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China announced on Sept. 6, 2012 that
any country that wishes to sell Crude Oil using its currency, the Renminbi, can do so. The next day Russia announced it
will sell China all the Crude it wants and will not expect to be paid
in $US.
These actions struck a Mortal Blow,
whose consequences are not yet fully evident, to the US Dollar as the
World’s Reserve Currency, and thus to the future Economic Health of the
U.S., a blow which will eventually impel it toward Third World status.
Formerly a main source of strength of
the $US was the arrangement with Saudi Arabia whereby Crude would be sold only
in US Dollars. Since the World had to have Saudi Crude, it had to have $US.
Not so anymore.
China and Resource-rich Russia are
ascending economically while the US and Western Europe are in an Economic
Decline.
Couple that New Power Reality with
another New Reality, the Accelerating Decline in Purchasing Power of
the Main Fiat Currencies, the $US and the Euro, when measured against Key
Tangible Assets.
The recent decision by The Fed and ECB
to print unlimited amounts of their Fiat Paper, was ostensibly to help revive
Economies, but in reality is designed to relieve the Mega-Banks of more of
their Toxic paper.
Thus the Major Fiat Currency Issuers,
– the U.S., Japan, and Eurozone – are engaging in a race to
depreciate their Currencies. In light of this “Race to the
Bottom,” two asset classes will, and already are, appreciating
in Fiat Currency Terms, and will serve as Inflation Antidotes for Profit and
Protection.
They are the Monetary Metals, Gold and
Silver, and the Tangible Assets which get used up – Crude Oil and
Essential Foods. The wise have already begun to accumulate Physical Gold and
Silver, and to invest in Agricultural Production.
China, now the World’s largest
Gold producer, is increasingly a Physical Gold importer. And they are
increasingly buying Food and Energy properties and producers around the
World. And Central Banks around the World are increasing Gold Holdings. The
Korean CB increased its Gold Holdings by 20% and Paraguayan CB by over 90%, both
in July alone! (See Notes 1 and 2 below regarding Deepcaster’s
specific recommendations.)
Similarly, Silver demand is skyrocketing
due to increasing use in electronics, medical, and solar energy applications,
among others. As with Gold, China has turned from a net exporter to a net
importer.
As demand for Food and Energy continues
to increase, propelled by the 80 Million persons added to the World’s
population each year, expect Conflicts over Resources to continue to
increase. Witness Japan’s and China’s conflict over Islands
claimed by both.
The “Winners” will be those
who follow The Golden Rule: Those who have the Gold (and the Energy and
Agricultural Assets) Make the Rules. N.B. China is the USA’s largest
creditor and wields considerable Financial, Economic, and Strategic Clout
over Japan. Consider this Delightful Note from The Telegraph, U.K.:
“A
senior advisor to the Chinese government has called for an attack on the
Japanese bond market to precipitate a funding crisis and bring the country to
its knees, unless Tokyo reverses its decision to nationalise
the disputed Senkaku/Diaoyu
islands in the East China Sea.”
“Beijing
hints at bond attack on Japan”
Ambrose
Evans-Pritchard, The Telegraph, 9/18/2012
The 21st century Power Reality of
Resource Conflicts has begun.
Another Power Reality is MainStream Media News Manufacturing and Disinformation
Dissemination. So far as financial and economic news is concerned, the flow
of Disinformation has if anything intensified. Presumably to stave off a rush
to Inflation Assets, the MainStream Media has
disseminated The Fiction that the U.S., and certain others, are deleveraging. That is a Myth. Consider:
“In the second quarter of this year:
- Consumer credit in the US grew by 6.2%, the highest pace in nearly
five years;
- US non-financial credit market debt grew by 5%, the highest pace in
nearly four years;
- Total household debt increased 1.2%, the highest pace in over four
years;
- US treasury debt has increased 110% in four years;
- After contracting by 1.2% in the first quarter, state and local
borrowing is now up 0.8%
“The numbers don't lie. Genuine deleveraging would imply a
reduction in debt, especially non-productive debt. Genuine deleveraging would
see market prices determined by fundamental forces of supply and demand, not
by government intervention, manipulation and inflationism.
“Instead, we get a profound form of 'mission creep' by central banks,
whose policies are now destroying the very same economies they are nominally
tasked with protecting.
“In the words of veteran analyst Jim Grant, the Fed has evolved well
beyond its origins as a lender of last resort and not much else, and now is
fully engaged in the business "of steering, guiding, directing,
manipulating the economy, financial markets, the yield curve..."
“It is a wholly specious argument to suggest that the creation of
trillions of dollars / pounds / euros / yen out of thin air will not
ultimately be inflationary; it is like saying that storing an infinite amount
of tinder next to an open flame does not constitute a fire hazard.
“Admittedly, the explicit inflationary impact of historic monetary
stimulus will not be fully visible until those trillions are circulating in
the economy in private exchanges between buyers and sellers-- rather than
squatting ineffectively in insolvent banks' reserves. But financial markets
are nothing if not capable of anticipating future trends.”
“The Greatest Trick the Devil Ever Pulled”
Tim Price, SovereignMan.com, 9/24/2012
In fact, Price Inflation is
Intensifying already (e.g. 9.3% in the U.S. already [see Note 3 re. Shadowstats]) as the International Economy continues to
slow. Stagflation is the name of this Reality (first visible in the
1970’s), and we now approach Hyperstagflation.
Investor Antidotes to the foregoing are:
1. Maintenance
of accurate information flows.
2. Long
Positions in Monetary Metals and Tangible Assets that get used up such as
Crude Oil and Essential Food Commodities.
Best regards,
Deepcaster
September 29, 2012
Note 1: There are Magnificent Opportunities in the
Ongoing Crises of Debt Saturation, Rising Unemployment, negative Real GDP
growth, over 9.0% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults.
One Sector full of Opportunities is the High-Yield Sector. Deepcaster’s High Yield Portfolio is aimed at
generating Total Return (Gain + Yield) well in excess of Real Consumer Price
Inflation (9% per year in the U.S. per Shadowstats.com).
To consider our High-Yield Stocks Portfolio with Recent Yields of 10.6%,
18.5%, 26%, 15.6%, 8%, 6.7%, 8.6%, 10%, 14.9%, 10.4%, 15.4%, and 10.7% when
added to the portfolio; go to www.deepcaster.com and click on ‘High Yield Portfolio’.
Note 2: No question that THE BIG
ONE is coming soon.
The Can can no
longer be kicked down the road: Consider
“On a three-month rolling basis, portfolion and investment outflows from Spain totaled
52.3% of the country’s GDP, more than double the outflows from
Indonesia, which reached 23% of GDP at the time of the Asian crisis.”
Jens
Nordaig, Nomura
The only Questions are:
When?
In what form?
Key Powers-that-be have telegraphed it
already.
They see it as the only way to save their
Bacon.
But it creates Profit Opportunities for
Investors.
To see these Opportunities, read
Deepcaster’s latest Alert, “The Big One
Cometh! Opportunity Knocks; Forecasts: Gold, Silver, Crude Oil; Equities,
U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates,” just
posted in ‘Alerts Cache’ at deepcaster.com.
And do not miss our recent Recommendation
which could turn a 4,500% Profit if it moves back up to its 52 week high.
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
DEEPCASTER HIGH YIELD PORTFOLIO
Wealth Preservation Wealth Enhancement
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