Oil persists in selling at over $50.00 a barrel. Even with the bogus statistics, unemployment is worsening. Consumers now totally disbelieve on a widespread basis that inflation figures are simply lies. The combat goes on each and every day in Iraq and Afghanistan with no end in sight. As we reported a month ago, GM will shut plants and fire 25,000 to 35,000 workers, shifting more work and buying to China, as America’s industrial infrastructure is permanently destroyed. The Working Group on Financial Markets and the Fed cannot keep the market up much longer.
The US consumer is 75% of the US economy. In April borrowing grew at the slowest pace in five months. Consumer credit or non-mortgage loans rose $1.3 billion or 0.7% at an annual rate, to $2.121 trillion in April. Credit card borrowing fell for the second straight month. In March, consumer debt rose $6.9 billion. What is even more significant was that economists predicted an increase of $7.5 billion and the Fed $5.5 billion. As you can see they do not have a clue to what is going on. As borrowing diminishes the economy slows and that leads to lower long-term yields on Treasuries, which means the Fed may not raise interest rates ˝% before the year is out. Last week the 10’s yield fell to an inter-day 3.84%, while the two-year paper rose to 3.58%.
It will not be long before we have an inverted yield curve that spells recession.
It is so exciting being part of the world socialist system. Recently, the World Trade Organization, WTO, which supercedes our sovereign laws, ruled, in a case brought by Antigua, that the US cannot block other countries from offering Internet gambling to Americans, even if they live in states such as Utah and Hawaii where gambling is illegal. Twenty-nine attorney generals have written a letter to US Trade Representative Rob Portman calling for a greater states’ voice in future trade talks. What an exercise in futility. Where were they when the case came up for hearing? Their letter is a waste of time. The elitists in Washington are going to do as they please unless we force them to leave WTO and NAFTA. These trade agreements are a disaster for our country. The AG’s have requested Portman withdraw gambling from the trade agreement. Why don’t they request we withdraw from the WTO? They say it violates our sovereign authority, so why limit it to one issue? The reason why is that it is politically incorrect. The bottom line is we should leave WTO because it is not in our best interest to be dictated to by a pack of socialist foreigners.
There is absolutely no question that the huge and largely uncontrolled flow of illiterate, unskilled Latino illegal aliens into the US is increasingly sabotaging not only our legal immigration process, but has undermined the wage structure of our entire economy. We do not have a boundless capacity to accept these people who are consciously violating our laws. There are 20 million of these illegal aliens in our country, of which, some 50% have no health insurance and some 35% receive some sort of federal benefits.
One in 20 US workers is an illegal alien, whereas in 1970 that was one in 100. In 2000, 63% men and 57% of women did not have a high school diploma and their average wages were 41% lower than the average US wages for men and 33% lower for women. Disturbingly children of Mexican immigrants have lower levels of educational achievement and wages than most native-born workers. Among men the wage gap was 27%; about 21% were high-school dropouts and only 11% were college graduates. It has been found the more illegal aliens that arrive in the US the harder it is for low-skilled workers already in the US to advance. In 2003 inflation-adjusted weekly earnings for all Hispanics (foreign and American born) dropped by 2.2% and in 2004 they fell 2.6%.
Needless to say, this flow has to be stopped at the border and the felonious employers should pay fines and go to fail. Those picked up should be sent back home. It is the only way we can control the program.
Executives at Berkshire Hathaway’s General Re unit knew four years ago the AIG would use a reinsurance transaction to “cook the books,” according to phone transcripts purloined by investigators. This is another case the SEC refused to pursue until NY AG Eliot Spitzer went public on the fraud. This was a coven of corporatist crooks led by the Greenberg crime family.
We expect soon that dissent will be criminalized. It will be called unpatriotic, un-American and terrorist. Dissent will be called assault and under that guise it will be criminalized. The basis is speech that denigrates the power of government is assault. This has already created an element of fear in our nation and as the perpetual wars expand, so will economic problems. If you do not attempt to institute change and stay in the battle, we are all lost.
More for subscribers....
COMMODITIES
In an effort to rig or so-called manage the oil prices, the head of OPEC said he will seek a 500,000 BPD output increase if prices stay high. Only in Your dreams.
In the third and fourth quarters demand for oil is going to expand so you can expect prices to remain over $50.00 a barrel.
The DOE says US crude supplies fell 1.8 million barrels in the week ended 6/10/05, gasoline fell 900,000 barrels and distillate stocks rose 2.5 million barrels. Crude is again over $56.00 a barrel.
