Risk Management
Financial Risk = Probability x Consequences
Apr 29, 2005
MARKET NEWS DIGEST
-> Bush Offers New Social Security Plan -AP
-> Gold eyes investment-led surge to $500 -Reuters
-> 2.8% durable goods fall, may signal 'soft patch' -USAT
-> House Approves U.S. $1 Gold Coin -AP
-> Stocks rally on sharp drop in oil prices -MW
-> Dollar slides on China currency reform news -AFP
-> 'Peak Oil' Gathering Sees $100 Crude This Decade
-> Gas prices around the world -CNN
-> Iran plans to knock out U.S. with 1 nuke -WND
COMMENTARY
-> Investment Success: With $1,000 or Less! -CRS
-> The ECONO-MATRIX -By Alex Wallenwein
-> Rare Coins Offer Keys to Kingdom -James Altucher
-> The Worrisome Dollar -The Aden Sisters
-> Globalization and its Discontents -Bill Bonner
-> One Nation Under Man -JB Williams
-> The Difference a Father Makes -ANS
-> PEACE Plan: What's Rick Warren planning? -FridayFax

FOUNDERS QUOTE OF THE WEEK

"Give up money, give up fame, give up science, give the earth itself and all it contains rather than do an immoral act. And never suppose that in any possible situation, or under any circumstances, it is best for you to do a dishonorable thing, however slightly so it may appear to you. ... From the practice of the purest virtue, you may be assured you will derive the most sublime comforts in every moment of life, and in the moment of death."

--THOMAS JEFFERSON

Read More Founding Father Quotes at RediscoveringGold.com


MARKET NEWS DIGEST


Bush Offers New Social Security Plan -AP
By DEB RIECHMANN
Apr 29, 2005

WASHINGTON (AP) - After nearly 60 days on the road pitching Social Security changes, President Bush is offering a new plan to fix its finances by cutting benefits of more prosperous future retirees. Democrats still aren't buying it.

In a prime-time news conference, Bush refused to back off his desire to carve private retirement accounts out of Social Security. Democrats say those personal accounts are a deal-breaker that would keep most of them from supporting Bush's revisions.

But for the first time he proposed changes under which Social Security checks for low-income workers retiring in the future would grow faster than those for people who are better off.

"By providing more generous benefits for low-income retirees, we'll make this commitment: If you work hard and pay into Social Security your entire life, you will not retire in poverty," Bush said.

The White House said Bush's proposal could be accomplished with a "sliding-scale benefit formula." That would mean lower Social Security payments for future middle- and upper-income retirees than they are currently guaranteed - a fact Bush himself did not mention in his 60-minute session with reporters.

Bush's plan immediately drew renewed ire from Democrats.

Bush would "gut benefits for middle-class families," House Democratic Leader Nancy Pelosi and Senate Democratic Leader Harry Reid said in a joint statement.

They reiterated their opposition to Bush's desire to let younger workers divert some of their Social Security taxes into personal retirement accounts. "All the president did was confirm that he will pay for his risky privatization scheme by cutting the benefits of middle-class seniors," Pelosi and Reid said.

Bush held his first prime-time televised news conference in more than a year as he scrambles to generate momentum for his stalled Social Security plans and to calm anger over $2-a-gallon gasoline prices. Those two issues have dragged his approval ratings down.

FULL STORY
Transcript
Related Stories:
4-29-05 -- House GOP plans Social Security draft -AP ...WASHINGTON-- House Republicans announced plans Friday to draft Social Security legislation by June as President Bush warned Democratic critics not to "play politics as usual" with his call for sweeping program changes including curtailment of some benefits.

[Editor's Note:
Bush Lobs Social Security Reform Ball Into Democrat's Court

Hoping to break up the partisan log-jam on the issue of private retirement accounts, President Bush tonight outlined a form of "means-testing" that would insure that the lower 30% of American earners would be the least affected by the SS deficits, and that the wealthiest alone face reduced benefits.

By disturbing the sacred cow of today's socialistic SS system of "equal benefits for all" Bush has forced Democrats to argue their case for a SS reform alternative that does not focus on tax increases.

President Bush's proposed plan will reduce up to 70% of the projected trillions in deficits from the present system that will soon begin coming due. Mr. Bush stood fast for his proposed private Social Security accounts as a part of a new reform package that promotes "worker ownership...and more fairness."

Bush did a good job of presenting a creative alternative to higher taxes and his best argument to date for the privatization of SS based on the added value of an intergenerational wealth transfer system, rather than simply allowing SS benefits to fall back into the government slush fund.

May I suggest that the next step is for Americans to look at all the facts and then begin to apply pressure upon their Senators and Congressmen to support the President's wise reform proposals, while we continue looking at other proposed solutions.

We have proposed seven steps of grass roots reform action and a free Research Report on Social Security Solutions. Here is the Intro: UNITING AMERICA ON SOCIAL SECURITY


House Approves U.S. $1 Gold Coin -AP
By LAURIE KELLMAN, Associated Press Writer
April 27, 2005

WASHINGTON, (AP) -- The House gave its approval Tuesday to a presidential look for the $1 coin, moving it a step closer to becoming the first 24-karat gold bullion coin in history.

"Not only will it be a moneymaker for the federal government, but it will also be a fun, educational tool to turn all of us into history buffs," said Rep. Mike Castle, R-Del., the bill's sponsor.

By a vote of 422-6, the House approved a plan for the U.S. Mint to begin selling the coin early next year, bearing the faces of U.S. presidents and first ladies.

