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“The U.S. economic
and systemic-solvency crises of the last five years continue to
deteriorate. Yet they remain just the precursors to the coming Great
Collapse: a hyperinflationary great depression. The unfolding
circumstance will encompass a complete loss in the purchasing power of the
U.S. dollar; a collapse in the normal stream of U.S. commercial and economic
activity; a collapse in the U.S. financial system, as we know it; and a
likely realignment of the U.S. political environment. Outside timing on
the hyperinflation remains 2014, but events of the last year have accelerated
the movement towards this ultimate dollar catastrophe. Following Mr.
Bernanke’s extraordinary efforts to debase the U.S. currency in
late-2010, the dollar had lost its traditional safe-haven status by
early-2011. Whatever global confidence had remained behind the U.S dollar
was lost in July and August. That was in response to the lack of
political will—shown by those who control the White House and
Congress—to address the long-range insolvency of the U.S. government,
and as a result of the later credit-rating downgrade to U.S. Treasury debt.
“The economy has
underperformed and likely will continue to underperform consensus forecasts
by a significant margin. In turn, weaker-than-expected economic growth
will mean significantly worse-than-expected federal budget deficits, Treasury
funding needs and banking-system solvency conditions.
“With the U.S.
election just nine months off, political pressures will mount to favor fiscal
stimulus measures instead of restraint. …Consistent with the precedent
set in 2008, the Fed, and likely the Treasury, also will remain in place to
do whatever is needed, at whatever cost, to prevent systemic collapse in the
United States. All of these actions, though, have costs in terms of
higher domestic inflation and intensified dollar debasement.
“The U.S. dollar
remains highly vulnerable to massive, panicked selling, at any time, with
little or no warning. The next round of Federal Reserve or U.S.
government easing or stimulus could be the proximal trigger for such a
currency panic and/or for strong efforts to strip the U.S. currency of its
global reserve currency status.
As the advance squalls
from this great financial tempest come ashore, the government could be
expected to launch a variety of efforts at forestalling the
hyperinflation’s landfall, but such efforts will buy little time…”
John Williams, shadowstats.com,
“Hyperinflation 2012”, 1/25/12
Ominously, just last December 2011, Ostensible U.S. Ally Japan, and
China, agreed to a currency Swap Arrangement. This move further eroded the
status of the U.S. Dollar as the World’s Reserve Currency.
More importantly it underlines the Fundamental Flaw not only in the
U.S. Dollar, but also in the world’s other major Currencies –
they are Pure Fiat Currencies… Keynesian Spawn.
Having no intrinsic value, Fiat Currencies facilitate a variety of
destabilizing phenomena. One is that their Purchasing Power is easy to debase
whether by Avaricious Mega-Bankers or by Politicians who want to reward their
constituents, but not have them pay for their borrowed benefits currently. A
typical result is The Great Currency Purchasing Power Degradation we are now
seeing.
The U.S. Dollar has lost over 95% of its Purchasing Power since the
Private for-Profit Fed was established in 1913 and the amount of Interest
Taxpayers have paid the Mega-Bank Owners of the Fed since then is in the
$Trillions.
Earlier this week an informative and widely read newsletter pompously
intoned: “Washington has decided to kill the dollar.” We and a
few others have been saying so for years. (See e.g.,”Dire
Economic Forecast Reveals Profit Opportunities & Cartel ‘End
Game’ Threat” (6/20/08) in the Articles by Deepcaster
at deepcaster.com.
The U.S. now continues on such a path (with the Euro following along)
and it has already led it to the threshold of Hyperinflation with 10.57%
per year Real Inflation per shadowstats.com, (Note 1) Official Figures
are Bogus.
Shadowstats Proprietor, Economist, and Statistician Extraordinaire John Williams tells it like it is (Rara Avis!).
The U.S. is at the threshold of a Hyperinflationary Great Depression.
