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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (67472)	11/19/2004 6:11:11 PM
From: stockman_scott	Respond to of 89467

The Trouble With Multiple-Choice Questions commondreams.org <<...democracy is a living process. If you nail it to a cross, to an agenda or to a multiple-choice question, it dies. If you live it -- honestly and openly -- it thrives...>>

To: Jim Willie CB who wrote (67472)	11/20/2004 11:16:52 AM
From: Wharf Rat	Respond to of 89467

The Sox won? Are you kidding me? Not only that, but Cal is #4. THE THREE STAGES OF A DOLLAR COLLAPSE Todd Stein & Steven McIntyre The Texas Hedge Report November 19, 2004 Courtesy of www.texashedge.com Our bearish views on the United States Dollar have been formed over years of watching what we view as reckless and incredibly shortsighted policy decisions by the Federal Reserve. The chief culprits of this attack on the greenback have been none other than Alan Greenspan and his band of merry sheep spearheaded by Ben "Printing Press" Bernanke and Bob "Lever up & Buy an SUV" McTeer. We have never been shy about our belief that the most likely outcome to be spawned from the monumental current account deficit, trade deficit, and other enormous debt imbalances in our country is a sharp and severe devaluation in the U.S. dollar. Globally, holders of dollars will seek to diversify into other assets. We have seen a bit of this as the dollar index peaked in 2001 at over 120 and has since dropped to 84. We thought it might be useful to readers to lay out the various stages of dollar collapse we see coming down the pike. In particular, we will be looking for three divergences in the coming months as signals that the dollar collapse is strengthening and that the gold/silver bull market (still in its early innings) is gaining recognition by the masses, which will propel the yellow and gray dogs even higher. We will hit the highlights of these divergences in an effort to get them on everyone's radar screen. The clear completion of each divergence should be viewed as bullish milestones for the metals. Divergence One: Gold/Silver to Outpace Foreign Currencies This divergence may already be getting underway in the most bizarre of sorts. Although the price of gold is up over 12% in the last year in terms of U.S. dollars, it is roughly flat in terms of the Euro and Swiss Francs. The same can be said for gold in Canadian dollars, Australian dollars, and Swiss Francs among others. Non-U.S. holders of gold have in many circumstances not seen any real appreciation in their gold holdings for the last year. Before this gold bull market is over, we believe this fact will change in a big way. From here it seems that highly certain that all currencies, particularly natural resource based economies with central bankers that have a clue, will continue to grind higher against the U.S. dollar. However, the European Union is again showing signs that at the $1.30 level, their monetary leaders will grab the megaphone and try to talk the Euro down or at least slow its rise. Witness recent comments from European Central Bank head Jean-Claude Trichet, commenting that recent Euro vs. Dollar moves have "tend[ed] to be brutal…brutal moves [are] not welcome." The rest of the talking heads in the Euro zone have echoed Trichet's whining last week. The last time the chorus wrung their hands this loudly, the Euro retreated from $1.29 to $1.16; this time we suspect the market will be wise to the boys crying wolf and the gravity of the dollar's fundamentals will push the dollar even lower and the foreign currencies to fresh new highs. Interestingly, we believe that even though foreign currencies will make new highs against the dollar, they will begin to drastically under perform gold. The value of gold in foreign currencies will rise, sparking even more buying around the globe as gold is the one asset that is no one else's liability. Unlike its fiat brethren, no weak monetary heads will be complaining about the rise of gold. Sure some central banks will continue to sell gold, but we suspect that as gold becomes their best performing reserve, central bank selling will dry up as well. The preservation of purchasing power that gold (and silver) offers will again become clear to a nation of investors, which when coupled with the new gold ETFs, should spark a continuation of the spectacular rally in gold that began in 2001. Non-U.S. dollar currencies will do well, but in the end, they face many of the same economic problems that the U.S. does and as such will be far more earth-bound than the precious metals. Look for the out-performance of gold versus foreign currencies in the next leg of the dollar decline. Divergence Two: Gold/Silver to Outpace the Base Metals To date, the metals rally has included both precious and base metals in a similar fashion. Both have gone up by appreciable amounts since their 2001 nadir. Gold is up from its $260 low to its current $437 an ounce - that is a 68% advance. The GFMS Base Metal Index however has more than doubled off of its 2001 low. The GFMS Base Metal Index has risen from 70 to 145 - a 107% increase. Despite being up 68% over the last 3 years, gold has actually underperformed the base metals in aggregate, thanks to meteoric rises in commodities such as zinc, copper, and lead. The fact that base metals have rallied just as strongly (if not more strongly) than the precious shows that a good deal of the broad metals' appeal over the last couple of years is based on the belief that the emerging industrial powerhouse - China - will suck up all of the world's commodities. There is some truth to that and a lot of base metals were bouncing off depressed levels, but in the end, they are plays on continued robust growth in the world's economy in the next couple of years - something we would not want to bet on. Besides, anecdotal signs point to overcapacity on the horizon in China - at least in the short run. In the weakening economy/stagflation type of environment that we envision, the desirability of buying base metals as a "robust world industrial economy and China play" is zilch. As such we expect to see the new buyers of gold and silver that will push them to higher levels will not be blanket metal buyers searching for a China play, but rather those that sense the world's fiat currencies are undesirable stores of purchasing power in the current environment. As the world's economy slows, look for gold/silver to diverge on the upside from base metals as the monetary nature attracts legions of investors. Divergence Three: Silver to Outpace Gold We continue to be extremely bullish on both silver and gold. In fact, as gold diverges to the upside from foreign currencies and base metals, it may well do better than silver initially. Over time however, we suspect that the superior fundamentals of silver and the fact that it is a much tighter and smaller market, will ultimately lead it to outperform even gold. From the two charts below you can see that silver is up 90% to date from its low while gold is up the aforementioned 68%. The two metals have basically moved in tandem to date. Initial flows out of the dollar will likely find gold to be the easiest non-fiat platform to store wealth. Likewise, the gold ETF has been approved before the silver ETF and will likely help the yellow metal attract the media and individual investors' attention. Silver may well lie below the radar for awhile longer, but eventually its supply/demand picture coupled with its own ETF could propel it to incredible heights. Please note your authors are long gold and silver and foreign treasury bills, so you should take our opinions with a large grain of salt, given our bias. As the dollar collapse continues, we will be looking for these three divergences: 1) gold outpacing foreign currencies; 2) precious metals outpacing base metals; and 3) silver outpacing gold as all healthy developments in a vigorous and intensifying bull market for Larry Kudlow's "barbaric" relics. gold-eagle.com

