The International Forecaster: May 2011

We believe that for the past 2-1/2 years the price of gold has been mainly driven by a flight to quality, as gold vied with the dollar for supremacy, as the world’s reserve currency. As we have witnessed gold has won that battle. The only way the dollar or any other world reserve currency can compete is by being backed 25% by gold. The elitist’s royalty of Wall Street and the City of London are quite upset with these developments, because they want all currencies to be fiat, so that they would not have to have a gold backed international monetary unit. Over the last six months another historic factor has come into play in evaluating gold versus currencies, and that is the interconnectivity of gold’s relationship with inflation. In the late 1970s this was the underlying factor for the rise in the prices of both gold and silver. At that time they never had the luxury of strength also coming from recognition of being monetary units. We hear the manic claims that gold and silver are bubbles or are manias. That cannot be because gold is and always has been the only real money. Every time the major media makes these bogus claims they always fail to mention that both gold and silver have appreciated in value in excess of 20% annually versus nine major currencies. They refuse to point out gold and silvers’ 11 years track record having risen from $260.00 and $3.80 respectively to more than $1,500 and $50 per ounce. This shows you the massive deception by the major media, which is totally controlled by the elitists from behind the scenes.

When QE3, or something akin to it, is implemented during the summer, it will give the stock and bond markets one last boost. Most of the gains from a future QE3 have already been reflected in the market place. On the other hand such recognition by investors, not as yet discounted, will give a very large boost upward to gold and silver. As this takes place downward pressure will begin to appear in the stocks, bonds and the dollar. Those events will make it even more difficult to sell US Treasury and Agency bonds. Efforts will have to be added by the Fed to cover up the again ongoing losses of banks and brokerage houses – the financial sector – under the concept of too big to fail. The greater the effort needed to save these bankrupt institutions and the government the greater heights gold and silver will rise too. Adding fuel to the fire most other nations will have their own versions of QE3 compounding world inflationary problems. Even if a nation is not causing inflation they are forced to absorb foreign nation inflation whether they like it or not.

You have to look at the terrible fundamentals America is facing. The Fed has a balance sheet close to $3 trillion that could be $5 trillion in a year and one-half. If they purchase 80% of Treasuries and Agencies and bolster the declining economy. There is no end in sight for zero interest rates. Both the increases in money and credit and low interest rates will continue to send inflation into orbit. Monetization is the name of the game and the Fed and other central banks are playing it to the hilt. The ECB raises interest rates ½% and expects miracles. That could happen after they raise them 5% to 6%. Talk about misdirection as they continue to increase money and credit. They must think fellow Europeans and others are dumb and that is not the case. They knew as well as we do that what the Fed and ECB does causes monetization and inflation. Americans are used to inflation and heretofore they have been able to adjust for it. Other nations have not had that luxury in the past. Foreigners are far more sophisticated when it comes to propaganda and do not as easily fall for it as Americans do.

***********************************

Saturday, May 21, 2011

IF Issue: Saturday May 21, 2011

Excerpts from the latest issue:

Bob Chapman - Sovereign Economist - 05-18-2011

http://www.youtube.com/watch?v=SIHXvvybv2Y&feature=player_embedded#at=282

Drew Rains – the Marine Disguisition

http://www.youtube.com/watch?v=wQgRadHAWcY

Freedom Files w/James Burns
Weekdays! 3-5 pm (Central) http://freedomfiles.us/

Bob Chapman/with James Burns

http://youtu.be/H3gY_iyyECE

MARKETS

The amount of money and people withdrawing from 401K’s has been staggering and Wall Street and government do not like it one bit. There are those who have been fired, run out of benefits, and half to cash in part or all of their retirement. The villainous ones are those still employed, who have taken up to three loans, many of whom have bought gold and silver with the proceeds.

That said, Senator Herb Kohl, Senator Mike Enzi have introduced legislation to limit citizens to tapping into their 401K’s, called “SEAL 401K Savings Accounts.” The bill would reduce and limit the number of loans workers may take from 401K’s and give participants more time to pay back loans after losing their jobs. In addition, employers would have the option to reduce the number of loans for their plans.

