|
“Financial currency inflated hell by global debt monetization is
the condition from which there is no escape, except through burning down the
old system and making a new one. This is the dead end sign at the end of the
road for can kicking. It is the condition of financial perdition. It is not
something coming in a distant future. It is here and now, clear and present,
if you have the eyes to see.
“The means to this end is the combination of sick sovereign
debt, risk insurance issued against the default of debt without sufficient
liquid capital to do so, and the fact that those entities who issued this
insurance are themselves and in truth illiquid under strain thanks to the
capitulation of FASB on true market value of their legacy and other assets.
This is the construction of the house of financial cards that will not
survive intact during the period of 2012 to 2015. This is what gold at $1700
is indicating to those unfortunate enough to understand the practical
workings of a system whose life force has been stolen to a degree that can
only be deemed epic….
“Only a resurgence of business based on solid foundations of
equity and not debt can do the final clean up and provide a door to a better
future.
“No politician anywhere can do the necessary without causing the
explosion of the results being heard almost as a new big bang. We are going
to inflate this debt away or those in power will be swept away by the
violence inherent in the suffering citizen….”
Jim
Sinclair, “The Lonely Road We Take Together”, 02/13/2012
Under “Operation Twist” The
Fed bought 64% of all U.S. Treasury Securities with maturities of 8 to 10
years, and 91%! of those maturing in 20 to 30 years.
All with hundreds of billions of Fiat Money created for “free”
out of thin air (no wonder wheat prices were up 12% and corn up 10% at one
point in January!). The Bond Vigilantes have been nearly neutered by The Fed,
temporarily.
And: The Fed
made $1 Trillion in de facto loans to the ECB and tacitly admitted QE3 is on
the way (of course, it is already here).
Moodys warns it
may downgrade credit ratings of 17 international and 114 European Banks. But
European Banks have borrowed $3.2 Trillion and want $1 Trillion more. And via
the LTRO the Eurozone has injected hundreds of billions of Euros more into
the Financial System and will add a second Tranche (likely $800 billion) at
the end of Feb, 2012 with more likely to come. Q.E. to infinity it is called,
and will surely result in a Very Bad End.
Clearly the Mega-Banker-Political Cartel
has chosen to Cram the system with Money and Credit to keep the Banks,
especially, and Key Market Sectors, secondarily, afloat (and to avoid for a
few months, the Market Crash which would otherwise surely have occurred)
until after…
…French elections this Spring
…German elections this Spring
…U.S. elections this Fall
Indeed U.S. Elections are 9 months
from now, in November, 2012.
And that “Cramming”
is THE KEY to the next 9 months’ Market Performance.
And that Cramming is disguised by
Bogus Official Statistics
Once again,
January Retail Sales Gain Was Not Statistically Meaningful and Likely Was All
from Rising Prices. As has been
the case in eight of the last nine months, the monthly change in January 2012
retail sales was not statistically meaningful, and it likely was
flat-to-minus, adjusted for official CPI inflation, as had been the case in
four of the last seven months. The evidence here continues to be for a
bottom-bouncing economy….
Where the purported month-to-month January retail sales gain was 0.4%,
seasonally adjusted, it was a contraction of 21.4% not seasonally
adjusted….
Under such circumstances, where the markets effectively are flying
blind as to actual economic activity, consideration of broad underlying
fundamentals is essential. Consumer income and credit remain structurally
impaired and continue to signal economic deterioration, not recovery, with the
broad economy remaining in serious trouble….
John
Williams, Retail Sales, shadowstats.com, 02/15/2012
See Note 1 below re shadowstats.com
Of course all
this Cramming will be (and already is) increasingly hyperinflationary.
And that disguised Hyperinflation
(already at 10.57% in the U.S., e.g.) provides Magnificent Opportunities for
Profit and Protection – See Notes 2 and 3 below.
Recent Downgrading (and ultimate
defaults) of Spain, Italy and Portugal and Watchlisting
of France and U.K. were earlier forecast by us and other honest analysts. But
The Key Takeaway is the ongoing and Prospective
Hyperinflation-inducing Response of the Mega-Bank-Political Cartel, and the
resulting Prospects for these nations and Greece.
