Financial Markets

Home prices are now at record levels in relation to average incomes in America, Australia, Britain, France, Ireland, the Netherlands, New Zealand and Spain; on current trends, Italy will join this group by the end of the year. In other words, houses are more overvalued today than at previous peaks, from which prices typically fell sharply in real terms. Add in China and South Africa, and two-thirds (by economic weight) of the world that we track now has a potential housing bubble.

General Motors has a glut of unsold 2004 models - so many it is offering 0% financing for six years to get rid of them. But it also owes so much in pension and health care costs for its employees it is almost impossible for the company to ever make any money. Over at Honda, each car costs the company $107 in pension and health care costs. But at GM, the cost is $1,360. You can imagine what the cost is for Chinese manufacturers. How can GM compete? How can it stay in business?

Fannie Mae (FNM) crashed fifteen percent this week. This only represents the tip of the iceberg.

Last March a Pew survey revealed that bin Laden is favored by 65 percent in Pakistan and 31 percent in Turkey.

This may well go on forever...

Precious Metals

The price of aluminum and copper are starting to soar. The rise in prices is caused by a combination of the radical devaluation of the dollar and the insatiatible appitite for industrial metals provided by India and China.

Move your equity into commodities.

Purchase physical gold and silver bullion. In reality, there is so little bullion available for purchase, that a concerted effort on your part could send the value of gold, and more importantly silver, to the moon.

Besides enriching ourselves through this exercise, will can passively bring about change in the only way that can really make a difference. As the price of bullion subsequently rises, more and more people will begin to recognize and appreciate precious metals for what the really are; money.

Although the monetization of gold and silver is the last thing the Central Bankers of the world want, it is the only way to defeat the fiat currency debacle, and return our country to its Constitutionally mandated money system.

If one half of one percent of Americans went out and bought ten ounces of silver apiece, that would amount to 14,000,000 ounces of silver. There is much less than 100,000,000 ounces of silver available. That much buying pressure would have an explosive effect on the price.

Consider it your patriotic and moral imperative.

Buy silver.

Speaking of Energy

The increase, equivalent to an average of 2.21 million barrels a day, brought the country's crude imports for the first eight months of this year to nearly 80 million tons (600 million barrels) _ a 39.2 percent jump from the same period last year.

China, Asia's largest oil consumer, is the world's fastest growing energy market.

A near doubling of crude prices over the past 18 months amidst record OPEC production can no longer simply be ascribed to the work of idle investment bankers, simply turning their speculative attentions away from dotcoms and telecoms to “the black gold rush”. The reality is that dramatic changes in underlying fundamentals have gone unnoticed for years by the majority of investors. The world is now losing more than a million barrels of oil a day to depletion - twice the rate of two years ago - according to a new analysis published this month in Petroleum Review, the oil and gas magazine of the Energy Institute in London.

Today, the supply cushion of crude oil has fallen to an alarmingly low level. With surplus capacity at less than 10 percent of consumption, the world is one strategically placed natural disaster or political upheaval away from a crisis. Meanwhile, North American natural gas deliveries are near a hand to mouth configuration relative to demand.

These are facts, not speculation. Here are some other key findings in the current Petroleum Review report:

Gabon, where output peaked in 1996, tops the list of countries in sustained decline with production there falling over 18 percent in 2003, more than double its average decline rate for the last three years.

Australia saw its production drop more than 14 percent in 2003, almost twice the average decline rate since it peaked in 2000.

UK production from the North Sea, which peaked in 1999, posted the world's fourth largest decline in 2003 at nearly 9 percent.

Indonesia, an OPEC member, has been in decline for 12 years, averaging 2.6 percent a year, but over the past few years this has accelerated to 8.5 percent last year.

Having confirmed that its two largest producing regions are now in decline, China, with only modest production growth of 1.5 percent last year, looks likely to go into decline soon.

Venezuela is also an old oil province. Its four oldest fields produced at one time together over 2 million barrels a day, but this has dropped to 850,000 barrels. It is struggling to keep its production up.

If you are not participating in the energy sector, you are passing up an extraordinary opportunity.

The Fed

The U.S. Federal Reserve has approved two quarter-point raises in interest rates since late-June, taking borrowing costs to 1.5% from a 46-year low of 1%. The Fed has said higher rates are needed to pre-empt inflationary pressures, and most forecasters expect further increases before the end of the year. While the FED had hoped that historically low interest rates would give a boost to the faltering economy by putting more money into the hands of individuals and businesses, this boost is yet to be seen.

Weak job growth has exacerbated the problem sending wages down. Hiring came to a near standstill last month, with a net gain of only 32,000 jobs, down from 66,000 in June, stunning economists who had expected seven times as many. With the unemployment rate holding steady at 5.9% and the ongoing outsourcing of US jobs, it seems an economic recovery is not in the near future.

A panel of experts denounced the Federal Reserve Board for secrecy and Congress for failing to hold it accountable, but their views were ignored by the myopic mainstream media.

Experts chastised the Federal Reserve Board for operating in secret, “scandalous” misuse of funds and Congress for abandoning its watchdog responsibilities for a sweetheart role.

But the forum by the Center for the Study of Responsive Law, held Jan. 8 at the National Press Club in Washington, was ignored by the mainstream media. The center is one of Ralph Nader’s projects.

Several speakers denounced the Fed for secret meetings with transcripts of the minutes shredded and Congress for holding only sweetheart oversight hearings.