The issue now moves to the Senate, where Sen. John Sununu, R-N.H., is expected to introduce a similar bill.

Officials at the Mint say the coin could be a financial boon, in part by winning a larger share of the world market. They estimate that the potential global market for 24-karat gold coins is about $2.4 billion annually.

That market is dominated now by Australia, Austria, Canada, China, Singapore and Mexico, whose 24-karat coins account for about 60 percent of global gold coin sales.

Castle said the government also would save as much as $5 billion over a decade — money that it would otherwise borrow by issuing Treasury bonds. The coin would be sold far above face value, keyed to the world price of gold.

The new coins are expected to sell for about the same price as American Eagle coins with similar levels of gold. The only difference will be that the new series will be pure gold without alloys mixed in.

The Mint currently produces 22-karat gold bullion coins in its American Eagle series, but it has been finding that international investors, especially in Asia, prefer the purer coins.

The American Eagle coins have face values of $50, $25, $10 and $5 but they sell for much more than that.

Before the American Eagle gold coin went on sale in October 1986, the United States had not had a gold coin in general circulation since 1933, when President Franklin D. Roosevelt took the country off the gold standard and ordered the withdrawal of the gold coins then in circulation.

http://www.ap.org

Related Stories:
WHY A GOLD STANDARD NOW? -- Craig R. Smith ... 9-22-04 -- Much of the support for a gold standard is related to a distrust of central banks and governments, as a gold standard removes the ability of a government to manipulate the value of money. "When the money of any country loses its backing there is no standard for any behaviour. Money sets a standard that spreads into every area of human activity." -Harry Schultz


Stocks rally on sharp drop in oil prices -MW
Crude slides 4% to end below $50; falls 11.4% on the week
By Mark Cotton, MarketWatch
April 29, 2005

NEW YORK (MarketWatch) -- U.S. stocks rallied in late afternoon trading Friday as crude-oil prices fell below $50 a barrel, soothing investor nerves rattled by data that offered conflicting signals on the economy.

The Dow Jones Industrial Average ($INDU: news, chart, profile) was last up 96 points at 10,166. The benchmark index is still looking at a decline of around 3% for the month of April.

The Nasdaq Composite Index rose 12 points to 1,916, bouncing back from a seven-month low of 1,889.83 touched earlier in the day. The tech-rich index remains on course to end lower for the fourth month a row, an event not seen in more than two and a half years. The S&P 500 Index rose 11 points to 1,154, but the broad gauge is set to tally a loss of around 2% for the month.

"Today's market is buffeted by the various economic reports we've had," said Kenneth Tower, chief market strategist at CyberTrader. "We started off with a sharp rally this morning on better than expected news, but the weaker than expected consumer sentiment news set it back."

For Sam Stovall, senior investment strategist at Standard & Poor's, traders are nervous because of the volatility of the market in the last week, as well as due to some trepidation going into a weekend preceding a Fed meeting on interest rates. Listen to his interview

"If the Fed is likely to raise interest rates by 25 basis points, that's already built into stock prices, but anything other than that might not be," he said.

http://www.marketwatch.com


Dollar slides on China currency reform news -AFP
April 25, 2005

Tokyo - The dollar was softer against the yen but firmer versus the euro in Asian trade on Monday as the yen gained on renewed speculation that China would soon revalue the yuan, dealers said.

The dollar was at ¥105.88 in late Tokyo morning, down from ¥106.00 in New York late Friday. The US unit hit a one-month low of ¥105.50 yen in early Asian trade.

The euro fell to $1.3022 from $1.3062 and to ¥137.96 from ¥138.45.

"Overseas speculators tested the dollar's downside by capitalising on thin market conditions and growing expectations that China will" change its fixed currency regime, said Rikiya Takebe, chief market strategist at Traders Securities.

"But the yen's rally proved short-lived," he said, adding that many were sceptical that the yuan issue would be enough to drive the US unit sharply lower.

Last week US Federal Reserve chairman Alan Greenspan said the yuan, pegged at around 8.28 to the dollar since 1994, hurts the Chinese economy.

It is widely believed that the yuan is undervalued against the dollar and that other Asian currencies are too - including the yen - although to a lesser extent, dealers said.

http://www.busrep.co.za


'Peak Oil' Gathering Sees $100 Crude This Decade -Reuters
Mon Apr 25, 2005
By Neil Chatterjee

EDINBURGH (Reuters) - Fresh oil shocks may send prices over $100 a barrel and trigger worldwide recession by the end of the decade, a conference on the theory that oil supplies have almost peaked heard on Monday.

Speakers said oil production by major companies is set to peak in coming years while the huge reserves of OPEC producers are overstated, meaning declining output will not be able to meet rising world demand.

"The current tightness in global oil markets is likely to be a permanent feature as the world nears peak output," said Matthew Simmons, chairman of energy investment group Simmons & Company International.

"Prices are going to go way higher -- $100 isn't very expensive," he told Reuters on the sidelines of the Peak Oil UK conference in Edinburgh.

The theory of peak oil -- that describes when global production will peak followed by a decline -- attracted an unlikely alliance of oil geologists, greens, nuclear power advocates and bankers to the conference in Scotland, where North Sea oil production has already peaked.

The International Energy Agency, which advises industrialized countries on energy policy, says world oil output should not peak before 2030.

But it says about $3 trillion in investment may be needed to meet an expected 60 percent surge in consumption. Despite record profits, energy companies are spending cautiously on new projects since a price crash in 1998-1999.

Company reserves came under the spotlight after Shell made a series of downgrades last year, scaring investors.