At the end of 2010, 28% of participants had loans outstanding, a record. The average loan balance was $7,860.00 and 58% of plans permit participants to have two or more loans at a time. If participants are fired or lose their jobs 70% default on their loans.

Workers generally may borrow as much as 50% of their vested account balance up to $50,000. The loan must be repaid in five years, unless the money was used to purchase a primary residence. The average interest rate is 1% over prime.

We find it of more than passing interest that Mr. Kohl is not running for reelection next year.

If you are going to borrow from your 401K’s do it now, ahead of this legislation, that could interfere with the purchase of gold and silver shares, coins and bullion. This is the main reason for this legislation, to stop you from protecting your assets. Of course, such loans involve selling holdings in the 401K’s and that puts downward pressure on stock and bond markets, or takes incoming funds destined for those markets away from those markets.

One aspect of a new and improved federal regulatory scheme is the seizure of 401(k) retirement plans and the subsequent government-administered disbursement of the funds.

In Chapter 3 of the Annual Report on the Middle Class released in February by Vice President Biden and the White House Task Force on the Middle Class, the Obama administration calls for enhancing the “retirement options” for the middle class by imposing “new regulations to improve the transparency and adequacy of 401(k) retirement savings.” [Read the entire article:

http://www.thenewamerican.com/index.php/usnews/politics/3478-obama-administration-plans-to-seize-401k-retirement-accounts [Here is your proof, as we have been telling you over and over again, get out of your 401Ks and IRAs before you have nothing more than a promise to pay from a bankrupt government. Bob]

**********************************************

Sunday, May 15, 2011

IF Issue: Saturday May 14, 2011

Excerpts from the latest issue:

Bob Chapman on Discount Gold Silver Trading 11 May 2011

http://www.youtube.com/watch?v=IGCxBEgIlhg

Freedom Files w/James Burns

http://youtu.be/PDaYB6Tcd9U
http://freedomfiles.us/

Kerry Lutzhttp://tinyurl.com/Bob-Chapman-5-12-2011

US MARKETS

The elitists who run America from behind the scenes have serious problems in trying to keep a badly damaged financial and economic system afloat. Ironically, these same characters are the ones responsible for the system and the condition that it is in today. It is not only confined to the US, but it prevails in England, Europe and other counties as well. Central bankers are all in constant touch with each other to employ tactics that will extend the current system in the hope that something they are doing will turn into at least a temporary solution. The US maintains virtually zero interest rates and floods the economy with money and credit. The European Central Bank, the ECB, raises interest rates, but continues injecting money and credit into the system. In Europe the higher interest rates are supposed to offset the inflation caused by the increase in money and credit. On the short term it isn’t going to work. On the long term much higher rates will work, if the increase in money and credit is lowered or stopped. The unpalatable problem with that is this medicine will collapse their economies. All these parties should have purged the system in the early 1990s when they had the chance, or just three years ago, when they had another chance to do so. The result is the inflation we see today, 6% in Europe, 12% in Britain and 10% in the US. The path these bankers have laid out will lead to hyperinflation and ultimately to deflationary depression. The approaches employed by both the US and Europe won’t work and the elitists know they won’t work. Historically these conditions are nothing new. We have seen them over and over again. More often the solution is to have another war, which can take the blame for the monetary, fiscal and economic profligacy and at the same time relieve the world of copious useless eaters.