To: Jim Willie CB who wrote (67472)	11/20/2004 9:34:33 PM
From: abstract	Read Replies (2) \| Respond to of 89467

Rattling My Brain by Phyllis Schlafly Whew! What a wonderful dream! I was taking a little catnap and found myself watching Jesus float gently back to Earth, hunt down Katrina vanden Heuvel and rip her face off her head with his bare hands! It's so nice to wake up refreshed! Say, that election gave us all a few palpitations, didn't it? I was on pins and needles all night -- as well as a few little goodies that got "Rushed" over to me a while back for safekeeping -- but in the end God triumphed, kicking Liberal behind all over the country and giving that trial lawyer's wife cancer just for good measure. It feels great, doesn't it? Not only did we win the election, but now we can rest assured that in at least 11 states the homos won't soon be debasing the institution of marriage like the rest of us. Of course, none of the states that passed the gay marriage ban have any gay people in them that I'm aware of, but it never hurts to plan ahead. What with this California stem cell research money, the homos are clearly planning to increase their numbers through cloning rather than teaching in the public schools, and pretty soon even the Red states might turn a rather sickly color of pink, if you get my meaning. Speaking of states, isn't it strange how the people who voted for that Kerry creature are all from places no sane person would want to visit, much less live in? Maine, Massachusetts, Vermont, New York, Washington, Oregon, California! While Bush supporters generally choose to settle in much more inviting locales, like Mississippi, Oklahoma and North Dakota. Of course, we have to be careful. The Values battle will never be truly won as long as there are paid speaking engagements and publisher advances. That's because, except for the White House, the Senate, the House of Representatives, a majority of Governorships and half the Legislatures, the Liberals still control everything! Just ask that poor Bill O'Reilly. Some young "woman" comes along (I will not call her a lady, after the way she didn't hang up on Bill so he could continue speaking in tongues in privacy) and the next thing, some evil trial lawyer is crawling up his -- well you know the rest. We did learn that Bill's big mouth is more than balanced by other equally impressive features. I guess Ann Coulter wasn't kidding. Slut. Now that it's all over except for the shouting, the random searches and the expanded detentions, I've had a chance to jot down a few random thoughts I'd love to share with you. --In the last days of the campaign, the liberal English medical journal Lancet announced that over 100,000 Iraqi civilians had been killed since the beginning of the war. What they conveniently didn't tell you is that during that very same period, over 1,000,000 condoms were forcefully distributed to American teenagers!!! --Have you seen those funny bumper stickers that call Massachusetts TAXachusetts!? What a riot! --Now that we are once again reassured that we live in a democracy and not a Stalinist abortion camp like John Kerry wanted, I think it's time we put a few more things on the ballot for a straight up or down vote. Evolution, for example. --If there was an ounce of juice left in this old sack of sand I call me, that cute Tucker Carlson could turn on the tap for sure! His bow tie reminds me of my old sweetheart "Professor" Irwin Corey, who, by the way, was no slouch in the "O'Reilly" department either! --I'm getting sleepy again, so I think I'll go back to bed now and see who else Jesus is ripping to shreds! Hint: He could do worse than to start with Gore Vidal. (Perhaps one day I shall recount the story of an attractive middle aged lady who fell victim to a terrible schoolgirl crush on a dapper New York intellectual, so different from she and yet with a bow tie so enticing... a woman whose last chance at true happiness was only to be dashed forever upon learning the AWFUL SECRET... and who has ever since made a career of exposing the terrible danger of the Love Which Dare Not Come To Ohio and 10 Other States... and... zzzzzzzzzzzzzzz... Oh, hello Jesus... nice gun... Phyllis modernmirth.com