Saudi says they will pump 500,000 more B/O/P/D. What they did not tell you is, it would be medium-heavy to heavy oil, which has a very limited market and is not easy to sell. Matthew Simmons “Twilight in the Desert” agrees that the kingdom’s aging oil fields will not be able to sustain the higher levels of production needed to satisfy the world’s growing thirst for oil. Refining seems to be as big a problem as production and more refining capacity will not be ready for three to four more years, at best. Be as it may, we are going to soon find out who is correct, Simmons or the kingdom’s geologists.
More for subscribers....
GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS
This past week the European Central Bank reported that three member central banks sold E1421 million of gold or 13.3 tons at the current book value. The previous week they sold 8.2 tons. These are the largest sales since the 47 ton sale in early May. In June and July, their sales should be completed per the banking agreement.
Andesa gold analyst Dr. David Davis has released a 55-page report, which says gold will reach $1,200 an ounce by the end of 2015. In 2008, it will see $700 and then $800 in 2010. He says supply is falling and demand is increasing. When central bank sales cease, the laws of supply and demand will take over and gold will explode.
Barkleys' Global Investors, a unit of UK-based Barclays PLC, which has been a staunch anti-gold and silver advocate for many years, will file an application for the first silver exchange traded fund with the SEC before the end of the year. We do not see how the fund will be able to get silver for delivery. There is very little liquidity in the market already. We see very little institutional interest because the market is too small and illiquid. If it is approved you can bet it will be designed to suppress prices just as gold ETF’s are doing.
As we write this paragraph, mid-Friday, gold has advanced over $440. As we predicted, we had our move to $430 to $435 and now we are pleasantly surprised that gold has broken out and is headed toward $456-$458. Pros are beginning to realize that Sir Alan Greenspan is making the mistakes of the 1970s all over again. Stagflation and ever increasing debt at all levels, in addition to ridiculously low interest rates. As we suggested, once gold broke the 350 euro level gold would take off – and it has. Gold has decoupled from both the dollar and the euro. The link to both is broken. Gold is again trading as the only real currency in the world as we predicted it would. Gold and silver are reassuming their monetary roles. All your assets should be gold and silver related, plus oil, gas and commodities. We will soon enter stage 2 of the gold bull market. We expect 4 phases culminating in a gold price of $3,500.00 an ounce.
The breakaway gap of Thursday with gold up $7.00 to $435.70 was accompanied by a euro gold price of 361. Once that is broken to the upside it’s up, up and away. Sooner or later the gold suppression cartel will run out of gold and when they do gold and silver prices will roar, and this could be it.
** Receive an Introductory Copy of the IF -- Please Use the Form Below** --
More for subscribers....
SUBSCRIPTION and RENEWAL INFORMATION: 1-YEAR $129.95U.S.Funds.
Make check payable to Robert Chapman (NOT International Forecaster), and mail to P.O. Box 510518, Punta Gorda, FL 33951-0518. Please include name, address, telephone number and e-mail address. We accept Visa and MasterCard charges. Provide us with your card number and expiration date. We will charge your card US$129.95 for a one-year subscription. Note: We publish twice a month by surface mail or 3-4 times a month by E-mail. Correspondence to Bob Chapman international_forecaster@yahoo.com, or for subscription information IF_distctr@yahoo.com
Foreigners please use foreign U.S. dollar denominated checks or Money Orders.
*****
EFFECTIVE IMMEDIATELY
PLS NOTE: THE 4-DIGIT EXTENTION OF ZIP CODE IS REQUIRED ON ANY MAIL BEING SENT TO US UNLESS THE COMPLET 9-DIGIT ZIP CODE 33951-0518 IS INCLUDED ON THE MAIL YOU SEND, OUR POST OFFICE ADVISED THAT IT WILL BE RETURNED TO SENDER.
The views contained here may not represent the views of CapitalUpdates.com,
its affiliates or advertisers. CapitalUpdates.com makes no representation,
warranty or guarantee as to the accuracy or completeness of the
information (including news, editorials, prices, statistics, analyses
and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or
materials contained on or within this website, without the express
written consent of CapitalUpdates.com, is strictly prohibited. In no
event shall CapitalUpdates.com or its affiliates be liable to any person
for any decision made or action taken in reliance upon the information
provided herein.
International Forecaster June, 2005 (#3) - Gold, Silver, Economy + More