Although the Greek Austerity package
passed, “the Market” rightly questions the ability of the Greeks
to implement the package. Understandably since Greek Manufacturing is down
15.5% in December, Industrial Production is down 11.3% in December, and
Unemployment is at 20.9%. So the Euro bounced up a little bit after the
package passed but not enough to move the U.S.$ much
lower than 79ish basis USDX.
Though the Eurozone expects another LTRO
injection (likely $800 billion) at the end of February the smart money knows
this will only create another temporary Sugar (Liquidity) High. But the basic
unsolved problem in the Eurozone, and the U.S.! is
Solvency not liquidity. Eurozone Crises merely deflect from the larger
U.S. Solvency Crisis.
Indeed, China is not exempt. In China,
Credit Outstanding is 200% of GDP and they just approved rolling $1.7 Trillion
in loans to local governments, a de facto default.
For the long run, few Structural
Problems have been “solved.”
In sum, over the mid and long term that
Euro strength (and probably the Euro itself at least in its current form) is
unsustainable for the whole host of reasons including not only the ultimate
de facto default of Greece, Portugal, and Ireland, but also probably
eventually default of Italy and Spain, and perhaps even France and the U.K.
Thus the Q.E. to Infinity.
With all the juicing and goosing The Fed
and ECB has provided the Markets, and promised to continue, the
Equities Rally could last fitfully for a while.
But such a Rally goosed by Excess
money and credit provided by The Fed and Eurozone, will only exacerbate The
Great Equities Crash when it surely arrives. Deepcaster
has forecast the approximate timing of that Crash. And the Developing
multi-year Jaws of Death Technical Pattern emphasizes this Prospect.
Meanwhile, Food and Energy Costs will
likely soar more, further financially disabling
consumers, which are 70% of the U.S. Economy and a similar % of other Major
Economies.
In this connection, the Crude Oil Price
is the most difficult of all Major Commodity Prices for The Cartel to
Manipulate but it can be manipulated but only over the short-term. Over
time, Supply and Demand determine Price because Crude is a necessity and
it gets used up.
Important to Note: The Crude
Oil Price at over $100 bbl is sending us a message:
Commodity Price Inflation, and, indeed, overall Inflation is increasing
regardless of what the (Bogus) Official Numbers Say. Therefore, Deepcaster recommends Opportunities for Profit and
Protection available in Key Market Sectors in its recent Letters and Alerts.
This fact of continuing high (and
increasing) energy and food prices underscores the Extraordinary Reckless
Policy Error (or intent) of both The Fed and ECB which create too much money
and credit (in their attempt to save their owners, The Mega-Bankers), and the
Obama Administration which continues to Increase the U.S. National
Debt to over $15 Trillion (from $10 Trillion when they were elected) plus
downstream unfunded liabilities of over $100 Trillion for Social Security,
Medicare, etc…
All this will of course, generate Hyperstagflation down the road for which we will all pay
(and are already paying) a very high price in Destroyed Savings and Wealth in
General.
Best regards,
Deepcaster,
February 15, 2012
Note 1:
*Shadowstats.com calculates Key Statistics the way they were calculated in
the 1980s and 1990s before Official Data Manipulation began in earnest.
Consider
Bogus Official Numbers vs. Real
Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported January 19, 2012
2.96% / 10.57% (annualized December, 2011 Rate)
U.S. Unemployment reported February 3, 2012
8.3% / 22.5%
U.S. GDP Annual Growth/Decline reported January 27, 2012
1.56% / -2.70%
U.S. M3 reported February 13, 2012 (Month of December, Y.O.Y.)
No Official Report / 3.87%
And Official Source Disinformation
continues, consider Shadowstats comments on the
January 6, 2012 release of U.S. Employment data:
“The
reported seasonally-adjusted 200,000 jobs surge in December 2011 payrolls included
a false, seasonally-adjusted gain of roughly 42,000 in the “Couriers
and Messengers” category. That gain was an artifact of the
seasonal-adjustment process and will remove itself in the January 2012
numbers.
