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	Precious Metals Market Timing	RONALD L.ROSEN rrosen5@tampabay.rr.com May 25, 2008

 

“Time is more important than price; when time is up price will reverse.”
W.D.Gann

 

SUNDAY SERMON MAY 25, 2008

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Washington Monument

	Men Of Honor ...
Jefferson Memorial		Lincoln Memorial

With bravery, honor, and dedication they fulfilled their obligation to future generations.

We Can Do No Less
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Dawn

We must dedicate ourselves to restoring integrity to our Nation and its currency. This means that all currency that is graced with the portrait of Washington, Jefferson, and Lincoln, absolutely must be as good as gold. If not, then the faces of Washington, Jefferson, and Lincoln must be removed from all currency. They can be replaced by any of the portraits of our politicians and leaders that have held office since 1913. With a few major exceptions they have all proven to be worthless just like our currency.

INFLATION HISTORY

 

 

Grandfather Economic Report
By Michael Hodges
published in the U.S.A. as a public service - - updated regularly
http://mwhodges.home.att.net - email Michael
Send a link to this page

 

BOTTOM-LINE - - DEBT SUMMARY TABLE AMERICA'S TOTAL DEBT (as of Jan. 1, 2008) - $53 Trillion - - add another $60 trillion for other contingencies such as Social Security/Medicare/Medicaid - Our Federal Government Debt Report shows $9.2 Trillion of debt as of end CY 2007, the State & Local Government Report shows debt of $2.2 Trillion, and $41.6 Trillion of private (household, business and financial sector) debt is revealed in America's Total Debt Report. These sum to $53 Trillion - - equivalent to $175,154 per capita, or $700,616 per family of 4. (This sum does not include the federal government's un-funded contingent liabilities such as social security/Medicare/Medicaid estimated at $57 trillion, plus additional unknown amounts(?) for other contingencies listed below.) The following table summarizes Total Debt in America - - as of December 31, 2007
DEBT TYPE	DEBT AMOUNT	Debt Per Child (per capita)
GOVERNMENT SECTOR DEBT:
Federal Government Sector debt - a record high as of year end 2007. (Treasury data and Federal Government Debt Report, (includes $2.4 trillion federal govt. owes foreigners, plus $2.7 trillion debt owed U.S. domestic public, plus $4.1 trillion surplus siphoned from and owed to trust funds) - total $9.2 trillion	$9.2 Trillion	$30,559
State & Local Government Sector debt - a record high (State & Local Government Spending Report)	$2.2 Trillion	$ 7,285
Un-funded Social Security contingent liabilities estimated looking forward	$7 Trillion	$23,648
Un-funded Medicare/Medicaid contingent liabilities *	$50 Trillion	$166,677
Un-funded federal employee pension contingent liabilities (incl. Postal service)	? $4 Trillion	?
Un-funded federal employee medical contingent liabilities	?	?
Un-funded state & local government employee pension & medical contingent liabilities	? $2.7 Trillion	?
Other off-budget Federal Govt. borrowings	?	?
SUM above Government Debt	$75.1 Trillion + ?	$248,675+?
PRIVATE SECTOR DEBT:
(see America's Total Debt Report)
Household Sector debt - soaring record high	$13.8 Trillion	$45,695
Business Sector debt - record high	$10.1 Trillion	$33,444
Financial Sector debt (domestic) - explosive record high	$15.8 Trillion	$52,317
Other (extra foreign debt in addition to such included in numbers above sectors)	$1.8 Trillion	$  5,960
Un-funded business sector employee pension contingent liabilities	?  $0.5 Tril. ?	?
Un-funded business sector employee medical contingent liabilities	?	?
Impact trillions of dollars of derivatives (+ off balance sheet debt) on above business & financial sectors	?	?
SUM above Private Debt	$42 Trillion +?	$137,416 + ?
SUM ALL DEBT
SUM Government + Private Sector Debt(including Contingent liability items)	$117.1 Trillion +?	$386,091 +?
SUM All Government and Private Sector Debt(exclude contingent liability items)	$52.9 Trillion	$175,154
We don't 'owe it to ourselves' - -  we owe $12.5 Trillion (24%) of above debt to international entities, ($2.4 Trillion owed by federal government plus $10.1 Trillion by private sector) >	[$12.5 Trillion]	[$41,391]
? = No reliable estimate available, or preliminary estimate only, or there may be other contingencies For discussion see the Federal Government Debt Report, America's Total Debt Report, Trust Fund Report articles, the State & Local Government Spending Report, the International Trade &  Debt Report and the Grandfather Social Security Report. (Debt Data Sources: Federal Govt. Treasury Dept.; Private Sector and State & Local Govt. from Federal Reserve flow of funds accounts, table D.3; International Monetary Fund; *Medicare/Medicaid per David Walker, US Comptroller General 7/22/07)

