“…The banking system remains severely
stressed, with some form of new easing—a QE-3—likely just a
matter of time, and likely sooner rather than later. All Fed actions since
the crisis of 2007 and panic of 2008 have been aimed at saving the banking
system—not the economy—where the survival and health of banking
system is the Fed’s primary function.
“In the current
political environment, however, the Fed likely would run into heavy public
opposition to an ongoing effort to bailout the banking system. …Any new
form of easing will be justified under the cover of an effort to boost
payroll-survey employment gain of 115,000 was below already-weak consensus
expectations, for a second month, while the household survey showed an
outright monthly employment contraction for the second month. None of the
month-to-month changes were statistically significant, as usual, but
year-to-year change in nonfarm payrolls has begun to slow markedly.”
Employment Fell as Payroll Growth Faltered”
Major Challenges confront investors in
the 2nd half 2012. So it is essential to describe the Key Forces
which will influence the 2nd half, as the Markets Takedowns
earlier this week show.
Indeed, The Precious Metals and Tangible
Assets Price Takedowns of Recent Days reflects The
Cartel’s (See Note 1) increasingly desperate Attacks on pro-Precious
Metals and Tangible Asset Sentiment and thus on Prices. Considering
“why” indicates how to profit from the Opportunities arising from
First we know that in the two of the
three largest economies in the World, the Eurozone and the U.S., unemployment
is high and rising, with youth unemployment near 50% in Key Countries
of the Eurozone. Citizen dissatisfaction has been reflected in the recent
French and Greek Elections and their Aftermath, and will intensify.
Moreover, Official Employment and
other figures in Key Countries are Bogus.
cover the April Jobs and Unemployment report issued by the Department of
Labor’s Bureau of Labor Statistics. They reported that the Unemployment
rate as of April 30th was 8.1 percent, which of course is
nonsense. It fails to include 7.9 million people looking for full time work,
but involuntarily settling for part-time work. Of course part-time work is a
double whammy, low wages and no benefits. It also fails to include 2.4
million folks who want to work, looked for work in the past 12 months, but
not the past 30 days. It also fails to include immigrants who are looking for
work, but are here, living in this country, marrying, having
children. If we add all this together, we are talking a real unemployment
rate of around 20 percent. Then we need to consider quality paying jobs,
which are not in this number. Full time employed folks at minimum wage, a
wage insufficient to support a family. The entirety of this situation is
“Now, to the
interesting number. The BLS reported with a straight face that the economy
created 115,000 new jobs in April. This number deeply disappointed markets.
It is a number that failed to cover the breakeven figure of 150,000 needed to
simply cover legal population growth, let alone eat into the ranks of the
“But wait, the
115,000 is vastly overstated. It was really a lie. The CES Birth Death
adjustment in April was a whopper of a lie, 206,000. In other words, the BLS
fudged the non-farm payroll actual counted number by 206,000, made it seem
better by 206,000 than it really was. It means the economy actually lost
91,000 net jobs in April.”
“McHugh’s Market Forecasting & Trading Report,” 5/4/12
Indeed, in the U.S., Real Unemployment
is 22.3%. Moreover, Real U.S. GDP is a Negative 2.17% and Real
Inflation 10.28% (see paragraph re shadowstats
below). Moreover, it is no wonder that economies are not recovering and that
unemployment is increasing because, as shadowstats
points out, the Bailouts and QE were, and are, all about sustaining a
Profitable Banking System for its owners (including the owners of the Private
For-Profit Fed) at the expense of taxpayers, as we describe in our Article,
“Gain From Gargantua” from 3/2/12 in
the ‘Articles by Deepcaster Cache’ at
Another Key Reality going forward is
that all the Bailouts and Q.E. (i.e. Money Printing) is coming at a Great
Cost. This vast and increasing Monetary Inflation is already transforming
itself into Price Inflation. We emphasize that in the U.S., the numbers are
already threshold Hyperinflationary with Real Inflation at 10.28%.
calculates Key Statistics the way they were calculated in the 1980s and 1990s
before Official Data Manipulation began in earnest. Consider
Official Numbers vs. Real
Numbers (per Shadowstats.com)
Consumer Price Inflation reported April 13, 2012
2.65% / 10.28%
U.S. Unemployment reported May 4, 2012
8.2% / 22.3%
U.S. GDP Annual Growth/Decline reported April 27, 2012
1.62% / -2.17%
U.S. M3 reported May 7, 2012 (Month of March, Y.O.Y.)
No Official Report / 3.02% (e)
Failing to take the impending
Hyperinflation into account can be lethally destructive to wealth.
And the Third increasingly troublesome
Reality going forward is that of Debt Saturation, not just of certain
companies and citizens, but of Sovereign Nations, because several Key
Sovereign Nations Debts can never be repaid.
