“The rate at which the majority of the eurozone
is descending into insolvency is accelerating. The rescue package for Spanish
banks, which appears to have been provisionally set at a figure designed to
impress the markets, hardly even produced a dead-cat bounce. All it has
achieved is to draw attention yet again to the helplessness of the
authorities in dealing with multiple debt-traps. So what is the answer?
“Explain why it is that those countries, driven by the
consumption so loved by Keynesians and monetarists alike, have turned into
basket-cases, while economies driven by a savings culture persistently
confound all neoclassical theory by making their citizens better off, in
“A call to arms for central banks”
Alasdair Macleod, GoldMoney, 6/16/2012
Amid all the increasing challenges in
the Markets and Economy there are three “Fortress Asset” Sectors
which will likely return Profits over the mid and long-term regardless of
Boom or Bust, Inflation or Deflation. To understand why we select just these
three Sectors first consider
“The Bureau of Labor statistics
reported the increase/decrease in non-farm payrolls and the unemployment rate
for June 2012 on Friday, July 6th. Stocks plunged on the news. Why? The BLS
reported that non-farm payrolls increased by 80,000 new jobs in June.
Isn’t that good? Well first of all, it is a false figure. The true
figure is there was a net loss of 44,000 jobs in June. The BLS decided in
their infinite wisdom that they think, they guess, they pretended that new
businesses that started up in June created 126,000 new jobs. They have no
idea what new businesses started, nor did they count new jobs in these
phantom new businesses. This 126,000 phony figure was added to the loss of
44,000 jobs to fudge a positive number for the release of the June jobs
report. This phony figure is called the CESBD adjustment, or the Birth/Death
adjustment. Birth/Death refers to businesses, not people. The truth is the
economy lost 44,000 jobs in June. This is abysmal. This is recession. This is
an indictment of government fiscal policy, of Fed monetary policy, of tax
policy and regulation of businesses. We need a true increase of 150,000 new
jobs each month just to break even with population growth, and need millions
more to put displaced workers back in a job.
“The truth is, the economy is falling
off a cliff, housing transactions are essentially non-existent, jobs are
declining, growth is shrinking.”
“Current Weekend Report”
Robert McHugh, Main Line Investors, 7/7/12
There is a War going on between the
forces of Inflation (e.g. mainly Central Bank Money Printing and 80
Million/Yr. World Population-growth-generated Demand) and the forces of
Deflation (e.g. several contracting Major Economies around the world,
resulting in Increasing Unemployment and a slowing Velocity of Money). The
“War” is disguised by Bogus Official Figures as indicated by
shadowstats.com (see Note 1 below) and Robert McHugh (above).
The Central banks will ultimately
“Win” via QE-to-Infinity but that “Win” will be a
Pyrrhic victory because it will bring Hyperinflation and Stagnant Economies,
i.e. Hyperstagflation. Fortunately there are three
“Fortress Profit Sectors” which will suffice to Protect and
Profit, despite Hyperstagflation.
Jim Sinclair correctly forecast the
Central Banks of the World would implement QE-to-Infinity. And so they
continue to do so. Just in the last few weeks:
- The ECB cut
its benchmark Interest Rate to 0.75%
- China cut
bank lending rates for the second time in a month
- The Bank of
England announced an expansion of its government Bond Purchases
- The private for-profit
Fed promised to “Twist” until Year-End
This Q.E. et al. has already resulted in
Threshold Hyperinflation, e.g. 9.3% in the US (per Shadowstats).
Bogus Official Statistics Mask these Realities of Threshold Hyperinflation,
Increasing Unemployment [22.7% in the U.S.] and Negative GDP Growth (-2.17%
in the USA).
Indeed the supposed
“Deflation” much Ballyhooed by the Mainstream Financial Media is
just Fiction. Consider Adrian Douglas’ point:
“There are frequent claims that the U.S. economy has entered a
period of “deflation.” These claims are totally unfounded and are
false. Deflation can only be a persistent state of general price decline. In
fact, in examining price trends, the U.S. is experiencing shocking price
increases of over 15% per annum. To illustrate this,
…the Continuous Commodities Index, CCI over the past ten years.
“…shows there are periods of high inflation and brief
periods of “disinflation.” “Disinflation” is a period
when the money supply expansion slows but does not contract. …(But) There is absolutely no sign of any reversal
in the general trend of inflation.
