Lancaster Predictions 2004 - The Lull Before the Storm

January 22, 2004

Relative stability reigns throughout the year.

Bush and Blair become media heroes and are seen to be "saving the world" from a number of ills from AIDS to terrorism to SARS and financial crises. Bush of course is re-elected as there is no meaningful opposition that isn't already sold out to the money power that already own Bush.

The country creeps towards martial law quietly with the population barely perceiving something is terminally wrong.

Patriot Acts I and II are used more and more for non-terrorist related crimes and freedoms are eroded in front of our very eyes and hardly anyone says a word, and if they do they can't be heard through the corporate owned media!

China's satellite state, North Korea, is held up as the poster child of nuclear proliferation and instability - conveniently posing as a huge threat requiring a massively expensive defense shield around the United States.

China revalues the Yuan (up against the dollar) and takes a hit in exports to the US. Taiwan is dangled infront of China as a tasty morsel the US is prepared to offer up in trade talks to try to continue the phony economic miracle.

Europe's economy struggles even more as their exports get more expensive.

The US dollar stabilizes at around 80 through the election.

Consumer prices deflate a little more but hold reasonably steady.

Gold rises to $450 by year end, with some spikes up and down.

Oil continues to move upwards ending the year at close to $40 per barrel.

Interest rates rise towards the end of the year, but not massively.

Real estate drops a little in value as consumers' ability to service more debt and pay ever higher asset prices finally starts to really slow by the end of the 2nd quarter.

Whiffs of deflation start to fill the air into the 3rd quarter and the talking heads start to waffle and cannot explain what is going on or why.

As we roll through the election the veneer starts to come off the whole facade covering the reality of the economy, however the illusion is strong enough to carry us through the Bush re-election. Not one talking head ever mentions Fraction Reserve Banking, Usury, Fiat Currency or Sound Money - - the American population remain blissfully ignorant amidst the biggest meltdown of a global financial system in the history of this Universe!

Upon the conclusion of the election we start to accelerate towards the inevitable collapse of our monetary system and all of the necessary, but very painful, adjustments in our lives that comes with it.

I'm not sure when the big crash will come. I could be and probably will be wrong about most of what I've said in terms of timing, the crash could come before the election, it could come after a massive dirty bomb or biological attack (or some other kind of disaster that could cover the reality of our failed system), all I know is that crash it will and sooner rather than later.

There it is. I'm no clairvoyant or seer, I just say what I see. I've changed by opinion on inflation, I think we'll see a deflationary depression - I've changed my opinion on many things over time and reserve the right to change them again going forward. These are just my opinions right now, they are bound to change as our situation evolves.

I'm still Long Gold and Long Short - although I now think that a Deflationary Depression will cause gold to eventually go down along with everything else - just not as much in relative terms. Gold will remain the ultimate store of value, and food and protection will remain the ultimate security during a depression!

Hold on for the ride, it isn't going to be pretty, but it is necessary.

Vaya con Dios!


Posted by rlancaster at January 22, 2004 11:11 PM

Dear Rich , thankyou for your balanced and believable prediction i often contemplate such matters.
I met a lady from india , a very unusual individual who i may say is the most remarkable person i have ever met.
There is no doubt in my mind that apart from the ability to alter ones consciousness she also has many abilities.
Take this as you may but she has proven to me such things and i would say i am known for being a scientific and highly cynical individual on many matters.

To cut to the chase last year she publically announced that 2005 could be a difficult year and that it could be a natural or manmade disaster. she said she was very concerned and warned her students to be cautious etc.

She knows if she got too specific folks would literally make this there focus so i believe she has held back for the sake of balance.

Her name is ammachi and i see her about twice a year . She is not my teacher but i feel her presence an enormous gift and feel high for days or weeks after .
You will not even find any reference to her vieled predictions on her website
But rest assured i have never known anything she has said not come to pass if predicted.
Many times she has proven to me that she can read my mind and concerns without any interaction from me ,along with me not telling anybody else etc..
Check her out when she comes to the US and you may adjust your 2005 predictions accordingly.

I know this is a strange missive i laugh at the so called psychics or rather sidekicks as i like to call them but this lady is the real deal. And well beyond my comprehension.

I can not see gold going down as you mention if it continues to take on more of a monetary concept but i personally am heavily into silver on account of its monetarily related supply demand potential.
Purely because the powers that be can not control it as easily , there is very little silver that could be dumped on the market by the european central banks.
Because many folks read your prognostications i would be happy to sound strange discussing this ladies credability should you want to email me for your number .

Have a great year

Nick Hodgson.

Posted by: NIck at January 25, 2004 03:24 AM

Long Term Capital Management was a hedge fund run by geniuses on Wall Street, using Black Box models which could perfectly predict intermarket relationships. The Global Economy is currently being gamed by Alan Greenspan in a similar fashion, using the Keynesian model to "manage" recessions, business cycles, the stock market, currencies, and assorted financial wipeouts.

