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THE INTERNATIONAL FORECASTER 12, June 2002 (#2) An international financial, economic, political and social commentary. Published and Edited by: Bob Chapman Vol. 6- No. 6-2 (46pgs) Phone & Fax: 941 639 4756 NEW: E-mail: bif4653@comcast.net PLEASE NOTE: THIS ISSUE IS COMING TO YOU EARLY SINCE WE WERE AWAY LAST WEEK AT THE GOLD CONFERENCE IN VANCOUVER. WE WILL ALSO PUT AN ISSUE OUT NEXT WEDNESDAY, JUNE 19TH SINCE WE WILL BE TAKING OFF ON THE 20TH TO CONNECTICUT TO VISIT THE GRANDCHILDREN. UP-COMING CONFERENCES The Fifteenth Annual New York Institutional Gold Conference will be held on September 23-24, 2002 at the New York Marriott Marquis in New York City. This Conference provides institutional and sophisticated investors with education about gold, precious metals and mining investments. This is the best-attended and largest investment conference for this region of the U.S. Senior management from hundreds of international natural resources companies will be available offering profit potential and capital preservation for market participants. Meet more than 100 mining companies including newly listed NYSE Gold Fields Limited. Hear from renowned financial experts like James Grant, Bob Chapman, John Hathaway, Ian McAvity, Jim Sinclair, David Tice, the Aden Sisters and many more leading advisors. Two full days of exhibits, workshops, newsletter editors workshops and exclusive events for institutional investors. For more details contact International Investment Conferences at (800) 282-7469, ext. 213 or iiconf@iiconf.com. Website: www.iiconf.com. Sandy Lawrence President International Investment Conferences, Inc. 6310 Sunset Drive Miami FL 33143-4823 sandylawrence@iiconf.com Phone (305) 669-1963, ext. 213 Fax (305) 669-0404 SOUTH-WEST FLORIDA GOLD-EAGLE CONVENTION REGISTRATON INFORMATION DATE: Saturday, June 29, 2002 TIME: 2:00 P.M. EST Registration Begins PLACE: Punta Gorda Harborside Holiday Inn http://www.holidayinharborside.com/ ADDRESS: 33 Tamiami Trail, Punta Gorda, Florida 33950\ (Hwy. 41 on the Peace River) RATES: Special room rates $62 off water / $72 on water TELEPHONE: 1-941-639-2167 FAX: 1-941-639-1707 DIRECT TOLL FREE RESERVATIONS: 1-877-639-9399 CONVENTION ITINERARY: 2:00 / 3:00 P.M. Registration 4:00 P.M. Bob Chapman – Keynote Speaker will be assisted by Richard Radez, President of Precious Metals for David A. Noyes & Company. He is also a consultant to David Tice and the Prudent Bear Fund. He is considered as one of the leading precious metals share Specialists in the world. 6:00 P.M. Catered Buffet Supper in the Dining Room 7:00 P.M. Discussion and Questions in the Convention Room Cash Bar 20 steps away – covered patio located off convention room for smokers. Water and Iced Tea in the Convention Room – all facing the Peace River. COST: Total cost per person is $30.00 usd. Spouses are encouraged to participate. CONVENTION RESERVATIONS & REGISTRATION: Please make checks payable to: Jon J. Bauman 3086 Harpoon Lane St. James City, Florida 33956 Registration will be completed upon receipt of check. LIMITED SEATING: There is a maximum limit of 80 to 90 persons. All reservations based on a first come-first serve basis. ADMINISTRATIVE CONVENTION CONTACT PERSON: Jon J. Bauman - E-MAIL – JONJBAUMAN@aol.com Tel. Number - 1-239-283-1807 AIR TRAVEL INFORMATION: SW International Airport, 40 minutes South of Punta Gorda http://www.swfia.com/ TRAIN TRAVEL INFORMATION: Arrive @ Fort Myers. Florida (FTM Station) http://www.amtrak.com/ RENTAL VEHICLE INFORMATION: http://www.rentalcars.com/Auto_Car_Rentals_at_Major_Airp/Auto_Car_Rental_F ort_Myers_Flo/auto_car_rental_fort_myers_flo.htm ADDITIONAL TRAVEL INFORMATION AND AREA ATTRACTIONS: http://www.this-town.com/Map_State_of_Florida.htm MAPS: PUNTA GORDA HARBORSIDE HOLIDAY INN: http://www.mapquest.com/maps/map.adp?country=US&address=33+TamiamI+Trail&city=Punta+Gorda&state+Fl&zipcode=&homesubmit.x=36&homesubmit.y=11 PUNTA GORDA, FLORIDA: http://www.mapquest.com/maps/map.adp?coutry=US&address=&city=Punta+Gorda&state=Fl&zipcode=&homesubmit.x=23&homesubmit.y=7 SOUTHWEST FLORIDA INTERNATIONAL AIRPORT: http://www.mapquest.com/maps/map.adp?airportcode=RSW&submit.x=45&submit.y=5 Disclaimer: This convention is not affiliated with Gold Eagle Inc., http://www.gold-eagle.com/, Vronsky or Westerman or any other derivative of the commercial name Gold-Eagle. This convention is a non-profit event sponsored by Citizens, posters, lurkers and other interested parties for entertainment and educational purposes only. The author/sender of this notification/publication in no way guarantees, expresses or implies any commitment or obligation on his behalf. Caveat Emptor. USMARKETS Since the beginning of May share prices have been moving lower with the waning of confidence in a strong economic recovery. Prices were depressed further by continued skepticism about corporate disclosure and accounting practices and evidence that corporate earnings were not recovering as predicted. These were followed by scandals pertaining to stock analysts’ biased recommendations and kickbacks in the hot IPO market of the late 1990’s. Even though economic activity picked up in the first quarter financing needs fell 25% from the previous quarter and business investment was off dramatically. Derivative activity fell slightly and the notional value of transactions was off 1%. All in all the first quarter was a good one. Unfortunately the second quarter is faltering and perceptions of the US investment climate have clearly changed. Now that the dollar is in free fall and the current account deficit looks to be $465-$475 billion this fiscal year foreign investors are scrambling to pull their funds out. Net foreign inflow was only $14.6 billion in the first two months of the year versus $44 billion last year during that period. Foreigners seem to be convinced that America has its own brand of crony capitalism. We still recommend the following SHORT POSITIONS: The first number is the price when we recommended it, the second is the current price and the third is the price to cover. GE $37.96, $30.20, $, $29.00; Citigroup $46.93, $41.00, $34.51; J. P. Morgan Chase $36.04, $33.69, $29.04 - stopped out – but re-short for $23.00; Monsanto $54.00, $26.31, $19.75; Goldman Sachs $82.25, $73.95, $63.27; Amazon $6.71, $18.58, $3.00; Sun Microsystems $10.40, $6.42, $6.25; Computer Associates $36.00, $17.11, $18.13 – stopped out – but re-short Open; AOL-Time $32.01, $16.55, $18.00 – stopped out – but re-short for $12.00; Fannie Mae $79.00, $77.47, $48.13; Cisco $17.26, $15.73, $11.04; Dell Computer $24.92, $26.28, $16.01; Ebay $35.38, $56.67, $26.75; Temple-Inland $56.66, $53.57, $34.63; International Paper $40.85, $42.81, $26.31; Boise Cascade ... (MORE).... ... The dollar is plunging. Will foreigners sell the $1.69 trillion in US stocks that they own? We believe a good many will, which can only mean lower prices. In the last quarter import prices were off 2.3% down for the 5th quarter in a row. This is deflationary. This is what we explained four years ago. Free trade brought cheap goods to America suppressing inflation. That plus has become a burden as imported goods’ prices continue to cause deeper deflation, which is offsetting the inflation caused by monetary inflation created by the FED’s increase in monetary aggregates. This is why we are headed into a deflationary depression. This is why George Bush began to erect trade barriers for steel and plywood. We were told free trade, at least for