LATEST NEWS & VIEWS...
Jun 6, 2004
MARKET NEWS DIGEST
-> Soros Likens Iraqi Prisoner Abuse to 9/11 Attacks -CNS
-> PAT BOONE BLASTS MEDIA OVER WAR COVERAGE -IFN
-> Crude up as OPEC disappoints -CBSMW
-> Stocks Rise on Jobs Report, "Stars Aligned" -Bloomberg
-> Gold to $400 and beyond -MiningWeb
-> Pension Under-funding: The Emerging Global Dragon
-> Salvaged coins excite market -Knight Ridder
-> A glint of chicanery in the silver market? -Tribune
-> NO GAME OF CHANCE -Craig R. Smith, CEO SATC
-> BUBBLE FATIGUE, THREE RULES -Bill Bonner, DR
-> COMPARING SILVER BULLION TO MORGAN DOLLARS
-> THE PRESIDENT'S ECONOMIC SECURITY AGENDA -Bush
-> RESTORING JOBS AND REBUILDING OUR ECONOMY -Kerry
-> CANDIDATES TAKE A THRASHING OVER ECONOMICS -UPI
HISTORICAL QUOTE OF THE WEEK
"Congressmen who willfully take actions during wartime that damage morale and undermine the military are saboteurs and should be arrested, exiled, or hanged."
-President Abraham Lincoln
ON 60TH ANNIVERSARY OF D-DAY FORMER CHAPLAIN STILL INSPIRES -ANS
By Mark Ellis
Senior Correspondent, ASSIST News Service
June 4, 2004
WHITTIER, CALIFORNIA (ANS) -- He was the only man on his landing craft to come ashore at Omaha Beach with no “visible” weapons to protect himself. But that didn’t stop this chaplain from being the first man out of his boat.
“I had the sword of the Spirit,” says Lt. Col. George Russell Barber, USAF (Ret.), who started his career with the horse cavalry along the Mexican border before World War II. “We were all afraid,” says Col. Barber, as the men came ashore June 6, 1944, amidst a hail of bullets and fiery explosions. “If a man says he’s not afraid, he’s lying—but we had our faith.”(Pictured: Col. Barber at Operation Christmas Child event in Santa Ana, CA).
Colonel Barber wanted to attend the recent dedication of the World War II Memorial in Washington D.C., but health concerns kept him away. Three months ago he was hospitalized with abdominal problems. After two months in the hospital he was transferred to a skilled nursing facility in Whittier, California, where he resides today.
At 89, the strength in Chaplain’s Barber’s legs is failing, but his mind is as sharp as the shrapnel he dodged in wartime. “It seems like it was only yesterday,” Col. Barber says, referring to the D-Day landing. “My mind is as clear as a bell—the memories are still vivid.”
Serving his country in four wars, one of his most powerful memories was the D-Day invasion on Omaha Beach in Normandy. “On the Sunday before D-Day I held services on 11 different ships in Weymouth Harbor for thousands and thousands of soldiers,” Barber says. “I gave away a lot of pocket Gideon’s Bibles--there are no atheists in foxholes.” (Pictured; Cemetery at Omaha Beach).
On the fateful morning of the invasion, he went over the side of his ship on a rope ladder into a flat-bottomed landing craft holding 30 soldiers.
“When we hit the shore they let down the ramp I stood in front and led my men off,” Chaplain Barber recalls. “They were shooting at us all around.”
To the right, Barber witnessed a horrible sight. “Just before we landed I saw a landing ship hit a mine,” he says. “It blew up and killed all 30 men. They were floating in the water and on the beach.”
Without hesitation, Barber rushed to the sides of the wounded. “I talked to as many as I could and prayed with them,” he says. “I said, ‘Trust in God.’” As men were dying he recited to them from John 14: “Do not let your hearts be troubled. Trust in God; trust also in me. In my Father’s house are many mansions…”
“Men were being killed all around me,” Barber says. “We were all trying to dodge the bullets,” he says. “Thank God I wasn’t hit.” Miraculously, none of the four chaplains landing on the Normandy Beaches that day were killed, according to Barber.
If they survived the barrage of hostile fire, the next challenge for Barber and his men was climbing over steep cliffs just beyond the shore. “I couldn’t get over the 100 foot cliff so I had to dig my own foxhole that night on the beach,” he says. “I prayed as if everything depended on the Lord, and I dug as if everything depended on me.”
“The Lord and me got that foxhole pretty deep,” he adds.
Unable to sleep, Barber crouched in his crude shelter amidst the storm of battle, staring up at a frightening display. “I watched the sky lit up by tracer bullets,” he says. “Every fifth bullet is a tracer bullet, so you can see it go up and come down.”
“The next morning I got over that cliff and I met Ernie Pyle, the famous war correspondent for Stars and Stripes,” Barber recalls. “We split a can of Spam together,” he says. Later that day, the two men walked Omaha Beach together, past the bodies of over 1500 who had fallen in battle. “We saw all the carnage and death and destruction, Barber says.”
Pyle wrote his own account of their walk together. “The wreckage was vast and startling,” he wrote. “In the water floated empty life rafts and soldiers’ packs and ration boxes…But there is another and more human litter. It extends in a thin little line, just like a high water mark, for miles along the beach.”
“Here are socks and shoe polish, sewing kits, diaries, Bibles and hand grenades. Here are toothbrushes and razors, and snapshots of families back home staring up at you from the sand.”
Then Correspondent Pyle did something on their walk the chaplain remembers vividly. He bent over and picked up a pocket-sized Gideon’s Bible lying next to a fallen soldier. “I picked up a pocket Bible with a soldier’s name in it, and put it in my jacket,” Pyle wrote. “I carried it for a mile or so and them put it back down on the beach. I don’t know why I picked it up, or why I put it back down.”
“I can’t prove it,” Chaplain Barber says, “but I probably gave that soldier that Bible only two days before that.” Less than one year later, Pyle lost his own life when a Japanese sniper killed him while he covered the war in the Pacific.
Chaplain Barber also survived the Battle of the Bulge, and was at the Remagen Bridge spanning the Rhine River immediately before it collapsed. For ten straight days the Germans bombed the bridge trying to knock out this vital supply line. During these critical days, 250 Allied engineers worked feverishly trying to repair the bridge and keep supplies flowing.