"Oil companies are moving from denial to confession," said former oil geologist Colin Campbell. "Every beer drinker knows the quicker he drinks the sooner it is gone, and the bar shuts at 11 -- the same applies to oil."

FULL STORY


Gas prices around the world -CNN
Think you pay a lot for gas? Perhaps you'd prefer to live in Venezuela.

Gasoline prices in the United States, which have recently hit record highs, are actually much lower than in many countries. A few countries, like Venezuela have prices that are far lower.

The main driver of price disparities between countries is government policy, according to AirInc, a company that tracks the cost of living in various places around the world. Many European nations tax gasoline heavily, with taxes making up as much as 75 percent of the cost of a gallon of gasoline, said a spokesperson for AirInc.

In Venezuela, on the other hand, oil is produced by a government-owned company and local gasoline prices are kept low as a benefit to the nation's citizens, he said. All prices updated May, 2004.

Nation -- City -- Price
UK -- TEESIDE -- $5.64
CHINA -- HONG KONG -- $5.62
GERMANY -- FRANKFURT -- $5.29
DENMARK -- COPENHAGEN -- $5.08
NORWAY -- STAVANGER -- $5.07
ITALY -- ROME -- $4.86
TURKEY -- ISTANBUL -- $4.85
PORTUGAL -- LISBON -- $4.80
KOREA -- SEOUL -- $4.71
SWITZERLAND -- GENEVA -- $4.56
KOREA -- KOJE/OKPO -- $4.53
AUSTRIA -- VIENNA -- $4.50
CROATIA -- ZAGREB -- $4.32
JAPAN -- TOKYO -- $3.84
AUSTRALIA -- SYDNEY -- $2.63
CAMBODIA -- PHNOM PENH -- $2.57
TAIWAN -- TAIPEI -- $2.47
GEORGIA -- TBILISI -- $2.31
U.S. -- Average -- $2.29
LAOS -- VIENTIANE -- $1.66
THAILAND -- BANGKOK -- $1.60
CHINA -- SHANGHAI -- $1.48
RUSSIA -- MOSCOW -- $1.45
KAZAKHSTAN -- ATYRAU -- $1.35
TAJIKISTAN -- DUSHANBE -- $1.32
AZERBAIJAN -- BAKU -- $1.15
VENEZUELA -- CARACAS -- $0.14

http://money.cnn.com


Iran plans to knock out U.S. with 1 nuke -WND
Tests missiles for electro-magnetic pulse weapon that could destroy America's technical infrastructure
April 25, 2005
By Joseph Farah, WorldNetDaily.com

WASHINGTON -- Iran is not only covertly developing nuclear weapons, it is already testing ballistic missiles specifically designed to destroy America's technical infrastructure, effectively neutralizing the world's lone superpower, say U.S. intelligence sources, top scientists and western missile industry experts.

The radical Shiite regime has conducted successful tests to determine if its Shahab-3 ballistic missiles, capable of carrying a nuclear warhead, can be detonated by a remote-control device while still in high-altitude flight.

Scientists, including President Reagan's top science adviser, William R. Graham, say there is no other explanation for such tests than preparation for the deployment of Electromagnetic Pulse weapons - even one of which could knock out America's critical electrical and technological infrastructure, effectively sending the continental U.S. back to the 19th century with a recovery time of months or years.

Iran will have that capability - at least theoretically - as soon as it has one nuclear bomb ready to arm such a missile. North Korea, a strategic ally of Iran, already boasts such capability.

The stunning report was first published over the weekend in Joseph Farah's G2 Bulletin, the premium, online intelligence newsletter published by WND's founder.

Just last month, Congress heard testimony about the use of such weapons and the threat they pose from rogue regimes.

Iran has surprised intelligence analysts by describing the mid-flight detonations of missiles fired from ships on the Caspian Sea as "successful" tests. Even primitive Scud missiles could be used for this purpose. And top U.S. intelligence officials reminded members of Congress that there is a glut of these missiles on the world market. They are currently being bought and sold for about $100,000 apiece.

"A terrorist organization might have trouble putting a nuclear warhead 'on target' with a Scud, but it would be much easier to simply launch and detonate in the atmosphere," wrote Sen. John Kyl, R-Ariz., in the Washington Post a week ago. "No need for the risk and difficulty of trying to smuggle a nuclear weapon over the border or hit a particular city. Just launch a cheap missile from a freighter in international waters - al-Qaida is believed to own about 80 such vessels - and make sure to get it a few miles in the air."

The Iranian missile tests were more sophisticated and capable of detonation at higher elevations - making them more dangerous.

Detonated at a height of 60 to 500 kilometers above the continental U.S., one nuclear warhead could cripple the country - knocking out electrical power and circuit boards and rendering the U.S. domestic communications impotent.

FULL STORY

Related Story:
The Nuclear Regulatory Commission's Guideline for External Risk Communication ... What is risk? Probability Times Consequeques Plus Hazard And Outrage Equals Shared Understanding. The NRC uses the following concept of risk to prioritize resources and make decisions about compensatory measures: Risk = Probability x Consequences -- It is about balancing the likelihood of an occurrence against a set of consequences ranging from relatively benign to potentially catastrophic.


COMMENTARY


Investment Success ... With $1,000 or Less!
Sage advice for the little guy (or gal) about protecting and growing wealth
By Craig R. Smith

WorldNetDaily.com Commentary
Apr 25, 2005

"Hope deferred makes the heart sick." –Proverbs 13:12

Most investment opportunities today are skewed toward "big" investors on Wall Street it seems, but here are some smart options for those who want big money results with little money to start.