now, must end, because it feeds deflationary forces. But it’s too late; free trade cannot be reversed quickly enough. Irrespective the elitists have to attempt to alter free trade otherwise they lose control and the goals of world government will have to be abandoned at least for now. The US Patriot Act violates the US Constitution. It allows government to conduct warrantless searches, which destroys our privacy rights. The FBI may now monitor libraries, the Internet and religious institutions without probable cause. Telephone surveillance has become an epidemic. The excuse is terrorism. Obviously this is what 9/11 was all about. The easy excuse to spy on every American in his or her own homes and businesses. It’s like a thief hiding in a closet in your home. Last year our government misplaced $17.3 billion, or better yet it was stolen. In April and May there were 4.2 insider sales for every insider purchase. This lopsided affair could be the result of Enron’s debacle noting how unwise it is to concentrate one’s wealth in any stock, particularly that of one’s employer. Then again the selling may be coming from other inside crooks that have cooked the books and want out before they have to “neither admit nor deny.” The SEC is pursuing five stock market analysts for potential conflicts of interest, violations of securities laws, undisclosed compensation and personal trading in subject securities. These are the analysts for major Wall Street firms that recommended buying many securities right up to their collapse or bankruptcy. The New York State Attorney General’s office has Citigroup’s Salomon Smith Barney brokerage unit on their menu. The next alleged malefactor is Jack Grubman who often performs his promotion on CNBC. Congress has managed to make the family home a store of value for the American public. You consolidate your debts by refinancing an appreciated home and it’s the only way to take interest as a tax deduction. Then came Fannie and Freddie who give out mortgages like popcorn. Nothing or little down and favorable interest rates even if you are a bankrupt. That moves the unqualified into homes moving present owners up into more expensive homes and driving up prices. In spite of 50% or more losses in the stock market home prices have kept the economy from entering deeper recession. Just in the last two years house prices are up 15%. Homes are not only places to live but are piggy banks. In fact now if you miss a few payments they just tack them on to the end of the loan. Home values have peaked and the only direction left for them is to go down. If investors are staying out of stocks and bonds and their home value begins to recede the only place left to go that has liquidity is into precious metals and tips. Over long periods of time gold always has maintained its value and liquidity. At this point in the economic cycle gold and silver are vastly under priced. The fall in the dollar that will force stocks lower will also force real estate lower. Foreigners in US real estate will sell to take a profit and switch to euros. Debt financed consumption that began this bubble almost 20 years ago will take a number of years to work off. First quarter S&P earnings were $11.28. The second quarter is estimated to be $12.64 or a total of $23.92 for six months. The experts say we should expect $52.27 for the year or $28.35 for each of the next two quarters or $14.18 for each of the last two quarters. S&P says its index earned $38.85 last year. This guideline presently is hard to follow because S&P’s new measurement is “core” earnings. They will deduct from reported earnings the imputed cost of options granted to executives; expenses related to under funded pension plans and restructuring charges for actions such as layoffs and relocating plants. It will exclude charges for discontinuing a business linear product, as well as charges related to mergers, acquisitions, litigation, and investment gains on pension-fund assets. S&P, in order to make salient comparisons, will calculate and publish core earnings data for the past ten years. That would bring core earnings for 2001 at $28-$29 per share much lower than the $38.85 previously calculated. They will be like GAAP pre-results. This is the real world and that is not what Wall Street wants. That puts those First Call estimates out in left field, but that’s what Wall Street will want to use whether they are realistic or not. The conflict will hurt share prices. We believe S&P is absolutely correct in their assessment. The companies will go right along reporting false earnings until they are forced to report them honestly and correctly. No matter what Wall Street and these companies think, confidence is slowly ebbing away in what is a slow and steady capitulation, which is bringing to a close the bear market rally. We will see 8,200 on the DOW broken this year and the calamity to follow will be gruesome. Investors looking for downside protection have accumulated large put positions with strike prices near current levels of the SPX. They are looking for an SPX fall. Traders who sold these calls will have to sell the stocks if the nearly targets are reached accelerating the downside, which will feed on itself. Put premiums are increasing but call premiums are not. We are starting to see premium build in gold share calls such as the *Goldcorp July 10’s. We have spent a lot of time contemplating the affect of a second terrorist attack. Although the administration has given ample warning over and over again that it’s coming we don’t believe the public really believes it and if it comes they will be almost totally psychologically unprepared. The event will prove that government is incapable of protecting them. A second attack could be a devastating blow to the market, which would take it to new lows, which is what the elitists desire because they will remain blameless. Consumer confidence would be crushed and GDP would quickly fall 1%. We don’t see airlines being targeted except by surface to air missiles. The real vulnerable locations are power and water plants, insurance companies and the banking and brokerage industries, Wall Street. Malls are very vulnerable as are amusement parks. This is one of the residual reasons money is flowing into gold, silver and gold and silver shares. The perennial flight to quality. Defense stocks and oil users have also faired well. Any kind of military action will send gold higher. You must be long gold and silver related assets on a longer-term basis. ... Either we have the worst intelligence agencies in the world or they knew the 9/11 attacks was coming and did nothing about it. We have had extensive experience with the intelligence community and we believe the latter is the case. Now that they and the Bush gang have been discovered no one is saying anything and a dark cloud has descended over the media. We do not need to give the FBI and CIA expanded police powers we need the executive branch to stop creating events so they can shape policy favorable to them. The Bush gang is using the muzzling of the FBI, which Bush was responsible for, to issue new diktats that allow policing agencies to regulate a police state. We will see one perpetual fishing expedition after another with not one bit of evidence. We are about to find out what it was like in Germany in 1930 and 40’s. All your personal data is right there at the crossroads of modern marketing and federal law enforcement. It’s all a fraud to control us and regulate our lives. We are the slaves in