THE INTERNATIONAL FORECASTER
(We only print excerpts)
In an interview with the French newspaper, Liberation, Robert Mundell, a novel-prize winning economist said, “with the emergence of the euro and its instability against the dollar, Europe, the US and Asian powers should come together and create a new “International Monetary System.” The present currencies he said would continue to exist and this international currency would be used in large international exchanges, for movements of capital and commercial transactions. Mundell was one of the people who laid the intellectual groundwork for the euro and the EU from its Common Market beginnings. This is the carrot and the stick approach. The elitists are beginning a new move for a world currency. First is for large transactions and then, it is for all transactions. Today we have many governments managing the values of their currencies in relation to each other to inflate, regulate international trade and to control individual industries and consumer goods and services. Yes, it works for a while but eventually it ends badly. World currency was a child of John Maynard Keynes, who spent years preparing for his bancor currency that was presented at the Bretton Woods Conference on 7/1/44. Interestingly his bancor was a fix unit in terms of gold and was to be accepted as the equivalent of gold. Instead the US plan was followed, a scheme to allow the US to inflate domestically and export its inflation to the rest of the world. This was the brainchild of Harry Dexter White, Assistant Secretary of the Treasury under Truman who was also a Communist. Under a gold exchange standard, dollars were eventually traded in for gold and on 8/15/71 Richard Nixon closed the gold window giving America a true fiat currency. The Bretton Woods System could not last because it was perpetually lopsided. The US wins and everyone else loses. If the years between 1944 and 1971 the elitists attempted to make the IMF the One-World Bank, but that was a failure. In a last ditch effort the SDR was created under the Special Drawing Rights Act in 1968. The idea was for the SDR to replace gold as the basis of the World’s Monetary System. The SDR was a total failure. That was followed in Europe by the ECU, the European Currency Unit, and later by the European Monetary System, equally abysmal failures. The result is today we have hundreds of fiat currencies and only a few have partial gold backing. The elitists have absorbed one failure after another and are about to lose again as gold rises strongly against the world reserve currency, the fiat US dollar. Today they have a helping hand from free trade and globalization, another method they are employing to bring about a world currency. That is part of what WTO and NAFTA are all about. Due to the havoc in exchange rates today trying to fix exchange rates is impossible. Others call for interest rates that would be fixed internationally. That would be one size fits all as in the EU, which has produced very poor results. Europe is still in a recession. There can be no financial and economic sanity as long as the world is full of fiat currencies. The only answer of course is a return to a gold standard, but the elitists will fight that as long and as hard as possible. In the end, they will lose and gold will win.
In 1991, we explained why the US would eventually physically move into the
Middle East. That is to secure the oil and gas for US and European interests,
flank Russia strategically and to profit from the control of the oil and gas.
A number of years later, in 2003, the Pentagon’s National Defense University
produced, “Beyond Containment: Defending US Interests in the Persian Gulf.”
This summarized what we had written about in detail some 12 years later. It
is easy is identify the strategic interest, but trying to guarantee that security,
through a large-scale, visible and permanent-looking US presence will erode
security, undermine security relationships with key Gulf States, impede needed
political reforms, stir domestic opposition within Saudi Arabia and other Gulf
States, and feed anti- American Islamic extremism. The removal of Saddam Hussein
will not eliminate all the problems in the region and it will create some new
ones. No WMDs have appeared, which was the basis for Mr. Bush and Mr. Blair’s
invasion. Instead, Mr. Bush continues to draw a broad link between an attack
on Iraq and Osama bin Laden’s attack on the US. There is no evidence that
this is the case. Once a new government is formed in Iraq, the US will have
a major presence in the country for some years to come and it will still have
to maintain forward-deployed forces in the region, which will continue its visibility,
which in turn will feed Osama bin Laden’s fundamentalist terrorism machine.
It is the excuse and it is the only way radical Islam can fight back. That said,
all efforts should be maximized to capture or kill Mr. bin Laden. The disturbing
aspect of the Bush neocon plan is the intention to unilaterally dominate the
world and form an international fascist dictatorial government. The invasion
also removes, to an extent, the specter of economic and financial problems in
the US. If the public’s mind is on the Middle East, they will not notice
as much the impending economic chaos. If you look at history, you will observe
that every time there were economic problems, war was created as a diversion.
That is what we have here, another reason for the war in the Middle East to
attend to US elitist interests. A shortcoming of the operations is that the
administration has not been able to invade Iran and control its oil output.
Again, that means US bases all over the Middle East, and those bases justified
by terrorism. The problem is the cost to the American taxpayer will be horrendous
and in perpetuity. That also means a draft to supply the warm bodies to occupy
those bases in those lands. Inadequate oil pricing has caused hardship throughout
the Middle East with local incomes dropping over 50% over the past 15 to 20
years. That is why oil is guaranteed to go to $40.00 a barrel or higher. Low
wages cause unrest. Higher wages bring contentment and less reason to follow
radical Islam. If the US is to stay in Saudi Arabia, they have to end the corrupt
government there. If not they will have to take over the government. The US
cannot withdraw from the region, even with Saddam in custody, unless they can
put an end to Mr. bin Laden. Saudi is no more stable now that Saddam is gone.
It faces a falling economy and fundamentalist radicals. Another question is,
can the US replace Saddam with a stable government in Iraq? No one knows yet.
