“Keynesian and monetarist economists claim all that’s
needed to return prosperity in the PIIGS countries is looser money and their
own currencies. The next best thing would be transforming the character of
the euro from that of the German mark to the Italian lira. They’re
wrong. A policy that tries to restore conditions that existed before the euro
crisis will fail, just like the foolish U.S. policy effort to reinflate the housing bubble. Prosperity comes from
savings and investment, not government deficits and welfare state programs
financed by the printing press.” (emphasis
Dan Amoss, CFA, Agora Financial, 8/24/12
Too true! But “government deficits
and welfare state programs financed by the printing press” will not be
abandoned any time soon. Since the consequences of not trying to
continue to kick the Economic Can down The Road (to the Cliff) are
unacceptable to Globalist Politicians and Bankers at The Fed, and the ECB,
the printing will continue; thus providing the Delusion (publicized by the MainStream Media) that Recovery is on the way, until
Reality pierces it.
Until then, print they will (see below
regarding Spain – critically important to the International Financial
System). The only questions are: when, how much, and when does Reality stop
But the Can Kicking provides Profit
Opportunities. So how does one Profit while the Can Kicking continues? Savvy
forecasting of the Timing and Variety of Can Kicking can greatly enhance the
chances for Profit and Protection, and prepares one for the more widespread
recognition of The Impending Reality.
That Reality, by the way, is Hyperstagflation. The excessive money printing and credit
provision (QE1, 2, LTRO, and ESM, etc. e.g.) which has occurred so far has
not revived the Economy. But it has caused substantial Inflation if one looks
at the Real Numbers, rather than Bogus Official ones (see Note 1). The
ultimate result is described by Marc Faber.
“There’s still a 100 percent chance the world heads into
recession, Marc Faber, publisher of ‘The Gloom, Boom & Doom
Report,’ told CNBC’s ‘Closing Bell’ on Thursday,
echoing a call he made in May.
“…‘The U.S. economy has decelerated and I
don’t see much growth in the next six to 12 months,’ Faber said.
“…‘I think that if you look at the injection of
liquidity and the intervention by the Federal Reserve and the Treasury with
fiscal measures, it has already impoverished the U.S. economy,’ he
“…‘Corporate profits will disappoint over the next
12 to 18 months.’”
“Odds of Global Recession Are 100%”
Marc Faber to CNBC’s “Closing Bell,” 8/23/2012
Indeed! The Mega-Banker Interventions
have so distorted the Financial Markets and Economy that most Sectors have
become mainly dependent on Interventions, even though The Delusion
persists among many that these Sectors trade mainly on Fundamentals.
- Invest and
Trade with well-informed forecasts of likely future Monetary, Credit, and
related Interventions in mind and with the recognition that we are likely
headed into a Hyperstagflationary Era.
- On the
Price-Bullish side, focus on those few sectors, like Food and Energy, whose
prices, though somewhat affected by Interventions like Q.E. for example
(which impelled increases in Food Prices) still Trade Mainly on Fundamentals.
- Pay close
attention to the Debt Markets and especially Sovereign and other debt yields.
Generally, Sovereign Debt (including U.S., U.K., and France as well as the
PIIGS) is in a bubble which has begun to leak, and will eventually burst.
Thus yields will be rising mid to long term. Consider Keith Weiner regarding
debt and The Fate of Fiat Paper Currencies.
“Debt has been growing exponentially everywhere… Debt is
backed with debt, based on debt, dependent on debt, and leveraged with yet
more debt. For example, today it is possible to buy a bond (i.e. lend money)
on margin (i.e., with borrowed money).
“The time is now fast approaching when all debt will be
defaulted on. In our perverse monetary system, one party's debt is another's
"money." A debtor's default will impact the creditor (who is
usually also a debtor to yet other creditors), causing him to default, and so
on. When this begins in earnest, it will wipe out the banking system and thus
everyone's "money." The paper currencies will not survive
“Is Gold Backwardation Now Permanent?”