a master slave relationship. The public is still convinced that it is being protected by government from terrorism when in fact the government has become the enemy. When you are hostage you identify with your kidnapper, as friend and protector for fear death will befall you. You are a victim of state terrorism, which is forcing you to accept me, the state. There are no coincidences in life. Everything happens for a reason. Top elitist Henry Kissinger, former secretary of state, will become advisor to Hick, Muse, Tate and Furst, a private equity firm specializing in buyouts. The CIA has created its own paramilitary unit to deal specifically with terrorists overseas. Its officers can operate without uniform or identification as officers of the US government and can only be put into action under secret authorization of the president. The CIA has been doing this for years using contract employees, now it’s official. Over the last two years we’ve had investigations and fines and on-going civil and criminal litigation involving accountants, analysts, brokerage and investment bankers and IPO criminality and now finally they have caught up with the worst group of all traders. We have written about their antics for 35 years and finally that section of the industry is coming under fire. Knight Trading Group a dominant force in wholesale trading is being investigated by the SEC following allegations from a former senior executive that the company engaged in improper trading called front running. The snitch, former head of Knight’s institutional trading desk, alleges an elaborate system of trading-rule violations that cost investors millions of dollars. The scope of the stealing is enormous. As Knight and others profited in advance from customer orders by buying in front of known customer orders. This and collusion have been going on for years. If the allegations are proven criminal, charges could follow. In January Knight paid a $1.5 million fine for trading- rule violations. The company has already dismissed two senior traders. The company’s stock has fallen from $78 to $5.92 a share. How did we miss this one? The Office of Federal Housing Oversight has codified tepid rules for Fannie Mae and Freddie Mac, none of which questions their market dominance or their use of derivatives. The agencies have been paying consulting fees to board members, which is a conflict of interest. Credit markets are concerned over the credit-worthiness of Farmer Mac, a corporation created by Congress to help bolster the farm loan market. Bids on default swaps have risen sharply over the past month, from 60 basis points to around 200 BP. The increase reflects investor concern over rising loan delinquencies and the agency’s financial disclosure. Farmer Mac is the largest issuer of unrated debt in the US with $3.2 billion in debt at the end of the first quarter, with some $2.3 billion coming due within a year. Farmer Mac’s stock has fallen from $62 to $30 a share, a 50% drop. We expect that will soon happen to Fannie and Freddie’s securities. Farmer’s CEO and the government say Farmer will be just fine. If you believe that we have a bridge for sale. Your tax dollars will bail them out, but that doesn’t mean the stock can’t go into single digits. We reject the scenario for a soft landing for the economy. As the dollar corrects the euro and yen will go higher inhibiting their exports, but due to a worse recession than in the US the demand for imports will not grow. Higher inflation in both regions will be moderate. A hard or crash landing will be more severe on Europe and Asia than in the US although their possibility of social unrest will be far less than in the US. Europe is strangled by wage rigidity and fiscal constraints. A continuation of the recession will cut European GDP at least 1% and Japan at least 1/2%. Hardly hit will be the rest of Asia, Malaysia, Hong Kong and China, which are pegged to the dollar. A dollar crash will have a devastating impact not only on the US financial market, but also on world markets. Not only have foreigners begun to pull their assets out of the US but so have US professionals, witness the Nikkei DOW’S result climb. The result will be higher interest rates and lower bond and stock prices. This will have significant negative consequences for a wealth-dependent US economy. As housing prices fall, the debt bubble is pierced and derivatives go out of kilter. American consumers, not ever having had a bad day in their lives, would lose all confidence and go into hibernation. What will you do if your pension check is cut in half? Also, as the dollar slips lower consumers won’t spend, they’ll reduce debt and save. Businesses won’t make expansion commitments and their pricing power will be totally gone. GDP growth would be zero or worse. A hard landing for the dollar is now a high probability event. The alarm bells went off when we switched to steel and plywood tariffs, then the dollar broke. Any correction of more than 25% in the dollar versus the euro, yen, pound and Swiss franc would signal a dollar crash. ... GOLD, SILVER, PLATINUM, PALLADIUM & DIAMONDS The FED has completed its monetization of 9/11 as it has done in every crisis since 1987, when they not only force fed aggregates, rigged the stock market, but also destroyed the gold market knocking it down $100 an ounce in one day. We expect once the FED is again forced to raise rates then the monetary spigot will again be opened with greater force than ever. That will not make the economy recover; it will send the stock market lower and gold higher. The ongoing complicating factor is perpetual war for perpetual peace, which is economically unproductive and will create massive unsustainable debt. Even risk and political uncertainty is tailor made for higher gold prices, so you cannot be out of gold and silver related assets. If for no other reason than what George W. Bush will do next in the elitist plan for world government. And all of you out there who know and see a conspiracy and cannot recognize its ultimate goal of world government are either afraid to be politically incorrect or you are dumb. This time the FED and other central banks have no intention of printing their way out of depression. They want it and they have planned it. The rest is disinformation and psywar. We will end up like Argentina and you can take that to the bank, unless the mobs have burned it to the ground. Another undiscussed factor is the dollar crisis has made the euro, that political unit, viable because it has 15% gold backing. We don’t know what gold dollar backing is, our government refuses to tell us. Since the planned event of 9/11 the reason to hold gold and silver is more important than ever. The elitists have made the world a very unstable place. The program of war in the Middle East has shifted dependency of the US and Europe for oil from Saudi Arabia to Russia. This is a major mistake. The name of the enemy may no longer be Soviet but Russia is still the enemy. They have been arming themselves to the teeth for the past ten years, massive underground facilities and all. All currencies are suspect, now even the dollar. If you remember bad money drives out good and so it will happen again as it has for centuries. Americans are going to pay a terrible price by not having a currency guaranteed by gold. That means Americans have to use their own initiative and use their fiat dollars and buy gold related assets. Last week the gold manipulators pulled another stealth attack overnight in Australia