Saturday mornings (don't forget, The Privateer is based in Australia) are very busy times for us. And that is especially true every second Saturday when we prepare our Gold This Week commentaries AND ready our newsletter - The Privateer - to be sent to subscribers the following day. Phew! So, just to take a tiny shortcut, the title of this particular analysis happens to be a sub-heading to the first page of The Global Report of the latest Privateer (#450 - published on May 19).
Not only is the truth out there, it is all around us. The specific bit of truth referred to in the headline comes from a splendid bit of detective work by Mr John Crudele of the New York Post. Mr Crudele has found, in the "Financial Report of the United States Government" for 2001, a signed cover letter from Treasury Secretary John O'Neill which states that the U.S. government did not really have the $US 127 Billion surplus they reported in 2001. No, on an accrual basis, they actually had a deficit of - are you sitting comfortably? - $US 515 Billion. We go into this piece of truth in MUCH more detail in the latest issue of The Privateer.
GREAT GALLOPING HORNY TOADS! You probably knew things were bad. We knew they were bad. But I'll bet that neither of us thought that they were THIS bad. No wonder that the Treasury is screaming for Congress to raise the "debt limit" by $US 750 Billion. At the rate they are spending now, they may well have to do it again by this time next year.
As you probably know, while Gold was doing nothing in $US terms on Friday, May 17 (it rose $US 0.80 to $US 310.90), the $US index was performing yet another swan dive. The Euro has reached $US 0.92. The Yen is up to 125.96 to the Dollar. Even the Aussie Dollar has breached the $US 0.55 level for the first time in a year and a half. Why? Everyone "knows" that the U.S. economic "recovery" is well underway, don't they? So why is the Dollar tanking?
Could it be that the "real truth" is starting to percolate loudly out there, to the extent that it can no longer be ignored? It is obvious that U.S. borrowing and spending is TOTALLY out of control. It is obvious that this borrowing and spending is putting the future viability of financial assets denominated in Dollars at ever greater risk. It is obvious that all the hot air about budget surpluses and the paying back of U.S. Treasury debt which has been emanating from Washington since the mid 1990s is so much dross. It is obvious that the maintenance of the current U.S. empire is costing the U.S. more than it can afford to pay. All this is obvious. The truth is indeed out there.
The father of the Welfare State, Germany's Otto von Bismark, had a very famous saying which he only used behind closed doors with highly trusted associates and underlings: "Never believe the truth of anything until it has been Officially denied at least three times." And no, Otto was not a hypocrite. He made it clear that this statement did not apply only to the foreign governments with which he dealt, it also applied to the government which he directed.
It cannot have escaped anyone's attention that government actions are very often at variance with government rhetoric. Mr Bush has talked repeatedly about "free trade" since his inauguration. Look at his actions. His administration has stressed repeatedly that they were looking out for the safety, freedom, dignity, and rights of all Americans by fighting "terrorism". Look at their actions. The problem for Mr Bush and his Administration is that is precisely what most non-Americans and an increasing number of Americans are doing. They are looking at the actions, and they don't like them.
What about "confidence" in the stock market? Well, Wall Street cannot afford anything else. And as for the individual Americans who are still throwing money at it, they are doing what most investors always do in the initial throes of a bear market, they are trying to "get even". This always happens, and the longer the bull market which preceeded the bear, the more tenacious the "market confidence" - no matter what contrary evidence exists.
Outside the U.S., there is very little "confidence" in the U.S. stock markets. With the fall of the U.S. Dollar this year, everyone is looking at losses even though the Dow is up for the year. The Dollar is down more.
The truth is out there. In the U.S., ongoing unemployment claims are running at 19 year highs. Over the year to March 31, 2002, personal bankruptcies in the U.S. increased by 15.2%. According to the U.S. Treasury, debt "subject to limit" has again reached its ceiling. It is now once again only $US 25 million below the $US 5.95 TRILLION debt ceiling, just as it was in early April. The problem is that THIS TIME - Mr O'Neill and the Treasury don't have April 15 to look forward to.
In more "normal" times, it is comparatively easy to be complacent and to ignore or deem irrelevant any bad news or any facts which are at variance with the party line. These are not normal times, the facts are proliferating, and they are of such massive variance with the party line that they are becoming all but impossible to ignore or ridicule. The truth is out there.
The "center" is still holding. The Dow is still above 10000. Gold is above $US 300, but it got there back on March 27, nearly two months ago, and it hasn't done much since. The U.S. Dollar is diving, but that is being passed off, for now, as being "good" for U.S. exporters. Mr Bush is now fending off claims that he was told about a terrorist threat well BEFORE 9/11, but no-one can prepare for all eventualities, and anyway, no one dreamed that the terrorists would or could turn passenger aircraft into guided missiles.
We salute Mr Crudele for his detective work and his provision of what is a GENUINE public service in bringing the results of his work to the attention of the public. We salute all the fine men and women who are doing the same, on the internet and even in some cases in the mass media. We salute that anomaly of a U.S. politician, the honest, courageous, knowledgeable and eloquent Ron Paul. The truth can never be silenced, but it is a saving grace of our modern times that the truth is so easily accessible to anyone who cares to look for it. The internet is there for everyone.
The truth is out there. Don't ignore it. Find it, study it, think long and hard upon it. And make Gold your ally. Anyone who knows the truth about the present global financial situation has no excuse but to own Gold. There is no way to reconcile one's ideas with one's action if one doesn't.