Real inflation is now at about 10% based on earlier formulas, as opposed to present official government doctored figures. These are close to the numbers of the1980s. Officially those numbers were 10%, but we were there and the numbers were 14%. We expect real inflation of 14% or more by the end of the year as QE1 and stimulus 1 effects play havoc with consumer purchasing power. Presently the PPI, the Producer Price Index, is 10% and that same figure applies to the cost of imported goods as well. As long as interest rates remain at zero and the creation of money and credit continues, inflation will climb ever higher. The Fed tells us that there will be no change in rates until after September. The Fed just observed the ECB raising rates. The next rise was set for June and we have already been told that won’t happen. Except for Germany all of the EU, not just the euro zone, is faltering. Europe and the US may not see higher rates until inflation exceeds 25% next year. As long as interest rates remain below the real rate of inflation little will be accomplished to bring inflation under control. These numbers are all within the confines of QE1 and QE2 and stimulus 1 & 2. We see no way to avoid QE3. Who will buy the Treasury’s debt? That being the case inflation three to four years out could reach 50%. Needless to say, rates would have to exceed 50% to slow down the economy and that would eventually entail a deflationary depression. During such a process as rates reached a peak, commodity prices would falter and begin to reverse. Gold and silver would lose their assisting inflationary impetus, and their course would depend on the strength of currencies. Both could strongly represent the only real money as they have in the past. We won’t know the final outcome until we get there, because many other factors could enter the equation, such as world war.

***********************************

Wednesday, May 11, 2011

IF Issue: Wednesday May 11, 2011

Excerpts from the latest issue:

bobchapmanradio

http://twitter.com/#!/bobchapmanradio

Bob’s Interview with Joyce Riley on The Power Hour

http://archives2011.gcnlive.com/Archives2011/may11/PowerHour/0509112.mp3

MARKETS

In legislation just proposed, and I don’t know by whom, nor do I have a number yet, the Dept of Labor has proposed a re-definition of who is a fiduciary, not under the Securities laws, but under ERISA, the law that governs tax advantaged retirement accounts, such as 401K and IRAs and it probably will include all retirement assets, we don’t have a definite direction yet of what they intend to do but it is my guess they want to limit those investments only to US government debt. They may include some blue chips or funds, I don’t know. They may allow other high-graded fixed income products. These DOL-ERISA rules override all SEC rules. We don’t know the final form of the legislation, nor do we know whether it will be passed, but my guess it will be. The government desperately needs to get those retirement funds invested in government debt. I would seriously think about terminating 401ks and IRAs by transferring the assets – without commission – into a personal account it then becomes a taxable event. I also believe there is a good chance that taxes will be higher next year. There is also an outside chance that retirement assets could be frozen – such events would be negative on the general market because government would be directing brokerage houses to sell retirement assets. This is all in the planning stage, but it is very real.

Your government attacks markets when they are most vulnerable and when it is politically expedient to do so. As we look back over 50 years we never would have believed things that go on today could ever have happened. The blatant presence of crime overwhelms you everywhere you look, particularly in the financial world. We are reminded of these conditions again as we reflect on what has happened in the commodity, gold and silver markets over the past two weeks. We saw an unprecedented five margin increases over nine days in the silver market, which took margin from $4,500 to $21,600. That in and of itself was disturbing, but what we saw from scores of commodity houses was even worse. Simultaneously many of them recommended the sale of commodities and they all raised margin limits to $40,000 to $42,000. The excuse was there was too much volatility. The same volatility had been present in commodities for months yet few increases were implement. Could there have been another reason? Could the naked short position of JPMorgan Chase and HSBC in silver have something to do with the double rise in margins? We also ask how did all the commodity brokerages suddenly decide simultaneously to double CME margin requirements effectively blowing out most commodity positions of small and medium sized investors? Did the Treasury Department or the Fed have anything to do with that? Of course they did. The naked short position of JPM and HSBC had to be protected because their loses were in the billions of dollars.

These past two weeks are a perfect example of market manipulation instituted to protect those too big to fail. These are two of the largest banks in the world and they just happen to be Fed shareholders. Morgan happens to be the Fed’s largest shareholder, so what else could we expect. From our viewpoint there is nothing less than a crime syndicate connecting banking, Wall Street, the Fed and the Treasury Department and Washington. The Fed has a balance sheet of almost $3 trillion, which is used to bail out Wall Street, banking and the government.