“ Fed officials may have skirted or violated the law when they made loans to foreign countries without congressional authorization,” said Robert Auerbach, a professor at the University of Texas and former economist with the House Banking Committee.

Greenspan’s career has been shielded from close scrutiny by an adoring cadre of financial journalists and a Congress that treats him more as a deity than a public official.

Only a handful . . . led often by Bernie Sanders (I-Ver.) can be counted on to challenge the Federal Reserve with anything that resembles a tough question.
When Greenspan was reappointed in 1996, after a General Accounting Office report found waste and abuse at the Fed, Sen. Tom Harkin (D-Iowa) wanted the Senate to debate the issue but was rejected by the leadership.

“ Greenspan’s cheerleaders in the media started attacking Harkin for insisting on a full debate of the nomination,” Nader said. “The Washington Post labeled Harkin an ‘obstructionist.’ The New York Times blasted Harkin’s remarks as ‘thoughtless barbs.’ And Al Hunt of The Wall Street Journal called Harkin’s efforts an ‘outrage.’ ” (All three are Bilderberg-controlled newspapers.)

The Federal Reserve takes in billions of dollars through the buying and selling of government securities . . . they draw interest from the Treasury on this growing portfolio of government securities, and the Federal Reserve then spends whatever it desires out of these funds and returns the remainder to the Treasury each year.

The Fed draws up its own budget and finances it from its own activities. Congress has no approval or disapproval process for any part of the budget. The budget does not go to the Office of Management and Budget. It is drafted and administered solely by the Fed.

“ We’re talking personal scandal here,” said Jeff Faux, president of the Economic Policy Institute. “We’re talking about the scandal of a huge concentration of power beyond the reach of democratic institutions.”

Financial Survival

Natural gas use will rise anywhere from 5 percent to as much as 15 percent in the coming winter. Prices will rise anywhere from 10 percent to 20 percent depending on your location. You can ofset these increases with added insulation and alternative fuels, but the cost of being comfortable is going up.

Economists don't have a standard definition for the "middle class." But the percentage of households having a pretax income of between $25,000 and $75,000 - a group occupying roughly the middle half of Census income tables - has declined by 1.2 percentage points since President Bush took office, after adjusting for inflation.

In the same 2000-2003 period, those making less than $25,000 grew by 1.5 percentage points to 29 percent of households. Those making more than $75,000 declined by 0.4 percent to 26 percent of all households. These numbers were crunched by FactCheck.org, a project of the University of Pennsylvania's Annenberg Public Policy Center to examine campaign statements for accuracy.

The middle class is under attack. Prepare yourselves.

Have you ever heard of hyperinflation? In January 1919, one ounce of silver cost 12 German marks. Four short years later, on November 7, the day that Hitler jumped on a table in a beer hall in Munich and shouted "The revolution has begun," the same ounce of silver cost a whopping 543 billion marks!

Think it can't happen here?

Check out Sterling Mining (SRLM.PK)

Get out of general equities and into commodities, like energy and precious metals.

What else can you do?

First of all, wake up! Either you support freedom with laissez-faire capitalism,
an economic doctrine that opposes governmental regulation of or interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws, or you support a statist/collectivist ideology that believes in taking the production of a person and placing it out of their control. Your choice is regain your freedoms or or suffer encroaching slavery.

There is a huge difference between the ideologies that support liberty and democracy. The ideology of Liberty suggests and implies that people should choose to be benevolent and productive, as part of God's moral code. That society will create for itself non-governmental organizations to deal with social needs, that government is established by society to sustain and defend the unalienable (God given) rights of the individual, and limited only to this function. Political power was to remain within the individual and his society.

Then why do so many of our politicians and teachers keep trying to shove this concept of democracy down our throats, as if freedom naturally followed? Maybe it's because majority rule sounds legitimate and moral on its face. Consequently, the majority of Americans have shown their willingness to give up their liberties in exchange for a handout.

As long as foreigners continue to accept our dollars in exchange for their finished goods and let them pile up in their central banks as "reserves" then we will be able to maintain some semblance of our "American way of life." But on the day that the foreigners decide they have enough dollar reserves and start to spend our IOU's, life in America will be unaterably changed for the worse.

Trade your dollars for precious metals while your dollars are still worth something. When all those dollars finally do come home flooding the US economy they will certainly be worth less. If we are ever to become a powerhouse economy again we must PRESERVE and accrue capital to reinvest at the right time in the future. No matter how little or how great your income, save something every month and live below your means.

Understand what is happening and "Spread the Word".

Higher oil prices should stimulate people to add insulation to their houses...or to buy a more energy-efficient automobile. It may also cause a lot of folks to become desperados. You might consider getting into the burglar bar business

Keep you eyes open about any news that has to do with the delivery of fresh water. If you don't already have control over some fresh water, get some. Go out into the country about sixty miles from the city you live in and buy five or ten acres of property with the water rights. Dig a well. You will be amazed at the peace of mind you will gain by this action.

If you are depending on Social Security, stop.

Get out of debt. Figure out ways to conserve. Take up gardening. Sell everything you don't need.

Follow the course opposite to custom and you will almost always do well...

Its not what you don't know that will screw you up, it's what you know that is wrong. The spin you hear from the mainstream media is intended to mislead you. Open your eyes and face the future. If you leave your head in the sand and ignore it, you are only leaving your butt exposed for the world to kick. This all may sound like gloom and doom, but when you get a handle on what is going to happen, you will have a future filled with opportunity. Fortune favors the Informed.