CONCLUSIONS

1. As America began to 'invent' new reasons for larger government than defined by its founding forefathers as the 4 principle purposes of government, government spending increased faster than economic growth, primarily fueled by zooming social program spending, much caused by Social Security & Medicare - and the share of the economic pie remaining to the private sector was reduced. Government spending ratios increased for the federal government, and state & local government spending increased faster than the economy and its employee head-counts faster than the population. As of today, the federal government spending ratio has reached 25% of national income - representing 10 times more growth in government spending than growth in the economy since1930. And, state & local government spending now consumes 15% of the economy, three times higher than after the 2nd world war.
2. National productivity and savings started a long down-trend and by 1970 real family incomes stopped rising and stagnated - as earnings of full-time males declined, singling the end of the on-wage earner family as more mothers were sucked into the workforce (away from their children) trying to help make up the difference - as each working person had to support more seniors and more state & local government employees than ever before - -and what we used to know as 'family values' begin to decline.
3. Education Productivity (relationship of output quality to per student real spending) started a long-term slide in the 1960s, dropping 71% over the next 3 decades. Helped by changing measurement criteria, this 'rate' has improved somewhat in last 2 years.
4. As a result of such government expansion, government entities increased mandated regulations on the private sector, at accelerating regulatory compliance cost loads on the economy and its productivity and savings. Today's compliance costs consume 16% of the total national income.
5. Following the above, inflation rates jumped - - and today are still higher than during the period of strong family income growth when inflation was measured by more stringent methods.
6. The nation's Trade Balance went steadily negative starting in then 1970s - and today America is the world's largest debtor nation - - with increasing deficits each year to a new all-time record deficit today.
7. And, the International Value of the U.S. dollar may again be threatened by exploding trade deficits, as it was before.
8. The graphics in this America's Debt Report prove that the nation, trying to maintain and expand consumption (instead of producing real goods and savings) begin to go more and more into debt, in relation to the size of the economy. Federal Government Debt ratios, after falling since World War II stopped falling and then soared to the highest peace-time ratio in history. Families, trying to keep up under the squeeze in the economy and of education quality, went more and more into debt, causing Household debt ratio (charts above) to grow twice as fast as the economy since the mid 1970s when family incomes stagnated - and are rising exponentially as of today.
9. Debt of the Financial Sector (charts next page) accelerated, now expanding exponentially to the highest ratios in history.
10. And - - America's debt productivity, less and less national income per added dollar of new debt outstanding, has significantly deteriorated.
11. As debt soars in America citizen voter turnout deteriorates, as does trust in government and family confidence in their future.

America, that used to derive strong family incomes and values from producing real goods and savings, even with one bread earner per family, has moved to a fully consumptive society financed by ever increasing ratios of debt at private and government levels, with nil savings - - with debt ratios reaching new records - - with each added dollar of debt producing diminishing amounts of national income.

AMERICA HAS BECOME LESS A FAMILY-BASED, FRUGAL AND PRODUCTIVE SOCIETY WITH SMALL GOVERNMENT - - AND MORE A CONSUMPTIVE, PERMISSIVE, DEBT-DEPENDENT AND GOVERNMENT-DEPENDENT SOCIETY THAN EVER - - A BECOMING QUITE DIFFERENT THAN THAT ENVISIONED BY ITS FOUNDING FORE-FATHERS. WE ARE AT A CROSS-ROAD. OUR YOUNG GENERATION FACES EXTREMELY SIGNIFICANT CHALLENGES IN THIS REGARD - - AND MAY BE LESS PREPARED TO MEET THE APPARENT FUTURE THAN ANY PRIOR GENERATION IN RECENT HISTORY

America may experience a crisis of economic un-sustainability.

But - will citizens fight back from the grass-roots to retake her proud heritage of the past. Will leaders come forth that do not scream: growth-growth-debt-debt? There is much to be done, because there is much at stake.

The purpose of the Grandfather Economic Reports is to increase public awareness

of major threats facing today's families and youth - compared to prior generations.

KNOWLEDGE IS POWER - IF YOU HAVE IT
                                                   

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 Reunion And Finale ...

                                      

Loved I Not Honor Anymore

General Robert E. Lee   

 

My Heart Shall Not Home ... You’ll Thank Me In The Morning ...

Let Us Cross Over The River ...  The Soldier’s Return ...  Cross The Green Mountain 

The next report will be posted on Tuesday, May 27, 2008.
Updates will be posted when market action warrants.
Stay well,
Ron Rosen and Alistair Gilbert

M I G H T Y I N S P I R I T

Disclaimer: Thecontents of this letterrepresent the opinions of Ronald L. Rosen. Nothing contained herein isintended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen is not a registered investment advisor.Information and analysis above are derived from sources and using methods believedto be reliable, butRonald L. Rosencannot accept responsibility for any trading losses you may incur as a result ofyour reliance on thisanalysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.

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