�It isn�t what we don�t know that gives
us trouble, it�s what we know that ain�t so.�
����������� Will
Rogers
Knowing what �ain�t
so� is increasingly important for Investors and Traders Going Forward.
Indeed,
going into 2014 perhaps the most important Realization to be made is that
certain Grand Investment & Trading Strategies and Assumptions which were
profitable in the past (e.g., in 2013) may well not be profitable in 2014 and
beyond.
�People
are right to fear Paper Money.�
Warren
Buffet
For one, the
ongoing Currency Wars � the Competitive Devaluation (i.e., loss of purchasing
power) of Fiat Currencies by Central Banks � will be an increasingly
important factor, as Warren Buffet tacitly acknowledges. The Assumption that
Fiat Currencies are a Reliable �Store� of wealth will be increasingly
questionable.
From a
broader perspective than just currencies, consider that developing and
intensifying Forces recently reflected in the Economy, Markets, and Interventions
make it strongly advisable that Investors and Traders consider shifting their
Investing/Trading Strategies, and especially so if their portfolios were
profitable in 2013.
Since
the Post-Crash (Beta) Rally began in March, 2009, stocks which were excellent
Bargain Values by important (Alpha) Metrics (e.g. Price-Earnings,
Price-to-Book, & Price to-Cash Flow Ratios) have soared. In other words,
with Beta Trends supporting top Alpha Picks, the Alpha Picks have done very
well. And Equities indices are still near record Highs.
But
Markets are cyclical (in other words, Beta or Primary Trends change). And
Major Primary Trend Changes in Key Sectors are Impending.
Indeed,
even the best Alpha Picks do not necessarily perform well, and often perform
poorly when Beta Turns Against them.
In
other words, when Beta does not support Alpha, Beta usually Trumps Alpha.
Moreover,
(and this Critical point is often missed) Dominant Beta Trends can be
Bullish in some Sectors and Bearish in others. Thus Deepcaster always aims to
identify which is Dominant in each Sector.
For
example, important Metrics like Inflation must be measured on a Sector by
Sector Basis. Financial Assets and Energy Costs have been Inflating since the
2008-2009 Crash. Not so in other Sectors.
Moreover,
but when one considers the Overall Rate of inflation, one should use the Real
Numbers (cf. Shadowstats.com � Note 2) and not Bogus Official Statistics.
Considering
a related example, since March, 2009, Financial Assets (e.g. Stocks) have
inflated so much due to Fed Stimulus (QE) that their Values are what Carl
Icahn correctly calls a �Mirage�. Too True. And Fed QE has caused
considerable Price Inflation which is not reflected in the Bogus
Official Numbers. Real U.S. Price Inflation is 9.08% per Shadowstats.com.
The
Fed QE created Beta Trend (Inflated Assets Values) not only lifts Great Alpha
Picks to New Highs but mediocre ones as well. Un fortunately, it is not
sustainable, and has created a Financial Assets Bubble.
A
Rising Tide lifts all Boats. But when it ebbs�
As we
forecast in 2013, Beta Trends are likely to Massively Change in 2014 in
Several Key Sectors. And one Major Trend change reflects the fact that a
Major Market Crash in Key Sectors is likely.
Moreover,
moving into 2014, we expect such Apparent Trend changes to come more often
and with more Volatility. This will necessitate a Change in Strategy for
many. For one thing, profits not taken quickly are often profits lost.
For
example, on December 31, 2013 the Primary Trend of most Equity Sectors was
very Bullish.
But as
of the end of January 2014, Many Sectors had turned Bearish.
And
February 2014 has thus far brought another Bullish Pulse, and increasing
Volatility.
In
sum, 2014 and 2015 are likely to dramatically demonstrate once again the
Truth of the Adage �Buy and Hold rarely Works Anymore.� Conversely Position
Trading in and out with a Multi-week rather than Multi-year Horizon does
work, at least for those who wish to make and take profits, before they
disappear. See our Recent Profits Taken record below to demonstrate this.
(Note 1)
Now
Consider certain other Key Mega-Strategy Shift Recommendations.