Given the ups and downs of the economy and markets so far in the 21st century, smaller investors often ask me; "What can the little guy do to protect and grow wealth? … “Stick it in the bank? Buy a ‘sure thing’ stock? Buy Euros? Buy Precious Metals?”

All may be valid choices, but which one offers the average guy (or gal) the most safety and profit potential, the perfect combination to today’s uncertain financial environment.

The key is to follow the lead of a few smart, value-based investors such as Warren Buffett, who is often referred to as the "Sage of Omaha".

Mr. Buffett has made two very smart financial moves in the 21st century; 1) Hedging the dollar's 40% decline, and 2) Sinking over $1.2 Billion into tangible assets like silver and gold.

Smaller investors should follow Warren’s lead, quietly moving into silver and gold just like Mr. Buffett has done, for the long haul, just on a smaller scale.

A tangible asset diversification strategy will...FULL STORY

Related Story:
Now, there's a Warren Buffett Monopoly -CNN ... Investment guru's holdings highlighted in Berkshire Hathaway version of popular board game.


The ECONO-MATRIX -By Alex Wallenwein
EURO vs DOLLAR MONITOR
Apr 25, 2005

In the financial world we live in, nothing is as it seems anymore - except for one thing:

We are all operating under the same illusion.

Well, most of us, anyway. Let me explain what I mean.

One of the cornerstones of what we call "reality" is that it is, by and large, the same for everyone. While we all have different mental perceptions and interpretations of the things we see, hear, feel, taste, and touch around us, on a strictly sensory level the vast majority of us agree on what kind of world we live in.

The same thing should be true of what we will call "economic reality." In a sane world, we all should be operating on the same economic and financial signals as everyone else.

The trouble is that we don't.

The ultimate kind of signal in any economy, whether it's local regional, national, or global, is price. The price of whatever it is we want to either buy, rent, or sell.

I am not arguing that all prices should be the same. That would be idiotic, of course. What I am saying is that the way in which we as humans determine the price of anything should be reliable. It should be determined based on a rock-solid, commonly shared, universally acceptable, and unalterable unit of account.

And that unit of account should be physically and conceptually inseparable from the very thing we use as payment for whatever it is we buy or sell.

Without that absolute unity, even identity, between the three aspects of money (medium of exchange, unit of account, and store of value) in every respect in the very thing we use as money there can be no reliable price-discovery mechanism.

"The market" is absolutely helpless when it comes to discovering the price of anything if there is no mechanism that makes the hidden costs of manipulation immediately (or at least mediately) noticeable.

When you give the power of determining the value of what we regard as money to mortal humans, mere individuals whose judgment will invariably be clouded by their own agenda, their own desires, their own ideas of what is right and wrong, correct and incorrect, then you create a financial world that resembles far more one of those computerized "programs" humans were fed in the movie called "The Matrix" than actual market reality.

When mere humans have the power to:

- determine the amount of currency-creation and of the cost of borrowing that currency at will;

- decree that certain institutions (banks) are allowed to literally loan currency into existence while being able to demand actual, tangible collateral from their borrowers as security;

- when the right to operate the "ultimate lender" - the "creator" of currency is farmed out to a private corporation with private shareholders;

- when these private shareholders of such corporation(s) are then recruited to perform the jobs of the elected officials who are supposed to oversee the actions of their own kind,

the you have created a financial "matrix" of such epic, such diabolical proportions that no normal human being - or even group, organization, or nation of human beings, can be expected to figure out what the real price of anything actually is.

It's like living in another movie called "Dark City" where a group of "administrators" nightly changes every individual's and family's apartment, address, furnishings, associations, etc. while people sleep. When they wake up, they live in new surroundings, with new people, having new jobs working for mew businesses, which keeps them so on edge and so confused and disoriented that they can never quite figure out what's wrong with their world.

That is what is happening to us, to real human beings, when we participate in what we are taught to regard as the "free market."

As long as central planners determine the nature, the amount, the value, and the design of the currency we all are required to earn, spend, and save, we do not live in economic reality. We are like little kids living in "Neverland" - and you know what happens to little kids over there.

They quite literally get shafted.

There is an easy, very visual way to get an idea how out of whack the world is that these central planners have created for us (or the world that we have allowed them to create for us), and that is to look at a chart of just about any economic parameter showing how it behaved before and after the world's reserve currency was decoupled from real money - gold.

Look at the difference in the several charts between the periods before 1971 and after 1971:

To create this chart I simply picked randomly from about twenty different time series stored in my "workspace" on "Economagic.com". I'll bet you get a very similar result if you pick other series.

If the various lines are seen as symbolizing the heartbeat of the US (and therefore the world) economy, you can see that this "patient" is suffering a heart attack. (Better get out of that hospital, quick!)

What you are looking at is a picture-book example of unmanageable, formerly un-imaginable imbalances being created - imbalances which will soon kill this patient dead.

What our leaders did to the world economy by taking all currencies off gold is akin to taking a passenger jetliner off the "autopilot" (i.e., a gold-referenced currency system) and letting a twelve-year old, adrenaline-crazed video game junkie take control of the cockpit!

How anyone with half a brain wave, looking at this chart, can still believe that our money-masters have "everything under control" and will surely prevent a "hard landing" if only we let them do their jobs in peace, is utterly beyond me.

But yet, such people exist. Not only that, they are in the majority.

They are mainstream investors clutching their ... FULL STORY


Rare Coins Offer Keys to Kingdom -James Altucher
RealMoney.com Contributor
4/28/2005

Living "the good life" doesn't necessarily mean wining and dining, lying on the beach and blowing all your money on roulette wheels in exotic casinos. Indeed, you can make more money (which is the ultimate joy for many anyway) by buying money.