with a follow-up in London. They then pounded the US market but could not put the gold price under $318 an ounce. JP Morgan in an attempt to look unbiased predicted a price in 2002 of $305 and in 2003 of $310 to $325 an ounce. This of course is disinformation, but it does show the gold cartel has given up trying to keep prices under $325 an ounce. The anti-gold propaganda as we predicted is all over the media, 99% one-sided. If anything, they have to fight the growing notion that gold has resumed its safe haven role. This, while the dollar declines and gold production falls. In 1999 the gold producers hedged over 500 tons, but this year they will probably buy in 400 tons. That effectively takes 900 tons out of the market a swing of 23% in a total market of 3,850 tons. The best part is that the hedgers have just begun to cover. Between them and the shorts we are looking at 15,000 tons. The ball has started rolling and it is only going to pick up momentum. The momentum has shifted and those hedges and shorts have finally given gold an underpinning it hasn’t had since 1985. Producers know no matter how much they make hedging it won’t stop the investing public from not buying or selling their shares and that is what this is all about. Share price appreciation. The hedgers are in a zero sum game they cannot now win. Small and medium sized central banks have no gold left to sell or hedge. The only leasors or derivative participants left are the major central banks and leasing due to low interest rates is no longer viable. Now that gold is firmly in the low $300’s many new participants have entered the long side of the market. Thus we see much higher gold prices. You do not want to be out of this market. Those who trade out could get left behind. An absolute worst-case scenario for gold over the next year is $512 an ounce. We are headed toward a lower stock market and lower bond prices due to lack of earnings and higher interest rates and when historically these things have happened, gold has moved higher. As the dollar devalues and deflation expresses itself the price of gold has to rise. Remember gold is a currency and it becomes the only refuge in the flight to quality from the dollar. In holding gold shares, bullion and coins don’t attempt to trade the market unless you are a professional. Go long and stay long. You only trade in the futures and options arena and again if not a professional get first class assistance. Foreign capital is fleeing the dollar and there are few real viable alternatives and gold is one of them. The trend in gold is up and the trend is your friend. Costa Rica’s President Abel Pacheco has decreed a moratorium on operating open pit gold mines. He specifically opposed the open pit gold mining plan of Industrias Infinito SA and its present firm, Vannessa Ventures located near the San Juan River in northern Costa Rica. The moratorium is indefinite. At today’s gold prices that will cost Vannessa $650 million. LeMetropoleCafé says, the Vatican financial managers were told by Goldman Sachs in September 1999 to sell all their gold. They also report that an Indonesian Consortium has 126 tons of gold in Zurich. They have tried to take delivery and were denied. Anglo-Gold continued to reduce its hedge book by 52 tons in the first quarter and 53 tons in the previous quarter. That puts a floor under current prices. Word is the Treasury sold $52 billion worth of gold in the first week of June. We love our country, but we despise our government. The average monthly increase in gold prices over the last 13 months was 1.7% versus a 3% monthly gain in the late 1970’s. This surely is no bubble, as Wall Street would have us believe. Australian gold producers are being urged to cover their hedges because they are toxic besides being fatal by the man who wrote them. He told this to us personally. There are big fireworks brewing. Gold producers are only doing slight covering contrary to belief. They are under enormous pressure by their lenders – bankers. Wait until the full story is finally told. Will they be lucky and just go to jail or will they be lynched? Buy, Buy, Buy. According to the Comptroller of the Currency, as of 12/31/01 JP Morgan Chase held $41.4 billion of gold derivatives of all maturities. The total held by US commercial banks last year was $63.3 billion. We find it of great interest that GATA contributor Gold Fields when interviewed by the Miami Herald upon its NYSE listing hosted by Marxist Nelson Mandela, its investor relation’s person Cheryl Martin said in reference to GATA “the company does not comment on the conspiracy theories in the market”. This is the politically correct attitude of many mining companies and the duplicitous position taken by Gold Fields. We know the mindset, which is, don’t rock the boat. The management of Gold Fields disgusts us. You certainly won’t see us buying their stock when alternatives exist. The evidence of manipulation is overwhelming and we can’t prove it because our so-called court system won’t let us go to discovery. The FED and Treasury are leasing gold and refuse to admit it. Two weeks ago we reported a rumor from the Venezuelan press, which stated, Spokane-based Gold Reserve (GLDR) was told to drop its concession for the Las Brisas project and leave the country. This rumor was entirely untrue. We apologize, but we can’t be responsible when a wire service prints falsehoods. The largest silver horde in history will be gone in two months and legislation before Congress would enable the federal government to become a net silver buyer primarily from US mines. If the government wants to continue to mint Silver Eagles, the world’s most successful silver coin, they’ll have to buy silver on the market. If Congress approves the program it would consume 20% of US silver production. Kinross, Echo Bay and TVX are going to combine plus TVX agreed to acquire from Newmont Mining a 49.9% interest in the TVX- Newmont Americas joint venture for $180 million. Kinross is the acquirer making it the seventh largest producer. Newmont will own 15% of the merged entity. The group will produce two million ounces of gold a year. This is a marriage by high priced producers on the lower rung of the middle -sized producers. Short term there is no excitement as Kinross’ stock fell 21% on the news. After we see all the numbers we’ll comment further. Here is the electronic contact info for the agencies you mentioned in your most recent "GOLD & SILVER POTPOURRI" on Gold-Eagle.com, for any other readers who may be interested in filing a complaint / request for disclosure against JP Morgan-Chase. marketreg@sec.gov SEC http://www.nasdr.com/tips.html NASD https://rn.ftc.gov/dod/wsolcq$.startup?Z_ORG_CODE=PU01 FTC http://www.oag.state.ny.us/emailag/ NY AG The hedges had best cover their shorts or run for the hills, the squeeze is on. Barrick, AngloGold, Placer Dome and assorted others particularly Australians had best extricate themselves or they’ll be in deep trouble. If their plight wasn’t difficult enough they only comprise some 11% of shorts. They have massive competition trying to cover as the gold price moves ever higher. We don’t expect much covering, they are too committed and it’s almost too late. They’ll either get dollars or bankruptcy debts. The gold corner they created is about to consume them. That gold is gone forever. Some producers and some gold bullion market manipulators will try to cover and in the process gold will catapult upward. Wait until the public of each country finds out