************************************************

Sunday, May 8, 2011

IF Issue: Saturday May 7, 2011

Excerpts from the latest issue:

Program on Wed, May 4, 2101 the big talker interview with Vincent Finelli – who is putting on the Get Prepared Expo – www.GetPrepared Expo.com

http://www.youtube.com/user/USAPrepares#p/a/u/1/lSQxtbb0EJ8

The International Forecaster Bob Chapman joins The Corbett Report once again to discuss the Osama psyop, the manipulation of the silver market, and the path to war.

http://www.corbettreport.com/interview-329-bob-chapman/

Bob Chapman interview with Kerry Lutz

http://tinyurl.com/Bob-Chapman-5-5-2011

http://youtu.be/0NCs1r5K8L4

Freedom Files w/James Burns
Weekdays! 3-5 pm (Central)http://freedomfiles.us/

MARKETS

As the economy stumbles the American standard of living recedes. 44 million people are using food stamps and in one year that figure will be 60 million. Washington and Wall Street say, what me worry? Of course not they are the masters of the universe. We are 24 months into an inflationary depression and it still goes undiscovered. Who cares that the issuance of food stamps is up 80%, as long as the bonuses on Wall Street and in banking continue to flow and bureaucrats get higher and higher salaries and benefits? The high cost of health insurance, no longer affordable to most have increased and Medicaid users areup 17%, as the program costs increased 36%. Those on welfare rose 18%, as costs rose 24%. It is now evident to many that the choice of early retirement in the late 1990s at 52 and 59 years old was a big mistake. Many must now work into their 70s, or starve. Many retirees are forced to reenter the workforce. Recently there were 2,000 job openings and 75,000 people applied. How is that for recovery? The birth/death ratio is bogus and real unemployment is 22%. The economy needs 2 million new jobs a year and that is impossible. Good paying jobs are still being offshored and outsourced. How about the millions without jobs now for years? While all this transpires the Fed bails out Wall Street, banking and government and leaves crumbs for the dispossessed.

It always gets us when these acceptable writers use soft or euphuistic phrases to describe creeping national state socialism. The big picture is dreadful, but government, Wall Street and the media won’t tell you that. Truth has nothing to do with business. They all spin one lie after another, just as you have recently seen with a certificate of live birth and the death of Mr. bin Laden. It reminds one of the old song, “Anything Goes.”

Those running Washington from behind the scenes know America can never pay off and liquidate its debt. That is why there is little effort to do so. The real idea is to destroy the system. It reminds one of Argentina in 1999, before they defaulted on 2/3’s of their debt only in a much bigger way. The dollar, because it is the world reserve currency, and that nations hold about 60% of foreign reserves in US dollars affects the entire world. America’s Wall Street, banking and government has had a 66-year party and everyone gets to pay for it. The next step, rather than austerity, will be confiscation of all, or part, of pensions, that $12 trillion pool of government and individual retirement funds. Needless to say, such irresponsible actions only delay the inevitable monetary collapse.

Tagging not far beyond is England and Europe, both of which have used the same template for so many years. In the US and all of these nations we see more than 50% of the population functionally illiterate and this same group country to country essentially pays little or not taxes, and receive benefits from government. That does not include the illegal alien population in each country that pays virtually no taxes. Spending far beyond tax receipts can only mean eventually that the deficits will destroy the system. That means a lower standard of living, which has already manifested itself in all three regions. Such profligacy has in the US, UK and Europe caused the Fed, the Bank of England the European Central Banks to create money and credit out of thin air monetizing buying and holding sovereign debt as well as debt clogging the balance sheets of the financial sector. In Washington the administration is considering an oil tax increase as the public pays more than $4.00 a gallon and in Germany it’s $9.00 a gallon. Expect more of this non-income tax taxation. Each tax increase and each loss in services brings less purchasing power, as inflation rages.

******************************************

Pages

Wednesday, May 25, 2011

IF Issue: Wednesday May 25, 2011

Saturday, May 21, 2011

IF Issue: Saturday May 21, 2011

Sunday, May 15, 2011

IF Issue: Saturday May 14, 2011

Wednesday, May 11, 2011

IF Issue: Wednesday May 11, 2011

Sunday, May 8, 2011

IF Issue: Saturday May 7, 2011