“…The index covers a broad range of industrial raw
materials for the production of energy, food, metals, and textiles. The CCI
composition remains unchanged since 1995 and so suffers no hedonistic
massaging or adjustments unlike the government produced Consumer Price Index,
CPI, and Producer Price Index, PPI.”
“Deflation – Nowhere to be Seen”
Adrian Douglas, Market Force Analysis, 7/7/12
Three Sectors have exceeded or at least
“Kept up with Real Inflation” in recent years and of those
Fortress Asset Sectors, two will likely do so consistently in the Long Run.
As well, one Mini-Sector looks to return
Spectacular Profits over the short to mid-term. Indeed, Deepcaster
expects to make a specific stock recommendation/s on our forecast Pull-Back
in the next few weeks.
One Inflation-Sensitive Sector will not
automatically do well but will be quite profitable at times and not so much
at others. Crude Oil is a Truth Teller about Real Inflation because it gets
(and thus is not easily subject to Price Manipulation over the Mid
and Long Term). Despite recent Pundit forecasts of $70 or $60 oil, Oil
and Energy shares rallied recently (as we forecast) and shot up 6% on the
Eurozone announcement that it would liquefy the Eurozone Banks for free (i.e.
at Taxpayer expense). Indeed Crude marched even higher to $87ish last week.
Bottom line: More paper/digital money chasing limited Crude Supplies in
increasing demand means higher prices, especially with a wider Mideast War a
Crude Prices will fall temporarily on
Bad Fundamentals News (e.g., on a Negative Employment Report) and will rise
on QE and Equities Positive Events. But until the Next Major Equities
Takedown the Crude Price Trend is likely still up. After all, for example, even
though China is slowing, its Crude Usage is still increasing, albeit at a
But mid to long-term that Uptrend will
be punctuated by significant drops in the Crude Price when, for example,
that Equities Downturn is coupled with increasing supply from the Bakken, Eagle Ford, and other Frac-Fields.
Thus those who have bought their Oil
Producer Stocks with the idea that they will reflect sustained Gain and Yield
without interruption will be most disappointed. For the short term,
the quality O & G companies should continue to perform well. Longer term,
there will be Major Downturns and Rebounds.
However, the two Sectors which will do
well going forward regardless are Essential Food Commodities and the Precious
Monetary Metals (with Periodic Price setbacks in the latter from Cartel Price
Suppression). Needless to say, it is essential to invest in the latter two
Sectors with the right timing and in the right “vehicle”.
Another Essential Profit Citadel is
High-Yield Stocks whose Total Return (Gain plus Yield) is aimed at beating
Real Inflation (9.3% in the U.S., e.g.) as is Deepcaster’s
High Yield Portfolio (see Note 2). Investors lose significant Purchasing
Power if they hold Fiat Currency denominated Assets which return less than
Real Inflation (see Note 1).
Holders of Gold and Silver bullion and
their Miner’s shares have been disappointed in recent months as
repeated Cartel Price Takedowns have depressed Prices, when Economic and Financial
Developments would (without manipulation) have otherwise dictated Explosively
But we Precious Metals Partisans should
not be disappointed, but rather see such Price Takedown as Superb Buying
Opportunities. There is increasing demand for Physical Gold and Silver,
increasing Central Bank Buying, and both are in a long-term uptrend. And The
Cartel is increasingly unlikely to be able to generate deep Takedowns, or
sustain Takedowns for long time periods.
Our Investment “Mantra”
– “Buy and Hold rarely works Anymore” does not apply
to Gold and Silver Bullion held in one’s own Physical Possession.
Buying and Holding Physical Bullion on dips is the very best way to Profit
and Protect Wealth, thus creating a Durable Profit Citadel.
July 13, 2012
*Shadowstats.com calculates Key Statistics the way they were calculated in
the 1980s and 1990s before Official Data Manipulation began in earnest.
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:
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
problem is that this 42,000 gain is part of a seasonal pattern that fully
reverses itself each January…”
Payroll Seasonal-Adjustment Problem”
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
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
Great Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities, Crude
Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates” –
Fed doesn’t have a clue about markets or economics. They are dangerous
Printing money is not good for the world and will lead to more problems for
“What the Federal Reserve is doing now is ruining an entire class of
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).
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.
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
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.