Keith Weiner, New Austrian School of Economics, 2/29/2012
While we do
not agree that “all” Debt will be defaulted on, or with,
Weiner’s basic point, that Major Fiat Currencies with the Purchasing
Power which they now embody, will not survive. However, his comments point in
the right direction: there will be increasing Sovereign Defaults, since The
Icelandic Solution (see our recent Article) is probably the only one for many
Sovereigns for the long run. And the Purchasing Power of Fiat Currencies will
continue to decline vis-à-vis Real Assets.
- Bear in mind
that ongoing Q.E. and related actions, etc. conducted by the private
for-profit Fed and ECB is intended mainly to bail out the Mega-Banks,
i.e. to keep them from collapsing from their own Bad Debts. (Recall that the
Financial Accounting Standards Board decided that Banks could mark their
portfolios to Model (i.e. to Myth) rather than to Market.)
out the Mega-Banks were not the main purpose, why is it that The Fed
continues to pay “interest” to the Mega-Banks for depositing
their Reserves at the Fed. Were these
“interest” payments to cease, the money could be loaned to
job-creating small businesses which, generally, are starved for funds. That
would increase employment and economic growth.
- Yes China is slowing. And, yes, the
Economy there is probably worse than its Highly Controlled Official
Statistics reveal. But its exports are still greater than imports and its relatively (to the west) high interest rates reveal an
economy which is still growing, albeit more slowly.
- And even
though Gold and Silver prices are subject to ongoing suppression by The
Cartel* (see Note 2), which has had an increasingly difficult time
maintaining its Takedowns, Takedowns which have bottomed at increasingly high
- Spanish Banks
are experiencing a Bank Run. ECB data revealed that outflows from
Spanish Banks were €74 Billion
($93 Billion) in July, twice the previous monthly record. These banks have
lost 11% of their deposits already this year.
Spanish economy is much larger than Greece’s, this will probably impel
the ECB to print more Euros. This will depreciate that Fiat currency even
more, and that is Good for Gold, Hold thy Gold! We do forecast another
Takedown is likely which should provide a Buying Opportunity (see Note 3
Prices for Food are not only the result of the U.S. Drought, but also caused
in large part by ongoing QE-caused Fiat Currency Purchasing Power Dilution.
(Remember the “Arab Spring” over a year ago was launched
by Food Price Increases.) Food Prices are not going to be dropping
much, if at all. Food Prices are in a long-term uptrend. Therefore, more
Societal Disruptions are coming.
(i.e. well in excess of GDP Growth) Central Bank generated Money Printing and
Credit Provisions are causing Real Inflation which is masked by Bogus Numbers
(see Note 1). Invest in Assets which hold their value in periods of Monetary
Inflation (see Note 4 regarding High Yield Portfolios).
September 01, 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).
For those who find The High Inflation Reality hard to believe,
consider Adrian Douglas’ point:
“There are frequent claims that the U.S.
economy has entered a period of “deflation.”
These claims are totally unfounded and are
false. Deflation can only be a persistent state of general price decline. In
fact, in examining price trends, the U.S. is experiencing shocking price
increases of over 15% per annum. To illustrate this, (consider) …the
Continuous Commodities Index, CCI over the past ten years.”
“Deflation – Nowhere to be
Seen,” Adrian Douglas, Market Force Analysis, 7/7/12
Thus Monetary and Credit Inflation (courtesy
of the Central Banks) continues to drive Price Inflation of essential Real
Assets. While this is the most important factor determining the Crude Price
(and the price of other Real Assets) there are four other factors which help
determine Crude Price (and Energy sector) moves, which we discussed in our
To see which Asset is about to explode upward,
as well as the Factors essential for successful Energy Investments, and our
latest Forecasts, read our recent Alert “Impending Launch & Crude
Secrets; Forecasts: Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S.
T-Notes, T- Bonds, & Interest Rates,” recently posted in
‘Alerts Cache’ at www.deepcaster.com.
To consider our High-Yield Stocks Portfolio with Recent Yields of 18.5%,
8.6%, 10.6%, 26%, 6.7%, 8%, 10.6%, 14.9%, 10% and 15.6% when added to the
portfolio; go to www.deepcaster.com and click on ‘High Yield
Note 2: *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
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
DEEPCASTER HIGH YIELD PORTFOLIO
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