To: Jim Willie CB who wrote (67472)	11/21/2004 9:55:15 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 89467

US Isolationism? Brian Bloom Frankly, I don't understand what's happening in the markets at the present time. Perhaps there is information to which I do not have access. Perhaps my model of what "should" be happening is faulty. The key issue which is causing me to stop and re-examine the validity of my model, is yields. The following Charts (courtesy stockcharts.com and decisionpoint.com) reflect this issue: Why, are yields not rising when: The US Government is so short of Capital that it is raiding pension funds to pay day-to-day expenses whilst it discusses raising its borrowing limit to over $8 trillion? The equities and commodity markets are giving buy signals - indicating that either the economy should grow from here (more robust economic activity places a strain on capital availability and rates should rise), or that inflation is expected to re-emerge (indicating that unless rates rise they will turn negative)? The US Dollar Index is reaching for long term technical support at around 80? The US Government continues to run its affairs such that expenditure exceeds income - giving rise to a need to either print money (inflationary) or borrow money? (Interest rates "should" reflect a credit risk premium, and the US Government surely represents an increasing credit risk at present). Yes, I could understand it if the market thought we were heading for deflation. Then interest rates could (and should) remain soft. But by the same token, there is no way that commodities should be rising to new heights or the US equities markets should be giving buy signals. Alternatively, given the latter two occurrences, interest rates should be also rising. But the only technical indicator that is showing interest rates are currently in a rising trend is that the rising trendline on the P&F chart is still intact. The PMO is turning down, when it "should" be breaking up. Why? Why are yields not rising from here? It doesn't make sense, and there are only five conclusions that can be drawn: The "model" is flawed and needs to be reassessed. Something structural is changing which has not yet manifested The market is manifesting some form of schizophrenia, where some investors are bullish and others are bearish - but they are playing on different fields The buy signals in the equities markets and commodities markets are "false", and we are heading for a period of deflation The phenomenon of apparently weak yields is temporary. There is a sixth possibility, but it seems a bit off-the-wall at present: The US Dollar Index support level at around 80 does not hold, leading to a US Dollar collapse, and the commencement of a period of isolation of the US economy from the rest of the world. At present, this idea seems a bit "flaky" to me, but let's explore it a bit. If the US Government is going to insist on printing its way out of its problems, it will flood the market with cash. A surplus of cash will lead to two things: A low price of capital inside the USA (and therefore low yields) Rising inflation in US Dollar denominated items In the meantime, such irresponsible behaviour will cause holders of dollars to want to get out of their holdings - so they will dump them, thereby causing a dollar collapse. This line of thinking starts to sound less flaky when we look at the world economy from the perspective of someone who does not live in the USA. First, let's look at the world through the eyes of the Chinese. Their Renminbi is linked to the US Dollar and so, to all intents and purposes, their economy is a Dollar denominated economy - but without the benefit of being able to print more dollars. Here is what has been happening to the Shanghai Market over the past five years (courtesy yahoo.com) It is not looking particularly happy. And here are two charts of the Euro gold price The following charts are courtesy of gold.org Yes, it looks like those countries to whom gold is important - such as India - have been actively accumulating gold as a "currency" And even the Japanese appear to be getting onto the band wagon But what I find intriguing is that the gold charts of the "conservative" economic areas - such as Europe and Japan - are rising at relatively modest rates. It hardly looks like a panic situation from their perspective. Some months ago, I started to be intuitively drawn to the biological concept of "bifurcation" - where an organism that is growing, splits into two separate entities. It sounded flaky at the time, and I have to admit it still sounds a bit flaky. But the evidence seems to be mounting that the USA is going off in a direction that may lead to economic isolationism, whilst the rest of the world carries on going about its business. Of course, those countries - like China - which have historically fed off the USA as a primary economic "driver" will likely suffer in the short term. But guess what? Japan has quietly been building its own bank of R&D. It is now a world leader (through Japanese Rail) in Magnetically levitate trains, and (through Toyota and Honda) in the "next generation" of hybrid motor cars. Toyota has also committed via its own R&D to perfect a fuel cell driven vehicle. Yes, Japan's own capital markets are a bit dysfunctional, but its Industrial base is solid, and the country has been slowly reorientating to "next generation" technologies. It is now generally accepted that Natural Gas will play a big role in the world economy going forward; and Australia has 100 years of "proven" reserves, and it anticipates a further 70 years of resources at current levels of consumption. It is also the worlds third largest producer of gold. Look at its stock market performance (All Ordinaries) relative to the Dow Jones over the past five years Conclusion There are only three logical alternative reasons why yields in the USA are not behaving according to the model's expectations: The buy signals in the equity markets and Dollar denominated commodity markets are "false" (increasingly unlikely) Yields are only temporarily weak, and should soon start to rise (more likely, but as yet no conviction) The USA dollar is heading for a collapse, and the US economy is headed for a period of isolationism. At face value, 3 above may seem flaky, particularly given the USA's predisposition to play a world leading role on the "globalization" front; and particularly in light of its political and military activities on the world stage. Nevertheless, that's what the markets seem to be telling us at present. In terms of a conventional biological model, the immune system of a sick organism will kick in to fight the cause of the sickness with the objective of eradicating it, so that the overall organism may heal itself. Either that, or the organism dies. $8 trillion dollars? Maybe the USA can live with that internally, but from a foreigner's perspective, maybe we'll pass on that one. gold-eagle.com