The Derivatives Cyclone and Liquidity Bubble created by Greenspan's hedge fund encompasses the entire globe. The Bank of Japan was recently recruited into the fund. The ECB and Bank of England will be next. The size and scope of the leveraged trades put on by Mr. Greenspan far exceed anything else found in financial history. And the leverage is about to become even greater.

I am predicting a most spectacular equity and real estate blowoff into the June - July timeframe, which will put Mr. Greenspan on the pedestal as the most successful hedge fund manager which ever lived.

Then something will go wrong.

The markets will no longer start "acting properly", so Mr. Greenspan will start doubling down on his bets, LTCM-style. The more he doubles down, the worse the result.

Eventually, things will get out of hand, and there will be a Chernobyl - grade meltdown in the Global Derivatives Colossus, also known as the Alan Greenspan Hedge Fund.

Under this scenario, gold and silver prices will trade up to unimaginable levels, as mountains of paper holders rush to safety.

Posted by: Mark at January 25, 2004 10:24 AM

Japan has agreed to spend up to $1.3 trillion US to support the dollar according to an article by Harry Chernoff on That's enough to keep things going at least through the election and probably longer. Maybe they've agreed to do this to try to help secure oil supplies in the Mideast and Caspian Sea areas. Regardless of their motivation, the US strategy should be to keep running huge trade and fiscal deficits to debase the value of the foreigners' US dollar holdings. Foreigners don't vote in US elections and Bush wants to get reelected, so he doesn't care if they end up holding the bag. Maybe China will get smart and debase their currency by printing yen and stockpiling raw materials instead of dollars.

Under this scenario I don't see how hard assets as measured in dollars are going to go down in price. But maybe as measured in gold (the 5th currency (in addition to dollar, yen, renminbi, euro) according to Marc Faber), prices will go down.

Posted by: AG at January 25, 2004 11:18 AM

Last part of last post should read --

Maybe China will get smart and debase their currency by printing renminbi and stockpiling raw materials instead of dollars.

Under this scenario I don't see how hard assets as measured in dollars are going to go down in price. But maybe as measured in gold (the 5th major currency (in addition to dollar, yen, renminbi, euro) according to Marc Faber), prices will go down.

Posted by: AG at January 25, 2004 11:57 AM

Let the games begin...better now than when I am an old man.

Gold won't "go down" it's a super cycle up...with BURSTS lower to shake out small-timers.
(Jerkoffz shouldn't be in futures -only the cash)

death & destruction will take longer (years into the future)...but, keep yer eyes peeled! A slow desinigration with NFL football games to cover Joe SixPax Wallmart job & declining lifestyle will be fun to watch as outsiders lookin in!

Ring the bell & take the money!

Posted by: LEXLUTHUR at January 25, 2004 05:14 PM

All I can say is... is this really going to happen in America? What a long strange trip it's been... Vaya con Dios.

Posted by: Amman Mohammed at March 3, 2004 08:43 PM

Just like the last depression of '29, people will
be jumping out of windows. And Donald Trump's renters
will not be able to afford the rent.

" Have Mr. Trump come to my office." Mr. Trump,
the rent receipts are down, you have not anticipated
the Depression of 2005.
Mr.'re not fired, I
want you to sell tickets to the on-lookers, we're
in desperate need of cash!

Posted by: bobbyjo at April 16, 2004 10:50 AM

And with the realization that the American public has been had, maybe we will see some positive change in leadership, come from this financial collapse. It disgusts me, that all this debt based prsopertity, has not been questioned by the lemmings. It doesn't take a PhD in Economics to see the equation doesn't work.

Posted by: Laura at April 17, 2004 12:16 AM

Only when we have nothing to say do we say anything at all.

Posted by: Miller Steve at May 3, 2004 10:06 PM

The unseen trigger for a market crash might be the unravelling of the HIV theory. Science is catching up with Robert Gallo and it is only a matter of time before reputable scientists will find everyone carries HIV particles. This will immediately crash drug stocks which are propping
up the market at the moment.
Check for relevant links if curious.

Posted by: Cal at May 18, 2004 02:17 PM

Very interesting things in you site

Posted by: Lewin Luigi at May 21, 2004 03:24 PM

What else can i say after all this ?!

Posted by: Becker Maki at June 4, 2004 08:53 AM

I see ...

stocks and housing bubble starting to fall in the summer, quite fast.
Major terrorist attack, climate problems, problems in the middle east will appear too. They
Will "blind" the political and financial leaders to real cause of the problem.
Major move down by November.
Economy will still look going well. Central bank will issue reassuring messages.

Consumer confidence will fall with "no real reason". And borrowing. And spending. And

Until july ... Yo yo movement of stocks.
Fall in the summer.
Unrest in the time of presidential elections.
Fall of housing market in fall,
By november start of full fledged depression ...

Posted by: DF at June 5, 2004 02:09 AM
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