since lost the peace, as thousands of young Americans die for nothing. GDP growth has fallen from 7.4% to 3.3% as of June. The inventory buildup from the second quarter is taking its toll on third quarter growth and earnings. August durable goods production slipped. New home construction has fallen for the past few months and the issuance of new construction permits has fallen sharply. Personal income in each of the past three months grew at rates half of those in each of the previous four quarters. The purchasing managers’ index has fallen for the past two months and in four of the last six months. Chain store sales have grown only 1.5%, the slowest this year. Interest rates are rising along with oil and natural gas prices and the CRB is poised to make a new high. The dollar is moving lower, and gold and silver higher. The state, local and federal governments are buried in debt. If consumers were not increasing debt, the economy would be headed down even more quickly. The burst of investment that we experienced following the Iraq invasion is petering out and has been slowing for some time. The administration and the experts tell us growth will continue at 4%. We do not believe that for one moment. The second quarter revision of GDP was from 2.8% to 3.3%. Do you really believe that? A one—half percent change. Impossible, it never happened. 3.3% is a number conjured up in a politically diseased mind. We are told growth will be 4% in 2005. We suggest 2 to 2 1/2%. That is unless the Fed opens up the M3 and repo flood gates. In order to get 4% growth we would have to have official 6% to 7% inflation. Of course, that would lead to much higher gold and silver pries. Obviously, even the smart money on Wall Street doesn’t believe the story either. The Dow hasn’t been able to go higher than 10,300 with all the manipulation the Fed could muster. By January, the market will have begun its decent. Most corporate executives agree with us, they see 2% growth in 2005. Not one of 50 Business Council members expects accelerating growth. Earnings probably were up 14% this year. If they are flat to up 8% next year, we are looking at 2% growth and much lower stock, bond and real estate markets. CEO’s differ from economists in as much as they are not paid to tell people it will be peaches and cream forever. They know there is nothing they can see that supports higher growth in 2005. If Bush were to win, again he would have no plan to accelerate the economy. If Kerry and Edwards succeed, they will be facing one of the worst messes in economic, financial and foreign policy in history. Thus, 2005 will be a slowing year even if the Fed and GSE’s flood the economy with liquidity again. 2006 to 2010 will be even more difficult.
The federal government’s no-fly list had 16 names on it on 9/11 and today it has over 20,000. The suspected list of terrorists has expanded and many on the list are not terrorists. Two thousand Americans have complained to the Transportation Security Administration but to no avail. The ACLU has filed a lawsuit on behalf of two peace activists because our government refused to explain why they were on the list. What the list really is, is a political hit list. The TSA’s Secure Flight Program should be called the Unsecure Flight Program, because it has been a complete disaster. Every time a passenger books a ticket the airline checks the traveler’s name against two enormous government databases, or suspect lists. If you are traveling as a foreigner and they do not like your itinerary, they have your ticket cancelled. If you are a German and you fly from Frankfurt to Mexico City, to Caracas, to Havana, to Mexico City to New York, your admittance to the US will be rejected because you stopped in Cuba. You then become a victim on the no-fly list. All the TSA has is excuses for their incompetence. Our police state is gathering steam and it will not be long before those on the list are picked up and put in interment camps.
