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US MARKETS

We marvel at man’s ability to want to play with numbers and charts. As far as we can discern, all participants have ended up as financial corpses. LTCM, Long-Term Capital Management, invested on the proposition that if prices fell in a range outside of the norm, you could calculate the odds of how likely prices were to come back. They had 25 Ph.D’s on the payroll. They calculated standard deviations on various debt instruments. They were destroyed by Russian default. The problem is that standard deviations do not work, just look at a roulette wheel. Scholes & Merton were two Nobel Prize winners and they had to have LTCM bailed out by the Fed and other large banks, because their system did not work, which any 12-year old could have told them and the Nobel committee in a snap. There simply is no logic in the extrapolation of chance. Finance and investing are not a science. They are an art form and all those who think they can put a slide rule to human behavior are sadly mistaken. Even worse, to incur debt in speculation is the height of folly. Never use margin because there is enough leverage in stocks and bonds already. It is inherent in their nature. There is no such thing as investing. It is gambling, no matter which way you cut it. The only difference in the tables in Las Vegas and the stock, bond, commodity and real estate markets is that you get to write off some of your losses, otherwise, it is all the same. We can say this with the experience of 45 years in the world of finance and markets. Almost all market moves are unforeseeable and perverse. Then today, to make matters worse, we have the Federal Reserve and the US government manipulating markets: the government, via the Working Group on Financial Markets, also known as the Plunge Protection Team, and the Fed, via repurchase agreements. Random walk, as proposed by some academics and newsletter writers, does not work. It is nonsense. The market is a game of psychological warfare. You determine what the enemy is going to do before he does it. The enemy, of course, is our own government and the Fed. Their agenda is totally different then ours. We invest/gamble to profit and retain the value of our purchasing power, they manipulate markets for power and the benefit of their elitist insiders. Incidentally, they will never allow you to use stocks, bonds and real estate to save for retirement. They want you dependent on Social Security so they can control you. As we write this, stocks and real estate are about to begin a long-term decline and as interest rates rise, bonds will follow. Markets are capable of appreciating or falling up to 30% in one day. It happened in 1987 and it will happen again. Life and markets produce events that should never happen from simply out of the blue. Theories, like the spin of a roulette wheel, have no memories. That is why you take profits on the way up and cut your losses on the way down. Government does not have the indefinite ability to cover up bad news for any extended period of time. You will see this quite shortly in the form of falling markets. This time the downside will be greased by a totally fiat currency. This is why we have bull and bear markets. Civilizations and life within them have an ebb and flow, which is replete in history. You simply have to be observant to figure out which way the flow is going and you act accordingly for your survival. Life is an art form, not a science. You almost never know what people are going to do. You guess at the direction they will take. It has nothing to do with intellect and everything to do with street smarts. Today, we see a crumbling economic and financial structure. If you can recognize that, you can save your assets and perhaps your life. The only way possible to do that is by having gold and silver related assets, otherwise you are doomed. This is one of the times in the history of man that is starkly outlined in black and white and there is only one route to follow.

            Word reaches us from the far reaches of the globe that the dollar is fast losing its place as the preferred world currency. In fact, in Europe the dollar is flat out being dumped. This has been particularly evident in Russia and the CZ-Republic. The Chinese are dumping dollars as well. Russia and China are moving a good part of the exchange into gold, as well as other currencies. In fact, some report actual panic selling of dollars. Considering this, we could soon see the euro at $1.35and the Swiss franc at $1.15. Six years ago, the Swissie was trading at $1.74. It looks like the G-7 may have a run on the US dollar on their hands, and in all likelihood central banks will have to become the buyer of last resort. You want to be long other currencies, particularly the euro and Swiss franc. It looks like a big run on the dollar is developing, and that means gold and silver are ready to breakout to much higher levels. Finally the shares, particularly the exploration shares will start booming again. It also projects much lower stock, bond and real estate prices, and we could see some derivative failures. If you stay in dollars, you will be a loser. If you are not in the game, you cannot be a winner.

