Mar 18, 2005
MARKET NEWS DIGEST
-> Stocks slide; Nasdaq at 2005 low -MW
-> Gold rebounds, Will it miss the CRB party? -MW
-> Oil Scales New High Over $57 -Reuter
-> In the grip of oil, new supply realities -MW
-> Report Lists 12 Possibilities for Terrorist Attacks -NYT
-> Social Security, budget woes mean painful choices -USAT
-> Israel plans strike on Iranian nuclear plant -TOL
-> China's U.S. Dollar Reserves Fall -Reuters
-> DOW 11,000... Not NOW! -Craig R. Smith, CEO SATC
-> Bottom Dollar -Robert J. Samuelson, Newsweek
-> Why Liberals Abhor True SS Reform -Chris Adamo
-> What time is it Mr. Bear? -Rock Gale
-> Robust Faith -Doug Giles, Townhall.com
-> The Financial Vortex -Paul Mladjenovic
-> "What's Your Worldview?" CD Released -IFP
FOUNDERS' QUOTE OF THE WEEK
"Wisdom and knowledge, as well as virtue, diffused generally among the body of the people, being necessary for the preservation of their rights and liberties, and as these depend on spreading the opportunities and advantages of education in the various parts of the country, and among the different orders of people, it shall be the duty of legislators and magistrates...to cherish the interest of literature and the sciences, and all seminaries of them."
ST. PATRICK'S DAY PRAYER... for March 17, 2005
May the strength of God pilot us.
May the power of God preserve us.
May the wisdom of God instruct us.
May the hand of God protect us.
May the way of God direct us.
May the shield of God defend us.
-St. Patrick (FULL STORY)
MARKET NEWS DIGEST
Stocks slide; Nasdaq at 2005 low -MW
Blue chips at 6-wk low; oil, interest rate worries weigh
By Mark Cotton, MarketWatch
March 18, 2005
NEW YORK (MarketWatch) - U.S. stocks extended losses Friday, with the Nasdaq at a new low for the year and blue chips at a six-week nadir, amid persistent concern over high oil prices and rising interest rates.
The Dow Jones Industrial Average was last down 46 points at 10,580. The last time the benchmark index was below 10,600 was on February 4. when it hit an intraday low of 10,586.
The Nasdaq Composite Index fell 10.90 points to 2,005.75 while the S&P 500 Index dipped 4.64 points to 1,185.57.
"Oil is still hovering above $55 and the 10-year bond yield is back to 4.50 percent so that's not a reason for cheer," said Peter Boockvar, equity strategist at Miller Tabak.
Boockvar said the direction of Friday's market is being skewed by the quadruple witching and the rebalancing of the S&P 500 index.
"What we do in the market may not correlate to what we would fundamentally do on any other day. If it wasn't for this expiration day, we're likely to go lower today as the market continues to roll over."
Within the benchmark index, the run of bad news for American International Group continued, with the insurer's shares sliding 1.8 percent on a report of a $100 million accounting error and potential mistakes over the way it accounts for the value of long-term leases. See full story.
Volume was heavy due to quadruple-witching, a phenomenon which sees the expiration of options, index options and futures contracts on the third Friday of March, June, September and December.
Friday marks the first stage in the re-composition of the S&P 500 Index to take into account a full-float adjustment so that only shares available for open market trading will be counted. S&P is shifting to half-float-adjusted indexes today with the entire transition completed on September 16.
The full-float adjustment also applies to Standard & Poor's MidCap 400 and SmallCap 600 indices. Read about the changes
Crude-oil futures edge higher in early trading after hitting an all-time intra-day high of $57.60 in trading Thursday.
"We are likely to see position squaring ahead of the weekend and very few shorts waiting to hold over the next few days which will likely lift the prices back up to over $57," said Kevin Kerr, president of Kerr Trading International.
At last check, crude for April delivery was up 20 cents at $56.50 a barrel. May crude, which becomes the front-month contract Tuesday, was up 4 cents at $56.95. Read futures movers
The impact of rising oil prices could be seen in the pick-up in import prices for February.
The Labor Department said import prices climbed 0.8 percent for the month as imported petroleum prices jumped 3.9 percent.
Also, U.S. consumer sentiment faded slightly in March, according to media reports of research from the University of Michigan.
The UMich consumer sentiment index fell to 92.9 in early March from 94.1 in February. It's the lowest reading since November. Economists were expecting the index to rise to about 94.6.
DOW 11,000... Not NOW! -Craig R. Smith, CEO SATC
Gold turns higher in mixed sector -MW
By Mike Maynard, MarketWatch
March 18, 2005
WASHINGTON (MarketWatch) -- Metals futures turned mixed Friday, with gold prices managing a modest rebound.
The turnaround put gold for April delivery at $439.40 an ounce in midday dealings on the New York Mercantile Exchange, up 30 cents, after retreating as low as $436.10. The benchmark contract had dropped $5.10 in Thursday's action and ended last week at $446.80.
Gold's snapback came even as the U.S. dollar traded higher against the other major global currencies.
Metals traders started to position themselves ahead of the March 22 meeting of the Federal Reserve called to review U.S. monetary policy.
Kevin Kerr has been a bull on gold's prospects and said he's unperturbed by this week's pullback in the precious metal.
"Gold may correct further from here, but this market seems steady and healthy as gold works its way higher," said the Kerr Trading International strategist.
Also on Nymex, May copper reversed higher, adding 0.75 cent at $1.512 a pound. April platinum erased early weakness, adding 50 cents to $880 an ounce, while June palladium gained $1.35 to $204 an ounce.
Silver alone remained lower, with the May contract off 2.2 cents to $7.385 an ounce.
According to the latest inventories data compiled by Nymex, silver inventories reached nearly 101.9 million troy ounces as of the close of business Thursday, up 199,415 troy ounces from the previous day. Gold inventories were unchanged more than 5.915 million troy ounces, while copper held steady at 45,395 short tons.