they have little or no gold left, in some countries the perpetrators will go to jail, in others they’ll be lynched. In England Gordon Brown just might be castrated if he’s not stoned to death. We are not overstating this crime because as gold climbs the world economy is going to slide into depression and the public is going to demand they be told how this happened and who was responsible. We also strongly take exception to trying to convince producer hedgers to cover or buy in their hedgers. These companies are the antithesis of the mining business. They have almost ruined an industry, destroyed hundreds of companies and thousands of jobs and are responsible for billions of dollars in individual losses. They have destroyed people’s lives with their greed. Why should we advise and help them? Let them go under so the non-hedged gold companies can buy their assets on favorable terms. The hell with them, they deserve everything they have coming and then some. The destruction and pain they have caused is inestimable. There are no technical barriers to gold and silver as it climbs to the upside. They are going to go where they are going to go and when they have reached their peak only the informed and lucky will get out near the top. We are very close to an explosion. A bullion bank is going to go bankrupt, probably JP Morgan Chase and you can be sure the other elitists who control our government will ride to the rescue with our taxes to bail them out, which will expedite the depression. We envision legislation in the US to do away with the privately owned Federal Reserve and the return to a US National Bank. The lock on monetary creation by elitists will be over and their dreams of a new world order will be crushed, but not easily. Once the exposure is made we must then pursue these people so they can’t easily repeat their evil designs. Even as exposure is evident don’t expect the public and Wall Street to plunge into gold and silver. They’ll come in gradually because the propaganda barrage will be enormous. We believe the elitists are already preparing for these events. They may be criminals but they are not stupid and they are in control. As Gold rises the financial system will come unglued and they’ll desperately try to hold it together. This process has at least three years to go. This is just the beginning so climb aboard for the most profitable, wild adventure of your life. This opportunity comes only once every 50 to 100 years. Buy gold and silver related assets now. *GOLDCORP INC. NEWS RELEASE OPTIONS LISTED ON MONTREAL AND PACIFIC EXCHANGES VISIBILITY AND LIQUIDITY FURTHER INCREASED Toronto, June 5, 2002 - GOLDCORP (GG: NYSE; G: TSX) is pleased to announce that options on The Company have been listed for trading on two additional stock exchanges. Effective May 30, 2002 the Pacific Exchange (PCX) in San Francisco began trading options on Goldcorp under the symbol GG, and effective June 3, 2002 the Montreal Exchange (MX) also began trading options on The Company under the symbol G. These very welcome events should continue to increase our market visibility and liquidity, which is of direct benefit to Goldcorp shareholders. The Pacific Exchange was founded in 1882 and is the 3rd largest stock options exchange in the USA and one of the world’s leading derivatives markets, trading options on more than 1,200 stocks. The ... ... LATIN AMERICA There is no question that Argentina has more than its share of corruption but their economic failure is not entirely their malfeasance. The real culprit was dollarization pushed upon Argentina by the IMF and banks and the IMF protocol of ruthless budget cuts and tax increases at the worst possible time. These criminals wanted Argentina prostate so they could move in and loot the country. How can Argentineans have any confidence in economic survival when there is absolutely presently no hope? The bankers and the IMF have guided the country into oblivion. Public debt was only 3% of GDP, which is not bad at all. It wasn't that long ago that the US figure was 5% of GDP. The key to the Argentine failure was not getting rid of the dollar when all its neighbors were devaluing. Had they dumped dollarization they could have survived. The bankers convinced them not to because debt would have been paid back on a devalued basis. As we predicted before the debacle, the peso fell 70% so the bankers lost anyway. The misery in Argentina isn't near over, but if it's any comfort the rest of the world isn't far behind. Up until now the only measured intelligent comments against the free trade area of the Americas has come from Venezuelan President Chavez and it almost got him assassinated in a Bush administration engineered coup. Brazil is now strongly complaining about steel tariffs. How can the US demand FTAA when it shuts its markets to foreign goods? You can't have it both ways. This is not a commitment to fair and equitable treatment; it is a one-sided government. How can you have an agreement that excludes steel, agricultural products and textiles? We believe there will be no FTAA. The moment has passed; it is too late. Central, South America, Mexico and the Caribbean had best prepare for even more tariffs. All Mr. Bush wants is political control and dollarization so he can control the region like a Roman emperor or Napoleon. As difficult as it may be the region should reject FTAA and set up its own tariff systems. It has worked for hundreds of years and it's time to return to national interests. Argentina will spread the impact of the financial crisis by offering some medium to long- term bonds. The exchange is voluntary. ... *Per SEC Rule 17B, an asterisk denotes that the International Forecaster is required to disclose compensation for investor relations and has in previous representations. This is a standard footnote in the weekly letter. For further compensation disclosure, please contact us at 941-639-4756 or request the same by replying to this email. This is a standard footnote in our market letter. Trading is risky and has inherent dangers of volatility and of loss of capital. The IF is specifically not an investment advisor but is a publisher of information. The IF strongly urges you to consult with your investment advisor to determine your suitability before acting on any information herein. Reference to securities herein should not be considered as an offer to buy or sell the same. Such can be done only in accordance with applicable law and only by authorized persons. SUBSCRIPTION INFORMATION: 1-year $99.95 U.S. Funds. Make check payable to Robert Chapman, P. O. Box 510518, Punta Gorda, Fl 33951. Please include name, address, telephone number and email address. We accept VISA and MasterCard charges. Please provide us with your card number and expiration date. We will charge your card $99.95 for a one-year subscription. Please note, we publish twice a month by surface mail or 3-4 times a month by email. Our email is: bif4653@comcast.net - Phone: 941-639-4756 Reprinted from The Sun by Charley Reese Argentine Crisis as Serious as the one in the US The economic crisis in Argentina is grave. Unemployment is now 20 percent, only 5 percent below ours during the Great Depression. It is no longer an inconvenience. People are now reaching the point where they simply have no money for food or medicine. In the meantime, the International Monetary Fund refuses to make any loans because the Argentine provincial government didn’t cut their budgets enough to suit the international financiers. Thus, the