“I watched the Remagen Bridge collapse,” Barber recalls. Horror-struck, he sprung into action and was able to extract several men from the twisted mass of wood and steel. “I held two men in my arms and watched them die,” he says.
Later, he and his men visited a concentration camp at Nordhausen, Germany. Before Allied troops arrived, Germans crowded 200 Jewish men into a building and set it afire. No one survived the flames. “War is ugly. War is hell,” Barber says.
After the war, Chaplain Barber met two members of the Polish underground while he stayed at a hotel in Germany. One day, the three men decided they would climb one of the highest mountains in Germany. “It was a windy and snowy day,” Barber recalls. They pulled themselves up some of the steep faces using a steel cable someone had left behind.
With a bitterly cold wind whipping their faces, they reached the summit, and Barber found something surprising. “There on top of one of the highest mountains in Germany we found a large white cross,” he says. The wind at that elevation made it hard for the three men to keep their balance. “We held on to the cross as we looked over the edge,” he says.
“What better thing to hold on to in the storms of life than the cross of Christ,” he says.
God willing, Col. Barber will reach 90 in August, and hopes to make it to 100-years-old. “We’re losing 1500 of our World War II veterans a day,” he notes. Before his illness, Col. Barber spoke about 100 times each year to various civic groups and organizations. “I don’t have the strength to go anywhere right now, but God’s been good to me,” he says.
EDITOR'S NOTE: A BIG thanks to all of America's Veterans of World War II as we honor you on this 60th D-DAY anniversary!
MARKET NEWS DIGEST
Crude up as OPEC quota hike disappoints -CBSMW
Traders see threat to Saudi oil supply after Khobar attack
By Myra P. Saefong, CBS.MarketWatch.com
June 3, 2004
SAN FRANCISCO (CBS.MW) -- Members of the Organization of Petroleum Exporting countries agreed to raise their production target by 2 million barrels per day on July 1, and then add another 500,000 barrels per day to the quota on August 1, according to news reports.
Qatar's Oil Minister Abdullah al-Attiyah made the comments ahead of the cartel's formal meeting in Beirut, Lebanon, according to AFX News.
"Big disappointment for oil traders as OPEC gives a fairly weak olive branch," said Kevin Kerr, editor of the Kwest Market Edge newsletter.
"All and all, this sends a message that they are not as concerned as they let on," he said.
In New York, the July crude contract rose 39 cents to $40.35 per barrel. Brent crude for July delivery is up 43 cents at $37.29 per barrel on London's International Petroleum Exchange.
"Saudi Arabia had argued for an immediate hike in quotas of 2.5 million barrels per day," said Thorsten Fischer, a senior economist at Economy.com.
"OPEC's compromise ... shows that the cartel continues to believe that global supplies are adequate, and that current high prices are due to a risk premium reflecting increased geopolitical instability and renewed terrorist threats, which have led to speculative buying and to a rise in investors' risk aversion," he said.
Al-Qaeda statement says high oil prices in Muslims' interest -Drudge
Fri Jun 04 2004 11:15:04 ET - Drudge Report
A purported Al-Qaeda statement claimed Friday that high oil prices, which were pushed up further by last weekend's deadly attacks on foreign oil workers in Saudi Arabia, were "in the interests of Muslims".
"The rise in oil prices is in the interests of the Muslim people," said the message attributed to Abdul Aziz al-Muqrin, who was identified as "the chief of Al-Qaeda in the Arabian Peninsula".
It added that the attacks on the oil-producing Saudi city of Al-Khobar "has placed the Saudi government in an impasse with the surge in oil prices which hit a record of 42 dollars a barrel."
The statement also denounced "the tyrants" who "plunder the wealth of Muslims."
It was posted on the website www.qal3ah.org and its authenticity could not be verified.
The spike in prices to record highs this week was partly driven by the attacks on Al-Khobar in the kingdom's Eastern Province in which 22 people were killed.
Read more about Financial Terrorism
June 4 (Bloomberg) -- U.S. stocks rose after a government report on jobs and a sales forecast from Intel Corp. signaled that companies stand to benefit from sustained growth in the economy and profits. The Standard & Poor's 500 Index had its first back-to-back weekly advance in three months.
``The stars are aligned for a nice second half,'' said Philip Orlando, who manages the $300 million Federated Large Cap Growth Fund in New York. The better-than-expected employment figures, which included the biggest gain in manufacturing jobs in almost six years, underscore the economy's strength, and Intel's statement ``last night was quite bullish,'' he said.
The S&P 500 rose 5.87, or 0.5 percent, to 1122.51. The Nasdaq Composite Index climbed 18.36, or 0.9 percent, to 1978.62 and the Dow Jones Industrial Average added 46.91, or 0.5 percent, to 10,242.82.
For the week, the S&P 500 rose 0.2 percent, notching consecutive weekly gains for the first time since March 5. The Dow average gained 0.5 percent and the Nasdaq fell 0.4 percent.
The number of Americans filing initial claims for unemployment dropped 6,000 to 339,000 last week, the Labor Department said in Washington. Economists had expected the number of claims to fall to 335,000 from the 344,000 initially reported, according to a Bloomberg News survey.
Gold to $400 and beyond -MiningWeb
June 1, 2004
JOHANNESBURG (Mineweb.com) -- South African gold traders are pinning their hopes on gold breaking through $400/oz by the end of this week, as pressure on the dollar is expected to continue.
“We could see a range of about $400/oz to $402/oz by the end of the week,” a bullion dealer at one of South Africa’s big four banks told Mineweb. And that may not be the end of it. Martin Potts, mining analyst at Durlacher in London, says the rising threat of terror attacks on the Saudi oil industry will keep oil prices high and the dollar low, a scenario that will buoy the gold price.
Gold has not only tracked the dollar’s latest fall, but has also edged higher on the back of rising fears of terrorist attacks in the Middle East. The latest violent spur to the price came on Monday, as Asian investors reacted to the attacks in Saudi Arabia. The price is up a full $10/oz since last Tuesday, when it traded at $385.55/oz. The price will be supported by fears, stoked by the British Foreign Office, that further terror attacks are ‘probable’ in Saudi Arabia.
But it is the short terms price action that will keep the traders occupied. Another local gold dealer reckons that Monday’s public holiday in the UK and US have kept things quiet so far this week and that continued weakening of the dollar will be good for all metals, “but especially gold and silver”.
