$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.

RELATED STORIES
Market Crash, War Imminent
It's War!, It's On, It's Now


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