human tragedy in Argentina provides a lesson Americans ought to learn. The present international banking system is exploitive and destructive and must be changed. So, for that matter, is our domestic banking system. Many countries in the world today are saddled with debt beyond their ability to repay. For the moneylenders, this is an ideal situation. The usurer simply collects interest in perpetuity. Since the principal was created out of thin air, he doesn’t care that it will never be repaid. He cares only that the interest is paid annually. As a matter of fact, our own public debt is beyond our ability to repay. Our annual interest payments for years have exceeded the federal budget during President Kennedy’s first year in office and will continue to do so for generations. While a column is too short to explain the banking and monetary system, there are a few points you should be aware of. First, the economy and the monetary system are two different things. You can have an economy, which is the production and exchange of goods and services, without a monetary system. But you can’t have a monetary system without an economy. A monetary system is simply designating something as a medium of exchange. It could be gold or silver or sticks or stones or whatever. In our case it’s paper – which, in itself, is worthless. The Federal Reserve notes in your wallet or purse cannot be exchanged for gold or silver, though you can use them to buy gold or silver at the market price. There is also a difference between money and wealth. Wealth consists of owned assets such as land, tools, machines, houses, factories and so forth. Money is simply a medium of exchange. The best way to illustrate this point is to suppose that you are stranded alone on a desert island, and the only thing you salvaged was a briefcase containing a million dollars in currency. You would then realize the difference between money and wealth. The money is worthless, since there is nobody you can exchange it with for the food, shelter and tools that you need. Your chances of survival would be slim to none. And this would be just as true if the $1 million were in gold or silver. A fractional reserve banking system, which we have, means that banks can lend more dollars than they have on deposit. These “dollars” are actually bank credits and are created by a bookkeeping entry. When the loan is repaid, the bank pockets the interest and fees, while the principal is extinguished with another bookkeeping entry. These kinds of banks, Thomas Jefferson warned, were more dangerous than a standing army. Since we have long forgotten the wisdom of our ancestors, we have both banks and a standing army. At any bank in the country today, if all its depositors showed up on the same day demanding their money in currency, the bank would have to close. This is what is called a “run on the bank.” It’s happening in Argentina today, and it happened in America during the Great Depression. In that case, people just lost their money, whether it was savings or in a checking account. To prevent bank runs, the federal government now insures each account for up to $100,000. The point is that all the factors that caused the Argentine crisis are present in our country – too much public and private debt, inflation, fractional reserve banking and a central bank. I’m more concerned about this than I am about terrorists. It’s easy to be missed by a bullet or a bomb, but not so easy to be missed by an economic collapse. Reese can be contacted at briarl@earthlink.net CVG should not to rush into any agreement on Las Cristinas http://www.vheadline.com/0206/12419.asp "CVG should not to rush into any agreement on Las Cristinas" report © by VHeadline.com correspondent David Coleman VHeadline.com : Sunday, June 9, 2002 -- Quinto Dia’s Guayana correspondent Cheo Gomez calls on the Venezuelan Guayana Corporation (CVG) not to rush into any agreement regarding Las Cristinas mines. “I don’t see any reason for the rush … if we have waited four years for the outcome of the Placer Dome, Crystallex and Vannessa Ventures saga, we can afford to wait a little bit longer before choosing the right partner.” Columnist Jose Rodriguez writes in Quinto Dia that at a recent open-air meeting in Sifontes municipality (Bolivar), community leaders have expressed support for the government and the CVG. * San Jacinto mining leader Juan Tremaria says Vannessa Ventures has been attempting to bribe the community into applying pressure on the CVG to recognize it as the legitimate partner. “We support the CVG’s position in rejecting negotiations with Placer Dome and Vannessa Ventures … the government must seek the most appropriate partner and start work on the mine as soon as possible.” Venezuela's Electronic News, an independent service of news & views from the Bolivarian Republic of Venezuela Where Have All The 'Men' Gone? By Devvy Kidd 6-9-02 My comments here exclude those men who have stepped forward with incredible courage since 1913 to face this tyrannical government, and like our Founding Fathers, have paid an enormous price both personally and financially. People like Bill Benson, our fine gentlemen down in the great State of Tennessee and too many others to list. Americans forget that the Founding Fathers were the "moneyed class" back then. They were farmers, merchants and men of means. They had a lot to lose, both in land and gold. Yet, they didn't hesitate to step forward against the most incredible odds to build a free nation, not just for themselves, but also for their women and children. My comments are directed at the men of this country, who over the past decades: Sit back in their easy chair reading Newsweek or spend their time bare chested at football game, well filled with suds to maintain those obscene beer bellies, while they have put their wives and children at risk. This nation is being invaded wholesale with illegal aliens who come into this country and kidnap, rape and murder our women and children. Some are caught, most are not. Why do the men turn a blind eye in pursuit of good times? These same men will go vote for the same politicians, state or federal, over and over, who refuse to stop this massive invasion of our country putting their women and children at risk. These same men continue to idolize their party "leadership," while that same leadership refuses to stop this invasion of global riffraff, turning America into a third world dumping ground. These same men would rather spend time, not banding together and having a serious discussion with these politicians, but rather put on their expensive gear and go ride their bike up a mountain, see the latest Broadway show or take a day off work to stand in line to buy tickets to the new Star Wars flick. Why is this? Today the men in this country sit around watching mindless trash like Survivor or Friends on the boob tube, instead of shouting down the roof against state and federal systems that are utterly and completely rotten beyond redemption. Systems and agencies that are putting their women and children into a state of involuntary servitude for all their lives. Instead they sit back with nary a whisper while state and federal judges to uphold this carnage against the people. Why is this? Black robed judges continue to hand out welfare and benefits to illegal aliens who are legally entitled to nothing but deportation. Instead of holding their elected public servants accountable for this insanity, men just get up in the morning, go to work at the company store, then