Resistance is expected at around the $396/oz level, said the trader, and at the $400/oz level “gold will be bullish again”. He added that at a price of $390/oz, the metal would be a ‘buy’ for punters.
The dollar has weakened by 2.63 percent against the euro since the European currency last peaked at $1.1932 on May 25. This morning (June 1) it was trading at $1.2246 a euro and slated to fall still further.
May 31 (Bloomberg) -- Pension plan funding across the world is much like a dragon that has just begun to emerge from its cave.
Spurred by stock market declines, poor investment decisions,aging populations and underfunding of defined-benefit pension plans, the beast is beginning to inflame the political process.
Politicians who admitted skipping pension payments are at the center of a major political scandal in Japan, for example. In the U.K., the government is considering a new pension insurance program called the Pension Protection Fund.
In the U.S., intense political pressure created an opposite result: companies in financial distress were allowed an $80 billion break from plan funding over the next two years.
More transparency on pension accounting will certainly help both private and public pensions across the world. Yet the sword of Damocles may hang over thousands of pension plans simply because of the way private plans are funded.
Many critics of current pension-funding laws and investment policies say they are grossly inadequate to meet the needs of aging societies.
Don't look to the U.S., though, as a good example of how to strengthen pension funding. Congress recently shifted more of the burden of insuring private pensions to the Pension Benefit Guaranty Corporation (PBGC), a quasi-governmental agency charged with bailing out private plans. It's funded by insurance premiums paid by companies and is required to back a system in which 90 percent of U.S. private defined-benefits are underfunded.
Soros Likens Iraqi Prisoner Abuse to 9/11 Attacks -CNS
By Robert B. Bluey, CNSNews.com Staff Writer
June 03, 2004
Washington (CNSNews.com) - Billionaire philanthropist and financier George Soros, a major donor to liberal political causes, says the mistreatment of Iraqi prisoners was a turning point in the war on terror that will lead to the downfall of President Bush.
Speaking to thousands of liberal activists at the Take Back America conference in Washington on Thursday, Soros spent more than 35 minutes expressing his disdain for the Bush administration. His address focused mostly on foreign policy and criticism of neoconservatives, whom he referred to as "American supremacists."
"I think the picture of torture in the Abu Ghraib prison, Saddam's prison, was the moment of truth for us," Soros said, "because this is not what this nation stands for. I think that those pictures hit us the same way as the terrorist attack itself. Not quite with the same force, because with the terrorist attacks, we were the victims. In the pictures, we were the perpetrators, the others were the victims."
Soros added, "There is, I'm afraid, a direct connection between those two events - because the way President Bush conducted the war on terror converted us from victims to perpetrators. This is a very tough thing to say, but the fact is that the war on terror, as conducted by this administration, has claimed more innocent victims than the original attack itself."
Soros predicted that photographs of Iraqi prisoner abuse would be a turning point in the presidential election. He spoke confidently of his desire to see Bush defeated.
"I personally am convinced that there will be a change of regime in this country," Soros said. "I think the general public now recognizes they've been misled. We will reject the Bush doctrine, but we need an alternative vision to reestablish our position in the world."
Soros, however, offered little in the way of solutions, other than to stress that the United States must work together with allies when confronting terrorism.
After months of remaining in the shadows, Soros recently has emerged as an outspoken player in liberal politics. Earlier this week, he was the subject of lengthy, and largely flattering, profiles in the New York Times and USA Today.
As one of the wealthiest Americans, the Hungarian-born, naturalized U.S. citizen has given away more than $15 million to liberal interest groups. The most notable contributions have gone to America Coming Together ($10 million), MoveOn.org ($2.5 million) and a liberal think tank called the Center for American Progress ($3 million).
PAT BOONE BLASTS MEDIA OVER WAR COVERAGE -IFN
BEVERLY HILLS, CA - (IFN) June 4, 2004 -- Entertainer Pat Boone told FOX News host Bill OReilly last night, "America is in greater danger" as a result of the irresponsible and sensationalistic media coverage by CBS of the Abu Ghraib prison scandal.
"This was a military matter that was already in hand. CBS knew, back in March, that resolve was already in progress toward punishing those who committed this crime. At a time of War, the public's right to know all the details is superceded by national safety. If CBS had really cared, they would have gone to the Pentagon first instead of rushing the story and pictures to air. On the whole, this incident has embarrassed all Americans and harmed the war effort greatly. Let us remember that we are fighting an enemy that believes they are rewarded by God for attacking Jews, Christians and all Americans. I think the President did the right thing."
Read more from Pat Boone on restoring financial freedom
Salvaged coins excite market -Knight Ridder
By Daniel Webster
Knight Ridder Newspapers
May 30, 2004
The romance of coins recovered from shipwrecks propels both divers and collectors. Modern robotic salvage equipment seems sure to add more Spanish galleons and early steamers to the list of treasure ships found with their coinage intact and eventually available for sale.
The Atocha and the Central America are two of the most recent treasure ships whose cargoes have excited collectors.
Now we have the Republic, this century's first major find. It was partly emptied last weekend in an auction on the Shop at Home Network, a small Southern cable channel.
The ship, a steamer bound for New Orleans from New York in 1865, sank after two days in a hurricane. It was carrying coins worth $400,000.
The wreck was discovered under 1,700 feet of water about 100 miles off the Georgia coast. So far, divers from Odyssey Marine Exploration Inc. have recovered more than 4,000 gold $20 coins, 1,496 gold $10 coins, and 47,000 silver half-dollars.
Since almost no one collected coins in those days, these rarities were meant to be used in commerce. Their value has increased underwater as they ceased to be circulating coins.
Salvage operations continue on the Republic, and Odyssey has also identified other wrecks of treasure ships.
The sudden appearance of the coins has reminded collectors that nothing stands still. When 47,000 half-dollars struck before 1865 appear, the value of all the other similar halves subtly changes as the definition of rarity is altered.
Among the $20 coins found is an 1854-O coin in pristine condition. Until it was found, only about 30 such coins had been known. This one suddenly became much sought after. Another $20 coin, an 1861-S, emerged from the sea as the "finest known."
The salvagers and the cable channel have yet to put dollar figures on individual coins or total sales, but acknowledged that the sale topped all previous 24-hour periods for the TV producers.
In the fall, a traveling exhibit will appear in major coin shows.
You can get more information from Swiss America... SHIPWRECK COINS AVAILABLE NOW!
