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Predictions for 2006

Regime Change Iran reported Friday:

During his recent visit to Ankara, CIA Director Porter Goss reportedly brought three dossiers on Iran to Ankara. Goss is said to have asked for Turkey’s support for Washington’s policy against Iran’s nuclear activities, charging that Tehran had supported terrorism and taken part in activities against Turkey.

Goss also asked Ankara to be ready for a possible US air operation against Iran and Syria.

So with that in mind, I predict the following for 2006:

Gold will go to $750 per ounce. It closed on Friday at $516.60.

Silver will go to $13 per ounce. It closed on Friday at $8.80.

Oil will trade at $75 per barrel or higher. It closed on Friday at $61.

The Dow Jones Average will hit 9000. It closed the year at 10,717.50.

Israel will attack Iran’s nuclear facilities.

Munich will be named best picture at Academy Awards.

Thank you for visting Mover Mike in 2005. May your 2006 be filled with health, good family memories and a pet that loves you unconditionally.

Predictions 2006 Iran gold Mover Mike

Iranian Oil Bourse Begins March 23rd!

My friend Rob Kirby has an interesting observation: March 20,

Iran is planning to open an Iranian Oil Bourse (exchange) for the express purpose of trading oil priced exclusively in Euros a PetroEuro. This will establish a Euro based pricing mechanism, or ‘oil marker’ as it is called by traders. The three current oil markers are US dollar denominated, which include the West Texas Intermediate crude (WTI), Norway Brent Crude, and the UAE Dubai Crude. In 2003, Iran started trading with its European and Asian partners using the Euro. The Iranian Oil Bourse, however, will also establish a fourth ‘oil marker’, dominated by the Euro.

On March 23, the FED will no longer supply the financial world with M3 money supply numbers. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. Kirby argues

that this is precisely where you would expect to find the ‘capture’ of any large scale monetization effort that the Fed would embark upon – should the need occur.

And the need may occur as foreigners sell their treasuries to acquire euros to purchase oil.

Kirby wonders why on the 2,110,500 ounces of a total 6.5 million ounces of gold ‘housed’ at COMEX warehouses have recently changed hands. Is someone preparing to own a lot of gold as the USD comes under pressure in preparation for the PetroEuro?

PetroEuro Rob Kirby gold Mover Mike

Camp Katrina

I have just added Camp Katrina to my blogroll. Phil is a soldier who, he says,

was lucky enough to get mobilized with the Army National Guard to help in the wake of Hurricane Katrina, and he and some friends started a blog, Camp Katrina, that highlights stories about the humanitarian efforts of the U.S. Military.

Did you read that MSM? ANG does humanitarian projects in the wake of Hurricane Katrina. They are more than killing machines!

Judge Perris Decides Bankruptcy is Secular Dispute

On Dec 7th, I wrote Portland Archdiocese Bankruptcy Update in which I outlined the job of Judge Elizabeth Perris was to decide which applies in the bankruptcy case, secular or canon law. Judge Perris has made her decision.

(She) today ruled that Catholic parishes and schools in Western Oregon are not separate from the Archdiocese of Portland.The decision by Judge Elizabeth Perris was largely a victory for plaintiffs who are seeking hundreds of millions of dollars in priest sex-abuse claims.

There is no constitutional requirement that internal church law be considered in determining a purely secular dispute.

The Archdiocese had tried to settle the claims for $53 Million on 130 claims with dozens more frozen pending settlement of bankruptcy issues. This decision would seem to mean that all properties of 124 parishes are now available to settle claims.

Catholic bankruptcy Mover Mike

Abortion – “international human right”???

The numbers are staggering. I am not against a woman’s right to choose, I am just against abortion. I think there must be a better way. From The Brussels Journal

Every year one in three pregnancies worldwide ends in an abortion. A total of 40 million abortions are performed each year, which means that since 1980 one billion children have not been allowed to be born.

New EU members, Lithuania, Poland and Slovakia – are overwhelmingly Catholic and the doctor’s rights to object to performing abortions are overwhelmed by the EU stated right for a woman to choose to have an abortion.

A European Union advisory panel has issued a statement saying that medical professionals are not allowed to refuse to participate in abortions. According to the EU Network of Independent Experts on Fundamental Rights doctors should be forced to perform abortions, even if they have conscientious objections, because the right to abort a child is an “international human right”.

Suppose our Supreme Court overturns Roe v. Wade, could we be “forced” by the UN to perform abortions because of an “international human right”?

abortion EU Mover Mike

The Tsunami, One Year Later

From the Canadian Freepress, The tsunami of rip-offs

(reports) the Financial Times, “a year after the Indian Ocean tsunami, up to a third of the $590-million so far spent under the United Nations’ $1.1-billion disaster flash appeal appears to have gone on administration, staff and related costs.”

One year later, many tsunami victims are still exposed to the elements scrounging for food.
Tsunami Mover Mike

Gov. Kathleen Blanco!

Baton Rouge, LA:

Members of Gov. Kathleen Blanco’s staff are scheduled to move into the newly renovated offices on Tuesday. Some members of the governor’s staff will return from the three-day holiday on Tuesday to newly renovated offices at the State Capitol. Shortly after the two hurricanes, Gov. Kathleen Blanco decided to renovate some of her staff’s offices. At the time of her decision, Blanco also was hinting at deep budget cuts to state programs and the possibility of laying off 20 percent of the state workforce.The project cost $564,838.

When will we all say, Enough?