return home in the evening to their false sense of security. Why is this? Back in 1776, this breed of men would be called cowards. Today men will spend endless hours with their stamp collection or at the bowling alley while Congress after Congress continues to pass unconstitutional legislation that deprives their women of their God-given rights - all because their "party" says it's good for our "democracy." Why is that? Today men will ignore the documented truth that the state and federal governments are all in collusion to bring America into a one-world government, but they will believe any lie that comes out of the mouth of their favorite radio talk show host or TV anchorman. Today men are desperately clinging to their comfort zones while their women and children are at risk from a police state being erected around them. Why is this? Today men will stand for hours on end feeding one-armed bandits in gambling casinos, while the Bush Administration's henchmen (Ashcroft and Mueller) continue to strip their women of their God-given rights, all in the name of "the war on terrorism." They are putting their children at risk by not demanding this government take the necessary measures to clean out the terrorists in this country, both Chinese and middle-Eastern. Why is this? For decades, America's men think nothing of spending spend lots of money on music CDs or plunking down big bucks to attend concerts or jazz festivals instead of protecting their own families from state predators calling themselves "child protective services." Everyone with children is now a target. Why won't they band together and surround the state capitols and demand that this evil cease? Back in 1787, the men protected their women and children to the death. For the older men, their grand children are targets of the state. But, these men have already served their country in the military and now it's time to spend their golden year in the Winnebago, they've done their part. After all, at Christmas they can show the grand children how much they love them by buying them "things" made in foreign countries. Why is this? Today the men of this country will allow a sleazy, morally bankrupt individual like Bill Clinton get away with treason (selling our most sensitive national defense secrets to the Communist Chinese) because Clinton supports their women's "right" to kill their unborn babies. Back in 1854, this was unthinkable. Today, their blind loyalty is to their political party now instead of what's right. Why is this? Today men think nothing of sitting down at the local bar every night during happy hour while their women and children are put at risk by agencies like the ATF and FBI making no knock, bust down the door on the wrong house raids, killing innocents inside. It's happened and it will continue to happen. A hundred years ago, this would not have been tolerated in a constitutional Republic because the men would not have stood for it, not for a minute. While their women and children continue to live in a state of bondage to a tyrannical government, the men simply write checks to the RNC or the DNC, thus encouraging those scoundrels to stay on the same path of the planned destruction of this Republic. By writing a check instead of storming the gates, this gives those men more time for the golf course, doing recreational cocaine or surfing the Internet for countless hours enjoying that great "adult" American pastime called pornography. Their harmless pastime does put their women and children at risk out in society, but they no longer care. Why is this? While the IRS bleeds a family dry, forcing the woman into the workplace and leaving the children to be raised by strangers, many of whom are pedophiles, the man of the house spends his free time doing the "guy thing" at a NASCAR speedway. Why is this? Why won't these men stand up to this rogue agency called the IRS? Over the past 40 years, the men of this country have sat back and allowed themselves to be brow beaten into submission and castrated by so-called "feminists" like Rosie O'Donnell and Hillary Clinton (although I defy anyone to show me one single feminine attribute of those females) instead of stand up and saying, "Hell No!" Hard core feminists aren't out there for equal pay, they're out there to destroy the male and the family unit. How it must gall them that the only way lesbians can "impregnate" their female lovers is artificial insemination by a male sperm. Over the past 40 years the men of this country have put their material objects and addictions before the well being of the women and children by kowtowing to every special interest group in this country in the name of "political correctness" or for government hand outs. Our nation was built by men who were self-reliant, independent and strong. Today they are tolerant, sensitive and genuflect at the feet of perverts called "gays." Why is this? The men of this country have laid down their arms in favor of political correctness, declaring open season for two-legged predators on their women and children. Instead of surrounding their state capitols armed to the teeth in defiance of such unconstitutional machinations on the part of cowardly and mentally impaired politicians, instead they grovel on their knees to the likes of Diane Feinstein. This sad state of affairs was unheard of in 1905. Why this inability to resist tyranny now? PC is a cancer on this nation that has turned a Godly nation into a moral sewer. These men have put their children in harms way via mandatory social indoctrination in the anti-God public school system. Why is this? The men of this country will go to extraordinary lengths to find the right fishing hole, but they refuse to lift a finger to ensure that their women and children will not be forced into global citizenship under the UN. Why is this? The men of this country will sit in front of the computer playing games while women and children in different parts of this country are being driven off the land by Nazi-style federal agencies. So what if their fellow countryman will lose his land, his wife and children thrown out into the street? After all, those families in Klamath Falls and too many other places have nothing to do with these other men's lives, so why should they give up any of their free time to stand up to the government to help them? Why is this? Women in this country spend hundreds of millions of dollars every year on "romance books" whose pages are filled with knights in shining armor and genuine heroes coming to rescue the damsel in distress. Why do you suppose that is? Why do you suppose the men are allowing their women and children to be put at risk in all the ways described above? Why are the women the ones out there on the front lines battling this government tooth and nail for our children - ready and willing to die if necessary to protect our own? Because America has lost its manhood. ___ © Devvy Kidd - All Rights Reserved Devvy Kidd is an Advisory Board Member for The Wallace Institute. http://www.devvy.com/wallaceintro.html She is the founder and Director of POWER (Project on Winning Economic Reform). http://www.devvy.com/devvyindex.html Her web site is: http://www.devvy.com State of Emergency in effect Some emergency executive orders (not subject to congressional review) in effect. The USA has been in such an emergency since 9-11-01: http://www.whitehouse.gov/news/releases/2001/09/20010914-4.html EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports. EXECUTIVE ORDER 10995 allows the government