A glint of chicanery in silver market?
Mike Blahnik, Star Tribune
May 30, 2004
Is the silver market tarnished?
Hundreds of silver investors passionately believe that prices have been manipulated downward for years by a coalition of financial institutions, costing investors millions of dollars and creating a dangerous supply shortage that will end only with an astronomical surge in prices.
Nothing short of manipulation, they say, can explain the 33 percent plunge that took silver prices from a 15-year high of $8.22 an ounce in April to $5.52 this month.
Galvanized by an outspoken analyst who writes commentaries for a Minneapolis precious metals broker, Investment Rarities Inc., these investors -- who own coins, bullion, silver certificates, futures contracts, mining-company stocks and mutual funds -- have taken their complaints to market regulators.
The uproar grew so loud that the Commodity Futures Trading Commission has taken the unusual steps of addressing the allegations on its Web site and sharing its own market analysis.
"We believe the allegations of manipulation in silver futures made by one analyst for so many years are based on false assumptions and faulty analysis," CFTC Market Oversight Director Michael Gorham said in a nine-page response to more than 500 letters sent to the CFTC.
Ted Butler, the silver-tongued analyst who caused the rain of letters, says he didn't expect the CFTC to say it had found any manipulation, but wishes it had revealed more about the trading activities of the commercial banks that frequently take large "short" positions in silver, betting on a price decline.
Still, he sees a silver lining in the CFTC's market analysis, which confirms that the use of silver continues to outpace new production.
"They really gave a lot of information about silver being in a deficit and acknowledging that world inventories have been drawn down dramatically," Butler said. "This is a first. This is like a historical document, giving you confirmation that the government is saying kind of the same thing I'm saying."
Silver's supply/demand fundamentals have seemed to favor higher prices for several years, a fact Warren Buffett cited for purchasing more than 100 million ounces of the metal in 1997.
Supply is seemingly limited because after many years of stagnant prices, there has been little incentive for mining companies to explore for new ore bodies.
On the demand side, industrial uses of silver have continued to expand because of the metal's superior conductivity and other physical properties.
"If we had a much higher price, not only would the miners be looking for more silver, we'd also have users looking for substitutes and trying to minimize usage," Butler said.
So far, the annual imbalance between demand and new supply has been covered largely by government stockpiles worldwide. China is a big seller. The U.S. government, which once owned more than 5 billion ounces of silver, sold the last of it a few years ago and now must buy more than 10 million ounces each year for coin minting.
Unlike his conspiracy counterparts in the gold market, Butler doesn't contend that governments or central banks are willing accomplices in silver market manipulation.
In the silver market, big commercial banks at times sell large quantities of futures contracts as hedges for their customers (often silver miners who stand to lose money if the price falls) but also as speculative positions.
These big banks have more financial backing than the speculative buyers (usually hedge funds and individual investors), so they can amass huge short positions. Before the recent selloff, those short positions grew to be four times as large as the deliverable quantity of silver stored in New York Mercantile Exchange warehouses.
According to the manipulation allegations, the large commercial banks, which also function as market makers by actively buying and selling to create market liquidity, have the ability to engineer a slide in prices by simultaneously dropping their bids. The selling then cascades as hedge funds and other previous buyers sell their contracts to lock in gains or limit losses. At that point, the commercial shorts cover their positions by taking the other side of the panicked selling.
"They know how to coordinate their buying and selling so that it goes against your logical sense of what should happen," Butler said. "They've never lost in the Comex silver arena in the 15 years I've been watching it. There's no way that these guys are that lucky and are never wrong."
Butler's allegations have brought him a wide following among individual investors. But his rantings prompted Pan American Silver Corp. Chairman Ross Beaty to call him "nuts" and label his commentaries as "drivel," and most precious metal mutual fund managers won't touch the topic with a 10-foot bullion bar. But Butler, his mettle tested by such criticism and the recent price drop (although prices have rebounded back above $6), remains committed to silver despite the rigging he believes exists.
"When the manipulation ends -- and it has to at some point -- you know the price has to explode," Butler said.
Maybe. But investors should approach any market that falls 33 percent in a matter of weeks with extreme caution.
Mike Blahnik is at firstname.lastname@example.org
NO GAME OF CHANCE -Craig R. Smith, CEO SATC
June 1, 2004
Gold moved up this morning by as much as $4 on renewed oil fears based on the attack in Saudi Arabia over Memorial Day weekend. Then the Plunge Protection Team (PPT) went into action to curb the rise and illustrate that the markets are held well in control.
Nevertheless, OPEC is busy assuring the world that they can provide an uninterrupted flow of oil to the world regardless. Oh yeah? Tell the terrorist that and they will prove OPEC wrong.
Al Queda has shown it's clear intention to coerce the Saudi's to turn against America, or pay the consequences. I believe they think the Saudi's would respond the way the Spanish did by removing troops from Iraq ie: doing whatever they demand.
Although the Saudi's don't have troops in Iraq, Al Queda will be demanding something from the Saudi's if they don't want to be attacked again. They are keenly aware of how quickly the Spaniards caved in to their demands in the name of public safety.
If the Saudi's stop or slow down oil to the U.S. it will prompt Bush to make the action in the Middle East, which will play directly into the hands of the terrorists. I hope and pray our President and his advisers are wiser than that.
If we were to have another terrorist attack in America this summer all bets are off. The stock markets will tank and gold will explode. Our own Homeland Security officials are warning us to expect an attack. As we can see by the Saudi attack this weekend, we are vulnerable to terrorist impact world wide, let's pray it's not here.
Every time another attack occurs oil responds, and thus gold.
This reminds me a lot of 1979/80. Russia invades Afghanistan. Iran takes America hostage. Interest rates starting going up while oil peaked near $50/bbl. We have all the fundamentals in place to see gold prices explode.
I expect to see the price of gold remain strong and very active this summer. Between the election, the proposed handing over of government in Iraq this month (and who knows what else) we are looking at anything but "lazy summer days." Traditionally, the summer brings a season of slower trading -- down but not this year.
In the summer of 1979, the markets were crazy and I expect we very will could see the same this year. While people may have vacation on the brain my goal is to help keep them focused on how important it is to have gold in their portfolio NOW.
If we were to have another terrorist attack in America this summer all bets are off. The stock markets will tank and gold will explode.
