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* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
*** The 'Summer of Love' heated up yesterday morning -
before Wall Street closed down for the 4th of July
celebration.
*** "Stocks rally on signs economy is slowing" said the
Reuters headline. The economy does seem to be slowing. But
only slightly. And the connection to the stock market is
feeble. Stocks can go up or down without much regard for
what the economy is doing.
*** The Dow rose 112 points. The Nasdaq rose 25 points. By
way of reference, the Nasdaq topped out at 5,048 on March
10th. It fell to a low on May 23rd and then rallied back to
4064 on June 21st. We're waiting to see how far this summer
rally will take it.
*** The market looked healthy yesterday. 1976 stocks
advanced. Only 796 fell back. There were 49 new highs, not
many but still more than twice the number of new lows.
*** A Reuters poll shows that the pros are still very
bullish. The Wall Street 'strategists' surveyed expected
the S&P 500 to end the year up 9.1% above its current
level. The Dow they thought would be 14% higher than today.
And the Nasdaq, these dreamers guessed, would end the year
up 26.5% at 5,150. If they are right...my friend Jim
Davidson will be heralded as a genius and I will be
"downright stupid".
(http://www.dailyreckoning.com/body_headline.cfm?id=206)
*** Remarkably, not a single one of the pros thought the
bear market might continue. None foresees lower levels for
any of the indices by year-end.
*** Meanwhile, the St. Louis Fed reports that the money
supply as measured by MZM is going up at a faster clip.
Could it be that "Easy Al" Greenspan has engineered the
'soft landing' that everyone hoped for - with small, very
public rate hikes...and quiet boosts in the supply of cash?
The economy is slowing...stocks seem to be rising more
slowly...and the most egregiously overhyped stocks, the
dopey dot.coms, are dying downwards.
(http://www.dailyreckoning.com/body_headline.cfm?id=222)
*** Anything is possible. But some things are more likely
than others. Most likely now is a continuation of the bear
market that began in April of 1998 with a collapse of the
Advance/Decline ratio...and climaxed with the topping out
of the Nasdaq on March 10, 2000. My guess is that the bear
is taking it easy during the hot summer months...but will
get back to work in September. But, as I say with tedious
regularity, who knows?
*** When I was just a little girl
I asked my mother, what will I be?
Will I be happy? Will I be rich?
Here's what she said to me:
Que sera sera,
Whatever will be, will be
The future's not ours to see
Que sera sera
*** Gold rose 80 cents. Platinum moved up $9.
*** A comment on the World Gold Conference, that took place
in Paris last week (whose source I have forgotten): "There
are only 24 people in the world who care about gold and
none of them are central bankers attending this week's
annual Paris gold conference. Gold has been stuck in a $275
to $290 per ounce range for most of the year. Central
bankers are dumping their gold reserves. A bad inflation
number these days doesn't budge bond yields or currencies.
Food for thought: When have you ever seen a large group of
central bankers agree on anything and be correct?"
*** Do you have what it takes to be a millionaire?
Author Thomas J. Stanley, well-known for his book The
Millionaire Next Door, has a new book out, The Millionaire
Mind. According to Stanley, the richest of the rich - that
is, the top 1% of U.S. households - did not get that way
from either the ability to reason (intelligence) nor
inheritance. The typical rich guy is a 54-year-old man who
has been married to the same woman for 28 years and has
three children. He has an average net worth of $9.2 million
and earns $749,000 a year. He got into college with an SAT
score of 1190 and usually got B's and C's. Nearly half are
business owners or senior corporate executives. They
attributed their success not to their brains, but to
qualities such as honesty, discipline, a supportive spouse
and the ability to get along with others.
*** "It's a puzzlement" says Ray DeVoe. Housing accounts
for almost 40% of the weighting of the CPI. But even though
HUD says there's a "crisis in affordable housing" because
housing prices are rising at twice the rate of inflation,
the people who keep the CPI have housing rising 2.9% year-
over-year...while the CPI itself is up 3.1%.
(http://www.dailyreckoning.com/body_headline.cfm?id=210)
*** Humans can make the best out of bad situation and the
worst out of a good one. It's genetic. As I write this, it
is a perfect 4th of July day here in Ouzilly. Deep blue
sky, perfect temperature...birds singing in the trees, and
an aroma coming from the Linden tree that is intoxicating.
So, how do my little boys make use of such an idyllic day?
War! The french kids have come over from next door; they've
chosen up sides and armed themselves with water balloons. I
hear Jules commanding: "Gabriel, you circle round to the
left in a diversionary tactic. [Poor little Gabriel, 6, is
always used as the bagman or the suicide brigade.] Edward
you and I will circle around and attack them from the
rear!"
*** Who am I? Who among us has not asked that question of
himself? Now, we have an answer. Janet Reno, Attny. General
of the United States during an Interview on CBS "60
Minutes" on June 26, 1999: "A cultist is one who has a
strong belief in the Bible...who frequently attends Bible
studies; who has a high level of financial giving to a
Christian cause; who home schools their children; who has
accumulated survival foods and has strong belief in the
Second Amendment; and who distrusts big government. Any of
these may qualify a person as a cultist but certainly more
than one of these would cause us to look at this person as
a threat and his family as being in a risk situation that
qualifies for government interference."
*** Now I know, I am a cultist. I contributed substantially
to my local Episcopal church and I home-schooled my
children. And I have far more faith in the Acts of the
Apostles than in the Income Equalization Act or the
Humphrey-Hawkins Act. My family must be in a 'risk
situation.'
