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$47 BILLION PINPRICK
POPS U.S. STOCK FUNDS
GuluFuture.com
2nd August 2002
PAGE
URL: http://www.gulufuture.com/future/fleefunds_z.htm
 It's
all over, bar the shouting and the leaping from high window ledges. Investors
fled US equity mutual funds in July, according to Merill Lynch, with early
estimates forecasting a net outflow of $47bn from the funds - the LARGEST
EVER cash terms outflow in stock market history.
However, from the paltry coverage in the rose-tinted media, this
calamitous sea change in small investor confidence never happened.
But there is now a despairing trend threatening the $4 trillion invested
in mutual equity funds. In June, there was a net outflow of nearly $18
billion, which was the third-largest on record.
"We could see sustained net outflows continue," David Bowers, chief investment
strategist at Merill Lynch told the Financial Times. Merrill had combined
data from ICI, TrimTabs and AMG Data Services to estimate the $47bn outflow
in July. On August 1, The Dow Jones Industrial Average slumped 2.6 percent
and the Nasdaq Composite dropped 3.6 percent.
If ever the dynamic towards war needed firming up, this provides the final
deadly impetus. The movement of the first sheep determines the direction
of the herd. If the investor stampede takes off, it will make 1929 look
like a small scale rehersal. Kick-starting the war machine is a long-planned
strategy by the US Administration to handle this well anticipated financial
crisis .
Wall St. crisis derails Japan
 The
latest gloomy Wall Street developments have punctured Japanese hopes of
economic recovery. Non-government commentators have taken a very poor
view of Wall Street's impact on hopes of a Japanese recovery.
In June, a report issued by the US Federal Reserve Board "Preventing Deflation:
Lessons from Japan's Experience in the 1990s," studied Japan's economic
bubble, aiming to prevent the bursting of the US stock bubble.
However, a researcher from a Japanese private sector think tank said:
"The report indicates that the US monetary authorities are very afraid
of the bubble bursting. They're worried that the United States will suffer
the same plight as Japan."
Economic Crisis Swells in South America
Back in the Americas, the crisis which began with Argentina's financial
meltdown six months ago, has now spread to neighboring Brazil, Uruguay
and Paraguay. It threatens to engulf other economies in the region as
well, including Bolivia and Venezuela, where deep recessions are now predicted.
In Brazil, Latin America's largest economy, government bonds have fallen
in recent weeks to half their face value, on fears of a government default.
In Uruguay, the government closed banks on Tuesday for the first time
in 20 years.
"We're becoming another Argentina," said Maurice Lopez, 45, a Montevideo
store clerk who waited today to withdraw cash from an ATM. "I can't believe
it has come to this."
Numerous nations in the region had begun to embrace U.S.-backed free market
reforms, including privatizations and lowered trade tariffs. Now, a backlash
has provoked rioting against sell-offs of state-run industries. Looters
raided supermarkets in Uruguay's capital Thursday, as unions protested
the banks closures.
The Gold Rush Takes Off
Meanwhile,
fifteen thousand gold and silver coins enthusiasts are expected to attend
the World's Fair of Money at the Marriot Marquis Hotel in Times Square,
New York. Yesterday, the attendance was so high that dealers were overwhelmed
by eager investors.
"I've sold more bullion in the last three months than in the first three
years of my store" said Ira Einhorn, owner of Coin Galleries of Oyster
Bay, a large Long Island's coin dealer. "It's like 1978 all over again."
That year marked the beginning of a bull market for coins, in which prices
on rare coins rose over 15 fold in two years. The same happened after
the stock market crash of 1987.
This
website, WWW.GULUFUTURE.COM, on 29th July, 2002
predicted that August 1st. would mark the
impact date of the financial system with an iceberg whose below-the-waterline
effects would dwarf the existing market falls and trigger a war.
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