Our own Homeland Security officials are warning us that there will be an attack. As we can see by the Saudi attack this weekend, we are vulnerable to terrorist impact world wide, let's pray it's not here.
Now is the time to protect their assets with gold and begin moving to a a personal gold standard with their portfolio. Today the U.S. government allows Americans to convert their retirement funds in IRA's, Keoghs or self-directed 401K pension plans into U.S. gold coins.
P.S. I loved the comments on CNBC today. "The best way to BET these markets is to use EFTs" REALLY? Is Wall Street betting? I thought the Dow was for investing and Las Vegas was for betting. People, please, see Wall Street for what it is - A very big game of chance. Thankfully, as we stand on the threshold of a world filled with new risks, gold stands as the best way investors can protect and growth their assets -- with very little to chance. Read THE PRICE IS RIGHT
The latest money supply figures show yet another bubble expanding; M3 is increasing at a breathtaking 20% annual rate. In the last 4 weeks, M3 has gone up $155 billion. If this were to keep up, the nation's total money supply would rise by $2 trillion in a year's time - an amount equal, roughly, to a fifth of national output.
But how long can it continue?
You will recall, dear reader, that Alan Greenspan has made a pact with the devil... and George W. Bush has made a pact with Alan Greenspan. They will both do all they can to keep the bubble expanding - at least until after the election. And now, with the war in Iraq going about as well as you might have expected, the economy has become more important than ever. If by ballot day, things seem to be going badly on both bubble fronts, things will also go badly for America's bubble president on Election Day.
But we are getting a little tired of bubbles. They seem to expand... and expand... and expand some more. Every time we expect them to deflate, they merely get bigger.
"You won't believe what is happening to real estate - even here in Baltimore," said a friend yesterday. "In your old neighborhood, they sold a house recently for over $300,000. It's unbelievable."
Unbelievable it is. A few years ago, they couldn't even give houses away in many parts of Baltimore. Seriously. The mayor tried it. He condemned hundreds of abandoned houses and tried to give them away for $1 each. Many of them found no takers.
The catch was you had to agree to live in them.
But now even Baltimore, which, until recently, was in a real estate bear market that began in the 1920s, is enjoying the bubbly world of the early 21st century. People not only want to live in inner-city houses, they want to pay a lot for them.
"In Hampden, [a run-down area of tiny houses built for mill workers in the last century], they're selling houses for $150,000," our friend continued.
Bubbles to the left of us, bubbles to the right of us, bubbles in front of us... How long will it be before one of them blows up?
We have grown weary of waiting. Budget deficits, trade deficits, consumer borrowing - the trends we thought would barely last another day now appear almost eternal. A kind of 'bubble fatigue' has set in. Like a crowd on the slopes of Vesuvius, we have all given up watching. Ignoring the smoke and ash, we go about our business... forgetting that the volcano could erupt at any minute.
"There are three rules for bubbles," writes Jim Jubak.
Rule #1 is that they continue much longer than you expect.
Rule #2 is that they expand faster near the end of the cycle... so just when you think they should have ended long ago, they seem more robust than ever.
Rule #3 is that no one wants to admit when it's over.
Like us, Jubak is not sure when the bubble period will finally end, but he thinks we must be getting near. Countrywide Financial reports a huge surge in adjustable rate mortgages - up 130% over last year. The credit bubble is expanding so fast, it must be nearing its pin. Likewise, General Motors has seen a big increase in its finance division. Making and selling cars is hard work, but financing cars, houses and insurance contracts is a piece of cake. GMAC now contributes 2 out of every 3 dollars of GM's profits... with more than half of the financing profits completely unrelated to the auto business.
"One of the most frustrating things about this market and about the interlocking relationships so characteristic of our financial system is that it is so hard to figure out who will get left holding the bag," writes Jubak. "I am certain, however, that this isn't the time for investors to let their guard down. This bubble is unlikely to break with the kind of pop that took down the entire stock market in 2000. But it is even less likely to deflate gently and without any pain."
Read Editor's review of Bonner's NYT #1 Bestseller "Financial Reckoning Day"
Below you will see a chart of the Silver market, which I believe is now set to make a run to $10 or better. The second chart shows a close up view of the MS65 Morgan Dollar performance during the drop from $8.44 to $5.54 in Silver prices. As for Gold/Silver stocks, most of the major of middle-tier producers were down 25-30% and exploration stocks were off 50-80% during this time.
You will notice that not only did the Morgan Dollars not lose any ground during this 34% correction in Silver, but they actually gained 13% moving from $155 to $175. This should answer any questions as to why we own coins rather than any type of bullion or leveraged futures contracts. This is a classic example of the large commercial traders "shaking the tree" so the weak leaves fall off.
In one four-week period, the massive commercial short position was covered while the record speculator long position was decimated. For more on this we will look at the Commitment Of Traders Report below, which lists the long/short positions of the large commercial traders and the public speculators.
The latest COT shows the total COMEX dealer net short position in silver has been reduced by 33,000 futures contracts (165 million ounces) on the wolf pack engineered sell-off, from over $8/oz. Gold's COTs show a breathtaking reduction of 140,000 contracts on the engineered $50 decline. The brain-dead tech funds served as the accommodating patsies, once again. Now the decks appear to have been cleared for a liftoff to a powerful rally.
This downward move occurred for one reason and one reason only - to allow the dealers to cover as many of their short positions as possible. The good news is that they did in spades. As such, the market structure now allows for a rally of significant proportions. The mother of all buy signals in silver is alive and well.
Many of you have heard that Warren Buffett made a comment at his annual shareholders meeting in mid May that he expects to see Silver top $10 per oz. within the next thirty days. It is my belief that the above information was the logic behind that statement.
If the commercials are reversing their positions, and they are, it means several things very profound. The commercial bullion dealers who are manipulating the price to the downside are giving up! They may be winning this battle down from $8.40, but they are losing the war! For the most part, they are covering at a loss at $6, since most of their short positions have existed since the $5 level and lower! And if they are buying at $6, it indicates that those who manipulate the price to the downside think this is a bottom. And so, it will likely be a bottom.
In conclusion, those of you who have positions in the Morgan Dollars have clearly made the right decision. Those folks who are invested in Gold/Silver stocks, or leveraged furures positions should take a long hard look at the risk/reward numbers. Massive moves in markets present danger as well as opportunity.
