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The elitists think we are dumb and they could care less what we think. The neocon version of democracy is a sham and a cover, which they hope lends an aura of legitimacy to what they are doing. The media, of course, trumpets the triumph of this so-called democracy when in fact it harks back to the 1930’s Triumph of the Will.
In Afghanistan we are told Hamid Karzai was freely elected, but the media leaves out the fact he was a paid consultant for Uocal, a CIA operative and a front-man for elitist interests.
In Palestine Mohammad Abbas was elected with little support from the people. He is another stooge for US, UK and Israeli interests. He sits in power as Palestine’s real leader Marwan Barghonti sits in an Israeli jail.
In Iraq we have Iyad Allawi who has been an asset of MI6 and the CIA since the 1980s, another stooge for elitist interests.
All three elections were rigged just like George W. Bush’s last two elections to become president. A consistent pattern of rigged elections. It is not the voting that is democracy; it is the counting. In Iraq it took a week or more to count the votes in secrecy of course. All was well though because the UN lent its veneer of legitimacy. As you can see, all is not as it seems. There is no question that there is widespread voter fraud in every election in the US and as well in foreign elections in which the elitists have a stake.
In the real estate market the question is who will get the ax first. Will it be San Diego, Los Angeles or perhaps Phoenix? Let’s take a shot at San Diego where we once lived in the hamlet of La Jolla. The California Association of Realtors Affordability Index recently put San Diego affordability at 10%, meaning that only the 10% of San Diego wage earners could afford to buy a median priced home. First-time buyers are just about locked out of the market. Other buyers are stretched to the financial limit. Just five years ago the 30-year fixed was 7.91%, today it is 5.71% and ARMS are 50% cheaper. If the economy was strengthening it would be different, but the only strength in the economy is real estate itself. Over 75% of San Diego Mortgages are some form of ARMS. Twenty-five percent do not make a down payment and mortgages are being written for as much as 125% loan-to-value ration. Even if interest rates remained the same you will have a topping in the market and some correction. We see rates moving up. How much is dependent on the ability to fund the current account deficit and reduce government’s fiscal budget deficit.
If the San Diego market would revert to mean prices, it would fall by 50% and that is only to the mean. They could and would likely overshoot the mean. Rising mortgage rates should decrease housing demand as more and more buyers are priced out of the market or cannot qualify. Foreclosures would follow and that will feed upon itself. This is the third real estate bubble in Southern California in 35 years, so we know how it works having lived there for 36 years. This boom is little different than the stock market bubble in 2000, except you will find real estate is relatively illiquid in a falling market. This time Americans are way in over their heads in debt and over 50% of loans are ARMs and 50% of loans are sub-par. You talk about a dog’s breakfast – this is it. Households are carrying overall debts equal to 80% of their annual disposable income. Yes, whom the gods will destroy, they first make mad. A major question is, if individual bankruptcies were close to 10 million over the past five years – could they double or triple over the next five years? The answer, of course, is yes.
We are wondering if the pressure on China to revalue is just a ploy and part of the propaganda crusade to blame America’s financial and economic woes on China.
If China were to revalue there would be some nasty consequences. Interest rates would rise as would mortgages. The stock, bond and real estate markets would fall and unemployment would increase. The budget deficit would grow larger but the current account deficit would ease somewhat. Thus, you say to yourself, isn’t it better for the Fed and the neocons to postpone the inevitable and let the yuan remain pegged. You also have to remember China conscientiously enabled the US government to continue its fiscal irresponsibility. Could China have made a deal with the neocons? They have and we will find out in time. Last year China bought $200 billion of dollar assets. This year they have sold $20 billion in treasuries net in the first quarter. Up until the end of last year China and Japan carried the US Treasury. Incidentally, Japan has been a net seller of US Treasuries by some $30 billion in the first quarter. Keeping the Treasury solvent has been Caribbean offshore accounts, which the establishment tells us are hedge funds. We believe it is the US Treasury and the Fed buying our own paper. Thus, the administration just might be making noises about China to keep American manufacturers happy – what there are left of them. No one in Washington wants to face a depression in office, so they will float this game as long as possible as Americans have there wealth stolen by real inflation. How can you protect yourself? Easy, be in gold related assets.
George and the neocons’ puppet dictator in Uzbekistan were responsible for the murder of 600 Muslims last week. This is a bloodthirsty, brutal, corrupt dictatorship, which George Bush has chosen for our ally. His forces fired on peaceful demonstrators, including women and children by helicopter, as trigger-happy militia plowed through the crowd three times randomly murdering people who could no longer tolerate the vileness of George W. Bush’s friends. This is democracy neocon style. This is the same dictator who stashed his gold at the Bank of England, whose daughter was caught with a plane-load of gold in Moscow and who approves of boiling people alive.
Eighty-percent of the citizens of Uzbekistan are impoverished with no quality controls on food or products. Healthcare is being privatized with the careful guidance of the US government. You can open a business only by bribing public officials. It is a society being run by criminals and it stands 114th out 144 in the world index of corruption. These are our new friends. The country exports gold and cotton and lives on handouts from the US and Europe. Ninety-percent of the country is desert. These are our partners in crime.
Fitch has downgraded the senior unsecured ratings of GM and GMAC to BB+ from BBB-. The move reflects the continuing decline in GM’s North American sales of key mid-sized and large SUV products, increasing product and price competition in the larger pickup market, and their affect on productivity. They said the rating for GM remains negative.
We were just informed by a Canadian subscriber that their bank just informed them that all money transfer wires out of the country had to be routed via New York City at the demand of the US government. This is to check to see if you are a money launderer, a drug lord or a terrorist. We are guessing that the US may well be demanding that of all international wire transfers.