The
U.S., Chinese, and to a somewhat lesser extent, the Eurozone economies are
presently (perceived to be) the world�s strongest. But, this apparent
strength is �what we know that ain�t so.�
But
with nearly $3 Trillion in Vulnerable Shadow Bank Debt and a Commitment to
slowing �Bridges to Nowhere� Infrastructure Spending and to increase Domestic
Consumption, China is already, and promises to continue to be somewhat
less of a Stimulus to Global Economic Growth than it has been.
Couple
the foregoing with The Fed�s fulfilling its commitment temporarily (we
seriously doubt it will last) to Tapering i.e., less Stimulus, and it is no
surprise that Commodity Currency (i.e., Emerging Market) Countries (most of
which supply China) and especially the Weakest Peripheral Countries�
Currencies have Crashed lately � cf. Argentina, Turkey and South Africa. But
the Key Point is that the Currency Risk is not limited to Emerging Markets
but ultimately extends to the Over-indebted USA and Eurozone Currencies too,
because, to a degree, the USA�s and Eurozone�s Economies are tied to China�s
too.
This
is consistent with our forecasts for the $US and Euro, and Major Economies in
General.
Considering
Equities, after a down January 2014, the Dow and Transports show momentum
shifting to the upside thus far in February. Indeed, we have recently
forecast the Targets and Duration for this �February Rally.�
But
Longer term, This January�s Markets swoon is a harbinger of what is
coming. The Underlying Economic/Structural Weakness of the U.S. and Eurozone
Economies has
begun to rear
its Ugly Head. Coupled with a Realization of the Interlinked Nature of
virtually all Major Economies (e.g. China�s slowdown effect on the USA and
Eurozone), with consequent increased
Recent Volatility,
Major Trend changes to come in Key Sectors are predictable.
In the
process of reconsidering �Old� Strategies, those who have not/do not see Gold
as Safe Haven and Profit Opportunity ought to take a second look. Regarding
Gold, Gold
consumption in China topped 1,000 tonnes last year � growing to 1,176.4 tones
with bullion demand soaring 57% � all records.
No
surprise then that Gold recently broke through Major Resistance at $1275 and
$1300 per ounce� The Chinese and Indians are intensifying buying and
taking possession of physical, and that is driving up the price despite
ongoing Cartel (Note 3) Price Suppression attempts.
In light of the
following Notes from JBGJ, is it true what some claim that Gold would have to
clear at least $1350 per ounce to conclusively establish an uptrend? In that
connection, it is our view that there are two recent developments which make
a continued Launch Up likely sooner than claimed.
We
quote JBGJ:
�India�s
trade deficit narrows to $9.92 bn on 77% drop in gold imports reports
��The trade
ministry said it had recommended easing curbs on gold imports, prompted by
the brighter trade picture.�
�JBGJ
continues to think that the end of India�s gold interdiction will be the big
surprise of 2014.�
�China
Surprises the Bears. Next, India?�
John
Brimelow, Early GJ 02/10/2014
��Appetite
from China has so far surprised on the upside. While historical seasonal
patterns imply a slowdown post the Chinese New Year, interest this week seems
to suggest otherwise. Volumes on the Shanghai Gold Exchange were very strong
yesterday at 31 tonnes and this was corroborated by the demand we saw based
on our own flows�
��This
positive surprise from gold�s largest physical market certainly helps and is
particularly encouraging considering these higher price levels.�
�It is worth
remembering that Chinese demand in this order of magnitude is a new event the
global gold market.�
Ibid.
Will
we Precious Metal Partisans have to suffer one more Multi-Week Cartel
Engineered Takedown, in light of the fact that Gold and Silver Paper Prices
are increasingly resistant to ongoing Cartel Takedown Attempts? It is still
entirely possible, but increasingly less likely as the days pass.
In
our view, the early 2014 Gold Rise is The Harbinger of the Price Explosion to
come soon. And since The Big Launch appears to be near, NOW is an excellent
buying Opportunity.
The
Physical Shortage is just too Critical. And Sonia Ghandi, head of India�s
(the World�s 2nd largest Importer) Congress party recently
criticized the Indian Governments Persecution of Gold Merchants via Tariffs.
Moreover,
Billionaire Eric Sprott recently demonstrated the Central Banks can not
successfully continue their Gold Price Suppression Throughout 2014, because
they are running out of Sufficient Physical Supplies to meet demand.