If you would like an evaluation of your current positions, contact our office @ 1-800-289-2646 and leave a message 24/7. Read MORGAN SILVER DOLLAR RESEARCH REPORT
-Trader Dick (AKA Richard Spohr)SATC
On May 28, 2003, President Bush signed into law a bold jobs and growth plan to strengthen America's economy and ensure its continued growth.
The House and Senate acted in a bipartisan fashion to make the President's tax relief plan a reality for American families, seniors, small businesses, and entrepreneurs. In passing a jobs and growth plan, the administration has taken aggressive action to strengthen the foundation of our economy so that every American who wants to work will be able to find a job.
The President's Jobs and Growth Act of 2003 will create jobs and grow the economy by:
· Speeding up the 2001 tax cuts to increase the pace of economic recovery and job creation
· Encouraging job-creating investment in America's businesses by providing dividend and capital gains tax relief and giving small businesses incentives to grow
· Providing $20 billion in aid to States for necessary services The President's tax relief will allow the American people to keep more of their own money to spend, save and invest; encourage individuals and businesses to make new investments that will lead to economic growth and job creation; and deliver critical help to unemployed citizens.
Relief for all Americans
Who benefits under the President's plan?
· The Jobs and Growth Tax Relief Reconciliation Act of 2003 will deliver substantial tax relief to 91 million American taxpayers. Middle-income families will receive additional relief from accelerated reduction of the marriage penalty, a faster increase in the child tax credit, and immediate implementation of the new, lower 10 percent tax bracket.
· Everyone who invests in the stock market and receives dividend income-especially seniors-will benefit from dividend tax relief. Half of all dividend income goes to America's seniors, who often rely on those checks for a steady source of retirement income.
· Every small business owner who purchases equipment to grow and expand will get assistance through an increase in the expensing limits from $25,000 to $100,000. · Unemployed workers received an additional 13 week extension of their federal unemployment benefits, allowing them the support they need while looking to rejoin the workforce.
The Jobs and Growth Act builds on the success of the President's 2001 tax cut. The President recognized that the time to deliver this relief is now - when it can do the most good for families, businesses, and the economy - not years from now.
Under the jobs and growth act, 91 million taxpayers will receive, on average, a tax cut of $1,126 in 2003.
· 68 million women will see their taxes decline, on average, by $1,338.
· 34 million families with children will benefit from an average tax cut of $1,549.
· 23 million small business owners will receive tax cuts averaging $2,209.
· 12 million elderly taxpayers will receive an average tax cut of $1,401.
· 6 million single women with children will receive an average tax cut of $558.
· 3 million individuals and families will have their income tax liability completely eliminated by the Act.
Helping American Families
The President's plan helps working Americans by focusing tax relief directly at moderate-income families and those with children. The plan:
· Accelerates marriage penalty relief by increasing the standard deduction and expanding the 15-percent tax bracket for couples in 2003. An estimated 45 million married couples will benefit from this provision;
· Raises the child tax credit from $600 to $1,000 per child this year, instead of in the year 2010. An estimated 34 million families with children will benefit from this provision; and
· Moves several million working Americans into the lower 10-percent tax bracket immediately, allowing them to keep more of their income.
For example, a married couple with two children and income of $40,000 will see their taxes decline under the President's jobs and growth law by $1,133 (from $1,178 to $45) in 2003, a decline of 96 percent.
The President's Plan to Strengthen Retirement Security
President Bush believes that we need to explore new ways to ensure that Social Security remains strong and financially secure for America's children and grandchildren. The President formed a bipartisan Presidential Commission to review Social Security and recommend reforms to put the system on sound financial ground. He has repeatedly stressed the need for modernization of the Social Security System. President Bush has also proposed solutions to strengthen pension plans and enhance retirement security for all Americans.
The President's plan to strengthen retirement security includes:
· Creating a Society of Stakeholders: President Bush supports the creation of Individual Development Accounts, providing savings matches for low-income Americans to accounts that would grow tax-free. The President's Social Security framework would also give all wage earners the opportunity to invest in financial assets, an opportunity that only half of Americans can now afford.
· Expanding Ownership of Retirement Assets: The tax relief legislation signed into law by the President in 2001 provided almost $50 billion dollars of tax relief over the next ten years to strengthen retirement security.
· Ensuring Freedom of Choice: The President's proposal would ensure that workers who have participated in 401(k) plans for three years are given the freedom to choose where to invest their retirement savings. The President has also proposed that choice be a feature of Social Security itself, allowing individuals to voluntarily invest a portion of their Social Security taxes in personal retirement accounts.
· Minimizing Risk through Diversification: The President's proposals would ensure that workers can sell company stock and diversify into other investment options, minimizing their risk.
· Strengthening Women's Retirement Security: The President signed into law legislation that would allow for "catch up" contributions to retirement plans, helping millions of American women who took time out from the work force to care for dependent family members. The President's Social Security Commission also made a number of recommendations to vastly improve the treatment of women through Social Security, including the creation of property rights in a personal account for every woman who experiences a divorce, expanded benefits for widows, and new "anti-poverty" benefit guarantees that would benefit women.
· Helping Future Generations Achieve the American Dream: The President has proposed extending Social Security to include inheritable assets. This provision would assist communities where life expectancies are unfortunately shorter than national averages, including African American households.
· Spurring National Saving and Economic Growth: Tax relief legislation signed into law by the President will accelerate economic growth by expanding national saving. The President's Commission to Strengthen Social Security has found that the President's Social Security initiative would "lead to increased national saving" in a way that is necessary to foster long-term economic growth.
Encourage Job-Creating Investment in America's Economy
The new jobs and growth law encourages individuals and businesses to invest in America's economy.
Reduction in Individual Tax Rates on Dividends and Capital Gains
· Roughly 35 million American households receive dividend income that is taxable and will directly benefit under the President's plan. More than half of these dividends go to America's seniors, many of whom rely on these checks for a steady source of income in their retirement.
· Almost half of all savings from the dividend tax cut under the President's plan would go to taxpayers 65 and older.
· The new law will reduce dividend and capital gains taxes for millions of stockholders -pumping billions into the economy this year alone. Twenty-six million taxpayers with income from dividends and capital gains will receive an average tax cut of $798.
Increase Incentives for Small Businesses to Grow
· Small businesses create the majority of new jobs and account for half the output of the economy. Their vitality is critical to America's economic health and the President's plan provides important incentives for their economic growth.
