“The Financial Times reports that the European Central Bank has secretly distributed E100 billion to Greek banks and billions more in secret to other European banks and, in doing so, has gained great "sway over eurozone politicians" -- you know, the people actually elected to run their countries.

“Infinite secret money is infinite secret power, and it's great that the FT is interested in this aspect of central bank secrecy. Is it too much to hope that the FT someday will show similar interest in the secrecy imposed by central banks on their interventions in the gold market, interventions detailed by GATA here?”

            “European Central Bank secretly distributes infinite money”

            Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc, 5/22/12

No surprise that The Cartel (Note 1) of Central Bankers continues to pump more Q.E. into the Financial System to preserve the Mega-Banks’ Power and Profits. Once The Cartel Bankers begin QE (i.e., Fiat Money Printing) they can’t stop. The problem is, Infinite Q.E. – The Biggest One – is ultimately a Recipe for Disaster for Citizens and Investor-Citizens alike since it eventually creates Dangerous Price Inflation.

“It's going to happen – as surely as we'll see QE4, QE5, and on and on and on.

“That's the problem with reckless money printing. It's like jumping into a swimming pool. You can't ever "un-jump."

“So now it's just a question of timing the announcement for maximum impact.”

            “Traders: Prepare for More Money Printing,” Jeff Clark, 5/15/12

QE can not be stopped any time soon, but it can be Profitably Corralled as we explain.

But first a bit more context is needed. Consider that a Covert (albeit de facto) QE3 has already been implemented in the last 6 months via The Fed’s Operation Twist and the ECB’s LTRO program.

Moreover, consider that the potentially Toxic (because highly leveraged) Derivatives Positions at the Mega-Banks are of the same Order of Magnitude that they were before the 2007-2009 Financial Crisis.

Specifically, consider the Multi-Trillion Dollar Derivatives Positions at the Four largest Banks (Sept 30, 2011) and compare it with their Total Assets.

Compare the approximate $4.7 Trillion combined Assets of these four largest Banks with their approximate $232 Trillion Notional Derivatives Exposure (as of September 30, 2011.

Stress Test Anyone?

Consider in addition, for example, the Best Estimates of the Capital Injection needed to “save” the Spanish Banks – around One Trillion Euros.

No wonder yields on 10 year Spanish Government Notes are approaching the Hyper-Toxic 7%.

A major problem in that each additional Injection of QE creates less and less Markets Boosting effect. Just as a Drug Addict needs more and more, with increasingly less effect.

Jeff Clark is correct, additional QE Tranches are coming “surely … we’ll see QE4, QE5 and on and on and on”.

But unlimited QE (i.e., unlimited Monetary Inflation) inevitably brings Price Inflation, which we are already seeing round the World. In the U.S., for example, 9.94%, annualized per shadowstats.com, already Threshold Hyperinflationary. Food Prices, e.g., are off their highs, but they have not really dropped that much, have they?!

So Neither Monetary nor Intensifying Price Inflation can be stopped, any time soon (though ultimately, the QE-Paper-Edifice is likely to collapse).

But the effects of Hyperinflation can be profitably corralled.

The following excerpt from Sharps Pixley gives us a clue as to how.

“Central banks gold purchase data in April cheered the gold market on Thursday, however. Mexico, Kazakhstan and Ukraine added about 204,000 ounces in April. The Philippines added a whopping 1.033 million ounces in March with gold now at 13.6% of its total reserves. UBS highlighted the Philippines’ gold purchase is significant as this is the second largest monthly Central Bank’s purchase after Mexico’s purchase of 2.5 million ounces in March 2011.World Gold Council (WGC) reported that central bank purchases were 80.8 tonnes in Q1 2012 or around 7% of global gold demand. What is more interesting is that WGC is now confident that central banks will continue to buy gold and has added official sector purchases as a new element of gold demand while eliminating official sector sales as a negative supply factor.”

“Central Bankers Bought More Gold while European Leaders Kept Talking”

Austin Kiddle, Sharps Pixley, 5/25/12

If there is any group that should know the effect of, and remedies for, infinite Fiat Money Creation, it is the Central Bankers.

And what are they doing? They are buying Gold.

And notice that in the recent Equities Market Downdraft, Gold is acting as a Safe Haven Asset, stubbornly refusing to move lower than the $1550s to $1560s range. Buying Timing is Key.

Notice also that recently the Mining Shares have performed better than Equities-in-General. The aforementioned are why Deepcaster has added Mining Shares Recommendations and other Monetary Inflation Surmounting Recos, including High Yield Recommendations (See Notes 2 and 3) aimed at achieving a Total Return (Gain + Yield) in excess of Real Inflation, to his Portfolios.

Thus, Guidelines for building a “Corrall” with both Wealth Protection and Profit Potential are

1) Buy Physical Gold and Silver at the right time.

2) Buy Quality Mining Shares whose Fundamentals and Key Technicals are quite Bullish now.

3) Do not be satisfied with Achieving anything less than a Total annualized Return in excess of the Real Inflation level of 10% otherwise, you will Surely lose Purchasing Power.

4) Aim to shift investments into Sectors which are resistant to and Profit from Monetary, and thus Price, Inflation.

“Q.E. to Infinity” as Jim Sinclair puts it, is here, now. And Deepcaster will be forecasting the timing of the next QE Tranche, implemented “for maximum impact” as Jeff Clark correctly notes.

Best regards,

Deepcaster,

June 02, 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.