“The
problem is that this 42,000 gain is part of a seasonal pattern that fully
reverses itself each January…”
“December
Payroll Seasonal-Adjustment Problem”
www.shadowstats.com,
John Williams, 1/6/12
Note 2: Deepcaster addresses the questions of Profit and
Protection in light of Fiat Currency Purchasing Power Destruction and
provides Guidelines in his article – “Essentials for Wealth
Acquisition Acceleration” found in ‘Articles by Deepcaster’ Cache.
Using such Guidelines facilitated Deepcaster’s
making buy and sell recommendations resulting in remarkable profits recently
if acquired and liquidated when we recommended, approximately*:
45% Profit on
Platinum ETF on February 8, 2012 after just 42 days (i.e., about 390% annualized!)
40% Profit on March 2012 $55 Dollar GDX
Calls on January 27, 2012 after just 23 days (i.e., about 635% annualized!)
34% Profit on Gold Royalty Streaming Company on December 5, 2011 after just
166 days (i.e., about 74% annualized!)
42% Profit on Volatility Index Futures ETN on October 3, 2011 after just 292
days (i.e. about 52% annualized!)
36% Profit on Double Short Euro ETF on September 7, 2011 after just 43 days
(i.e. about 300% annualized!)
35% Profit on Double Long Gold ETN on August 23, 2011 after just 41 days
(i.e. about 280% annualized!)
26% Profit on Double Long Gold ETN on August 17, 2011 after just 35 days
(i.e. about 260% annualized!)
25% Profit on Gold Stock on August 8, 2011 after just 201 days (i.e. about
45% annualized!)
150% Profit on Gold Stock Calls on July 13, 2011 after just 56 days (i.e.
about 975% annualized!)
*Past Profitable Performance is no assurance of future Profitable
Performance.
Note3: “A
Great Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities,
Crude Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates”
– February Letter
“The
Fed doesn’t have a clue about markets or economics. They are dangerous
people.
Printing money is not good for the world and will lead to more problems for
the world….
“What the Federal Reserve is doing now is ruining an entire class of
investors.”
Jim Rogers, Bloomberg Interview, 6/29/11
We are not so Negative about the Near-Term Prospects for Nominal
Asset Price Growth in Certain Sectors as we were six months or
a year ago.
That is mainly because the E.U., Mega-Banks, and the Fed, have already de
facto launched a Massive Quantitative Easing 3, with more likely to come.
This QE will serve as a Major Force impelling (but not necessarily
successfully) Nominal Asset Prices UP in certain Sectors, for example,
for Equities.
But before one becomes too enthusiastic about the Prospects one should
consider the implications of our Forecast for Nominal Assets Prices Strength
in certain Sectors.
The practice of issuing Bogus (U.S. and other Key official) Inflation figures
obscures the Fact that Monetary Inflation (generated mainly by reckless Q.E.)
is very rapidly depreciating the purchasing Power of most Fiat Currencies
– by about 11% per year in the U.S. e.g. (per shadowstats.com).
Our High
Yield Portfolio is aimed at achieving Total Return in excess of Real
Inflation. Stocks in that Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%,
26%, 6.7%, 8%, 10.6%, 10% and 15.6% when they were added to the Portfolio.
Also
important to note is that, while massive Q.E. is a Major Inflationary Force
tending to pump up Prices in certain sectors, there are Powerful Deflationary
forces operating as well – the depreciating Housing Markets in the U.S.
and China come to mind. Real Estate in some areas in China is down over 25%,
but Food prices are up 9% year over year.
The key to identifying The Great Opportunities (and Great Potential Losses) is knowing which Sectors will likely have Inflating
Asset Prices and which will have Deflating ones.
Investors failing to Evaluate Inflation/Deflation Prospects on a Sector by
Sector Basis will have missed Great Opportunities and fallen into a
Dangerous Trap.
Deepcaster’s Letter --“A Great
Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities, Crude
Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates; February
Letter” -- posted in the ‘Latest Letter & Archives’
Cache at www.deepcaster.com, identifies
which Sectors will likely be helped (albeit temporarily) by this Massive QE3
and which will likely be hurt, and provides Forecasts for all. And in his
March Letter, “The Pause Before The Great Bull; 3 Buy Recos! Forecasts: Gold, Silver, Equities, Crude Oil, U.S.
Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, March
Letter”, Deepcaster makes 3 Buy
Recommendations designed for Protection and Profit.
|
