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“… I think
this next phase of the crisis — a crisis that started with the credit crunch
— has been exacerbated by governments and central banks creating even
more debt in the global economy.
… The credit
crunch was the result of too much leverage (debt) in the global economy. So
the private sector starts to deleverage and instead of letting the market
take its natural course, authorities add more debt to the global economy. Now
the imbalances are worse than before the credit crunch.
I couldn’t make
this stuff up if I tried.
Thus, I believe this
story ends badly again; deleveraging globally is the only way to solve the
problem if countries wish to see real growth ever again.
It won’t be pretty
for most asset classes…”
“The
Bank of England falls off the wagon. The pound could be sore in the morning!”
Jack
Crooks, Money and Markets, 10/8/11
Make no mistake about it, however much the Eurozone is able to
temporarily paper over its crises (and however much the USA is able to
deflect attention away from its arguably worse
crises), the Crises remain and worsen, as Jack Crooks points out. But
Great Crises provide Great Opportunities (as we outline here) especially with
Insiders aggressively buying going into seasonally strong Q4.
Perhaps more important, Great Mistakes in overall Investment
Perspective (e.g. the Recession is over; Peak Oil is not a problem,
‘Buy and Hold’ is generally a Good Strategy to employ in the
Equities Markets, Inflation is quite subdued) are an invitation to serious
Investment losses for those holding these views, and a Great Opportunity for
Others.
Crooks’ basic point is irrefutable. Piling Debt upon more unpayable debt only worsens the crises in the middle and
long term. In fact, even if the bankers take a larger “haircut”,
prospects for the PIIGS and certain other Major Nations ultimately avoiding
default are dim.
The foregoing reveals our first Great Opportunity. Short-term, there
are several forces, which are propelling the Equities Markets into Rally-mode
into year-end as Deepcaster earlier forecast.
Short-term, there is likely still
a profit Opportunity on the Upside, if any such Rally does not get
derailed by any of the large Black Swans lurking out there (more than a
distinct possibility!).
Mid and long term, the fact that fundamental Financial and Economic
problems have largely not been sustainably solved, presents a far
different prospect.
But short-term, such a Bullish Equities forecast does present another
Great Challenge and Opportunity.
Assuming a year-end Equities Rally continues, that will reflect
“Risk-On” behavior. And that will provide The Cartel* with
another pretext to redouble its efforts to Take down Precious Metal prices
again, because the demand for P.M.’s as Safe Havens will ostensibly
have diminished.
And that would provide a Great Buying Opportunity for Gold and
Silver.
*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.
But the Cartel faces unprecedented challenges in sustainably Taking
Down P.M. prices again, given increasing demand for delivery and
possession of Physical Metal.
“Gold physical
demand remains strong… The buying interest remains broad based
throughout Asia.
…In fact…
the current extended period of net buying, combined with the strength in the
physical market, indicates that the current net buying is some of the
strongest seen since at least 2009…”
Standard Bank, 10/14/11
Ed. Note: Standard Bank
is a Major Gold Dealer, especially to emerging Market Countries.
Indeed the macro-perspective is bright for the P.M.’s, but it
dictates that any Equities Rally will likely be short-lived.
The fact is that the festering and fundamental Systemic
problems have not disappeared, and are worsening.
And that will have “earth-moving” consequences down the
road.
Bob Chapman suggests some of them, and that reveals yet another Great
Opportunity.
“… The
German government is already in the process of protecting its banks and we
are told contingency plans are in the works to return to the Deutschmark. The
possibility of six sovereign defaults accompanies by bank failures looms in
the distance. Considering the condition of other European banks, and the
possibility that three major French banks may be purchased by China, we could
see disruption in the global banking system. The advocates of world
government wanted all world banks interconnected and now that control
connectively will act as a lynchpin to possibly destroy the entire system. As
these preparations are made the euro continues to sink in value versus other
currencies, particularly what should under normal circumstances be a weak
dollar. The dollar again has become the best of the worst. The very fact that
Germany is building a reserve of Deutschemarks has to spell the possible end
of the euro. … Without German euro zone participation the euro will
cease to exist…
The importance of Greek
failure and default and a 60% haircut of Greek debt are important, as Greece
finally succumbs, but not priced into the markets is that Germany will return
to the D-mark. … In addition US banks are still 25% or 35% exposed to
European sovereign and bank debt, plus the $150 billion in CDS sold to
European banks. Overall US banks have major exposure in Europe.
The foregoing events
will be very disruptive to financial markets worldwide. … Germany is
preparing for the worst by the Bundsbank giving
orders for Deutschemarks to be printed immediately. Make no mistake about it
that this is the greatest crisis to the EU since WWII and the bailing wire
that holds the agreements that binds the euro and the EU are coming
unraveled. The die-hard one-worlders just do not
give up. As the center falls apart these idiots are calling for new agreements
to replace the old ones to keep this unnatural association together…
The banks caused all
these problems and have been assigned 21% of the losses. We believe that
figure should be at least 50%. If that were put in place, nationalization
would be the only solution and that would neutralize the power of the banks,
which are responsible for 85% of the problems. Put the burden where it should
be, on the banks.
At this point in time
sovereign countries should be worried about protecting their own citizens,
not others. Germany seems to understand this. Can you imagine the inflation
throughout Europe if $4 to $6 trillion was created and lent to the insolvent
countries? …”
“Euro
Reckoning Amongst Long Term Threats”
Bob
Chapman, The International Forecaster, 10/8/11
But
Chapman’s final point – “Can you imagine the inflation
throughout Eurozone if $4 to $5 Trillion was created and lent to the
insolvent countries,” is most revealing.
Chapman
employs the subjunctive hypothetical “if”. He probably should
have said “when” the European Central Banks create a large
portion of the $4 to $5 Trillion wanted to bailout the insolvent
sovereigns/banks.
