“Investments that are denominated in a given currency include
money-market funds, bonds, mortgages, bank deposits, and other instruments.
Most of these currency-based investments are thought of as
“safe.” In truth they are among the most dangerous of assets.”
Warren Buffet, Fortune Magazine, 2/9/2012
An early 2012 Report indicates anti-Gold Sentiment (“Led”
by Warren Buffet who is Wrong about Gold, but right about the Dangers of
Currency-Based “Investments”) has reached recent record highs
except among those in the “know”:
(In the short term) “I expect the (Gold) price to decline and
when that happens I will buy more.” Jim Rogers 4/4/12.
While the anti-Gold Sentiment is perhaps baffling at first glance,
thoughtful educated Investors should see it as facilitating an Opportunity
Window. Consider the following:
· While most of the
Eurozone Bailout Money from The Fed and ECB has gone to Banks via Sovereign
Debt restructuring – Eurozone lending to non-financial Companies shrank
by 3 billion Euros in February 2012. As in the USA, Eurozone businesses and
citizens are not much helped (and are arguably hurt) by the Bailouts.
And even the ECB’s $Trillion recent LTRO Injections have not
helped the hopelessly indebted Sovereigns either, as recent spiking yields on
Spanish and Italian debt testify.
· Last weekend, Eurozone
Officials agreed to transfer the remaining Assets of the EFSF to the ESM. That
would bring the total Eurozone Bank Bailout Funds available to €700
billion until the middle of next year when the new rescue fund kicks in with
a €500 billion ceiling. Already, Officials in the know (e.g., the
Secretary-General of the OECD) say it is “not enough” in
the long run. And they are right. Indeed the Sovereign Debt Situation is
hopeless without more large Creditors “Haircuts”.
· And consider that U.S.
Banks hold $641 billion in loan exposure to Europe.
· And the four biggest
U.S. Banks hold 95% of the $250 Trillion! in
U.S. Derivative Exposure, according to the Bank for International
Settlements, the Central Bankers’ Bank.
· And Global Derivatives
Exposure rose to $707 Trillion! as of the
June 2011 BIS Report. (Path: www.bis.org/statistics/derivatives.htm)
PIMCO’s “Bond King”, Chairman Bill Gross, sums it
up. “Greece is a Zit, Portugal is a Boil, Spain
is a Tumor.” Bloomberg 4/5/12
Surely, one gets this Picture now. To keep the
entire Paper/Digital Edifice from falling, the Central Banks will indulge in
even more Massive Money Printing/Digitizing.
And that is why Opportunity Knocks in the Precious
Metals (notwithstanding Cartel (See Note 1) Interventions) and why we are
already seeing serious Price Inflation in Energy and Food –
“One the more interesting investments
I’ve made over the last few years was buying a
sizeable chunk of a successful baby products company…
“The managing partner forwarded me a letter yesterday…
[which] explained that, over the last two years,
prices have risen substantially in the developing world…
“China, for example, has seen wage increases
of 44.6% since 2010. Vietnam- 39.1%. The polyethylene resin that we use has
gone up in price 40.3%. Naturally, the rise in oil prices has also increased
transportation costs substantially as well.
“The letter… followed up with a polite
assertion that they would be increasing their prices as a result.
“And they say there’s no inflation.
“This is a direct consequence of the rapid
expansion of the money supply. When you print trillions of dollars, euros, renminbi, etc., there are consequences… namely,
“At first, it’s the developing world
that suffers the most. Central bankers in countries where the entire economy
is based on cheap manufacturing feverishly expand their own money supplies in
an effort to keep pace with the [devaluation of the –ed.] dollar and
euro. If they don’t, the fear is that their currencies will rise, killing
the manufacturing industry.
“Since these countries have tiny bond markets
and lack reserve currency status, all the new money they print goes straight
into the local economy. This pushes prices up.
“At first, it’s usually raw materials,
intermediate goods, and staple commodities. I remember being in Sri Lanka
last year where the price of turnips had recently gone up nearly 40%, and people were demanding higher wages.
“As wages in the developing world rise, it
eats into the manufacturer’s profit margins. Eventually, the
manufacturers capitulate and pass the inflation back to their customers in
the developed world.
“You can probably guess that, since
we’re now paying more to have our products manufactured, we have to
raise prices for our retailers and end users.
“It takes a while for all of this money to
make its way through the system… but rest assured, it does come home to
roost. No doubt, inflation is very much with us.”