Consequences and Essential Preparations:
“The effects of QE2 included debasing
the U.S. dollar. As the dollar weakened against other currencies, oil
prices soared, and that spiked U.S. consumer inflation. Although the
Fed likes to tout “core” inflation, net of food and energy costs,
the oil inflation also has begun to spread into the broader economy.
“The economic and systemic crises,
triggered by the collapse of debt excesses that had been encouraged actively
by the Greenspan Federal Reserve, have been centered on the U.S. financial
system. … then-Federal Reserve Chairman Alan Greenspan played along
with the political and banking systems. He made policy decisions to
steal economic activity from the future, fueling economic growth of the last
decade largely through debt expansion.
“The Greenspan Fed pushed for
ever-greater systemic leverage… Also complicit in this broad
malfeasance was the U.S. government, including both major political parties
in successive Administrations and Congresses.
“As with consumers, though, the federal
government could not make ends meet. Driven by self-serving politics
aimed at appeasing that portion of the electorate that could be kept docile
through ever-expanding government programs and spending, political Washington
became dependent on ever-expanding federal deficit spending, unfunded
obligations and debt.
“While Wall Street may hail any
artificial propping it can get from the Fed’s efforts to support the
markets, more than “moderate” related declines in the U.S.
dollar’s exchange rate destroy any illusions of stock gains and savage
the U.S. consumers’ dollar purchasing power. A declining dollar
can turn U.S. stock profits into losses for those living outside the
dollar-denominated world, as funds are converted back to the strengthening
currency domestic to the investor. Inflation driven by dollar weakness
will do the same for those in a U.S. dollar-denominated environment, where,
eventually, inflation can turn U.S. stock profits into real
(inflation-adjusted) losses.”
John Williams at
shadowstats.com, “Hyperinflation 2012”, 1/25/12
Essential Preparations
The U.S. Dollar’s Ultimate Crash will likely be Rapid, and
because of its (then former) Reserve Currency Status will be felt around the
world. Williams puts the no-later-than date at 2014.
Only very few Assets will be Relatively Immune to its dramatically
Negative Effects.
But before then there will be as he says, “Advance
Squalls” coming ashore, (the 2008-2009 Crash was one and MF Global
bankruptcy another) so it is important to prepare now.
Just consider that the Fed-led Cartel ‘End Game’ Plan is
set. (See Note 4 re Cartel) All that Prior and
Ongoing Cartel Money and Credit Creation will likely lead to Hyperinflation
followed by Collapse and a Depression (Think Weimar Republic or Zimbabwe).
Bob Chapman describes one likely course of events.
Here we have QE 3 in the works as we predicted
months ago. We said it would consist of the Fed buying the banks garbage so
they have cash to follow the Fed’s orders. Those orders will be to buy
Treasuries, Agencies and to make loans to small and medium companies. Before
the Fed bought $1.4 trillion of this paper, mostly MBS and CDO’s. We
never found out what the Fed paid for previous purchases and we won’t
this time either. This is another gift the Fed, or should we say taxpayer
gifts to the banks. What we are seeing in Europe and again shortly here is
another stuffing of the system with money and credit. The Fed is headed down
the road of no return and they know exactly what they are doing. That is
playing money and credit creation to the bitter end. Historically no central
bank has had the power to do this. If played out to the end we have to expect
hyperinflationary depression, which will end in a deflationary depressionary collapse. This will destroy the value of
the US dollar and its purchasing power. The entire system will probably
collapse to a great extent including perhaps 60% of commerce, 40% to 50%
unemployment, and the end of the financial system and resorting to bartering,
the social support system and government. They will all collapse, so you had
better prepare for it. All this will be expedited if Ron Paul is not elected
our next president. If he were to be elected he could short-circuit many programs
and policies that are destroying our nation.
Bob Chapman, The International Forecaster
theinternationalforecaster.com, February 1, 2012
Recommendations and Observations
1)
Buy Physical Gold and
Silver to be held in Personal (not Bank Vaults) Possession, and Mining
Shares with a Caveat.