What has become known as Patriot Act II and is in reality Patriot Act III will impose draconian measures to relieve you of your freedom. It would establish a national ID card as a national standardization of driver’s licensing: biometric identifiers, including fingerprints, face recognition, photos, iris or retinal scans, and other private physical ID’s for travel documents, which would be used for security in domestic travel as well as foreign travel: establish a national electronic database for birth certificates, with permanent identifying information assigned each individual, such as a national ID number: expand secret eavesdropping and search powers against individuals suspected of terrorist activity, whether or not the individual is associated with a foreign power: in other words anyone who disagrees with the government: the removal of federal oversight further weakening individual privacy rights in library or personal records: allow guilt by association with a group targeted by government: approval of automatic detention without bail in immigration cases at the government’s request: increased secrecy in immigration court matters: approval of the use of secret evidence in immigration matters: allowing the death penalty in terrorism cases, which is a very important issue because anything that you do or say will now be categorized as a terrorist act. This way government can quickly liquidate any dissidents. This act destroys constitutional protections and is a bold, comprehensive attempt to give government dictatorial powers only previously found in totalitarian regimes. Like the efforts for secret Selective Service Draft papers that have been drafted in secret without telling the public what they are up too, and this is a bipartisan effort. This Act would rapidly expand law enforcement and intelligence operations, reduce or eliminate judicial oversight over surveillance, authorize arrests, create a DNA database based on suspicion only, create new death penalties and even take American citizenship away from persons who belong to or support disfavored political groups. Any American citizen who provides material aid to a group the government has designated a terrorist organization would be stripped of his citizenship. An American can lose his citizenship by living outside the country for extended periods of time. You would not have to denounce your citizenship, but citizenship would be withdrawn as inferred by your conduct. This tact would allow deportation of anyone who disagreed with government such as us or the removal of our citizenship if we lived outside the country. This puts all Americans in jeopardy of becoming terrorists. This fear would terrorize the American citizenry into obeying anything government desired. You are about to become prisoners in your own country if this Act passes.We encourage you to immediately contact your elected representatives and stop this legislation, because if you do not we can assure you that you will end up in an internment camp.
As we have said prior to Afghanistan’s invasion, the CIA wanted to control the opium trade and have they been successful in doing so. Production will be up 6% this year from a record 3,600 tons last year. The US investment, of course, is protected by US troops, some of who are giving their lives to protect elitist’s drug interests.Of course, European governments are hopping mad because their countries are being flooded with cheap heroin. Drug enforcement is non-existent. Profits are spectacular. Agents pay the farmer $2,000 for heroin they sell in Europe for $70,000. Not only does the CIA make a profit, but also they ensure the loyalty of warlords and politicians.
Foreign central banks purchased $616.6 billion in 2003, after having bought $351.9 billion in 2002. Asia’s reserves increased more than $350 billion between 1/2003 and 3/2004. This allowed the Fed to pursue its cheap money policy. This held off the recession/depression. The Asians, by accommodating, have fueled rampant credit excesses in their own countries. In the US the excesses of credit use has gone into assets of personal consumption. In Asia, it has gone into capital investment and production, which has led to over-capacity and falling plant and equipment values. Presently in the US, spending on consumer durables is falling as personal savings rise. In the first seven months of the year spending on consumer durables was $23.5 billion, versus $71 billion in 2003 and $58 billion in 2002. The three-month annualized growth rate since January 2004 for real disposable personal income has fallen from 5.7%, to 4.6%, 4.5%, 3.7%, 2.5% and 0.8% this past July. For the first seven months of 2004, real disposable income was up $77.4 billion, or at a $132.7 billion annual rate. It grew $226.2 billion in 2002 and $173.4 billion in 2003. As a result, consumers borrowed to offset declining purchasing power by 74% since 2000. The Fed’s phony recovery will turn out to be a financial and economic disaster in spite of having increased M3 and other credit by some $8 trillion. Over the last 2-1/2 years, annualized growth of real GDP has averaged 3.4%, far below the 5.4% in previous business cycles.Wages and salaries have gained only 2.2% and when compared with the average of 10.6% over past postwar recoveries, it is dreadful. From 2000 through 2003, disposable incomes grew $965.9 billion and spending increased $1.023.7 trillion, and debt increased $2.726.9 trillion. 2005 will slow moderately and 2006 will see recession. 2007 will usher in depression.
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GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
The open interest in gold in April was 305,000 positions. The funds net ratio was 5.5 or 5.5 longs for every one short fund. The current ratio is only 3.3, which means the market is not nearly as speculative as it was in April. You should be aware that the more shorts the more that has to be covered – as bought back in. In April, the small specs were net long about 52,000 contracts. Today, that figure is 40,000, meaning the market is not nearly as overbought. The gold suppression cartel has done lots of selling to accommodate the longs and we are nowhere near previous highs in spec long contracts, which means the Fed will have to short lots more to keep gold from moving upward through $433.00 an ounce. This means this time the gold suppression cartel probably is in deep trouble. They have money to short, but it is the physical market that is going to take them down. The physical buying is relentless and they cannot have much gold left. Once gold crosses $430, every spec in the world will jump on the gold bandwagon. That is little specs, big specs and funds. The cartel cannot stop the run this time. Gold has broken out in yen terms and is poised to do so in euro terms. All technical data suggests higher gold prices and the fundamentals are overwhelming.