Rare coins are often the currency of the rich and famous -- whether it's historical biblical coins found at archaeological digs or the original silver dollars that launched our nation's currency.

Indeed, there are collectors who, starting from humble beginnings, have amassed fortunes by buying and selling rare coins. John Jay Pittman, for instance, was an engineer at Kodak from 1947 to 1970, making between $10,000 and $15,000 per year. Each year he invested up to half his salary in rare gold and silver coins. Over the course of 20 years, he probably made a total investment of about $100,000, and his collection ultimately sold for over $30 million.

There are two ways one can get involved in coin collecting:

* Collect your own coins, and master the subtleties of the different coins and grading mechanisms that are used to establish value for each coin.
* Invest alongside the masters.

Assessing the value of a rare coin does have similar characteristics to valuing a business. You use comparables and you make sure there is a significant margin of safety. The value of a coin depends in large part on its rarity, which is a function of both the particular time and place it was minted, as well as its current condition. Depending on these two factors, there are various scales that will assign a grade based on the perceived rarity of the coin. Grades are between 1 and 70, with anything in the 60 to 70 range considered "rare." A coin that is graded a 69 might be significantly more expensive than a coin graded at 68.

The key to "value investing" in the coin space is to acquire coins that might have been graded too low or coins that are more rare than other similarly priced coins. For instance, a 1905 Liberty nickel with a 65 grade might cost $500 right now, even though there might be only 157 other 1905 Liberty nickels with a 65 grade. This offers a better margin of safety than a Morgan Silver Dollar that might have a similar price but comes from a population of 3,000 to 7,000. In the long run, rarity of population is the best predictor of future price, much in the same way that cash flows are the best predictor of a company's stock price.

Coins are here to stay, and like any product of inflation combined with artistry and precious metals, will rise in value forever. Make money off of money: the good life indeed.

http://www.thestreet.com


The Worrisome Dollar -Aden Sisters
Mary Anne & Pamela Aden
April 25, 2005
www.adenforecast.com

The situation with the U.S. dollar is getting downright spooky. Even though the dollar moved higher this month, it remains bearish, the major trend is down and worldwide sentiment continues to worsen.

To illustrate what we mean, here’s a key question… What does the Prime Minister of Japan have in common with central banks in countries like China, India, Russia as well as billionaires like Warren Buffet and Bill Gates, former Fed chairman Paul Volker, several Fed presidents and the former assistant Treasury Secretary in the Reagan Administration?... Answer: This growing list of countries and individuals are all seriously concerned about the U.S. dollar’s future, in some cases extremely so.

CENTRAL BANKS: Lowering dollar reserves

A recent BIS study, for example, concluded that Asian central and commercial banks have reduced their dollar holdings over the past three years from 81% to 67%. More worrisome, our biggest lender, Japan, has been a net dollar seller in four out of the past six months.

These and other countries simply do not want to keep funding U.S. spending. The U.S. is heavily in debt and living beyond its means. Growing numbers believe the dollar will be unable to maintain its world reserve currency status, and they want out.

The fact is, no country has ever been able to keep its world reserve status while building up the biggest debts in history. Plus, we’ve transferred our wealth to foreigners, who’ve accumulated $3.6 trillion in U.S. assets over the past 15 years, thanks to the growing U.S. trade deficits (see Chart 1). Some Fed officials feel this is nothing to worry about, but history tells us otherwise.

DEFICITS AND THE DOLLAR

Reserve status is a privilege belonging to the most economically stable country and the currency reflects that country’s health and safety. The latest full year U.S. trade deficit soared to a new high of $665.9 billion, or 6.3% of GDP. Anything over 5% is considered extremely dangerous and it puts downward pressure on the currency.

As you can see, the U.S. dollar index has been in a steep decline for over three years but it’s recently been holding at its 1995 low (see Chart 2). As long as the dollar index stays below 86.50, the major trend will remain down, meaning the dollar’s headed even lower.

Remember, the dollar has already dropped 70% against other currencies since the early 1970s when it stopped having a link to gold, becoming instead a floating paper currency. The current dollar decline is actually a continuation of this long-term downtrend.

Due to the current environment, we feel strongly the dollar is headed even lower and since gold and the dollar move in opposite directions, this is going to keep upward pressure on gold.

http://www.adenforecast.com


GLOBALIZATION AND ITS DISCONTENTS -Bill Bonner
Daily Reckoning
Apr 22, 2005

Globalization is nothing more than the extension of the division of labor across international boundaries. Our little village in France has the vestiges of a self-contained community. As recently as the end of WWII, almost everything people needed was produced right there. The farms grew wheat. Farmers raised vegetables... and cows... pigs... chickens. There was a machine shop... a forge... a woodworking atelier. There still remain the 'Versailles' boxes, in which lemon trees were planted. The boxes allowed the trees to be moved into heated space in the winter. Otherwise, they would freeze and die.

But as distance was annihilated, commerce in lemons was born. There was no longer any need to plant lemon trees in transportable wooden boxes when the lemons themselves could be shipped, quickly and cheaply, by the millions. One country can produce lemons. Another can produce machine gun cartridges.

Individuals... towns... enterprises... regions... can divide up the labor, work more efficiently, and produce more things at lower cost. Everyone involved gets a little richer.