“And They Say There’s No
Simon Black, SovereignMan.com, 3/30/2012
But why are Gold and Silver, the Superb Inflation Indicators, well off
their 2011 highs? That is mainly because a Fed-led Cartel of Central Bankers
and Allies engage in an Ongoing Campaign of Precious Metals Price Suppression
in order to support the Ostensible value of their Treasury Securities and
Fiat Currencies (see Note 1). Even the Financial Establishment Notables are
beginning to acknowledge PM Price Manipulation. Consider Bill Buckler of
Buckler writes: “It is interesting that many
of the some people who are now abandoning stock markets because of their
volatility over the last few years are the same people who become affronted
at the slightest mention of the possibility of precious metal price
manipulation. A moment’s serious contemplation make
things clear. The precious metals and gold in particular have always been the
‘alternative’ to government promise based on and created out of
thin-air money. As such, the precious metals have always been Public Enemy
No. 1 as far as the money manipulators are concerned. Anyone who aspires to
intervention in an economy and the political power that it gives is and
always has been an enemy of gold. As long as there is a central bank
manipulating money and interest rates, all markets are manipulated by definition.
To imagine that the precious metals would be overlooked is ridiculous.”
“ALL Markets are Manipulated”
Bill Buckler, www.the-privateer.com, 3/30/2012
And consider The Financial Establishment Icon, the Interest Rate
Observer’s, Shrewd Jim Grant
“… The Federal Reserve, Grant said, is
the anti-capitalism business… ‘The Fed ought to get out of the
manipulation business…. They ought to forswear the intervention in
Jim Grant, Interview with Maria Bartiomo,
notwithstanding the most recent Gold Price Takedown earlier this week (and
the one on February 29, 2012… and the many earlier ones) conditions are
building for a continuation soon of the Gold and Silver Bull Markets with
even Greater Force.
The Gold Market is
indeed “like a coiled Spring” to use Jim Sinclair’s term.
That is why Deepcaster has recently issued several
Buy Recommendations and forecast Timing and Targets notwithstanding ongoing
Cartel Takedown attacks. And the characteristics of these Takedowns explains
why Deepcaster forecasts different “launch
dates” for Bullion and Shares Rallies, as well as for the Massive
Prospective Takedown of the Equities Market.
There is much at stake
in forecasting timing of the Impending Massive Wealth Destruction and
Hyperinflation wrought by ongoing Central Bank Quantitative Easing, as
accurately as possible. Marc Faber explains why:
“I think somewhere down the line we will have a massive wealth
destruction. That usually happens either through very high inflation or
through social unrest or through war or credit-market collapse.
“I would say that well-to-do people may lose up to 50 percent of
their total wealth…
“I think that people should own some gold, and I think that
people should own some equities because before the collapse will happen with
Mr. Bernanke at the Fed, they're going to print money and print and print and
print. And so what you can get is a bad economy with rising equity price.”
Marc Faber, CNBC Interview, 4/2/2012
And Jeff Nielson
presents a Candid Description of the Wealth Destruction which has already
“In writing about the relentless collapse of Western economies,
I frequently point to ‘forty years of plummeting wages’ for
Western workers, in real dollars. However, where I have been remiss is in
quantifying the magnitude of this collapse in Western wages.
“On several occasions I have glibly referred
to how it now takes two spouses working to equal the wages of a one-income
family of forty years ago. Unfortunately that is now an understatement. In
fact, Western wages have plummeted so low that a two-income family is now (on
average) 15% poorer than a one-income family of 40 years ago.
“… real wages peaked in 1970 at around
$20/hour. Today the average worker makes $8.50 hour – more than 57%
less than in 1970. And since the average wage directly determines the
standard of living of our society, we can see that the average standard of
living in the U.S. has plummeted by over 57% over a span of 40 years.
“This brings us to the second point: the
refusal of our governments to adopt a consistent methodology in reporting
inflation statistics can only imply a deliberate attempt to deceive, since it
is 100% logically/statistically invalid to simply string together
disconnected series of data…
“Thus, our governments have been lying about
inflation for the last 40 years as a deliberate means of hiding the 57%
collapse in our standard of living. Meanwhile, the situation is more than
reversed if you’re one of the fat-cats at the top. While average
American workers have seen their wages plummet by 57% over the past 40 years,
in just 15
years (1992-2007) the 400 wealthiest Americans saw their
incomes rise by 700%.
“This is economic rape, plain and simple.
“The causes of that economic rape are equally
“3) Oligopolies/monopolies. It is elementary
capitalist theory that monopolies and oligopolies are unmitigated
evils. By definition they are 100% parasitic,
and 100% non-competitive – and have absolutely no place in any
capitalist economy. Yet today the global economy is totally overrun with
these gigantic, non-competitive parasites. With these mega-parasites
permanently blood-sucking us, the impoverishment of our societies was an
“U.S. Standard of Living Has Fallen More Than
Nielson, Le Metropole Café, 4/02/2012
In sum, more Substantial Wealth Destruction is coming for those who
are Not Aware and Not Prepared.
April 06, 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’
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”
– February Letter
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,
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.