The
Foregoing are all Key Harbingers of the Gold and Silver Price Explosion to
Come soon.
Ultimately,
we agree with the Strategy reflected in Neil Collins�s Financial Times
Article (01/24/14) �Demand Physical Gold� because one Day Paper Price
Manipulation will end �catastrophically.�
Finally,
regarding that Most Honest Indicator (and one which should be central to
strategic planning going forward), the Crude Oil price, we recently correctly
forecast Crude�s Rally back up to $100/bbl.
Strategically
speaking, if the February Equities Rally continues in the next very
few weeks, we expect Crude to Rally on up beyond $100 perhaps even to
$110ish. World Demand is still increasing, and above-ground supplies are
tight, and the US has an increasing above-ground Crude and Distillate
shortage.
Indeed,
unsurprisingly to us, OPEC estimated that World Demand has now risen to 90
Million/bbl/day � a record.
Emblematic
of many Trend Changes which we forecast, only the next Episode of The Great
Equities Crash will likely serve to deflate Crude Demand, and thus
Prices, significantly once again, but only for a while.
To
Profit and protect, �Old� Strategies and Assumptions, must at the very least
be reconsidered.
Best regards,
Deepcaster
February 14, 2014
Note 1: Finally! The Great Launch in a Key
Sector is likely finally about to begin!
And this Rocket Launch
should provide Mammoth Profits to those who jump on the Rocket soon.
Therefore, we made a Buy
Recommendation for stock in a company with at least 300% Profit Potential
selling for only a little over $1 per share.
To see why we
think the Launch Rocket is igniting and our Buy Recommendation, read
Deepcaster�s recent Alert, �Great Opportunity Launch! Buy Reco!
Forecasts: Gold & Silver, Equities, Crude Oil, U.S. Dollar/Euro, U.S.
T-Notes, T- Bonds, & Interest Rates,� posted in �Alerts Cache� at
Deepcaster.com.
Btw,
our attention to Key Timing Signals has facilitated Recommendations which
have performed well lately. Consider our six most recent:
100% Profit on Crude Oil
Call on February 10, 2014 after 27 days (i.e., about 1400% Annualized)
30% Profit on Equity Index
Puts on February 5, 2014 after 8 days (i.e., about 1440% Annualized)
55% Profit on Water
Management Company on January 15, 2014 after 406 days (i.e., about 50% Annualized)
140%
Profit on Equity Index Call on December 27, 2013 after just 10 days (i.e.,
about 5200% Annualized)
40% Profit on Equity Index Call on December 19, 2013 after just 2 days (i.e.,
about 7500% Annualized)
135% Profit on Equity Index Call on October 28, 2013 after just 13 days
(i.e., about 3800% Annualized)
Note
2:
*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 16, 2014
1.5% / 9.08%
U.S.
Unemployment
reported February 7, 2014
6.6% / 23.2%
U.S.
GDP Annual Growth/Decline reported January 30, 2013
2.74% / -1.40%
U.S.
M3
reported February 7, 2014 (Month of January, Y.O.Y.)
No Official Report / 3.04% (est) (i.e., total M3 Now at $15.54
Trillion!)
Note
3: We
encourage those who doubt the scope and power of Overt and Covert Interventions
by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions
to read Deepcaster�s December, 2009, Special Alert containing a summary
overview of Intervention entitled �Forecasts and December, 2009 Special
Alert: Profiting From The Cartel�s Dark Interventions - III� and Deepcaster�s
July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco;
Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes
& T-Bonds" in the �Alerts Cache� and �Latest Letter� Cache at
www.deepcaster.com. Also consider the substantial evidence collected by the
Gold AntiTrust Action Committee at www.gata.org, including testimony before
the CFTC, for information on precious metals price manipulation. Virtually
all of the evidence for Intervention has been gleaned from publicly available
records. Deepcaster�s profitable recommendations displayed at
www.deepcaster.com have been facilitated by attention to these
�Interventionals.� Attention to The Interventionals facilitated Deepcaster�s
recommending five short positions prior to the Fall, 2008 Market Crash
all of which were subsequently liquidated profitably.
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER
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