There are really only two ways to get what you want in life, dear reader. You can do so honestly... or dishonestly. You can get it by working for it... or by stealing it. You can get it by trade and commerce... or by force and fraud. You can get it by civilized methods... or by barbaric ones. You can get rich by "economic means" or by "political means," as the great German sociologist, Franz Oppenheimer put it. Globalization is merely an elaboration of the economic means of getting things. It requires civilized relationships to make it work; people have to get along with each other in order to trade. They must rely on others - even other people in strange, faraway places - for their daily bread. They must also be able to count on the medium of exchange that they trade goods and services in. If they can't trust the money, they are not likely to want to do business.

The end of history has been announced several times. But it never seems to arrive. People always tend to think that what is will remain... that trends in place right now will continue at least indefinitely, and perhaps forever. The odds of anything going wrong, they tell themselves when the going is good, are like the extreme edges of a bell curve - vanishingly small. But people badly "underestimate the persistence of history's traditional side, the rise and fall of empires, the rivalry of regimes, and the disastrous exploits of great men," wrote French historian Raymond Aron. That is to say, they tend to ignore the political means that tend to mess things up... and the rare, fat tail events that make history interesting.

There are times when civilization goes forward. And there are times when it goes in the other direction. Woodrow Wilson slammed the United States into reverse in 1917. It has been backing up ever since, in the sense that Americans rely more on force and fraud to get what they want. Gun-toting soldiers now defend America's many supposed interests all over the world - even in places where America seems to have no interests. The U.S. government takes far more of its citizens' money than it did in 1917... and provides detailed instructions to Americans on such a wide variety of matters that one can scarcely toss a chicken out the window or blow up an outhouse without asking permission of the authorities.

But we're not complaining. For while the U.S. Empire was growing, so was world trade. In the free world until 1989... and now almost everywhere... a "pax dollarum" greatly aided the cause of globalization throughout the second half of the 20th century. But this new globalized commerce has a fraudulent side to it. The hegemonic power is using political means, even while it shops. During the last big boost in the division of labor, in the 19th century up until 1914, the money in which transactions were calibrated was backed by gold. No country - not even an imperial one - could cheat.

If a country consumed more than it produced, other countries found themselves with surpluses of the laggard nation's currency. They then could ask for gold in settlement. Gold was real, the ultimate money. When a nation's gold horde was in danger, it quickly adjusted its policies to correct the imbalance. The dollar, on the other hand, is merely a piece of paper, backed by nothing more than the full faith and credit of the United States treasury. How good a promise is that? No one knows for sure. Niall Ferguson explains why it may be worth less than many think:

"A rising proportion of Americans may consider themselves to have been 'saved' in the Evangelical sense, but they are less good at saving in the economic sense. The personal savings rate among Americans stood at jut 0.2 percent of disposable personal income in September 2004, compared with 7.7 percent less than 15 years ago. Whether to finance domestic investment (in the late 1990s) or government borrowing (after 2000), the United States has come to rely increasingly on foreign lending. As the current account deficit has widened (it is not approaching 6% of GDP), U.S. net overseas liabilities have risen steeply to around 25% of GDP. Half of the publicly held federal debt is now in foreign hands; at the end of August 2004, the combined U.S. Treasury holdings of China, Hong Kong, Japan, Singapore, South Korea, and Taiwan were $1.1 trillion, up by 22% from the end of 2003."

The odd thing about the spurt of globalization in the last five years is that it's so lopsided. The U.S. takes... but it doesn't give. It borrows... but it doesn't pay back. It buys... but it doesn't sell. It imports... but it doesn't export. The only reason foreigners put up with those shenanigans is because they receive paper currency in payment. They assume their dollars will be as valuable in the future as they are now. They assume the trends of the last 50 years will continue unchanged. They assume that no terrorists will knock off an archduke... and no fat tail will plop itself down in the currency markets. They assume that someone, somewhere, had the situation under control. And yet... "If the private market - which knows that with high probability the dollar is going down someday - decides that that someday has come and that the dollar is going down now," writes Brad DeLong, "then all the Asian central banks in the world cannot stop it."

What will happen when the world figures out that the United States is pulling a fast one? We don't know. But like the period following the sinking of the Lusitania, we're sure it will make the history books.

http://www.dailyreckoning.com


One Nation Under Man -JB Williams
American Culture/www.therant.us
April 22, 2005

There is a reason, a very good reason why the founders established America as a free nation guided by basic rights endowed by our Creator rather than man made and issued by our government. But many have either forgotten or never been taught that reason. It’s natural for men to desire dominion over man, but it is also a deadly proposition…These men sooner or later attain the appropriate title of tyrant…

Those who seek to remove God’s dominion over America fail the most basic test of understanding America. Any thinking person with a third grade education could tell you that we only have two choices on earth, either God’s dominion or man’s dominion. Whether or not one believes in any God at all, you don’t have to be a genius to recognize the pitfalls of allowing men dominion over man. Have we learned nothing from history?

The founders had seen the pitfalls first hand and dodged that bullet in their founding of this country. However some 200 years later, man’s desire for an open society where anything goes requires that man make his own rules, set his own moral standards regarding acceptable codes of conduct. God’s law won’t work in an open society because God’s laws place restrictions on human behaviors, responsibilities and consequences for choices made on a personal level. The words sin and accountability are judgmental, narrow minded, discriminatory and offensive.

So a nation that once trusted only in God, casts God and his laws overboard in exchange for man’s laws. How many times have you heard that we are a nation of laws? This is true, but we are fast becoming only a nation of laws… no longer a nation with a strong moral compass and an inherent sense of or respect for basic right and wrong.

We have replaced simple ideas of right and wrong with only that which is legal or illegal. In doing so, we have opted for man’s dominion over men and the writing is on the wall.