Will gold sector miss the party? -MW
By Peter Brimelow, MarketWatch
March 14, 2005
NEW YORK (MarketWatch) -- Last week, the Commodity Research Bureau Index (CRB) surged to levels not seen since the alarming weeks of late 1980. The dollar index slipped 1.4 percent. Gold, which was up $11.70, or 2.7 percent, therefore rose in terms of foreign currencies. But gold shares were ominously soft.
Both the Amex Gold Bugs index and Philadelphia Gold/Silver Index were only up some 2 percent. On Thursday they actually fell, although gold rose. Are the shares suggesting the gold sector will sit out the commodities ball? Why?
This commodities up/dollar down bash is some party. Asserting that the CRB has "TAKEN OFF" and illustrating this with one of its beautiful trademark point and figure charts, Australia's The Privateer Web site headlines, "Ignore The Booming CRB Index At Your Peril." Bridgewater Associates "Daily Observations" on Friday was cheerfully talking of "The Break Down of The Dollar System." Perhaps most impressively, the well-connected institutional service The Gartman Letter, which adroitly predicted the dollar's New Year rally, berated itself on Wednesday for recently reiterating bullishness ("We were wrong ... hubris of the first and highest order ...") and has completely readjusted its model portfolio.
Yet the gold bugs are furious, and they do have something to complain about. Dan Norcini documented on LeMetropole Café that all previous times the CRB index has been at this level, gold was around $600. The Privateer observes that if the CRB and gold had kept pace since the latter's $456 peak on Dec. 3, gold would now be $510.90. Apparently the gold shares are right to detect something troubling about the performance of the metal.
The pro-gold community generally agrees as to what it is: covert selling by central banks. In an important development for this group, the March issue of Jefferson Financial's Gold Newsletter carries an essay by Frank Veneroso. Veneroso, who led revolutionary analytical developments in the gold world in the early '90s, addresses the World Gold Council market prepared by the consultants Gold Field Mineral Services (GFMS). He has said little on this subject for several years. Now, in a powerfully argued piece, he declares the GFMS estimates "so removed from historical trends and current market trends that they have become ludicrous." Further, accepting the view that the gold market is managed, Veneroso gives cautious approval to the contention favored by the LeMetropole site that the "manager" is in retreat. This is the point which gold shares currently do not accept.
An elegant and exhaustive discussion of the immediate empirical evidence for this view was published this weekend in the new issue of James Turk's Freemarket Gold & Money Report. Turk concludes: "Central banks have created a wonderful opportunity ... All they have managed to do is to make gold ... very undervalued." He adds a long-term technical argument for gold shares.
Oil Scales New High Over $57 -Reuters
Mar 17, 2005
LONDON (Reuters) - Oil prices scaled fresh highs on Thursday, forcing OPEC to consider a second output increase just a day after its deal to raise supplies failed to halt crude's record-breaking advance.
U.S. light crude broke above $57 for the first time, gaining $1.04 to $57.50 a barrel. London's Brent crude, benchmark for European imports, rose $1.12 to a record $56 a barrel.
"It's not in our hands, prices are determined by the market," said UAE Oil Minister Mohamed al-Hamli.
The Organization of the Petroleum Exporting Countries agreed on Wednesday to raise output by 500,000 barrels per day with immediate effect. The agreement allows the addition of a further 500,000 bpd if prices do not fall below $55 for U.S. crude.
"If prices continue as they are now, then starting from next week we will start our (telephone) discussions," OPEC President Sheikh Ahmad al-Fahd al-Sabah told reporters in Isfahan, Iran (news - web sites).
With its output already near a 25-year high, OPEC is stretched to meet rising demand, encouraging the investment community to bet that oil's bull run can go further.
Mainstream investors are diversifying into energy and commodities markets, driving U.S. crude on average to $49.16 so far this year, up $7.70 from 2004's average and $18 higher than the mean for 2003.
In the grip of oil, new supply realities -MW
Coming to terms with the new realities of supply, pricing
By Thomas Kostigen, MarketWatch
March 15, 2005
SANTA MONICA, Calif. (MarketWatch) -- Extremists have warned for years of an impending economic disaster due to the end of oil; the movement is dubbed "Peak Oil." It posits that one day all the oil in the world will be depleted, prices will soar and disaster will ensue.
And many are saying that day has come.
"Peak Oil is no longer on the way. It is here," says Michael Ruppert, who runs a Web site and pens a newsletter on topics that range from government corruption to insider trading to Osama bin Laden.
Ruppert and those like him who preach about the days of fire and brimstone are taking their cue from the fact that no significant oil deposits have been found as usage soars. The Energy Department last week released its short-term forecast, which sees demand increasing five percent over the next two years. Meanwhile, suppliers are dour about oil reserves.
"Oil is no longer in plentiful supply. The time when we could count on cheap oil and even cheaper natural gas is clearly ending," ChevronTexaco Chairman David O'Reilly said in a recent speech.
Economists and oil ministers say there is no need for alarm. Indeed, James Flanigan, the economics columnist for the Los Angeles Times flatly says, "Oil prices will not -- repeat, will not -- climb inexorably in coming years, for one simple reason. It's called human nature." He says people will react and make changes in their daily lives to consume less energy.
Alternative energy sources too will alleviate some of the demand on oil. Yet, those sources are far away from replacing petroleum-based fuels.
In the meantime, consumers will suffer with leaps in gas prices and energy bills, as has been the case recently in the United States. Crude hit $55 per barrel last week, and -- closer to home, at least in California -- gas prices topped $2.20 for a gallon of regular at the pump.
The confluence of increased oil usage as nations such as China and India industrialize with a winnowing of supplies winnow accounts for much of the price increases. That situation is unlikely to change. But it doesn't mean the end of oil; it means the end of oil pricing as we know it.