If they cannot the country could explode into civil war. Bringing Iraqi oil
into world markets will not improve energy economics or lower prices. The oil
needs to be sold at higher prices to justify the cost of Iraqi reconstruction
and to line the pockets of Mr. Bush’s cronies. Lower oil prices will eventually
create chaos throughout the entire region. We can promise you 9/11 will live
on, occupation will continue to be used to suppress the American people. That
is necessary, because the elitist know they cannot stave off depression much
NYC, AG, Eliot Spitzer and State law makers condemned the office of the Comptroller of the Currency for passing laws that will limit states’ power in going after predatory lending. The rules, which exempt national banks from some consumer protection laws, were passed last week. The GCC contends it has the constitutional right to preempt state authority and laws since the banks are federally chartered. This is another example of the federal government being used to shield elitists as they fleece the public.
Your won’t hear or see it in the media, but every central bank in the world is printing money and buying dollars to keep their currencies cheap as the US attempts a slow devaluation. Then US wants a slow devaluation so that American and foreign investors do not freak out. That is nice, but it also allows the other nations to fight back and gives them the opportunity to perpetually cheapen their currencies. It is a race to see who can print the most money the fastest. It isn’t only insanity, but it is very inflationary. Everyone is playing the same stupid game and they will all be losers. Ultimately this madness will send holders of all currencies galloping toward gold.
This year we will see a generally sideways market until the fall and then it will start to decline. Commodities, gold, silver, oil and gas will rise in price. 700,000 or more people will drop out of the economy in each quarter of 2004. These are the people our government chooses not to count in the unemployment numbers. That is why unemployment is really over 13%. The jobless recovery will affect consumer spending in an increasing way as we head toward the end of the year. It will bring recession in 2005 and depression in 2006. The Dollar will drop and gold and silver will move higher in 2004 and 2005, as real inflation increases. In 2006 and beyond, deflation will takeover and gold and silver will rise further in a flight to quality from all currencies.
In our 44 years of covering financial markets we have never seen such a stream of propaganda, lies and misinformation come out of the Federal Reserve. Six speeches in the first seven days of 2004. This isn’t coincidence, this is disinformation. It is orchestrated and it is lethal for our economy. They have to convince the public and investors that the recovery is real to make it a self-fulfilling prophecy. Alan Greenspan has been fighting a rear guard action for 16 years. We never really recovered from the 13% inflation of the 1970s. We just continued to print money, robbing people of their savings so that when they retired they had very little to show for 40 to 50 years of work. Monetary inflation is theft by stealth. Sir Greenspan is now beating his chest, due to his strategy of addressing the stock market’s bubble consequences, rather than attacking the bubble itself as he should have in 1996. Sir Alan created the bubble, so he certainly didn’t want to destroy it. The consequences of that bubble have not even begun to appear, but they will be addressed in 2005. We see the brightest of world economists back off from calling the US government liars regarding their inflation figures. We are distressed when we read fine economists who say that inflation has effectively been eliminated. What planet are they on? The economy is being held up by tax cuts, fiscal insanity, and reckless FED aggregate creation and almost zero interest rates. That cannot go on forever. The average person has been pushed into hard assets. Property assets, and now gold and silver, are now the haven to escape the dissent of the US dollar, the fiat world reserve currency. The problem is these assets to a great degree do not lend themselves to being liquid and this makes FED policy very difficult to achieve. If you then add virtually no savings, record levels of personal indebtedness, a massive budget deficit, a record current account deficit and burgeoning trade deficit you have consumers who can only consume on further indebtedness. That is why the FED has to have foreigners lend us $1.7 billion in fresh cash every day. Thus, the bubble in the stock market that the FED created has spawned bubbles in credit instruments, pensions, bonds, real estate, refinancing, derivatives and in commodity prices. Although commodities have only begun their assent, on a scale of 10, they are a 2. One of the biggest questions is how dumb are the foreigners who are lending us money and losing it as the dollar falls? They seem to be getting the message. In the third quarter, only $59 billion in inflows versus $212 billion in the first half. That is an inflow reduction of 45% and it would have been much worse if central banks, particularly Japan, hadn’t bought most of the Treasury paper. If nothing else these figures show foreigners are cashing in dollars for something else. The day of reckoning is near at hand. If not this year, then next year, though probably this year. The future is treacherous. The key lever is interest rates. Once they start moving up again all heck will break loose. Finally, that is when the FED will realize the game is coming to a conclusion. This time damage containment won’t be possible.
We have a new respect for Paul O’Neill, he has done the unpardonable and told the truth about what goes on behind the conspiracy’s doors. Mr. Bush and his neocons could not have a war fast enough. There were no WMD. Mr. Cheney says deficits do not matter. The resident nutcase now has a new space plan to divert the mindless masses from more important issues, colonies on the Moon and Mars. Yeh, beam us up! That is after he brings capitalism and democracy to Iraq and Afghanistan at the point of a gun. The White House is understandably deeply disturbed with Paul O’Neill, so they now have him under investigation for exposing classified documents. We have been there. Everything up to and including top secret can be found in your local newspaper. This is just a feeble attempt to get back at Mr. O’Neill for telling the truth.
China has 500 million unemployed or under-employed ready to work. The rest
of the world can sit around and do nothing as China does all the work. That
is 30 years of slave labor waiting in the wings. 48% of GDP growth comes from
exports. What happens when the world slides into depression in 2006? China could
have lots of idle factories and revolution on its hands. We are not all that
bullish on China. They are more vulnerable than we are, especially if we erect
At the Summit in Monterrey, Mexico last weekend, Washington has called for corrupt governments to be expelled from the OAS, the Organization of American States. We assume Washington will leave first.
US border agents will soon have access to the immigration and tax records of Canadian residents for use in nabbing terrorists before they cross the American border. A merging of Canadian and US Immigration and Customs databases will also help them intercept illegal aliens, criminals and fugitives. Canadians your government has sold you out again. Revenue Canada files will be in possession of every employee on the border and others.
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