There are at least two inescapable consequences inherent with this dramatic change in American philosophy. First, men who make or interpret laws are now given the power to administer the rights once endowed by our Creator, inalienable by man. In the tradition of mankind, they will do so in their own self interests as we have already witnessed on many occasions.

Second, the fact is, no law can be written to effectively govern the behaviors of men who have no internal moral compass. Man made laws are proven daily to be a wholly inadequate means of keeping evil doers at bay. Our courts are filled with people who have no respect for any laws, manmade or otherwise and our prisons are overflowing with evil doers. Our courts are left with no choice but to put rapists, thieves and murders back on the streets again and again.

Yes, we have always been a nation of laws, but now we are fast becoming a nation only of laws.

Add to the equation that we have also accepted the idea that courts are now an integral part of the legislative process and you have one unelected man or court, on the basis of one case, circumventing the legitimate legislative process by creating law from the bench in the form of case law.

Combined these things leave us with one man or one court determining the individual rights of all Americans. In case you have not been paying attention, these men have already reversed our most basic right to life to accommodate their wishes for a new right to die, or more accurately stated, to kill. If we won’t respect and protect the sanctity of life itself, no other rights matter…

The fact is many evil doers both individually and collectively in groups, hide behind man made laws to protect their right to do wrong. Most know what they are doing is wrong, but the fact that it is legal or at least not illegal, makes it alright. Or does it?

For every new law passed there is a well organized and educated lawyer who can and will find a means to twist that law to his clients favor and a judge with his or her own agenda. It is no longer their job to determine guilt or innocence, but only to defend the accused by all means available, including turning the intent of the law inside out if need be.

Judges have come to believe that they are legislators rather than arbiters of real justice. It’s called an oligarchy, the rule of a few over many. The worse part is nobody elected the few and nobody remembers how to fire them either, or that they should… It was Thomas Jefferson’s biggest fear and it has come to pass.

But the blame can not be laid at the feet of the judiciary or even elected officials. The blame rests squarely on the shoulders of those in America who desire man’s dominion over man, and those who know better but allow it… We the people…

As a result, today we have a right to kill at will, both inside and outside the womb, as a matter of convenience. It isn’t right and most of us know it, but it is legal, kind of... That removes the fundamental right to life once endowed by our Creator, once believed to be inalienable by man.

If one does not have a right to life, then a right to liberty or the pursuit of happiness seems silly. An open society is achieved, almost… anything goes, no limits, no discrimination, no consequences. Just the way we like it… life on our own terms.

The basic sales pitch for an open society is equal rights for all. But are all people, all ideas, all ideologies and all behaviors welcome in our society equal? In a truly open society, they are… anything less is called discrimination today.

Those who believe in the traditional family unit and the sanctity of marriage must accept the notion that marriage is nothing more than a legal contract between two parties and we all know that contracts, like rules are made to be broken. In order to have an open society where anything goes, these contracts must be broken…and they must be meaningless.

Personal liberty has been replaced with a specific list of government issued rights. The right to pursue ones owns happiness now has no limitation of moral or ethical standards governing the means by which one can achieve personal happiness, even at another’s expense.

The right to an equal economic opportunity has been replaced with an equal right to stuff and taking it from one who earns it against their will for purposes of equal distribution to those who don’t earn it is not only acceptable, but desirable, at least to those doing the taking.

Once we were One Nation Under God… Today we are only a nation of laws under man. Men we didn’t elect and men we forgot how to fire. The nation, whose freedom and liberty was endowed by our Creator, has now used those freedoms and liberties to commit social suicide.

Though some 90% of our nation believes in God, we have allowed those who do not to retire God’s dominion over this land. In so doing, we the people have staked our entire future upon men… their laws, their interpretations, their personal agenda’s and their political aspirations.

People who were once to be governed by themselves and their own moral compass are now governed by other men who often have no moral compass, men who are only governed by their own agenda’s.

Organizations like the ACLU operate under a façade of protecting personal civil liberties. But if you research the founder of the ACLU and its history, you will see that it is no accident the ACLU seems only concerned with the civil liberties of otherwise socially and morally bankrupt behaviors and people.

We are nearing the stage of One Nation Under Man. History has taught us better, but the human condition requires that we re-learn old lessons over and over. So here we go again, blindly rushing towards social suicide and although God could help us, he won’t. It’s that little thing called “free will”.

Man will strip us all of it soon enough, but God won’t touch it. In the end, it will make believers out of non-believers, but at great expense. In the end God’s will wins, but at great hardship to those who insist in inflicting harm upon themselves and their neighbors.

Once again, history will repeat itself. We will learn the lessons again, only to forget them again over the passage of time.

Always the optimist, I look for the silver lining in everything. The cycle of life on earth never fails to provide that silver lining. However, always at great expense…

http://www.therant.us


THE DIFFERENCE A FATHER MAKES -ANS
Former NFL “Grid Iron” star, Ed Tandy McGlasson, challenges fathers to excel in fatherhood and he equips them to do so in his new book
By Dan Wooding
Founder of ASSIST Ministries

ANAHEIM, CA (ANS) -- Ed Tandy McGlasson, a former lineman in the National Football League, has gone from being a “grid iron” star to becoming the pastor of the Stadium Vineyard in Anaheim, Calif.

Now he has turned his attention to helping fathers excel in fatherhood and equipping them to do so.

