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Amid the Chaos of the
Financial Markets and The Economy, One Essential Key to
Successful Investing in 2012 is Clear as a Pure Toned Bell.
That One Key Reveals
itself to us upon considering just a very few facts.
Via its promise to keep
interest rates low until 2013, The U.S. Fed is already engaging in
(and prepared to engage in more) QE 3. For example, Operation Twist does
provide more liquidity by lengthening Treasuries’ Terms.
The Swiss National Bank
is committed to printing unlimited amounts of Money to keep the Swiss
Franc from appreciating.
And the Bank of England
launched a 75 Billion Pound QE 2 just this past Fall.
And even the ECB, which
has for now refused to increase its bond-buying, is engaging in its
own Operation Twist and Rate Reduction. (We forecast the ECB will eventually
print Euro-Bonds, thus further devaluing the Euro.)
The Key Point is that
all these Actions Create Great Monetary Inflation, which is a Surefire
Invitation to Great Price Inflation.
But there are Great
Price Deflationary Forces at Work as Well.
The Great Debt
Destruction Derby which was manifest
recently, for example, in the Mega-Bankers “agreeing” to take a
50% Haircut in the Greek Debt Restructuring Package (and which is also
manifest in similar programs around the developed world like e.g. the HAMP
Programs in the USA in which a portion of Homeowner’s debt is written
off) has only just begun!
And Economies around the
World are Slowing and that too is quite deflationary.
So The Question
is what will it be going into 2012 and beyond – Inflation or Deflation?
One thing is sure; we
will continue to have Monetary Inflation – the Central Banks
have promised us that.
But what about Price
Inflation? Given the aforementioned Massive Existing Deflationary Forces,
will Price Inflation be a problem?
The answer is Yes, very
much so! But Why? and Where?
The Fundamental Reality
(essential for Investing Success going forward) is to see that the
Deflationary Forces are limited primarily to certain Sectors while the
Inflationary Forces affect others.
To broadly (and somewhat
over-simply) identify them, many Financial Assets (e.g. European Sovereign
Bonds and most Stocks) and, beginning very recently, Basic Materials critical
to Economic Expansion (e.g. Copper and other Building Materials) have begun
to either deflate in price or “appreciate” at a slower rate and
will continue to do so for the foreseeable future.
In contrast, Essential Tangible Assets in
relatively inelastic and increasing Demand (e.g. certain Agricultural
Products, and, subject to Caveats, Energy, as in Crude Oil) either are (as
Crude Oil), or can be expected to, appreciate in price. That is why Deepcaster plans to make a specific recommendation next
week which we expect will appreciate dramatically as a result of this trend.
In sum, the
Fundamental Reality going forward is that we expect to have Inflation in some
Key Sectors and Deflation in others, so it is essential to consider the
Inflation versus Deflation issue on a Sector by Sector basis.
So overall which
Sector Forces are Prevailing? The Price Inflationary Forces or Price
Deflationary Forces?
Overall Price Inflation (i.e. Fiat Currency Purchasing
Power Debasement) is already Prevailing. Indeed, it is already
threshold Hyperinflationary.
How do we know this? For
the U.S., we know this from looking at The Real Numbers, for example.
**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 November 16, 2011
3.53% / 11.12% (annualized October,
2011 Rate)
U.S. Unemployment reported December 2, 2011
8.6% / 22.6%
U.S. GDP Annual Growth/Decline reported November 22, 2011
1.51% / -2.89%
U.S. M3 reported December 3, 2011 (Month of November, Y.O.Y.)
No Official Report / 2.74%
Note that annual U.S. CPI at 11.12% is already Threshold
Hyperinflationary.
Similar “Real Inflation” Numbers (as opposed to Bogus
Official Numbers) can be found in other developed and emerging economies with
Fiat Currencies.
The aforementioned Real
Inflation Numbers imply that considerable Purchasing Power Degradation for
certain Fiat Currencies is either already occurring or is on the Horizon.
Therefore, with a view to profiting from this trend, we recently recommended
shorting one of these.
A consistent and
profitable approach is to invest in securities where Total Return (Gain Plus
Yield) is likely to exceed Real Inflation (see Note 1 below).
As well, acquiring Gold
and Silver because they are Real Money with Profit potential and with no
counterparty risk (N.B. quite unlike Fiat Currencies) is the Ultimate Refuge
from Degrading Fiat Currencies.
But Gold and Silver are
under ongoing Price Suppression attacks from a Cartel (See Note 2) of
Mega-Bankers.
Therefore, profit
maximizing-Investments in Gold and Silver rely on Good Timing and wise
choices as to the Form of the Investment (See Note 3 below).
In sum, proper Sector
Evolution and Selection to take advantage of Inflation or Deflation (as the
case may be) is important for Wealth Protection and Profit.
Best regards,
Deepcaster
December 16, 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.
Wealth
Preservation - Wealth Enhancement
Financial
and Geopolitical Intelligence
Gravitas,
Pietas, Virtus
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