2)
The Caveat re Mining
Shares is that they are “Paper”/Digital Securities. Thus because
a Dollar Crash and the “squalls” leading up to it will
affect all Paper/Digital Money flows, invest in solid Miners Now, but be
prepared to continue to re-evaluate the “Money Flows Risk” before
The Great Dollar Crash.
3)
That Impending Great
Crash will lead to numerous Counter Party Failures. It is thus essential to
be out of Assets with Great Counter-Party Failure Risk prior to The Great
Crash.
4)
But Prior
to that Crash, it is reasonable to Incur Counter Party Risk, provided one
plans to be “out” in time (a challenging task!).
In making this Critical
Timing Determination to evaluate the Financial and Economic Squalls as they
come ashore. One of Deepcaster’s Ongoing
Primary Goals is to help our readers make such Timing Judgments. Thus we
include Forecasts for most Major Sectors in each week’s letter or
Alert. 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.
5)
Given the aforementioned
Real Inflation Reality, it is essential that one Aim for Total Return (Gains
plus Yield) in excess of that (10.57% Real Inflation in the U.S., e.g.). Deepcaster has designed its High Yield Portfolio with
that Aim. Those selections had recent Yields of 18.5%, 8.6%, 10.6%, 26%,
6.7%, 8%, 10.6%, 10% and 15.6% when added to the Portfolio. (See Note 2)
6) Become familiar with the ongoing Cartel ‘End
Game’ which we have described in several articles including “Gold-Freedom versus
The Cartel ‘End-Game’ & A Strategy for Surmounting It
(09/23/10)” and “Surmounting The Armageddon Scenario & Cartel
‘End Game’(2/26/10)” in “Articles by Deepcaster” Cache at deepcaster.com.
7) As well as investing in Precious Metals, Invest in Tangible Assets in
relatively Inelastic Demand. We specifically, for example, have recommended
Specific Agricultural investments in recent Alerts. (See Note 3)
8) Consider seriously getting out of variable-rate debt and into fixed
rate debt.
9) Get regular Input from Independent News Sources. Several
Financial and other Mainstream Media periodically Manufacture or Censor or
Spin Real News.
10) Prepare to Barter. Silver coins and Canned Food are useful barter items.
And Bill Gross properly
blames The Fed for
“We are witnessing the death of abundance and
the borning of austerity, for what may be a long long time. Monetary and Fiscal Excesses carry with them
explicit costs…significant costs that may be ahead for a global economy
and financial marketplace still functioning under the assumption that cheap
and abundant central bank credit is always a positive dynamic.”
Bill Gross, PIMCO 2/1/12
True, but perhaps the Understatement of the Year.
Best regards,
Deepcaster
February
04, 2011
**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 August 18, 2011
3.63% 11.21%
(annualized July, 2011 Rate)
U.S. Unemployment reported September 2, 2011
9.1% 22.8%
U.S. GDP Annual Growth/Decline reported August
26, 2011
1.55% -2.83%
U.S. M3 reported August 14, 2011
(Month of July, Y.O.Y.)
No Official Report 2.44%
***Note 2: Using the above Guidelines
allowed Deepcaster to make buy and sell
recommendations resulting in remarkable profits recently if acquired and
liquidated when we recommended*, approximately:
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!)
38%
Profit on Silver on July 18, 2011 after just 201 days (i.e. about 68%
annualized!)
150%
Profit on Gold Stock Calls on July 13, 2011 after just 56 days (i.e. about
975% annualized!)
40%
Profit on leveraged Short Treasuries ETF Puts on April 15, 2011 after just 3
days (i.e. about 4800% annualized!)
30%
Profit on Silver on April 6, 2011 after just 98 days (i.e. about 111%
annualized!)
To
read our recent article -- “Essentials for Wealth Acquisition Acceleration”,
go to www.deepcaster.com and click on the ‘Articles by Deepcaster’ Cache.
Past
Profitable Performance is no assurance of future Profitable Performance.
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Wealth Enhancement
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