Gov.Blanco Katrina Mover Mike

Update: Betsy’s Page gets to the story on Jan 2nd


A Flat Yield Curve, Two Views

I heard Art Laffer, of the Laffer Curve, expound on Rush Limbaugh this morning that the economy is going great, that Bush is to be admired for keeping his hands off the economy, like Clinton and Reagan. Greenspan has done a great job and the economy is healthy and there is no inflation. The bond market with its flat yield curve is no worry. Since there is no inflation for as far as investors can see, a flat curve is a healthy sign. And the yield at the long end is providing a positive yield.

On the other hand, and with economists isn’t there always “another hand”, it pays to read Bill Cara Wednesday as he wrote about the yield curve.

…due to the size of the bond market, neither the Treasury nor the Fed can manage the long-term bond yield as well as they can and do the short-term rates. In fact, in just five years, the bond market has grown so huge, and the percentage of U.S. Treasury debt in the control of foreign traders (now over 50 pct versus one-third in 2000) that I believe U.S. monetary policy is out of control, i.e., it can no longer be used as an effective control mechanism.So, with respect to the yield curve, I now believe that international financial and capital markets are in control.

What does that imply? For one, the occupant of the White House is no longer the master of his domain. From this point forward, whenever financial and capital market risks, and opportunities for creating wealth, warrant the re-investment of foreign capital into their own domestic economies, foreigners will sell their holdings of U.S. debt. And the moment that begins to happen, the U.S. bond market will fall, and rates will rise.

[…]

…the flatter the curve, the more attractive bonds will be relative to equities. The higher the level of rates, the less attractive bonds become, but the more risky equities become (average PE multiples will fall). In both cases, gold will out-perform.

So we have lost control of monetary policy to foreigners, who are currently finding bonds more attractive than stocks and if a better opportunity comes along they sell bonds, leading to higher interest rates which are not good for stocks. Bill Cara like Mover Mike thinks Gold and gold mining stocks will benefit.

Update: I just received my Weekly Chart of the Day and here is a chart that supports the position that Cara and I make:

Art Laffer gold Mover Mike

October 8th Kashmir Earthquake

Almost three months after the earthquake that killed 73,000 people in Pakistan-administered Kashmir, half of them children, a second tragedy is unfolding in the mountains. The winter disaster that the relief agencies had feared is now a reality.

So reports The Independent, noting that 3.5 Million people are still homeless, many in makeshift tent cities that are not suitable for the snow and cold temperatures.

The arrival of the snow has triggered a migration south by those fit enough. A few feet deep at present, the snow will soon be drifting up to 20ft. Very soon, the mountain roads will be impassable. Major snowfalls and even colder temperatures are forecast for this weekend.

The UN is worried that without adequate shelter, more people could die from the winter than from the quake.

Gold Mining and Non-Recourse Loans

Jim Sinclair at his MineSet web site has a definition on non-recourse financing and how it involves derivatives.

(The way it works is that the production loans are secured by a sale of gold in over-the-counter derivatives either by the producer or by a third party on behalf of the loan with the short sales of gold built into the loan agreement and therefore secreted from general view.)

Gold mining companies raise money for mine or claim development by joint venture, banks loans, or sales of stock. Sinclair argues that non-recourse is sinister and gets a junior gold mining company into trouble and urges them to get rid of these type of loans.

Now why do I bring this up? Well, I see that Barrick and Placer Dome have been given the go-ahead for their merger. Both companies have used all the tricks to finance development and have used derivatives to hedge their production against price declines. The combined companies will have about 15% of the annual production presold at prices much lower than current market prices and have sold short 21,000,000 ounces of gold over the next ten years. A mark to the market on Barrick would show them to be $3 Billion off sides, meaning the asset has gone $3 Billion against them; their shareholders will never realize the benefits of rising gold prices on 21,000,000 ounces. That is 525 tons of gold. That 525 tons is how much Russia wants to add to their FOREX reserves and that is one fourth the amount that China wants to add to its reserves. Add to that, the central banks and bullion banks are short 12,000 to 16,000 tons and you have quite a bit of pent up demand!

Sinclair goes on to discuss Refco and he says still we have no reason for the sudden bankruptcy. After all, there was no money missing. Bennett, when it was foundt that he had been secretly juggling a personal debt to Refco of $425 Million, he paid the debt off. We are told it was a loss of confidence. Sinclair talks about derivatives and points out that when you have a buyer and a seller of derivatives and the price of the asset moves, then one side is an immediate winner and the other is an immediate and equal loser.

The greatest fear in this so called market for derivatives is the forced unlocking of the positions from total offset – one side a profit and the other a loss – to one account with the profit and another with the loss and both segmented from each other.That in bankruptcy would leave the loss totally exposed to someone and that someone need not be Refco. The reason for that is one account, maybe the house, held the profit and another cooperative party may have held the loss. If an account is frozen when called an asset the house is trying to protect itself for some complex reason. The OTC derivative game in both unregulated, non-transparent and down right dicey.

In a bankruptcy, the judge should secure all assets away from all liabilities which inherently means the disaster of all OTC derivative culprit’s worst nightmare.

From Reuters we learn that US Regulators are concerned that that the Refco Securities unit had recently stopped closing out customer accounts and returning property and assets.

Refco’s securities unit — in a filing that seeks court permission to amend the process for closing accounts — argued that the costs and expenses of a SIPC proceeding would be damaging and potentially hurt its debtors by eating into the existing net equity value in Refco Securities of more than $50 million.

This reads to me that Refco has some problems with derivatives and unprotected “losers” in those derivatives.

Refco derivatives Mover Mike

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