This week, the House and Senate budget committees are expected to vote on the President's 2006 budget, which contains language that authorizes drilling in the Arctic National Wildlife Refuge. That has environmental activists are up in arms.
Whether we're at "Peak Oil" or not, don't expect we'll ever be at Cheap Oil again.
3-16-05 -- Oil Prices Shoot to New Intraday High, $56 -AP ... Crude oil prices soared to a new intraday high above $56 a barrel Wednesday in spite of a decision by OPEC ministers to authorize the pumping of an extra half-million barrels of oil a day.
Report Lists 12 Possibilities for Terrorist Attacks -NYT
By ERIC LIPTON, New York Times
March 16, 2005
WASHINGTON, March 15 - The Department of Homeland Security, trying to focus antiterrorism spending better nationwide, has identified a dozen possible strikes it views as most plausible or devastating, including detonation of a nuclear device in a major city, release of sarin nerve agent in office buildings and a truck bombing of a sports arena.
The document, known simply as the National Planning Scenarios,(PDF version) reads more like a doomsday plan, offering estimates of the probable deaths and economic damage caused by each type of attack.
They include blowing up a chlorine tank, killing 17,500 people and injuring more than 100,000; spreading pneumonic plague in the bathrooms of an airport, sports arena and train station, killing 2,500 and sickening 8,000 worldwide; and infecting cattle with foot-and-mouth disease at several sites, costing hundreds of millions of dollars in losses. Specific locations are not named because the events could unfold in many major metropolitan or rural areas, the document says.
The agency's objective is not to scare the public, officials said, and they have no credible intelligence that such attacks are planned. The department did not intend to release the document publicly, but a draft of it was inadvertently posted on a Hawaii state government Web site.
By identifying possible attacks and specifying what government agencies should do to prevent, respond to and recover from them, Homeland Security is trying for the first time to define what "prepared" means, officials said.
That will help decide how billions of federal dollars are distributed in the future. Cities like New York that have targets with economic and symbolic value, or places with hazardous facilities like chemical plants could get a bigger share of agency money than before, while less vulnerable communities could receive less.
"We live in a world of finite resources... FULL STORY
3-16-05 -- Americans must accept threat of terror attack, Chertoff says -KRN
By Frank Davies, Knight Ridder Newspapers
WASHINGTON - New Homeland Security Secretary Michael Chertoff asked the public Wednesday to learn to live with the long-term risks of terrorism as he pledged to do a better job assessing that danger.
"We win the war against terror by rejecting terror as a tool of intimidation, and we triumph when we take account of real risks and threats but do not become hypersensitive or overly responsive to them," Chertoff said in his first major speech since taking over the huge 2-year-old department.
He offered no direct criticism of his predecessor, Tom Ridge, or of the color-coded terrorism alert system that became a staple for late-night comedians. But he told an audience at George Washington University that terrorists "seek to exploit psychological vulnerability" and to "control and manipulate our behavior."
He recalled that Winston Churchill, Britain's prime minister during World War II, rallied the citizens of London during German bombing raids with a message of perseverance.
"We want to live mindfully but do not want to live fearfully," Chertoff said, adding that Americans could follow Churchill's exhortation: "We will not flinch or weary of the struggle."
Chertoff said he was launching a top-to-bottom "comprehensive review" of how Homeland Security - a department with 180,000 employees from 22 once-separate agencies - should be organized. The reviewers would make recommendations without regard to "old jurisdictions and old turf," he said.
3-16-05 -- ElBaradei, Nunn Say Action Needed on Nuclear Threat (Bloomberg) -- The head of the United Nations nuclear watchdog, Mohamed ElBaradei, and former U.S. Senator Sam Nunn today said world leaders must unite quickly to prevent terrorists from obtaining radioactive materials for an attack. ``We must not wait for a watershed nuclear event to provide the needed nuclear security update,'' ElBaradei told a nuclear security conference in London arranged by the UN's International Atomic Energy Agency. ``We're not doing enough to counter the prospect of a nuclear terrorism incident,'' he told reporters after his address, adding that leaders need to overcome ``bureaucratic inertia'' on the issue.
3-16-05 -- Lawmakers pressuring Bush for more Border Patrol agents -Chronicle Bipartisan group wants more money for border security in the new budget By SAMANTHA LEVINE, Houston Chronicle ... WASHINGTON - A bipartisan group of lawmakers, including many from Texas, is pressing for money to hire thousands of new border guards that were approved by President Bush but then left out of the 2006 budget. "I am hopeful that the administration will change its view on this," said Rep. Michael McCaul, R-Austin, who penned a letter to be sent today to House appropriators asking for money for border security. The letter was signed by 44 representatives, including 16 Texans. The signers include Rep. Gene Green, D-Houston, and Ted Poe, R-Houston, Ron Paul, R- Surfside, and Kevin Brady, R-The Woodlands.
Related Story/Special Offer:
ATOMIC IRAN - Introduction, Foreword -- By Craig R. Smith, CEO, SATC -- 3-5-05 -- NUCLEAR PROLIFERATION is the most serious international security threat the world faces today. When the cold war ended and the Soviet Union imploded, many Americans thought the risk of nuclear war had been greatly reduced. Today the threat of a nuclear "dirty bomb" attack on a U.S. major city is growing. If smugglers can deliver 4 tons of drugs across the border, they can easily deliver 4 pounds of nuclear material -- enough to kill tens of thousands and create economic havoc in the U.S. -- Unless ...
FREE GUIDE TO COUNTER-TERRORISM (Report and DVD) -- 3-16-05 -- A recent Red Cross survey states 2/3 of Americans have done nothing to prepare for another terrorist attack or other emergency, therefore, Swiss America has released a new educational DVD and CD, featuring Pat Boone entitled, "A Citizen's Guide to Counter Terrorism," which exposes Islamic "Jihad" and gives preparedness basics, including the "financial terrorism" threat.