The
Eurozone (and The Fed via operation Twist, and, probably, via offshore accounts)
are already expanding their creation of money and credit, and the consequent
serious “Inflation” has already begun. In the U.S.A. for example,
Real CPI is already at a Hyperinflationary Threshold level of 11.4% (see Note
1 below).
Thus
it is highly likely Hyperinflation is in our future, as Money and Credit
Creation far outstrip GDP growth (actually, negative GDP “growth”
in the USA per Shadowstats.com).
This
provides another Great Opportunity in addition to Gold and Silver Purchases.
Essential Assets in high, increasing, and relatively inelastic demand (food
and including food producers and related businesses) will see increasing
demand (in part from the 80 million/yr increase in
world population) and will not only be excellent inflation hedges, but likely
Profit Centers since people will buy food regardless of price. We have
recommended several of these in recent Letters and Alerts.
Finally,
short-term, Equities prospects are positive, because analysts and
consumers alike are generally bearish, but P/E and forward P/E ratios are
below long-term averages and, we repeat, insiders are buying aggressively.
As
a Contrarian, we read these as Bullish signals, short-term.
But
given that we face structural systemic and fundamental (e.g. debt saturation,
sovereign insolvency, and negative GDP) Headwinds greater than those faced in
the Great Depression, the aforementioned Bullish forces will not prevail mid
and long term.
Another Great Opportunity is provided via certain Great Mistakes in
other Investment Perspectives. For example, I can recall about five years
ago, a former colleague of mine, claiming that (California, or pick the
State) Real Estate Prices will continue to climb indefinitely. Wonder what
the several hundred thousand California homeowners “Underwater”
think about that today?
As we have pointed out on several occasions (The Opportunity Antidote
to Cartel Created Crises (8/26/11), Profitably Surmounting Plutocratic
Perfidy (8/18/11), and Gold-Freedom versus The Cartel ‘End-Game’
& A Strategy for Surmounting It (09/23/10)) we are not in a normal
Business Cycle Correction but rather in a Supercycle
Great Correction magnified by Cartel Markets Intervention. He who fails to
recognize that is in for Serious Investment Pain.
Another Great mistake is that China will Continue to be a Growth
Engine. Maybe, but China has a Debt Saturation Crisis too – loan
Growth has been 30% annually in recent years.
And China has already stepped in to shore up the banks while trying to
deflate the lending bubble. And holders of Chinese Equities have already been
feeling the pain.
Finally, an Analyst whose work that Deepcaster
otherwise much admires just bought the argument that because of the recent
advances in Oil and Natural Gas production from shale… “So much
for peak oil.”
“Let’s turn to No. 3, which deals with Peak Oil. People
have thought that the U.S.’ and Canada’s oil production
“peaked” and never would increase again. But as P… pointed
out, ‘Who would’ve said a few years ago that North Dakota would
be an energy superpower?’ Yet it is on its way to becoming a
significant producer of oil. Not only North Dakota, but there is also a
revival, due to new technologies, happening in Texas and other places. In
Canada, it’s the same story. For the first time in three decades, oil
production is on the rise. So much for Peak Oil…
Be clear about what he’s saying. He’s not saying oil
consumption won’t grow. All is he saying is that it’s not going
to grow as fast as today’s market assumptions imply. ‘Prices
can’t be assumed to keep rising…’”
“Hunting for S-Curves”
Chris Mayer, agorafinancial.com, 10/13/11
A Few Facts: The source of Hydrocarbons (Oil and Natural Gas) is
decayed biological material from eons past, which is in principal limited in
amount.
And while new technologies (e.g. shale fracking)
can unlock previously unavailable sources, they too are absolutely limited in
amount.
And has P… (quoted above) looked at the
depletion/production curves for shale gas?
They are the very definition of “rapidly depleting”.
Now the Energy Situation is more complicated than the above snippet
suggests. A Major Factor is that Recessions diminish demand and thus prices.
Furthermore there are reasonable arguments to be made both that we
already have, or that we have yet to arrive at, (and if so, when?) peak
production.
But to say that the Peak Oil issue should not be considered or that
“Prices cannot be assumed to keep rising” is to omit a vital
consideration, a consideration essential to timely profiting from Energy
Investments.
In sum, longer term, the Vastly Increasing Amounts of Fiat Currencies
(see Note 2 below) will be chasing depleting resources limited in supply.
The foregoing Great Perspectival Mistakes provide Great Opportunities
for the well-informed.
Best regards,
Deepcaster
October 14, 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 September 15, 2011
3.8% 11.4%
(annualized August, 2011 Rate)
U.S. Unemployment reported October 7, 2011
9.1% 23.1%
U.S. GDP Annual Growth/Decline reported September 29, 2011
1.63% -2.83%
U.S. M3 reported October 8, 2011 (Month of September, Y.O.Y.)
No Official Report 2.61%
Note 2: The Staggering Magnitude of Fed (and other Central
Banks) ongoing Money Printing and Credit
(i.e. Debt) Creation can lead to only one conclusion for most
investors around the world, and one question.
Conclusion: The Purchasing Power of my Fiat Currency will
continue to decline (e.g. Real U.S. CPI now at 11.4% per
Shadowstats.com), and
Question: How do I protect myself and profit?
Deepcaster addresses the questions of Profit and Protection in
light of Fiat Currency Purchasing Power Destruction in his article –
“Essentials for Wealth Acquisition Acceleration” and provides
Guidelines.
Using such Guidelines
facilitated Deepcaster’s making buy and sell
recommendations resulting in remarkable profits recently if acquired and
liquidated when we recommended, approximately*:
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!)
Deepcaster
October 14, 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,
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