To: Jim Willie CB who wrote (67472)	11/23/2004 10:02:35 AM
From: stockman_scott	Read Replies (2) \| Respond to of 89467

Economic `Armageddon' predicted ____________________________________ By Brett Arends/ On State Street Tuesday, November 23, 2004 Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish. But you should hear what he's saying in private. Roach met select groups of fund managers downtown last week, including a group at Fidelity. His prediction: America has no better than a 10 percent chance of avoiding economic ``armageddon.' Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, ``it struck me how extreme he was - much more, it seemed to me, than in public.' Roach sees a 30 percent chance of a slump soon and a 60 percent chance that ``we'll muddle through for a while and delay the eventual armageddon.' The chance we'll get through OK: one in 10. Maybe. In a nutshell, Roach's argument is that America's record trade deficit means the dollar will keep falling. To keep foreigners buying T-bills and prevent a resulting rise in inflation, Federal Reserve Chairman Alan Greenspan will be forced to raise interest rates further and faster than he wants. The result: U.S. consumers, who are in debt up to their eyeballs, will get pounded. Less a case of ``Armageddon,' maybe, than of a ``Perfect Storm.' Roach marshalled alarming facts to support his argument. To finance its current account deficit with the rest of the world, he said, America has to import $2.6 billion in cash. Every working day. That is an amazing 80 percent of the entire world's net savings. Sustainable? Hardly. Meanwhile, he notes that household debt is at record levels. Twenty years ago the total debt of U.S. households was equal to half the size of the economy. Today the figure is 85 percent. Nearly half of new mortgage borrowing is at flexible interest rates, leaving borrowers much more vulnerable to rate hikes. Americans are already spending a record share of disposable income paying their interest bills. And interest rates haven't even risen much yet. You don't have to ask a Wall Street economist to know this, of course. Watch people wielding their credit cards this Christmas. Roach's analysis isn't entirely new. But recent events give it extra force. The dollar is hitting fresh lows against currencies from the yen to the euro. Its parachute failed to open over the weekend, when a meeting of the world's top finance ministers produced no promise of concerted intervention. It has farther to fall, especially against Asian currencies, analysts agree. The Fed chairman was drawn to warn on the dollar, and interest rates, on Friday. Roach could not be reached for comment yesterday. A source who heard the presentation concluded that a ``spectacular wave of bankruptcies' is possible. Smart people downtown agree with much of the analysis. It is undeniable that America is living in a ``debt bubble' of record proportions. But they argue there may be an alternative scenario to Roach's. Greenspan might instead deliberately allow the dollar to slump and inflation to rise, whittling away at the value of today's consumer debts in real terms. Inflation of 7 percent a year halves ``real' values in a decade. It may be the only way out of the trap. Higher interest rates, or higher inflation: Either way, the biggest losers will be long-term lenders at fixed interest rates. You wouldn't want to hold 30-year Treasuries, which today yield just 4.83 percent. business.bostonherald.com