It was not a happy meeting in Rottach-Egern, Germany. There were long discussions about the Iraq war and the Middle East in general; how to deal with Iran, Euro-American relations and the coming financial collapse, which they created that is now unavoidable.
The most intensive discussions were regarding the elitist failure in Iraq and why such actions have to be left to the UN and collective agreement.
UN taxation as we earlier reported was high on the agenda. The vehicle most favored was a direct tax on oil at the well-head. Equally as important is convincing people that the UN has the power to tax the people of the world.
They also discussed tax harmonization so that each country’s taxes were the same giving no country an unfair advantage. That would put everyone in the 50-60% bracket.
The game is rigged by government against the citizens.Prices are indexed not wages and even then the BLS lies about prices via hedonics when indexing inflation. The Department of Labor, average gross weekly earnings for private non-agricultural workers rose $267.26 a week in 1982 to $532.17 a week in February 2005, doubling in 23 years. The same figure adjusted for the consumer price index for urban wage earners and clerical workers, otherwise known as CPI-W, rises from $267.26 to $276.95. That is a purchasing power gain of $9.69 over two decades. That is a gain of 3.6%, an annualized gain of 0.16% over half a working lifetime. This is what our government has done to us, simply cheated us.
China and the US are repeating Japan’s worst mistakes in the asset bubble in the 1980s and today’s bubble is on the cusp of bursting. The enormous inflow of funds into China over the last year is creating excess liquidity, which authorities have so far been unable to sterilize in domestic markets. The outrageous property prices in Shanghai are a replica of Japan in the 1980s. In the ensuing years Japanese real estate prices fell 68% and they are still falling. A revaluation of the Chinese yuan would be suicide. They would be better off facing trade sanctions. Chinese revaluation would set off catastrophic deflation of asset and property values. Non-performing loans would explode and in a banking system where half the loans are already non-performing it would be devastating. A currency revaluation in 1934 played a key role in undermining the pro-western regime of Chiang Kai-Shek, preparing the way for a communist revolution. Revaluation means China will no longer need to buy US Treasuries and the financing of the profligate American lifestyle would come to an end. Washington does not have a clue to what it is doing.
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GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
There is absolutely no question and there is no other explanation why purchases of thousands of tons of gold in the futures and forwards markets do not blow the price of gold sky-high. The official sector must step in on gold price rallies as an offsetting forward seller.
The answer to these accusations of market rigging operations is that the BIS report reveals that in major banks and dealers in the G-10 countries, the total national value of all gold derivatives rose from $318 billion at mid-year 2004 to $369 billion by year-end.That $51 billion increase is 32% in annual growth. That increase occurred to offset mining companies that were reducing their hedge positions.
We do not know how long this can continue, but we do know the physical demand for gold is very strong. The cartel can sell all the gold they want and the artificially low price they have created is causing demand for physical gold to increase. We should see the gold-fixing cartel in trouble before the year is out.
The layoffs at Harmony Gold are probably going to run close to 11,780. The South African Labor Court had ruled against harmony’s retrenchment of 4,900 workers earlier this month, now they have new even worse numbers.
The latest Comex data shows that 17 speculators have cut gross long positions by 1.27 million ounces to 17.65 million ounces while 1.76 million ounces of new shorts were established, taking the gross short position to 8l.70 million ounces. This is a four-year high, which tells us the commercials are going to go long and squeeze those shorts. That means we should get a sharp strong short covering rally soon to $430 to $435 an ounce.
In South Africa the National Union of Mineworkers (NUM) has demanded a 20% wage hike for miners working for major gold producers. The Marxist NUM must want to shut down the entire gold mining industry. Essentially two years ago the NUM received a 17% pay hike, which was double inflation. If that were duplicated mining companies would be hard pressed to stay in business.
In 2004 the gap between silver fabrication demand and conventional supply was 21.2 million ounces; the 16th consecutive year of structural deficit. Overall mine production was up 4% and silver produced at primary mines increased by 9%. The latter was 30% of net global silver production. Supply of silver from above-ground stocks decreased 39.8 M oz. to 202.3 M oz. Government sales were off 30% to 61.7 M oz. Most of the reduction was from smaller Chinese sales. Their sales were off almost 50%. Fabrication demand was off 2%, but that was not bad considering silver prices rose 36% to $6.66 per ounce. The electronics field was the big buyer, up 14%. Coins and medal fabrication rose an impressive 15%. Photographic demand fell 6%. Digital camera sales have slowed and it is believed market saturation is near at hand. All in all, another good year for silver consumption. It is now only a matter of time before above-ground inventory is gone and higher prices prevail.
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AFRICA
In Zimbabwe Robert Mugabe is exterminating his people. They now stand and wait for famine. Starvation is upon them. The government has destroyed commercial agriculture. Thousands of farms lay fallow, now the property of local communist officials. Worse yet, 50% of the population is dying of AIDS. It is no wonder Western nations don’t help; they want the country depopulated of useless eaters. Zimbabwe has no money. They cannot buy corn or gasoline. There are 11 million people left in the country, 3.5 million have already fled, 3,300 a week die of AIDS. The country will probably produce 200,000 tons of corn and they need 1.8 million tons. Any aid that comes will be too late. About one-third of the remaining population will starve to death in a country that was once the envy of all of Africa.
Former South African president Nelson Mandela’s son-in-law is wanted by US authorities for the rape of a student in 1993. The event happened while he was an assistant professor at the Manchester Technical Community College in Hartford, Ct. After his arrest in 1993, he was released to go home for Christmas and never returned.
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International Forecaster May, 2005 (#4) - Gold, Silver, Economy + More