Social Security, budget woes mean painful choices loom -USAT
By Sue Kirchhoff, USA TODAY
Mar 15, 2005
WASHINGTON — Al Gore's 2000 campaign pledge to squirrel away Social Security revenue in a special "lockbox" didn't click with voters or Congress, though it did become fodder for a Saturday Night Live satire.
But it turns out that the former vice president's idea wasn't so laughable after all.
Today, as Congress and the White House debate proposals to ensure Social Security's long-term solvency — and lawmakers square off over President Bush's 2006 budget — the nation is running historic deficits that Federal Reserve Chairman Alan Greenspan says have been exacerbated by lawmakers' failure to protect trillions of dollars in Social Security surpluses. (Related graphic: One nation under debt)
The deficits, coupled with a low personal-savings rate, have left Congress, and the economy, playing catch-up as it prepares for the pending retirement of the 79 million baby boomers — a demographic shift that will put unprecedented pressure on Social Security and Medicare, the government health care program for the elderly. Greenspan calls the long-term budget challenge a greater threat to the economy than current record trade deficits. Fed Governor Edward Gramlich warns that the nation could be headed for a "fiscal disaster."
Social Security is just part of the looming fiscal challenge, and not even the largest share. The pending fiscal issues are so daunting, however, that economists doubt the economy can accelerate fast enough to grow its way out of its problems. While the long-term deficits are not, in the largest measure, caused by imbalances in Social Security, they will force painful choices on spending, taxes or borrowing to preserve current benefits that are the only income for 22% of the elderly.
"Too much spending, not enough saving and all the things that come from that mean slower growth, higher interest rates and less international competitiveness," Douglas Holtz-Eakin, director of the non-partisan Congressional Budget Office, said in a recent interview.
3-16-05 -- Dollar Falls After Record Account Gap - Bloomberg -- The dollar fell more than a cent against the euro and dropped versus the yen after a government report showed the US current account ...
3-16-05 -- Trade gap sets records, up 25% in '04 -CNN... Widest measure of deficit surges to all-time highs of $665.9 billion for '04, $187.9 billion for 4Q.
Bottom Dollar -Robert J. Samuelson, Newsweek
The greenback's fall is stoking fears of a global crisis. Behind the slide: a world economy wildly out of balance
March 21 issue - There's been plenty of good news of late about the U.S. economy, so let's start with that: employment is expanding (2.4 million new payroll jobs in the last year); inflation remains low (less than a 2 percent rate in the past quarter); the stock market is higher (up 11 percent on the Dow from its November low), and business investment is impressive (rising at a 14 percent rate in late 2004).
Indeed, the recent news has been so good—a major exception being $50-a-barrel oil—that we're hearing again of the "Goldilocks" economy, which grows fast enough to increase jobs and slow enough to muffle inflation. But beyond all the upbeat indicators lurks a potentially frightening problem that unsettles even the wisest and most seasoned economic observers. It's not government budget deficits, a possible housing bubble or even $2-a-gallon gasoline. It's the dollar.
If you've been following closely, you know that the dollar has been declining steadily against many foreign currencies. From recent highs—reached in mid-2001 or early 2002—the dollar has dropped 38 percent against the euro, 23 percent against the yen and 25 percent against the Canadian dollar. And most economists expect the slide to continue. By the year-end, the euro may rise to $1.45 from $1.34 and the yen to 97 from 104 (that's 97 yen to the dollar), says economist Nariman Behravesh of Global Insight. But, of course, you probably haven't been following closely.
For most Americans, the subject of the dollar—its value on foreign-exchange markets—is a yawner. A depreciating dollar makes foreign vacations more expensive, puts pressure on the prices of imported cars and shoes and (the good part) improves the global competitiveness of U.S. manufacturers. Normally, these matters aren't high on our "must know" list. But now is not normal.
The significance of the dropping dollar is that it's actually a symptom of a larger and more troubling development. For 15 years the American economy has been the engine for the world economy through ever-increasing trade and current-account deficits (the current account includes other overseas payments like travel and tourism). In 2004, the U.S. current-account deficit is estimated to have reached $650 billion, a record 5.6 percent of the economy (GDP).
Other countries' economies benefit from sending their goods to eager American buyers, and the United States in turn sends massive amounts of dollars abroad to pay for those goods. The trouble is that there are now more dollars than foreigners want to hold. If there's a glut of anything—apples, computer chips, Beanie Babies—prices go down. So when surplus dollars are sold for euros, yen or pounds, then the dollar drops in value against those currencies.
THE IN-CREDIBLE SHRINKING DOLLAR -- 2-22-05 - By Craig R. Smith, SATC -- The U.S. dollar has lost over 40% of it's buying power since 2001 -- and that's under Bush's "strong dollar" policy! Can you image what's ahead over the next four years for the heavily indebted dollar? I can: "Trouble!" A surging cost of living! 'We the People' are the ultimate victims of the shrinking dollar. Get ready for Phase II of the gold bull market!
3-15-05 -- STARKERS -Buttonwood, The Economist ... The Dollar is heading inexorably down. The question is how much it takes with it ... At the end of February, officials and academics from all around Asia met in Bangkok to discuss the sliding dollar and concluded that they should move more definitively to their own advantage. There are repeated suggestions that regional payments systems should be set up, such as the gold dinar standard suggested for the Islamic world in 2002 by Malaysia’s prime minister. It is possible that, this time around, OPEC and other oil exporters will channel their windfall profits through the Treasury’s books. But what will happen if a significant portion of countries decided not to add to their dollar holdings? More than the dollar would weaken. Big foreign buyers of bonds have been keeping interest rates down, perhaps by one percentage point, as Alan Greenspan suggests. That would change, for a start. Without this support, the yield on the ten-year benchmark Treasury bond could rise to more than 5%, pushing up interest rates on mortgages. That, in turn, could prick America’s house-price bubble and prompt a general deleveraging, with implications for economic growth both in America and elsewhere. Standard & Poor’s, a rating agency, warned on Monday that a weak dollar would substantially increase concerns about credit quality.