            Over the last four years, we have evidenced an overt effort to silence Americans. First by the kept media, which is all but controlled by the elitists. Now we see at peaceful demonstrations across America the police using pepper bullets. In Boston, a young girl lost her life as she was suppressed by riot police. Americans do not need to be suppressed or sanitized at peaceful gatherings. It is their right to gather and it is not the right of government via the police, to become brutal goons of the state. Today when children draw anti-war pictures in art classes or people generally dissent against Washington, they are arrested, interrogated and intimidated via a pattern of thought control by our Secret Service. Our president has the Secret Service and local police remove demonstrators, particularly those carrying signs that might mar the TV imagery of a triumphant presidential motorcade. This is the same tactic used by Adolph Hitler and his brown shirts on the streets of Germany in the1930s. We are being denied our constitutional rights. We should not have to fear violent attacks funded by our own tax dollars. Americans are now supposed to heel, not dissent and not ask questions. To do so is unpatriotic. The real enemy out there is not some nefarious terrorist, it is our own government. The media, except for selective radio stations and short wave, is controlled by the elitists. If all that is not enough they want to use our driver’s licenses and RFID chips to track us and everything we do. We can see Fatherland Security sweeping everyone in a building at a political meeting, actions typical of a totalitarian state. We are only now seeing the tip of the Orwellian iceberg. George Orwell issued us a warning about the future of human freedom in a world where political organizations and technology can manufacture power in dimensions that would have stunned the imaginations of earlier ages or generations. A world where satellites can read license plates in a parking lots, computers that can tap into thousands of telephone and fax transmissions at once, and computers that watch our every move. No one wants to notice the ever-widening gap between our elitist government and the people. We are ruled by manufactured crisis. We are told our enemy is the phantom terrorist, yet in reality it is our own government and those who control it. We must move now before we are compromised beyond repair. We must seek out all the information we can, regarding this effort to totally control us. We must stay undivided by our enemies. We must speak out and listen to each other and seek the real truth. We can no longer remain silent; if we do we will die.

More than 40% of Pentagon contracts since 1998 have been no-bid contracts. During that period, $362 billion in contracts have been awarded. Of the top 10 contractors, only one received more than half of its funds through open-bid competition.  Fifty percent of the DOD budget has some $900 billion since 1998 has gone to contractors instead of to a build up of the military. Seven hundred and thirty seven companies received $100 million or more, most are generous political donors. Mr. Bush received $5.4 million from these contracts in what is a political spoils systems. The great majority came this year. Eighty percent of all defense-contracting dollars were received by 1% of the contractors. Then there is the notorious Halliburton-Kellogg, Brown and Root with $4.3 billion of which half came via no-bid contracts.

            President Bush told the UN General Assembly he was for the creation of a Global Army called the Global Peace Operations Initiative. Italy and the US submitted the proposal; G-8 countries will train 75,000 peacekeepers, initially from Africa.

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GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS

Word from the gold pits is that there are several big buyers in the market with $2 to $3 billion in buying power. They believe as we do that the dollar has another 30% to fall.

            There are big silver buyers in the market but they will only accept physical delivery, which is very difficult to get. If they pay up, they will pick some up.

            Even though the world media has blacked-out the manipulation of the gold and silver markets, there are many out there that realize like we do what is going on. The Chinese, Middle Eastern governments, the Russians, India and hedge funds. The cabal is playing a dying, losing game and they know it, but they have no other choice. If you notice, the corrections in price to the downside are shorter and shallower than previously and soon the corrections will not come, as gold and silver break higher. Everyone wants physical delivery and soon that will break the cartels back.

            The Shanghai Gold Exchange is offering a $4.00 discount on the gold price to attract business. The Chinese government is obviously desperate to dump dollars and take yuan out of circulation.