|
“Lenin is said to have declared that the best
way to destroy the capitalist system was to debauch the currency. By a
continuing process of inflation, governments can confiscate, secretly and
unobserved, an important part of the wealth of their citizens….while
the process impoverishes many, it actually enriches some …Lenin
was certainly right. There is no subtler, no surer means of overturning the
existing basis of society than to debauch the currency. The process engages
all the hidden forces of economic law on the side of destruction, and does it
in a manner which not one man in a million is able to diagnose.”
John Maynard Keynes, The Economic Consequences of
the Peace, 1919
Ironic it is to focus on Keynes’ most Profound Insight when much
of the Responsibility for the ongoing Currency Debauching which facilitates
Today’s Economic and Financial Crises is properly his. Indeed, the
Inflation which Implementation of his Economic Policies is causing is
increasingly confiscating the Wealth of businesses and citizens. The U.S.
Dollar has lost over 95% of its Purchasing Power since The Fed’s founding
in 1913 and its purchasing Power continues to be degraded. That Increasing
Monetary (and thus ultimately, Price) Inflation is one Primary Megatrend with
which all of us, worldwide must increasingly cope. We address that challenge
here.
Consider first the Magnitude of the Monetary Inflation. Deutsche Bank
reports that as of the end of March, 2012 the combined Balance Sheets of the
four largest Central Banks will top $9 Trillion, whereas five years ago those
balance sheets totaled “only” $3.5 Trillion.
That means $4.5 Trillion of “Hot” Money pumped into the
Economy by those four banks alone in just five years. No wonder Food and
Energy Price Inflation is increasing. And no wonder the Fed-led Cartel* is
redoubling its efforts to suppress the prices of Gold and Silver, the
Ultimate Indicators of Inflation. The Cartel also suppresses Prices of Gold
and Silver because the increasingly widespread recognition that they are Money, delegitimizes the Cartel’s Treasury
Securities and Fiat Currencies.
Cartel Precious Metals Price Suppression Attacks are becoming more
frequent, because the Price Takedowns are becoming ever more difficult
to sustain. Beginning with the Price Takedown attack of November 9, 2010 it
was 173 days until the next attack (5/1/11), and only 128 days until the next
attack (9/6/11), and only 93 days until the next attack (12/8/11) and only 57
days until the next attack (2/3/12), and only 26 days until the Famous
February 29, 2012 “Leap Year” attack. Notice that it is becoming
harder and harder for the Cartel to sustain its Takedowns.
*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.
No wonder Massive Head and Shoulders Patterns for both Gold and Silver
are nearly complete (Deepcaster forecasts Timing
and Targets for these impending Moves, and makes Recos
aimed at profiting from them in his latest Alerts, and April Letter).
But the CB’s Massive Monetary Inflation helps only the Mega
Banks (and them only temporarily) and not most Businesses, Workers, or the
Economy, because the resulting price Inflation (Cf. Gasoline and Food)
dampens Wages and slows the Economy.
In the U.S, for example, Official Figures indicate 23 Million
Unemployed or Underemployed. The Real Number is somewhere North of 30 Million
unemployed (about 22%) and the Real Inflation rate is 10.5% per
shadowstats.com.
QE hurts citizens around the World. And we are already seeing it in
the Real Numbers.
Consider the U.S. 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 March 16, 2012
2.87% / 10.45%
U.S. Unemployment reported March 9, 2012
8.3% / 22.4%
U.S. GDP Annual Growth/Decline reported February 29, 2012
1.62% / -2.70%
U.S. M3 reported March 17, 2012 (Month of February, Y.O.Y.)
No Official Report / 3.92% (e)
And Official Source
Disinformation continues; consider Shadowstats
comments on the January 6, 2012 release of U.S. Employment data:
“The reported
seasonally-adjusted 200,000 jobs surge in December 2011 payrolls included a
false, seasonally-adjusted gain of roughly 42,000 in the “Couriers and
Messengers” category. That gain was an artifact of the
seasonal-adjustment process and will remove itself in the January 2012
numbers.
“The problem is
that this 42,000 gain is part of a seasonal pattern that fully reverses
itself each January…”
“December
Payroll Seasonal-Adjustment Problem”
www.shadowstats.com,
John Williams, 1/6/12
Indeed, Q.E. helps almost no one but the Mega-Banks.
And, an important related consequence of Q.E. creates another
Megatrend. As the CB’s pump ever more hot money into the system, Price
Inflation takes off. (The U.S. e.g. is already at 10.45%.)
Price Inflation Pressures Company Sales and Earnings and lowers or
annihilates Workers Discretionary Income.
Businesses lay off workers and/or do not hire and they are pressured
to hire lower wage workers. Dean of the Financial Newsletter Writers, Richard
Russell, outlines the consequences (which are ultimately the result of QE).
“Among people who have not been able to find a
job in over a year (in some cases three years), the situation is distressing
and actually very scary. About 34,000 people enter this situation every
month. They are willing to do almost any kind of work, but there are no jobs.
The fact is that foreign workers are taking their jobs. They are highly
educated and willing to work for a fraction of workers in the United States.
My view: living standards will have to come down in the US if we are ever to
get anywhere near full employment.”
Richard Russell, 2/24/12
Indeed, Canada, the United States and most of the Eurozone have become
Mass Immigration Magnets. Of course, Mass Immigration is a net (after
subtracting taxes immigrants pay) cost to Taxpayers, many businesses and most
Workers, since they pick up the Education, Health Care and other Expenses of
the New Arrivals (Contra Russell: the majority of Immigrants to the U.S. are
low-skilled with an average 4th Grade Education and thus impose a
net multi-billion dollar cost on businesses and other Taxpayers.)