Israel plans strike on Iranian nuclear plant -Times
Uzi Mahnaimi, London Times
Mar 14, 2005
ISRAEL has drawn up secret plans for a combined air and ground attack on targets in Iran if diplomacy fails to halt the Iranian nuclear programme.
The inner cabinet of Ariel Sharon, the Israeli prime minister, gave “initial authorisation” for an attack at a private meeting last month on his ranch in the Negev desert.
Israeli forces have used a mock-up of Iran’s Natanz uranium enrichment plant in the desert to practise destroying it. Their tactics include raids by Israel’s elite Shaldag (Kingfisher) commando unit and airstrikes by F-15 jets from 69 Squadron, using bunker-busting bombs to penetrate underground facilities.
The plans have been discussed with American officials who are said to have indicated provisionally that they would not stand in Israel’s way if all international efforts to halt Iranian nuclear projects failed.
Tehran claims that its programme is designed for peaceful purposes but Israeli and American intelligence officials — who have met to share information in recent weeks — are convinced that it is intended to produce nuclear weapons.
The Israeli government responded cautiously yesterday to an announcement by Condoleezza Rice, the US secretary of state, that America would support Britain, France and Germany in offering economic incentives for Tehran to abandon its programme.
In return, the European countries promised to back Washington in referring Iran to the United Nations security council if the latest round of talks fails to secure agreement.
Silvan Shalom, the Israeli foreign minister, said he believed that diplomacy was the only way to deal with the issue. But he warned: “The idea that this tyranny of Iran will hold a nuclear bomb is a nightmare, not only for us but for the whole world.”
Dick Cheney, the American vice-president, emphasised on Friday that Iran would face “stronger action” if it failed to respond. But yesterday Iran rejected the initiative, which provides for entry to the World Trade Organisation and a supply of spare parts for airliners if it co-operates.
“No pressure, bribe or threat can make Iran give up its legitimate right to use nuclear technology for peaceful purposes,” said an Iranian spokesman.
US officials warned last week that a military strike on Iranian nuclear facilities by Israeli or American forces had not been ruled out should the issue become deadlocked at the United Nations.
ATOMIC IRAN - Introduction, Foreword -- By Craig R. Smith, CEO, SATC -- NUCLEAR PROLIFERATION is the most serious international security threat the world faces today. When the cold war ended and the Soviet Union imploded, many Americans thought the risk of nuclear war had been greatly reduced. Today the threat of a nuclear "dirty bomb" attack on a U.S. major city is growing. If smugglers can deliver 4 tons of drugs across the border, they can easily deliver 4 pounds of nuclear material -- enough to kill tens of thousands and create economic havoc in the U.S. -- Unless ...
China's U.S. Dollar Reserves Fall -Reuters
China cut the share of its foreign reserves held in U.S. dollar assets last year, suggesting that the United States might no longer be able to rely on Asia to finance growing deficits, investment bank Lehman Brothers said in a report this week.
China's has the world's second-largest foreign currency reserves after Japan, with the equivalent of nearly US$610 billion (euro470 billion) at the end of 2004. That rose by US$209.9 billion (euro161.5 billion) last year, driven in part by a surging trade surplus.
Even as the reserves grew, the share of dollar assets held by China's central bank fell to 76 percent, down from 82 percent in 2003, Lehman Brothers said.
The bank "is slowly diversifying its FX (foreign-exchange) reserves away from U.S. dollars," said the report, written by London-based analyst Shruti Sood.
The Chinese government won't disclose the composition of its foreign reserves, but acknowledges that most are in U.S. Treasury bills and other dollar assets.
Japanese Prime Minister Junichiro Koizumi and South Korean officials have said their own governments should diversify their foreign currency reserves, reducing reliance on the dollar.
Combined with those comments, the results of research on Chinese holdings suggests that the United States might no longer be able to rely on Asian official financing for its growing current account deficit, the report said.
DOW 11,000... Not NOW! -Craig R. Smith, CEO SATC
Investors know the price of everything and the value of nothing!
March 14, 2005
"The Dow is playing palsy-walsy with 11,000 – an old friend not seen in years."
-WILL DEENER, Dallas Morning News
It seems the financial media is in search of pundits with "safe bets" in 2005 for the stock market. I guess it's no secret that investing in the 21st century has come to resemble gambling so much, that there's just no hiding it anymore. But no amount of window dressing, public perception management or anything else can cover up the fact that "2005 is going to be a tough year for stocks" Don Hayes tells CNBC.
Now, as the Dow approaches the magic 11,000 threshold, Wall Street bulls are again searching for visions of grandeur, despite the fact that the last time the Dow finished above 11,000 was four years ago in June 2001.
The fact is that since the market peaked in 2000, millions of people have suffered large losses, discovering that notions like stock splits and Internet companies ultimately do not yield profitable results. And yet today, too many people still know the price of everything and the value of nothing. I think investing is about buying value and building a margin of safety. The Dow at 11,000 offers neither.
The problem is that stock indexes tell investors very little about the individual stock and virtually nothing about it's true value. Stocks in general are "priced for perfection" in a world that's far from perfect.
Seven undeniable economic facts that Wall Street bulls like to ignore;
1) Confidence in the U.S dollar is faltering, the euro is becoming 'world money'.
2) Commodities like oil are skyrocketing, with no end in sight = inflation!
3) Interest rates are rising, which may be a pin in the real estate bubble.
4) The U.S. borrows about $1.8 B per day, totaling about $7.7 Trillion.
5) Nuclear proliferation is the major threat, as Iran, N. Korea illustrate.
6) U.S. government debt is $44 Trillion -- between Medicare and Social Security.
7) The U.S personal debt has grown to $9.3 Trillion, yet savings is only 1%
"We the people" have about $60,000,000,000,000 (Trillion) in acknowledged U.S debt. Divided by roughly 100,000,000 employed U.S households and you get about $60,000 debt per household - up from $25,000 just a few short years ago.