· Current tax laws permit small business owners to write off as expenses up to $25,000 worth of equipment purchases. The President's plan will increase that limit to $100,000 and index it to inflation - encouraging them to buy the technology, machinery, and other equipment they need to expand.
· If small business owners invest more than $100,000, they qualify for a 50 percent bonus depreciation that further reduces the cost of investment - encouraging investment that grows businesses and creates jobs.
Turning Recovery into Prosperity
· The President's jobs and growth law will provide $109 billion in tax relief this year alone. It will spur real overall economic growth, yet it is disciplined and tailored to address specific challenges.
· The American economy is strong, but it must be stronger. The President's plan is a focused effort designed to remove the obstacles standing in the way of faster growth and greater progress.
· President Bush will not be satisfied until every American who wants a job can find one; until every business has a chance to grow; and until we turn our economic recovery into lasting prosperity that reaches every corner of America.
George W Bush has chosen tax cuts for the wealthy and special favors for the special interests over our economic future. John Kerry's priority will be middle class families who are working hard to cover the mortgage, pay the high cost of health care, child care and tuition, or just trying to get ahead.
The first thing John Kerry will do is fight his heart out to bring back the three million jobs that have been lost under George W. Bush. He will fight to restore the jobs lost under Bush in the first 500 days of his administration. Kerry has proposed creating jobs through a new manufacturing jobs credit, by investing in new energy industries, restoring technology, and stopping layoffs in education.
John Kerry has a plan to secure America's economic future and ensure that workers can achieve the American dream in our changing economy. John Kerry has the courage to roll back Bush's tax cuts for the wealthiest Americans so we can invest in education and healthcare. He isn't afraid to crack down on corporations that are hiding their money in Bermuda to avoid paying their fair share and will end special tax giveaways to companies that ship jobs abroad. And he will defend the rights of workers, consumers and shareholders in holding corporations accountable for their actions.
John Kerry's Plan to Create 10 Million Jobs
The Most Sweeping International Tax Reform in Over Four Decades in Order to Encourage Companies to Create Jobs in America and Stop Shifting Jobs Overseas for Tax Reasons
John Kerry is unveiling a comprehensive economic agenda that will unleash the productive potential of America's economy to help it create 10 million jobs in his first term as President. Over the next several weeks, Kerry will unveil a series of proposals that will restore confidence in the economy and spur job creation.
John Kerry: Protecting America's Jobs
Outline Places to Address Outsourcing - Part of Comprehensive Plan for American Jobs "Under this Administration, America's middle class has been abandoned - its dreams denied, its Main Street interests ignored and its mainstream values scorned by a White House that puts privilege first," said John Kerry. "Middle class Americans don't ask for special favors, they just want basic fairness, and a President who fights for that ideal."
John Kerry Jobs Tour
While President Bush continues to send jobs overseas, today Democratic presidential candidate John Kerry, elected officials and labor leaders will fan out to Super Tuesday states as part of a nationwide jobs tour to meet and talk with workers about the devastating impact of the Bush economy on middle class families and outline John Kerry's plan to put America back on track.
Reviving American Manufacturing
State Tax Relief and Education Fund to Create Jobs and Stop Painful Budget Cuts
Provide Tax Relief to Middle Class Families
Prepare Americans for 21st Century Jobs by Opening the Doors of College for All
Making Corporate America Live by America's Values
Protect the American Worker
Restore Fiscal Discipline to Washington
Close the Pay Gap
Expand Economic Opportunity for Women
CANDIDATES TAKE A THRASHING OVER ECONOMICS -UPI
By Dar Haddix
UPI Business Correspondent 5/26/2004
WASHINGTON, May 26 (UPI) -- Though Bush and Kerry claim to be on opposite sides of the economic fence, participants in a discussion at Libertarian think tank Cato Institute indicated that both candidates have made some of the same mistakes.
Panelists at a Cato forum Tuesday bashed both Bush and Kerry for overspending and trade foibles, but Bush fared far better on tax policy than Kerry.
Chris Edwards, tax analyst at Cato, said during Tuesday's discussion that the next president will have an important influence on fiscal policy. For one thing, "He will be the last president before the gigantic entitlement-cost explosion begins starting around 2008."
Medicare and Medicaid costs are rising by $50 billion a year now but will be rising by about $100 billion a year after 2008, he said. Also, the next president will decide whether to keep the Bush tax cuts or keep them permanent, and also control spending or create a bigger financial burden for whoever takes over the presidency in 2009.
Edwards' outlook on either candidate's spending competency was hardly optimistic.
"Like Bush, John Kerry doesn't seem that interested in fiscal budget issues," Edwards said. "Senator Kerry is not a Democratic spending hawk." The National Journal scored Kerry as the most liberal senator in 2003.
"The risk if he's elected is that he wouldn't listen to the boring Bob Rubin, 'reduce the deficit' advice -- he'd want a big legislative achievement and it would be something to make the liberal base of his party happy such as universal health care," Edwards said.
However, with a Republican Congress he may well govern from a centrist position like Clinton did, Edwards said.
Edwards had no kind words for the incumbent's spending either. "Bush has a terrible overspending record."
Edwards criticized Bush for not vetoing a bill Congress passed in January of this year that included 8000 pork barrel projects, as well as Bush's proposals for a mission to Mars and extra funding he's requesting for Iraq.
Edwards criticized Bush as using up his valuable campaign time touting "bite-size" spending proposals instead of talking about ways to cut the deficit.
Based on spending issues, "The Republican party basically seems to be running Bill Clinton for their White House candidate this year," he said.
Edwards also slammed inconsistencies and shortfalls in Kerry's spending proposals. He noted that Kerry wants to cut taxes for the middle class, restore pay-go budget rules, restrain spending for certain programs and cut corporate welfare. However, Kerry only wants to curb spending for programs other than defense, entitlements and education, but that leaves only 16 percent of the budget. Kerry is also proposing several new corporate welfare programs, Edwards said. In fact, on Kerry's Web site it lists 79 new programs or spending increases, including several big-ticket items like $650 billion for universal health care over 10 years, as well as several smaller "micromanaged" programs, like canceling student loans for engineering and computer science students if they get jobs in manufacturing.