In his new book, The Difference a Father Makes (Ampelon Publishing) McGlasson uses the model of Jesus and God the Father, to show how setting up goal lines in the lives of children makes their entrance into adulthood is a must – but he says that a father’s job does not end there. In a powerful way, he answers the “Yeah, but how?” question every man asks after being inspired to be a good father. (Pictured: Book cover).

McGlasson shows how to discover the potential fathers have to make a difference in the lives of their children and explains how they can empower their children to pursue their dreams and help them to soar to unfathomable heights.

McGlasson spoke about what he considered the main problems that father’s face today in raising their own children.

“We have a generation of disconnected Fathers and children,” he said. “Torn by the pressures of life the distance fathers feel with their children is growing. The big questions I hear from Dads, is how do I connect to my teenage son or daughter? I feel like I lost them. Why are they so angry…? The other issue for dads is not knowing how to make a difference. It is no wonder that men are ill equipped to handle this. Most of our fathers didn’t know what to do either.

“This book not only informs but gives permission to make a difference. It is very practical. I believe fathers spend too much time trying to give their kids things that they don't really want. I have found that what my children want most from me is not riches, but me. When I learned that this a huge weight lifted off their shoulders and I discovered the incredible joy of giving my heart and life away to my children.”

www.thedifferenceafathermakes.com

Related Ministry:
Shiloh Foundation - Father the Fatherless -- Introductory PDF
...Shiloh Foundation is committed to reach the fatherless children of our generation. Why? A recent presidential report concluded that the number one cause of the breakdown of the family is divorce, which has created fatherlessness.


PEACE Plan: What is Rick Warren planning? -FridayFax
Apr 28, 2005

"Rick Warren, author of the top-selling book 'The Purpose Driven Life' and founder of the Saddleback Church in Lake Forest, California, made a dramatic announcement on Sunday 17th April 2005, the 25th anniversary of the church's founding," reports Dan Wooding, founder of Assist Ministries. In front of 30,000 people in the Angel Stadium in Anaheim, he said that he believes in a revival movement in the 21st Century. He spoke of a new reformation in Christianity and his vision for a global spiritual revival through the so-called PEACE Plan. Warren is convinced that this will lead to one billion Christians being mobilised for global mission by the year 2020. "This new Reformation," he says, "will predominantly happen through average people in small groups."

President Bush excited, says Colson
It was the first time that friends and Christian leaders from the USA and abroad joined members of the Saddleback Church in such numbers. Visitors included Paul Kagame, President of Rwanda, who brought greetings from his nation, and Gaddi Vasquez, Director of the Peace Corps, who read a message from President Bush. Chuck Colson, one of the Guests of Honour, commented "I knew President Nixon very well, who would have been excited by the idea of the PEACE Plan. I also know President Bush well enough to know that this is exactly the sort of thing he loves: people who stand up and do what needs to be done without waiting forever for the Government to address it..."

Facing the giant
Warren presented his PEACE Plan in detail. At the heart is a progressive vision for mobilising American Christians to help churches in Third World nations address the enormous problems against which even governments or the United Nations are helpless. Through a reformation of the entire missionary Christianity, the Christian church will be the only force capable of coordinating and driving the effort to meet the five greatest challenges facing the world: spiritual emptiness, selfish leadership, poverty, sickness and ignorance.

The five stones
Based on the story of David and Goliath, Warren explained that in his vision, hundreds of thousands of small groups will "attack these Goliaths with five stones, like David, who gathered five stones as he approached Goliath". These five stones are Planting churches, Equipping leaders, Assisting the poor, Caring for the sick, and Educating the next generation.

Millions of changed lives
Wooding reports that Warren, founder of the Purpose Driven movement, has already changed the lives of millions of people in 150 nations, through tens of thousands of Christian churches. In 1980, seven people met in Rick and Kay Warren's apartment. In the 25 years since then, the church has grown to around 20,000 members. Over 350,000 pastors and leaders from 120 nations have attended Purpose Driven seminars, and over 20,000 churches in 28 nations have held the '40 Days of Purpose' course.

Bestseller results in three missionary Trusts
The book "The Purpose Driven Life", published in 2002, sold 22 million copies - a world record for a non-fiction hardcover book. Warren and his wife have since founded three Trusts which channel 90% of the income from the books to world mission, including AIDS help in developing nations.

4,000 new believers over Easter 2005
A particular highlight of the celebrations on 17th April were the baptisms in a large heated pool in front of the stadium. Warren had preached his basic "Purpose Driven Life" message in 12 Easter services attended by over 30,000 people, 4,000 of whom decided to follow Jesus, according to the report. Source: Dan Wooding, Assist Ministries and www.saddleback.com

FridayFax


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."
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ABOUT THE EDITOR

David M. Bradshaw is Editor of REAL MONEY PERSPECTIVES, a new, syndicated daily financial/cultural news digest. In 2001, he published REDISCOVERING GOLD IN THE 21ST CENTURY: The Complete Guide to the Next Gold Rush and has been an economic commentator since 1987, when he produced the World Economic Perspectives radio show. In 2004, he produced "A CITIZEN'S GUIDE TO COUNTER-TERRORISM" a free-to-the-public educational resource on DVD and CD. In 2005, he released a new CD, "WHAT'S YOUR WORLDVIEW?" a one-hour CD sample from his 24-hour series, "THE BIG PICTURE: The Shape of Things to Come" discussing geopolitical, economic and spiritual trends in the 21st Century. MORE ... PERSONAL NOTE: Youngest daughter Braida Zoe (age 14 mo.) is now feeding herself, running, says "hi" and "bye-bye," her name, "mama" & "dada." Shown with her mom (and loving wife) Micki among some 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.

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