to seize and control the communication media. EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals. EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms. EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision. EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions. EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons. EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft. EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations. EXECUTIVE ORDER 11005 allows the government to take over railroads, inland waterways and public storage facilities. EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders in to effect in times of increased international tensions and economic or financial crisis. EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control all aliens, to operate penal and correctional institutions, and to advise and assist the President. EXECUTIVE ORDER 11049 assigns emergency preparedness function to federal departments and agencies, consolidating 21 operative Executive Orders issued over a fifteen-year period. EXECUTIVE ORDER 11921 allows the Federal Emergency Preparedness Agency to develop plans to establish control over the mechanisms of production and distribution, of energy sources, wages, salaries, credit and the flow of money in U.S. financial institution in any undefined national emergency. It also provides that when a state of emergency is declared by the President Congress cannot review the action for six months. Gold and the Dollar By U.S. Rep Ron Paul (Remarks to the U.S. House of Representatives, June 5, 2002) http://www.house.gov/paul/congrec/congrec2002/cr060502.htm Mr. Speaker, I have for several years come to the House floor to express my concern for the value of the dollar. It has been, and is, my concern that we in the Congress have not met our responsibility in this regard. The constitutional mandate for Congress should only permit silver and gold to be used as legal tender and has been ignored for decades and has caused much economic pain for many innocent Americans. Instead of maintaining a sound dollar, Congress has by both default and deliberate action promoted a policy that systematically depreciates the dollar. The financial markets are keenly aware of the minute-by-minute fluctuations of all the fiat currencies and look to these swings in value for an investment advantage. This type of anticipation and speculation does not exist in a sound monetary system. But Congress should be interested in the dollar fluctuation not as an investment but because of our responsibility for maintaining a sound and stable currency, a requirement for sustained economic growth. The consensus now is that the dollar is weakening and the hope is that the drop in its value will be neither too much nor occur too quickly; but no matter what the spin is, a depreciating currency, one that is losing its value against goods, services, other currencies and gold, cannot be beneficial and may well be dangerous. A sharply dropping dollar, especially since it is the reserve currency of the world, can play havoc with the entire world economy. Gold is history's oldest and most stable currency. Central bankers and politicians hate gold because it restrains spending and denies them the power to create money and credit out of thin air. Those who promote big government, whether to wage war and promote foreign expansionism or to finance the welfare state here at home, cherish this power. History and economic law are on the side of the gold. Paper money always fails. Unfortunately, though, this occurs only after many innocent people have suffered the consequences of the fraud that paper money represents. Monetary inflation is a hidden tax levied more on the poor and those on fixed incomes than the wealthy, the bankers, or the corporations. In the past two years, gold has been the strongest currency throughout the world in spite of persistent central bank selling designed to suppress the gold price in hopes of hiding the evil caused by the inflationary policies that all central bankers follow. This type of depreciation only works for short periods; economic law always rules over the astounding power and influence of central bankers. That is what is starting to happen, and trust in the dollar is being lost. The value of the dollar this year is down 18 percent compared to gold. This drop in value should not be ignored by Congress. We should never have permitted this policy that was deliberately designed to undermine the value of the currency. There are a lot of reasons the market is pushing down the value of the dollar at this time. But only one is foremost. Current world economic and political conditions lead to less trust in the dollar's value. Economic strength here at home is questionable and causes concerns. Our huge foreign debt is more than $2 trillion, and our current account deficit is now 4 percent of GDP and growing. Financing this debt requires borrowing $1.3 billion per day from overseas. But these problems are ancillary to the real reason that the dollar must go down in value. For nearly seven years the United States has had the privilege of creating unlimited amounts of dollars with foreigners only too eager to accept them to satisfy our ravenous appetite for consumer items. The markets have yet to discount most of this monetary inflation. But they are doing so now; and for us to ignore what is happening, we do so at the Nation's peril. Price inflation and much higher interest rates are around the corner. Misplaced confidence in a currency can lead money managers and investors astray, but eventually the piper must be paid. Last year's record interest rate drop by the Federal Reserve was like pouring gasoline on a fire. Now the policy of the past decade is being recognized as being weak for the dollar; and trust and confidence in it is justifiably being questioned. Trust in paper is difficult to measure and anticipate, but long-term value in gold is dependable and more reliably assessed. Printing money and creating artificial credit may temporarily lower interest rates, but it also causes the distortions of malinvestment, overcapacity, excessive debt and speculation. These conditions cause instability, and market forces eventually overrule the intentions of the central bankers. That is when the apparent benefits of the easy money disappear, such as we dramatically have seen with the crash of the dot-coms and the Enrons and many other stocks. Now it is back to reality. This is serious business, and the correction that must come to adjust for the Federal Reserve's mischief of the past 30 years has only begun. Congress must soon consider significant changes in our monetary system if we hope to preserve a system of sound growth and wealth preservation. Paper money managed by the Federal Reserve System cannot accomplish this. In fact, it does the opposite. SUBSCRIPTION INFORMATION: 1-year $99.95 U.S. Funds. Make check payable to Robert Chapman, P. O. Box 510518, Punta Gorda, Fl 33951. Please include name, address, telephone number and email address. We accept VISA and MasterCard charges. Please provide us with your card number and expiration date. We will charge your card $99.95 for a one-year subscription. Please note, we publish twice a month by surface mail or 3-4 times a month by email. Our email is: bif4653@comcast.net - Phone: 941-639-4756 |
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International Forecaster June 2002 (#2)
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