As a result, Social Chaos is increasing
and Extreme measures are being considered. Spain’s 10yr Note Yields are
at 6%ish again; its Banks/Economy will “need” over $1Trillion.
That is, it is too Big to Bail.
Some Nations may resort to an
“Icelandic approach” of Debt Repudiation. For example, Great
Britain may resort to an approach similar to Iceland’s, a decision
which would have profound effects on the Capital Markets.
could be just eight months away from cancelling billions of pounds of public
debt that it acquired with made-up money, Financial Mail has learnt.
“The first £8billion of
gilts – Government bonds – bought under the Bank of
England’s quantitative easing scheme will be due for repayment from the
start of next year.
That means the Treasury will give the
Bank £8billion to redeem gilts that the Bank bought with cash that it
conjured out of thin air.
Bank, a nationalised industry whose shares are
owned by the Treasury, could then return the £8billion to George
Osborne and his colleagues, who will in effect have spent £8billion of
Dan Atkinson, “Treasury could make £8bn of public debt
‘disappear’ if it cancels bonds bought by Bank of England,”
5/5/12 Financial Mail
Indeed, as one Commentator on Dan
Atkinson’s report notes, such an “Icelandic” Debt
Repudiation course of Action could go a long way toward Alleviating both
Great Britain’s and the USA’s Debt Crises.
private, for-profit Federal Reserve cabal borrowed its funny-money concept
from the Rothschild-controlled Bank of England. The idea is that these
central banks conjure up money from thin air [a book-keeping entry], then
lend [by buying government bonds] the newly-created money and collect
interest on that funny-money. Tax-payers are, of course, the ones paying the
the interest "dividends", Dan Atkinson reports that British
taxpayers have already paid the Bank of England 12 billion Pounds on
debt/money created since the start of the Quantitative Easing program.
would go a long way toward becoming solvent by repudiating all the
funny-money debts created by central bank book-keeping entry. At least in the
United States, the Constitution gives the Congress and Executive full power
to issue the nation's money. No bank intermediary, such as the Federal
Reserve, is needed to lend money.”
Such a Debt
Repudiation is not unprecedented in the U.S. President John F. Kennedy
embarked on a similar course when he ordered the U.S. Treasury to issue U.S.
Notes which were competitive with the Federal Reserve Notes/Debt issued by
the private for-profit Fed. After President Kennedy was assassinated a few
months later, the U.S. Notes disappeared from circulation.
Given all the foregoing, it is understandable
that The Cartel will go to great lengths (as in this week’s Precious
Metals Takedown) to destroy pro-Precious Metals and pro-Tangibles Sentiment.
To consider how all the foregoing is
likely to play out see our Forecasts as well as the 3 Takedown Antidotes we
suggest, in our June Letter, “3 Takedown Antidotes with Great Profit
Potential; 2nd Half 2012 Forecasts: Gold, Silver, Equities, Crude
Oil, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates” in
Deepcaster’s ‘Letter Archives’ at
deepcaster.com. One Takedown Antidote is referred to in Note 2 below.
Fourth, virtually all important Markets
and not just the Precious Metals Market are victims of Cartel (See Note 1)
The Markets Manipulation has become so
blatant and pervasive that even Establishment Notable Jim Grant
(Grant’s Interest Rate Observer) was recently moved to describe the
extent of the Manipulation.
world in which we invest is a world of immense wall to wall manipulations by
our friends in Washington. And people get off on Goldman Sachs because it
has done this and this, it is pulling wires...The Federal Reserve is the
giant squid of squids, it is the vampire squid of vampire squids."
- the vampire squids - have manipulated virtually every single price
and valuation in the capital markets. People ought to recognize when they
invest that one of the unspoken risks is the risk that this hall of mirrors,
this Barnum and Bailey world that the Fed has created for us is going to
vanish one day because they will not be able to hold it any more...
It's not as if there is nothing to do in investing, but one must always keep
in mind that the valuations that we see, that the prices that we watch
flicker across the tape are prices that are fundamentally manipulated by
these well-intended, dangerous people in Washington called the Federal
“The Federal Reserve Is The Vampire Squid Of
Jim Grant, 5/3/12, via Bloomberg
And the Financial System Mismanagement
is not limited to The U.S. Fed.
Marc Faber aptly characterized the
Eurozone’s Financial Managers
in Brussels are completely useless Functionaries…who seek only to keep
Faber, Bloomberg Interview, 05/10/2012
In sum, successful Investors in the
second half, 2012, will need to consider the four aforementioned Realities in
order to make accurate Forecasts and thus Identify Profitable Opportunities.
May 11, 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”
– 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.