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* * * * * * * * * * * * * * * * * * * * * * * * * * * * *
"What good did the theories of the philosophers do us? Did
they help us to take a single step forward or backward? ...
Did they alter our forms of contentment? We are. We argue,
we dispute, we get excited. The rest is sauce. Sometimes
pleasant, sometimes mixed with a limitless boredom, a swamp
dotted with tufts of dying shrubs."
Tristan Tzara,
The Dada Manifesto
On July 4th, 1776 a group of rich men and philosophers in
the American colonies got very excited. They were so
annoyed at Britain's mercantile restrictions and petty
taxes that they decided to take action...
The reasonable thing to do would have been to negotiate, to
talk, to bargain...to seek a concession here and there. The
changes the colonists wanted were marginal ones. They did
not seek a whole New World Order. They didn't want a real
revolution - no new calendar, no Thermidor or Brumaire; the
churches would not be burned; no palaces would be looted
and no monarchs killed. They merely wanted to be able to do
business as they saw fit, without the interference of a
meddlesome government. They probably could have gotten most
of what they wanted by being patient and reasonable. But
their blood was up. And so they did something extreme. They
announced their independence from Britain, putting their
lives and fortunes at risk, and gave every American some
names and dates that almost none could remember.
The consequences were disastrous for many of these men. An
e-mail message I received yesterday tells the story:
"The men who sowed the path to freedom 224 years ago were a
remarkable group of men. We know them as the signers of the
Declaration of Independence. But to the British they were
marked men and traitors to the Crown.
Here's what happened to the signers of one of the greatest
documents in history.
Twelve had their homes ransacked and burned.
Two of their sons were killed serving in the Revolutionary
Army. Another had two sons captured.
Nine of the 56 fought and died from wounds or hardships
during the Revolutionary War.
These men put their lives and everything they owned on the
line.
All knew that they would be jailed, tortured or killed if
captured.
Carter Braxton of Virginia, a wealthy planter and trader,
saw his ships swept from the seas by the British navy. He
sold his home and properties to pay his debts and died
broke.
Thomas McKean was so hounded by the British that he was
forced to move his family constantly. He served in Congress
without pay and died poor.
Vandals or soldiers looted the properties of Diller, Hall,
Clymer, Walton, Gwinnett, Heyward, Ruttledge and Middleton.
At the battle of Yorktown, Thomas Nelson, Jr. learned that
the British General, Cornwallis, had taken over his
(Nelson's) home for his headquarters. Nelson urged
Washington to open fire on his home, destroying his home
and property. Nelson died bankrupt.
Francis Lewis had his home and property destroyed. The
British jailed his wife, and she died a few months later.
John Hart was driven from his home, and he and his 13
children fled for their lives. For over a year, Hart lived
in the forest or in caves. Later Hart returned to what was
left of his home: he died from exhaustion and a broken
heart.
Norris and Livingston suffered from similar fates."
These men pledged "for the support of this declaration,
with the firm reliance on the protection of the divine
providence, we mutually pledge to each other, our lives,
our fortunes and our sacred honor."
Today, we remember these men and the sacrifices they made.
But for what? What difference did it really make? For all
their suffering have our contentments been altered in any
way? Did anyone's life expectancy increase as a result? Did
anyone's income go up? Are we really so much better off
than the citizens of Britain? Or Australia? Or New Zealand
or Canada?
The founding fathers didn't know it at the time, but
government was just at the threshold of a huge multi-
century bull market that would take it from something that
had little impact on peoples' lives, to something that
controlled nearly ever detail - from the price of rice to
the amount of water in your toilet. The sacred honor of
today's politicians seems concentrated on whether it takes
two clicks for you to reach an Internet connection or just
one. And it didn't seem to matter whether you were
independent or not. In the time since the Declaration of
Independence almost all the world's nations have suffered
the same fate.
In America today, nothing is too trivial or too private to
escape the notice of the heirs of Misters Adams and
Madison. Every aspect of your financial life, for example,
is open to inspection. Every molecule you swallow is
subject to government approval. Every root cellar and
pigsty you build must have the permission of a swarm of
agents. Instead of working less than 3% of the time to pay
taxes, as did the American Colonists, we now work about 50%
of our time to support federal, state, and local parasites.
What's worse, we have to suffer through quadrennial
political campaigns (which are stupider than game shows and
much less honest) to determine who gets to rob us.
And there is no escape. Imagine getting together a group of
hotheads such as those who met in Philadephia in that
summer 224 years ago. The Truths that were self-evident two
centuries ago - are now threats to the republic. People who
believe in the rights that were inalienable in the time of
Jefferson - such as the right to liberty and the right to
bear arms to maintain it - are seen as dangerous cultists.
Try to assert your right to 'dissolve the bonds' that tie
you to Janet Reno and the Clinton Administration and she
will have you shot in the back.
Better yet, forget the whole thing. Grill some hot
dogs...drink some beer...watch the rockets' red glare and
the bombs bursting in air and be thankful you don't live in
Zimbabwe.
Your very thankful eyes and ears here in France...
Bill Bonner
P.S. A nice thing about living in a foreign country is that
it changes your perspective. When I lived in America, I
viewed most of the news as a tragedy - a miscarriage of
justice here...skullduggery there...numbskullery almost
everywhere. But here in France, I read the papers and see
things in a different light. It is all a comedy. I expect
to be entertained and amused by the silly things people do
- and I am rarely disappointed.
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