Is the only way up for inflation?
I realise that many people on both sides of the Atlantic believe that the official in-flation
figures are misleadingly low. There is even a conspir-acy theory suggesting that the figures are deliberately cooked.
Suffice to say here that the markets do not believe that the inflation numbers are grossly
understated and neither do the central banks. They both react to the official figures - and last week there was enough in
those to get them excited.
EURO AND GOLD PRICE MANIPULATION Part I by J.N. Tlaga
Never in history was gold manipulated down as extensively as it was under Bretton Woods
agreements. Signed on July 22, 1944, they actually created the International Monetary Fund and the World Bank, whose meeting
in Prague this year was adorned with Professor Mundell's remarks that will be analyzed here.
Under Bretton Woods agreements, the currencies of the IMF member countries were to be
defined pro forma in weight of gold, and those "gold parities" were to be translated into par values against US dollar, whose
gold parity at $35 per fine troy ounce was 888.67 milligrams (or 15 and 5/21 grains 0.9 fine). The currencies of the IMF member
countries became convertible to dollars at "fixed but adjustable par values", but only dollars were made officially convertible
to gold. (Not to American nationals, only to foreign central banks.)
The Great Silver Spike of 1980 by Roland Watson
In fact, reversing our CPI numbers, a silver height of $14 today translates to about $5.50
in 1980 dollars. That happened to be silver's price on the 19th January 1979 and way to the left and beyond on our Silver
Peak map. Can Son of Peak Silver really ascend such fantastic heights? How high can it go before the other side of the mountain
range is revealed to us? Will a sheer drop await more investors at the other side, or will the ascent be that more gentle
with the occasional plateau upon the way?
How does a currency collapse? And the U.S.$ ? by Julian D. W. Phillips
When a currency loses the confidence of its people, its fall becomes exponential, as has
happened to the Zimbabwe $, where in 1982 one U.S.$ equalled 1 Zimbabwe $. Today around Z$200,000 buys one U.S.
$ if you can find someone idiot enough to sell one for the Z$.
In day-to-day terms, the smallest note in Zimbabwe a Z$500 is the size of a U.S.$.
The price of a single-ply sheet of toilet paper is more expensive at around Z$867.
Spending money they haven't earned by Bill Bonner
The happiness mongers are out in full force. Something must be amiss. Unlike them, we
don’t claim to know better than anyone else what the future will bring. Instead, we look to the present and try to see what
it has brought already. And what we see is a public as short on worry as it is on cash. And that, dear reader, is precisely
why the economic news is so good. Because consumers are spending their fool heads off. People are still buying houses, as
Mr Stelzer points out. The GDP is still increasing. Why? Because people are spending money they haven’t earned yet. Worried
people don’t do that.
MANIPULATING THE MASSES by John Williams
In reality, however, annual inflation is over 8%, unemployment is around 12%, and annual
GDP growth is flat. Not only does common experience support the latter set of numbers, but also taking a close look at how
government economic reporting has been manipulated over time. What will surprise many, though, is that the annual 2005 federal
deficit was $3.5 trillion (not billion). That extraordinary number is as reported by the U.S. Treasury, using generally accepted
accounting principles.
How Close is a Real Estate Meltdown? by Clif Droke
Are we to a "housing bubble" meltdown? Are we going to see the real estate boom reverse
and turn into a real estate bear market anytime soon? Will 2006 see the onset of declining property prices on an intra-regional
basis? In short, I think we'll find the answers to at least the first two of these questions will be answered in the negative.
For select regions, however, there will be rather pronounced slowdowns in construction and housing sales that may seem like
the bubble has burst, especially when compared with the high growth rates of the previous 3-4 years. We'll discuss some of
these regions here.
The Silent Dollar Crash and Parallel Investment Universes by Econotech
Yet as of now, the financial markets and mainstream media barely seem to acknowledge this
silent yet huge dollar crash, rather quite the opposite. In terms of risk premia, credit spreads and volatility, global financial
markets continue to be more euphoric than at any time in the past twenty years, as I pointed out on 3/24 link. The IMF's April
"World Economic Outlook" link raised its global growth forecast for 2006 0.5% to 4.8%, which would be the fourth straight
year above 4%.
Dollar starts the big slide against major currencies by DAVID SMITH
THE dollar has embarked on a big decline that will see it fall against all leading currencies,
according to analysts.
The plunge is being prompted by America’s $800 billion (£438 billion) current-account
deficit, they say.
How US Investors Can Best Profit from the Trashing of their Currency by Clive Maund
So what's a poor US investor to do? The solution is actually simple and involves two key
planks. The first thing you have to do is get your money out of US denominated assets, and the second thing is to invest in
hard assets - Base Metals, Precious Metals, Oil and Commodities generally, via stocks or other instruments that are not priced
in US dollars. In other words, put your money into hard assets priced in more resilient currencies.
