“Renewed economic contraction has started to show up in the
reporting of major economic series. Headline June retail sales declined by
0.5% versus May, in the context of earlier monthly contractions…
“The general outlook remains unchanged …. Official
reporting shows a plunge in economic activity from fourth-quarter 2007 to
second-quarter 2009, with an ensuing upturn in activity that led to a full
recovery as of third-quarter 2011. In contrast, I contend the economy began
turning down in 2006, plunging in 2008 into 2009 and subsequently
stagnating—bottom-bouncing—at a low level of activity ever since.
There has been no recovery, and the economic downturn is intensifying anew.
“The official recovery simply is a statistical illusion
created by the government’s use of understated inflation in deflating
the GDP. Use of understated inflation in such a manner results in overstated
“The long-term fiscal solvency issues of the United
States—where GAAP-based accounting shows annual deficits running in the
$5 trillion range—are not being addressed…
“Neither economic nor systemic-solvency issues have been
resolved by U.S. government or Federal Reserve actions. With the economy weak
enough to provide cover for further Fed accommodation to the still-struggling
banking system, the next easing by the Fed likely will trigger a massive
dollar selling crisis and begin the process of a rapid upturn in domestic
consumer inflation…” (emphasis
“Commentary #455: June Retail Sales,”
John Williams, www.shadowstats.com, 07/16/2012
Unreliable Official Statistics and poor
or just flat inaccurate Mainstream Media reporting leaves many Investors in a
quite vulnerable position. Investors are thus so disadvantaged by having to
rely on such lousy data (or lack of any data) that it is arguably tantamount
to financial abuse.
Indeed, Key Mainstream Financial and
other Media generally have done such an abysmally poor job of reporting
lately (indeed, at times distorting or apparently even censoring the most
important Developments) that we thought it would be useful to summarize
Important Recent Developments because this knowledge is essential to help
Investors Profit and Protect.
The following Real News is from sources
which we have generally found to be reliable. Fortunately, much of the Real
News is Good News, but much is Negative.
In any event, perhaps most important is
the Mainstream Media and Mainstream Financial Media refusal to report on the
ongoing suppression of Precious Metal Prices. Knowing the Real News is
essential to profiting and protecting wealth.
Notwithstanding The Cartel’s (Note
1) attempt to demoralize Precious Metals Partisans with their repeated Price
Takedowns, one should consider the following Good News which indicates Gold
and Silver are setting up to Rally in spite of ongoing Cartel Price
— Japan has
recently ceased exporting Gold.
Gold Imports have Increased dramatically even though China is now the
World’s largest Producer.
Takedowns of The Gold and Silver Price are regularly getting bought by
Heavyweight Buyers (mainly from Asia) in the $1570s for Gold and in the $27
range for Silver. China apparently has put a floor under this market (but
N.B. this would not prevent The Cartel from temporarily running the
stops down to say $1530s for Gold and $25 for Silver).
— Another Dose
of Overt QE is likely sometime this year – a Dose that would surely
launch Gold and Silver Prices upward.
— For the first
time in a long time, Swaps Dealers (Big Banks and Large Traders) are net long
the Gold Markets. They have Strong Hands.
— The Cartel
has increasingly been unable to sustain its Takedowns for very
But the News is not all positive. Even
so, knowing the Negatives is essential to Profitable Investing and Wealth
— For example,
as John Williams of shadowstats.com points out, there is no economic recovery
and “the economic downturn is intensifying anew.”
inflation is already Threshold Hyperinflationary (e.g. 9.3% in the U.S.) per
shadowstats.com (Note 2).
— The weakening
Economy is reflected in the Federal Reserve Bank of New York’s recent
report stating that fully half the stock market returns of the past decade
resulted from Fed Actions’. Of course, this means the ostensible
Economic Recovery is built on the Quicksand of Fiat Currency Creation, and Overindebtedness. Regarding Profiting and Protecting
Wealth from Inflation and other Negatives, see Notes 3 and 4 below.
— The LIBOR
Fixing Scandal has only just begun. Literally Trillions in loans around the
Planet have been pegged ultimately to LIBOR or a LIBOR Pegged Rate. The
lawsuits and scandals only just began. And they will shake the Banking System
to its core (and thus be Gold and Silver Bullish).