Edwards cited a laundry list of unfortunate spending similarities. Neither candidate identifies any substantial programs they'd like to cut; their campaign speeches are filled with demands for more money; they both support large intrusions into state and local policies" like K-12 school spending; Bush's proposed health-care program would cost $90 billion, and Kerry's $650 billion; both support more business subsidies.
"On spending they're both pretty well indistinguishable," Edwards said. Edwards was more receptive to Bush's tax policy.
Kerry wants to repeal Bush's tax cuts for those who make more than $200,000 annually -- the top 2 percent of household incomes.
Edwards said Kerry's plan to repeal tax cuts for wealthy is problematic for several reasons. For one thing, he said, increasing taxes on wealthy Americans is bad economics. "They're not just rich people -- about two-thirds of them are small business owners," Edwards said. "Academic research clearly shows that increasing taxes on small business reduces job creation and reduces small business investment."
It's also not fair, Edwards said, since those who make more than $200,000 per year pay about 26 percent of their income in taxes, compared to middle-income residents that only pay 10 to 15 percent, he said.
The clearest difference between the two is how they view social security, he said, noting that Kerry said he would "never never never" privatize social security.
"Social Security is a huge issue. I hope young Americans take note of Senator Kerry's position on the issue," he said.
Gary Hufbauer, Reginald Jones Senior Fellow at the Institute for International Economics, also expressed concern about the burgeoning costs of entitlements. "Neither candidate has addressed or will they address the dominant fiscal problem of our times and for the next several decades, which is the rising burden of entitlements."
Historically he said the United States has borne a tax burden of about 19 percent. When it rises above that, there's a tax cut. "We are either going to breach this historical 19 percent ceiling or these entitlements are going to have to be cut, or both, but ... the next president can postpone this to his successor because the crisis will likely not hit in the next four years," he said.
"I don't think the debt level to GDP ratio is high enough or the turmoil we might see in the exchange market is great enough [to cause a crisis in the next four years] ... but it is in the cards," he said.
There are few examples of countries reducing their entitlements gradually, Hufbauer said, but cited Britain as the best example.
Hufbauer said that the tax savings Kerry said he could achieve -- $850 billion over ten years -- would be offset by spending proposals that would cost at least that much over the same time period.
Hufbauer said pointed out that since Kerry said he's not going to raise retirement age, cut benefits or reduce premiums, "add that together with privatization and it's sort of what you've got now on Social Security is what you get in the future."
The only "wiggle room" Kerry would have is to raise the cap from about $88,000 on covered wages but not have a corresponding increase in benefits. "But to do that he would have to have a Democratic majority in the House of Representatives, and that's a long shot."
As for Kerry's proposed reduction of the corporate tax rate, Hufbauer said it does address the fact that the United States is not as tax-competitive as it was 10-15 years ago compared to other countries, but "it isn't enough to make us competitive compared to Asia where the most of the new competition is coming from," Hufbauer said.
Dan Griswold, associate director of the Cato Institute's Center for Trade Policy Studies, called Bush's efforts to expand trade impressive, noting actions such as the upcoming signing of trade agreements with five Central American countries and the Dominican Republic, and supporting normal trade relations with China, now the United States' fourth-largest trade partner. But he said Bush also imposed 8 to 30 percent tariffs on foreign steel. The tariffs were lifted after 20 months, but "the economic and political damage had been done." He also signed the 2002 farm bill that locked in subsidies that were 80 percent higher than those under President Clinton.
"Besides being costly to taxpayers and consumers alike, the farm bill undercuts the U.S. government's position in global trade talks -- urging other countries to lower their trade barriers and make the tough choices when we are unable to make those same tough choices here."
Griswold also decried Bush for imposing tariffs on Canadian softwood and some Chinese products, and for continuing the travel and trade embargo on Cuba. "When it comes to Cuba the president seems to forget all the sound arguments he makes for trading with China -- but they don't seem to apply to Cuba when it comes to promoting human rights and democracy through trade expansion."
Ironically, Kerry's record on trade is a complete contradiction of his presidential campaign rhetoric, Griswold said. "Senator Kerry has employed rhetoric on the campaign trail that has been significantly less friendly toward trade than his actual record," Griswold said.
Kerry's record shows him supporting trade liberalization most of the time -- he voted for NAFTA in 1993, for the Uruguay Round agreements in 1994, for a version of fast-track trade legislation in 1997, for normal trade relations for China, and to lower trade barriers against imports from Africa and the Caribbean. He has also voted against sugar quotas and sugar subsidies, and against steel tariffs.
More recently though, he voted for the 2002 farm bill, and for more restrictive language on labor, environment and human rights standards in trade agreements. "About two-thirds of the time Sen. Kerry's votes in Congress have been in the direction of trade liberalization. If I were grading the actual records of Sen. Kerry and President Bush by free trade standards I would give them both a B, maybe a B-." with farm subsidies chief among the worst mistakes, he said. He added, "While paying lip service to the need to trade he's ratcheted up his calls for enforceable labor and environmental standards at the core of every trade agreement, never mind that he supported agreements in the past that didn't have that kind of restrictive language."
Griswold slammed Kerry for proposing that the United States reopen trade agreements, keep track of how many jobs are shipped overseas, require a 3-month notice before jobs go overseas, and restrict bidding for federal contracts. "All of these proposals would add to the cost of doing business in the United States, driving up costs for consumers and taxpayers and inviting retaliation from our export markets abroad."
"The road to the White House is littered with the wreckage of campaigns based on a protectionist message ... not since Herbert Hoover have Americans elected a president who ran on a explicitly anti-trade platform," Griswold said.
ABOUT THE EDITOR
David M. Bradshaw is Editor of Real Money Perspectives, publisher of Rediscovering Gold in the 21st Century: The Complete Guide to the Next Gold Rush (7/01) and has been an economic commentator since 1987, when he produced the World Economic Perspectives radio show. In 1997, he produced a one-hour TV documentary, "Preparing Wisely for the Next Millennium," which was distributed free of charge at Blockbuster Video nationally. In 1999, he produced a one-hour radio special, "The Big Picture: The Shape of Things to Come" discussing geopolitical, economic and spiritual trends in the 21st Century. NOTE: Youngest daughter Braida (3.5 months) just discovered that she has control of her tongue -- a valuable lesson for us all! ... MORE
DISCLAIMER: All of the information in this story is believed to be true, however errors are possible.
Past performance is no guarantee of future performance. All investments have risk.