My point is that Wall Street is famous for whistling by the graveyard, pretending that we are "Donald Trump" wealthy -- that is, for appearance sake only. Borrowing endless "equity" from our homes to maintain the image.
The Wall Street club responsible for pulling the big money strings may pretend that they (and we) are above the laws of economics. But they (and we) are not. It is just this type of pride that has a history of bringing nations down.
Feb Chairman Alan Greenspan, speaking out on the massive U.S. deficit, warned last Friday, "Has something fundamental happened to the U.S. economy that enables us to disregard all the time-tested criteria for assessing when economic imbalances become worrisome?" he asked. "Regrettably the answer is no."
Old School Teaching New School
CNN reports, "The old school has taken center stage," according to Richard Peterson, chief market strategist with Thomson Financial. So the old school of investing is back in style.
The "old" European Investment Formula that I learned back in the 70s was simple... 25% in stocks, 25% in bonds, 25% in real estate, 25% in gold (or cash equivalent). But today, I think good old fashioned gold is preferable to U.S. dollars because of the massive debt that keeps dragging he value of the dollar lower and lower.
"Some of the sharpest minds on Wall Street are betting that you'll make more money in metals than Microsoft the next few years. The new bull market is in stuff, not stocks, they say," reports JOHN WAGGONER for USA TODAY.
So, tangible "stuff" is where the big money is moving and that means we are still in the early stages of a bull market that could last another decade. This is excellent news for the individual investor IF they are willing to first invest some time to learn before earning.
So, will Dow 11k necessarily be a cause to rejoice? Not neccesarily. Keep in mind that the Dow has been boosted by commodities like oil, metals, basic materials and consumer durables, yet the average dividend yield for the 30 Dow is just 2.3 percent. Hardly worth the risk, considering CDs and bonds offer as much and tangibles like gold and silver offer much more!
The most important thing for the market will not be whether the Dow tops 11,000 but whether it can stay there for an extended period. I agree that the psychological boost of Dow 11k should not be ignored, but Dow 11k does not necessarily mean that happy times are here again. Diversification strategies that includes precious metals is the key.
So I say, Dow 11,000? Not Now! I say the real issue is finding true value, at any price!
Why Liberals Abhor True Social Security Reform -Chris Adamo
March 11, 2005
If Americans of all ages ever recognize the degree to which they've been conned by the proponents of failed government programs such as Social Security, they will likely respond in a manner reminiscent of the Boston Tea Party. And it is not hard to imagine a few career politicians floating in the harbor alongside of King George's cargo.
Consider the caterwauling from Democrats in response to President Bush's efforts to reform Social Security. Originally promoted as merely a retirement supplement, Franklin Roosevelt's scheme initially involved a miniscule payroll tax. Once implemented however, the road was clear to incrementally grow the program in scope and cost, eventually burdening American workers with a thirteen percent confiscation from every dollar they earn.
Politicians in Washington quickly recognized that intake from taxpayers would, for a time, exceed expenditures. So, in a manner sufficient to earn any Enron executive a trip to the slammer, Congress soon began pillaging the fund, using the money to supplement its insatiable quest for pork. Worse yet, it then covered its actions with a lie of unfathomable proportions.
Ostensibly, such violation of public trust is assuaged by the substitution of IOU's, offered as a "guarantee" of repayment. Consider the abject absurdity of this concept, and how it exemplifies the unbridled contempt with which these politicians regard the American people.
Not even worth the paper it is written on, any government issued "IOU" simply concedes the fact that monies were indeed appropriated, and that sooner or later, somebody will be forced to repay them.
Since governments cannot create wealth, and only possess that which can be forcibly extorted from the citizens, those promissory notes hold no monetary value whatsoever. Instead, they are nothing more than confessions of the original theft. If they are to be repaid, it will be by the very same citizenry that was overtaxed to create the surplus in the first place.
Meanwhile, political operatives are having a field day dipping into the coffers, essentially robbing from one citizen in order to purchase the loyalty of another. It is perhaps the biggest deception of the twentieth century to portray Social Security surpluses as anything other than a supplemental income tax, further burdening the citizenry while enabling big-government liberal Democrats from both parties to perpetuate their business as usual.
Thus, the phony outrage among liberals, intent on maintaining the system in its present form, offers proof of their real loyalties. And politicians who piously suggest another tax hike as some sort of corrective action are merely showing themselves to be willing to continue the theft, not only from this generation, but from future generations, until such time that the public wakes up to the sham.
A Plan To Unite America on SS Reform
What time is it Mr. Bear? -Rock Gale
Jan. 25, 2004
The bear says, "It's 2:00 PM, mid 1999." Dow is at 11,000, up over 1200% since 1971. In that same time, American GDP has risen only 150%, Production has risen only 150%, but Money Supply has risen 600%. Clearly, it is not interest rates but market manipulators and loose money that have brought a record number of investors into the market with the promise of huge gains. But the Fed.'s greedy strong dollar policy is pricing Industry out of the world markets, and most of the money will soon be stolen. Executives at Worldcom, Enron, Global Crossing, and many others will rape childlike investors and bankrupt their companies. The children all take TWO giant steps forward and buy 2000 more Nortel shares at $C 118.00. The price-to-earnings ratio stands around 120. John Roth pockets 100 million or so while telling investors and employees how great things are looking just 3 months down the road. "Yippee!," the children cry.
What time is it Mr. Bear?
The bear says, "It's 3:00 PM, July, 2002." The Dow has fallen to 8000. The continent falls into a deep recession. The US deficit rises to 400 billion a year. The US federal debt hits 7 Trillion as the Fed tries to spend its way out of the hole they dug. The Fed lowers interest rates, 12 times and turns on the money spigots. The Fed spends the peoples' pension savings fund as do all the major corporations.