As many Investors-citizens of the Eurozone, U.S. and Canada are
increasingly realizing neither the Massive Q.E. nor Mass Immigration Mega
Trends are in their Interest, but rather in the interests of a few
Mega-Bankers, and a few businesses which Privatize Profits from cheap
low-skilled labor, but Commonize Costs for their
education, health care, etc.
Are these two Mega Trends reversible? Surely. (The non-profit www.carryingcapacity.org advocates Solution for both of them.) The Eurozone and other
Sovereign Debtor countries could adopt and impose an “Icelandic”
Solution to the problem of Excessive Sovereign Debt, and would likely already
be on the road to recovery, as is Iceland.
And the Citizens of the Eurozone, U.S. and other Debtor Nations could
dramatically reduce Immigration (allowing in only a few highly skilled
workers) thus reducing the social while Economic Costs and increasing
employment opportunities.
However, since both Mega Trends, Mass Q.E.
and Mass Immigration are ongoing, until or if they are reversed, they must be
addressed. Indeed, Deepcaster provides
opportunities to Profit from Mass Q.E. (See Notes below.)
In sum, in order to Profit and Protect, one must stay abreast of these
two Key Mega Trends.
Best regards,
Deepcaster,
March 29, 2012
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 January 19, 2012
2.96% / 10.57% (annualized December, 2011 Rate)
U.S. Unemployment reported February 3, 2012
8.3% / 22.5%
U.S. GDP Annual Growth/Decline reported January 27, 2012
1.56% / -2.70%
U.S. M3 reported February 13, 2012 (Month of December, Y.O.Y.)
No Official Report / 3.87%
And Official Source Disinformation
continues, consider Shadowstats comments on the
January 6, 2012 release of U.S. Employment data:
“The
reported seasonally-adjusted 200,000 jobs surge in December 2011 payrolls
included a false, seasonally-adjusted gain of roughly 42,000 in the
“Couriers and Messengers” category. That gain was an artifact of
the seasonal-adjustment process and will remove itself in the January 2012
numbers.
“The
problem is that this 42,000 gain is part of a seasonal pattern that fully
reverses itself each January…”
“December
Payroll Seasonal-Adjustment Problem”
www.shadowstats.com,
John Williams, 1/6/12
Note 2: Deepcaster addresses the questions of Profit and
Protection in light of Fiat Currency Purchasing Power Destruction and
provides Guidelines in his article – “Essentials for Wealth
Acquisition Acceleration” found in ‘Articles by Deepcaster’ Cache.
Using such Guidelines facilitated Deepcaster’s
making buy and sell recommendations resulting in remarkable profits recently
if acquired and liquidated when we recommended, approximately*:
45% Profit on
Platinum ETF on February 8, 2012 after just 42 days (i.e., about 390% annualized!)
40% Profit on March 2012 $55 Dollar GDX
Calls on January 27, 2012 after just 23 days (i.e., about 635% annualized!)
34% Profit on Gold Royalty Streaming Company on December 5, 2011 after just
166 days (i.e., about 74% annualized!)
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!)
*Past Profitable Performance is no assurance of future Profitable
Performance.
Note3: “A
Great Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities,
Crude Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates”
– February Letter
“The
Fed doesn’t have a clue about markets or economics. They are dangerous
people.
Printing money is not good for the world and will lead to more problems for
the world….
“What the Federal Reserve is doing now is ruining an entire class of
investors.”
Jim Rogers, Bloomberg Interview, 6/29/11
We are not so Negative about the Near-Term Prospects for Nominal
Asset Price Growth in Certain Sectors as we were six months or
a year ago.
That is mainly because the E.U., Mega-Banks, and the Fed, have already de facto
launched a Massive Quantitative Easing 3, with more likely to come.
This QE will serve as a Major Force impelling (but not necessarily
successfully) Nominal Asset Prices UP in certain Sectors, for example,
for Equities.
But before one becomes too enthusiastic about the Prospects one should
consider the implications of our Forecast for Nominal Assets Prices Strength
in certain Sectors.
The practice of issuing Bogus (U.S. and other Key official) Inflation figures
obscures the Fact that Monetary Inflation (generated mainly by reckless Q.E.)
is very rapidly depreciating the purchasing Power of most Fiat Currencies
– by about 11% per year in the U.S. e.g. (per shadowstats.com).
Our High
Yield Portfolio is aimed at achieving Total Return in excess of Real
Inflation. Stocks in that Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%,
26%, 6.7%, 8%, 10.6%, 10% and 15.6% when they were added to the Portfolio.
Also
important to note is that, while massive Q.E. is a Major Inflationary Force
tending to pump up Prices in certain sectors, there are Powerful Deflationary
forces operating as well – the depreciating Housing Markets in the U.S.
and China come to mind. Real Estate in some areas in China is down over 25%,
but Food prices are up 9% year over year.
The key to identifying The Great Opportunities (and Great Potential Losses) is knowing which Sectors will likely have Inflating
Asset Prices and which will have Deflating ones.
Investors failing to Evaluate Inflation/Deflation Prospects on a Sector by
Sector Basis will have missed Great Opportunities and fallen into a
Dangerous Trap.
Deepcaster’s Letter --“A Great
Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities, Crude
Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates; February
Letter” -- posted in the ‘Latest Letter & Archives’
Cache at www.deepcaster.com, identifies
which Sectors will likely be helped (albeit temporarily) by this Massive QE3
and which will likely be hurt, and provides Forecasts for all. And in his
March Letter, “The Pause Before The Great Bull; 3 Buy Recos! Forecasts: Gold, Silver, Equities, Crude Oil, U.S.
Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, March
Letter”, Deepcaster makes 3 Buy Recommendations
designed for Protection and Profit.
|