There is, as we have said for years, no question that GFMS and the World Gold Council do not report the proper figures and do everything possible to retard the upward movement of gold prices. Firmly behind this undermining is Barrick Gold, Placer Dome and most of the Australian and South African producers. You say: that does not make any sense; it would produce lower earnings for shareholders. Yes, it does make sense when elitists who run these companies are propelled by a totally different agenda. We will say some producers are forced into hedging by banks in order to acquire capital to expand, but other than that, there is a conscious effort to suppress gold prices.
These two organizations and various producers, along with bullion banks and central banks have suppressed gold prices since 1987. First, illegally and then, legally in the US under a 1988 Executive Order by Ronald Reagan. That brings us to government’s part and the minions who are bought and paid for to attack unhedged producers. Anyone who attacks the gold cartel is attacked by them and the SEC in an effort to shut them down. In earlier writings, we exposed the relationship of Mineweb and Tim Wood with the gold suppression cartel, the SEC and the government. We now find Mr. Wood has left MineWeb and started a new publication, Resource Investor. His first article is in defense of hedgers and is an attack on non-hedgers. By the looks of the site and the advertising, we would say that the International Investment Conferences (IIC) is behind Mr. Wood’s efforts. This long-term holder of gold conferences has decided to throw their weight behind the gold suppression cartel, which is the antithesis of what 95% of their small exhibitors are all about. In Mr. Wood’s first biased report, he attacks Agnico Eagle, Goldcorp and Meridian in a thinly veiled fashion. All three of these companies that exhibit at these shows, should take a hard look at continuing to do so. Mr. Wood is part of International Investment Conferences and they are bringing these companies into question. We do not believe any of the small companies share the opinions of Mr. Wood and the management of IIC, concerning their supporting the gold cartel. This is the exact opposite of what these small companies are trying to accomplish. Mr. Wood and conference management like CFMS and the WGC refuse to address the fact that there is a gold suppression cartel. Furthermore, Mr. Wood not only works for the cartel, but as well does the dirty work of our government and the SEC. Thus, we recommend boycotting the new site, Resource Investor, and the International Investment Conferences. They are working to destroy the upward progress of the true value of gold. If you own gold or gold shares and you attend their offerings, you are financing the enemy.
As producer hedge books have been reduced, outstanding gold derivatives have been growing. BIS data is collected from banks and their open gold derivative contracts reflect trading in the forward gold market, not only with producers of gold, but with other commercial banks as well as central banks. It is therefore impossible to establish a one-to-one relationship between BIS data and the hedge book of producers for gold published by the GFMS. There is an increase in speculative short positions unrelated to mining hedge books the GFMS and the WGC refuse to expose. That is because they are fronts for the gold suppression cartel. The central banks and official sources have already dumped at least 22,000 tons of gold via sales and leasing and are now naked-short gold positions in order to keep the suppression going. This explains the silence of central banks, governments, the media, GFMS, WGC, MineWeb, and Resource Investor and over these many years, International Investment Conferences. This cabal of silence has deceived producers and investors for years. Now you can see why blatant contradiction reveals the depth and degree of collusion between all these parties. All these organizations have hurt gold mining companies, gold bullion and coin holders, shareholders and countries whose economies produce gold. We are talking losses in the hundreds of billions of dollars. How any gold producer or exploration company can support these crooks is beyond us. We get no protection from the government, the SEC, or the CFTC, because they are all in on it. The sooner these people are exposed to the gold community, the sooner the price of gold is going to go up. You as owners of gold coins, bullion and shares should be outraged. You should boycott all of these organizations because if you do not you are aiding your own enemy.
NM Rothschild says gold is the cheapest in terms of oil in over 12 years. If the gold oil price returns to its average of 15.7 barrels of oil to an ounce of gold then the gold price would be $840 and ounce.
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International Forecaster October, 2004 (#3) - Gold, Silver, Economy + More