The marketing gurus and spin doctors go to work to create hyper-consumerism. Home equity loans are used to buy cars at 0% financing with cash-back and no money down. Anyone can get a mortgage with as low as 3% down payment. The riskier ones are all bundled up together and sold to unsuspecting foreigners. House prices sky-rocket as the binge takes hold and the illusion of wealth is created through more debt financing. A friend of my father-in-law laughs as he relates how he has used 16 credit cards to carry his debt over at a lower and lower interest rate to avoid the payments. The last card has guaranteed him a 1.7% interest rate for three more months. Then he says that he'll move all his debt over to a new card!
A new mantra is created and taught to the people - "Dow 10,000 - Dow 10,000" they repeat endlessly. The kids all remember the chant because they heard it a couple of years ago. All the while, the network media puppets report that a great economic upturn is coming in the very next quarter - or the one after that. All the children take THREE big steps forward and buy anything that moves on the NASDAQ at either infinite or negative price-to-earnings, because they have nothing saved for when school gets out. "Yahoo!," they all shout.
What time is it Mr. Bear?
The bear says, "It's 4:00 PM, February, 2003." The US declares war on IRAQ, and states that anyone who helps out can bid on lucrative restoration contracts. Congress agrees to let the president spend whatever he wants as the yearly deficit rate rises to half a trillion per year. The great tax rebate of 2003 is planned as a last resort to stimulate the still dormant economy into recovery. The new master of the printing press says the sky's the limit. "We have a thing called a printing press," he states for the record. It's only paper after all. The children are a bit shocked but take FOUR steps forward and buy 4000 shares of Haliburton oil. "Death to Saddam Hussein!" they shriek in a frenzy.
What time is it Mr. Bear?
The bear says, "It's 5:00 PM, December 31, 2003." The Dow has reached 10,000. NASDAQ has reached 2,000 again. The kids are climbing the walls like chimpanzees on amphetamines. The headlines pump the "new" economic paradigm. Trade DEFICIT FALLS to only 38 billion in November - imagine! Only 456 billion per year if all 12 months are that good! This is supposed to be wonderful news? A new mantra is born. "Dow 11,000 - Dow 11,000" the kids chant. The US Dollar has fallen some 30% in two years, and is starting to get out of control. Long term interest rates are rising and already home prices and housing starts are down. The home refinancing market is shriveling and will soon crimp consumer purchasing numbers. Debt is out of control.
Robust Faith -Doug Giles, Townhall.com
March 12, 2005
If Christians would toughen up a bit, get out of the religious closet, follow their faith instead of their fears, and live their beliefs in a more robust way, we would once again change the face of this nation more drastically than Michael Jackson’s plastic surgeon altered his mug. Maybe that’s a bad analogy. But you get my point.
Hey Christian, why don’t you go public with your faith? Why don’t you work what you supposedly believe into your sphere of influence, huh, PC JC man? Come on, Dinky … true faith is resilient. It can handle scrutiny. It has answers for tough questions. It has solutions for societal pollution. It wants to go play outside.
God designed Christianity to be a 4WD spiritual vehicle with mudders, a truck that brings life to the outback. It is not a sensitive Miata that must be preserved from going offroad and into the bush. Quit treating the truth claims of the scripture, the power of the Holy Spirit and the compassion of the Creator like they are some fragile little Fabergé eggs that must be coddled, kept in the sanctuary and never exposed to the mean world.
Look, if the believer really wants to change things that he feels are detrimental to both the soul of man and the soul of our nation, and not just blather on about how bad things are on his Townhall.com column or via his mediocre talk radio show on ClashRadio.com, then he must embrace four spiritual qualities. Yes, the following four points were common denominators, fundamentals that Christians have joyfully lived for hundreds of years around the globe, principals that eventually caused the land in which they dwelt to be changed for the better. If you live, eat, sleep and breathe these four things for a few decades, history states that you’ll watch their positive impact on the course of your life, your church and your nation.
Are you ready for this? I knew you were.
1. Incorporate what you believe into your daily grind.
2. Bump up the quality of your spiritual experience.
3. Get a passion for effective action.
4. Labor for personal, ecclesiastical and national reform.
The Financial Vortex -Paul Mladjenovic, Author
Growing & Protecting your Wealth During the Coming Unavoidable Financial Storms
March 7, 2005
Your money, career & retirement goals are at great risk! What will you do when economic & financial storms swirl around and hurl devastation at you and your family? It is now becoming clear (even to Washington) that massive problems are facing our economy and that millions could be blind-sided by multiple gathering storms that are at this point unstoppable! Just think about what is facing you and I and so many of our loved ones in the coming months and years…
• Historic, massive debt problems threaten to derail and destroy our fragile economy. Just think about it… The US Gross Domestic Product (GDP) is currently at about $11 Trillion. Yet, We as a society have $37 Trillion in debt. Our collective debt - personal, mortgage, business & government-is 3 ½ times bigger than our national output. How can you grow an economy with that massive debt hanging over it?
• The US Government has $44 Trillion in unfunded liabilities. This mind-boggling sum stems from tremendously expensive and mismanaged programs such as Medicare, Social Security and other huge obligations. Add that $44 Trillion to the above $37 Trillion in debt and you have $81 Trillion squeezing and slowly crushing our national prosperity. What happens as these humongous liabilities become more and more uncontrollable? How will this affect you?
• The Federal government deficit will exceed $500 billion during fiscal 2005. This is the biggest deficit ever! This pushes The US government national debt past $8 Trillion which is also a record. How will this affect your taxes and your financial strategies?
• The US Dollar is headed for oblivion! Because of the gross mismanagement of Federal debt and the money supply during the past 10 years, the US Dollar is in a slow motion crash that is historic and will send shockwaves through the US economy. How will its plunge affect consumer prices, the stock market and your wealth-building pursuits?
• Corporate and government pensions are woefully underfunded and will probably cause millions of pensions to suffer shortfalls. How will you and millions of future and current retirees avoid what looks to be a major financial catastrophe?
Just think about the challenges that await us in the coming months and years…
• US personal debt is huge.
• US trade and budget deficits are horrendous.
• Corporate Pension funds are under-funded.
• Municipal pensions are under-funded.
• Social Security Fiasco.
• The mortgage/ real estate bubble
• The demise of the US dollar and the coming super inflation
• The hazard with $100+ Trillion of Derivatives
• Yes… and much more. The list is not complete!
Look. Millions of people will be at risk. You shouldn't be among them! With the right strategies, you can easily protect your hard-earned money and achieve financial security. In fact, the right strategies can make you rich. History tells us that some of the greatest fortunes that were ever made were created in times of financial turmoil. Imagine turning a few thousand dollars into $50,000, $100,000 or much more!
Amidst the financial carnage that is now clearly coming, there will be some that will become rich because they became aware, gained knowledge and put into action financial strategies that offered breath-taking potential to amass a fortune. That's why I recommend that you attend the most important financial event that I have ever done, Financial Vortex. You won't see and hear a bunch of tired talking heads from those misguided financial talk shows. Remember that in 2000, as the bear market arrived, those shows told you every day to "invest in stocks" and "build wealth with tech stocks" and "buy internet stocks". What happened? Over $7 trillion in hard-earned wealth was erased in the great Bear Market of 2000-2002!
Many lost 50%, 75% and even 100% as the bullish financial gurus talked about "staying in stocks for the long haul". Ugh! Millions saw their nest eggs needlessly (and avoidably) shrivel away. Well, guess what? The problems and challenges facing investors today are more worrisome than in 1999-2000. Stocks were generally an unsafe investment back then and they are still very risky today. The next few years will be a bad time for those that are blindly bullish on stocks, bonds and real estate. Don't be fooled! Learn from people that have a track record and offer you information and guidance that is proven, tested and logical. The best financial guidance in the country will be at the Financial Vortex Conference!
* [Ed. Note: If you live anywhere in the Metro NYC area, call 201-585-0239 to speak directly with Paul about his upcoming "Financial Vortex" Event on Saturday, March 19, 2005, 10:00 am - 4:00 pm . Mention Swiss America and receive a very special discount off the $195 registration price. Email Paul at firstname.lastname@example.org... Read Paul's latest Feature Article: "7 financial & economic predictions for 2004-2006"
"What's Your Worldview?" CD Released -IFP
By David Bradshaw, Idea Factory Press
March 9, 2005
"Liberalism is dying!" says New Republic magazine. If so, what is replacing it?
Everyday the world seems a little smaller, but the importance of godly wisdom grows a lot larger. For a growing number of the faithful, that means enlarging our worldview.
"History is moving toward a count-in to redemption, rather than a countdown to destruction," according to Dr. Jack Hayford. If that is true, then we all must face an altered perspective about our role in society in the days ahead.
Scientists tell us that every cell in our body carries in it two DNA codes; one code to bring the cell to maturity and reproduction, and another code to bring the cell into harmony and integration with the entire organism. It's part of God, our Creator's design to place within every person an individual destiny of maturity and reproduction -- and a corporate destiny to integrate with the whole body. For many this requires a fresh worldview!
The purpose of this newly released audio CD, "What's Your Worldview?" is to help the listener explore their own worldview and see how compares with a historical, biblical worldview. The goal is to help listeners understand their unique purpose on earth by challenging their present worldview based on Scripture.
During the first hour of the new "What's Your Worldview?" CD you'll discover...
* Whether your worldview is based on human principles, or divine principles?
* Your worldview is defined as the way that you interpret yourself and the world around you.
* Your worldview includes your beliefs about God, yourself, family, neighbors, civil government, science, art, music, history, education, economics and all other areas of life.
* Each of us has a set of presuppositions, things that we believe before hand, which underlie all of our thoughts, words and deeds.
* Your worldview my be conscious or unconscious, but it will determine your destiny and the destiny of the society you live in.
* You're either going to develop your own worldview... or swallow someone else's!
"Human history is rapidly approaching a point of convergence," according to featured strategist Dennis Peacocke. This convergence is magnetic in nature - polarizing the "faithful" and the "faithless." In other words, the comfortable road may be much less traveled in the days ahead.
This CD is just the beginning. The Internet now allows millions of truth seekers to help discover their worldview, thanks in part to Swiss America's sponsorship. (see True-Wealth.com)
So clear your mind and spirit of worldly confusion and join me in resonating with 'the sound' of The Big Picture. Listen to the first 2:30 NOW.
The State of Christianity in 2005
REAL MONEY PERSPECTIVE Archives~ FEATURED COMMENTARY Archives
Welcome to the 21st century paradigm shift
-- from a "stock-driven era" to a new "commodity-driven era."
In "Economic Solutions for the 21st Century" you'll discover ...
* SOCIAL SECURITY REFORM ... A plan to unify America
* WHY YOU MUST OWN assets that offset a DECLINING DOLLAR
* WSJ SAYS: "You don't have to be rich to invest in COINS."
* WHY SILVER could rise to $50, $75 or even $100 per ounce.
* "ATOMIC IRAN" spells the beginning of a new U.S. "Dirty War"
ECONOMIC SOLUTIONS for the 21st Century -- FREE Offer! ($19.95 value) ... LISTEN: "A Must Read" ... LISTEN: "I SLEEP BETTER!" -Michael Savage
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. MORE ... NOTE: Youngest daughter Braida Zoe (age 13 mo.) is now feeding herself, WALKING, says "hi" and "bye-bye," her name, "mama" & "dada." Shown with her mom (and loving wife) Micki amoung bright Spring flowers!
DISCLAIMER: All of the provided information is believed to be accurate, however errors are possible. The opinions in the Commentary section do not necessarily reflect the opinions of Swiss America. Past performance of any investment is no guarantee of future performance. All investments have risk.