— Legal and
Illegal Mass Immigration generates immense Net Costs to the
U.S., (and probably to European Nations). For example in the U.S., a
majority of households headed by a
Illegal Immigrants are collecting welfare. According to a recent study, 8
major welfare programs cost the U.S. Government (Taxpayers) over $517
Billion/yr. Mass Immigration imposes similar net costs for Healthcare
and Education. President Obama’s recent Illegal Alien Amnesty granted
work permits to 1.4 million (former) Illegals. This not only depresses Wages
but also increases Job competition for some 25 Million Unemployed Americans.
Except for highly skilled Immigrants, Mass Immigration typically imposes Net
Economic losses for the Host Country, not to mention stressing social and
— The Bilateral
Currency Swap arrangements China is establishing with Australia, Chile, Japan,
Russia, Iran, India, and Brazil spell doom for the $US Dollar as the
World’s Reserve Currency in the next few months or very few years. Be
prepared for devastating consequences for the U.S. Economy (but this
Development too is Gold and Silver Bullish).
— Those who
believe they are Owners of Physical Gold and Silver stored in Allocated and
Segregated storage in Bank Vaults, are increasingly disappointed.
numbers of Investors are finding it difficult to obtain actual Delivery of
the Physical they supposedly own. Or when they actually get Delivery
they find the bars were smelted long after they supposedly purchased and
stored them in ostensibly Segregated and Allocated Accounts.
Deepcaster agrees with
Von Greyerz and Buckler: Get Gold, Physical Gold.
“But in spite of all the adversity that gold has encountered in
the last 12 years, the yellow metal has still appreciated over 6 times since
“So why is gold likely to erupt in the next few weeks? After a
strong move into late August 2011 we have had a correction/consolidation for
almost 11 months. During this time, every single fundamental factor in the
world economy has deteriorated. The Eurozone countries are in a complete mess
and can never recover. The UK economy is in a terrible state but they are
just lucky that they can print money which Eurozone countries can’t do.
The same is the case with the US. Debts are increasing at an exponential rate
and there is no attempt by government to stop the spending of money the
country doesn’t have. Total debts and exposure in the US is approaching
$500 trillion. This includes unfunded liabilities and derivatives. The latter
are likely to become worthless when counterparty fails, something which is
very likely to be the case. Most economic figures are deteriorating in the
US. The US has had the fortune of all the focus being on Europe but that will
“Japan has massive debts and the economy is extremely weak. And
China with its major credit explosion will also suffer badly when the whole world
stops buying their goods.
“…Governments will continue to apply the only method they
know (with the blessing of economists like Paul Krugman
and Martin Wolf) which is issuing unlimited amounts of worthless paper that
they call money. This is of course no solution and only adding insult to
“A concerted (ECB, FED, IMF etc) money
printing bonanza is likely to start in 2012. This will lead to all currencies
collapsing in real terms. Collapsing currencies will lead to a hyperinflationary
depression. But many assets will deflate in real terms, especially the ones
that were inflated by the credit bubble. This includes stocks, property and
bonds as well as debt which have all been in a massive bubble for at least
four decades. Gold will be a major beneficiary.
“Gold will also appreciate because there is a total distrust in
governments’ ability to govern. The more governments fail, the more
they will want to control the system and the citizens and the more regulation
they introduce. There is also distrust in the financial system. Lehman, MF
Global and PFG amongst others are only the very beginning of a serial
collapse of banks and finance houses.
“There is also distrust in a system that prints money with the
beneficiaries primarily being bankers and the financial system. Bankers and
banks keep failing and keep on being rewarded more for each time they fail.
No banker is ever penalised for losing billions
which the tax payers ultimately are responsible for.
“All the king’s horses and all the king’s men
Could never hold gold down, Amen!”
Egon von Greyerz,
“Asia is accumulating Gold. Russia is accumulating Gold.
(Supposedly) backward nations all over the world are accumulating Gold, on
both an individual and a government level. While the (supposedly) developed
world has developed an idea of monetary safety which turns all history on its
head, the rest of the world is not going along with them. We will leave it to
you to decide which are the credulous and which are not.”
Bill Buckler, editor of The Privateer Australia, 7/2012
July 21, 2012
*Shadowstats.com calculates Key Statistics the way they were calculated in
the 1980s and 1990s before Official Data Manipulation began in earnest.
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:
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
problem is that this 42,000 gain is part of a seasonal pattern that fully
reverses itself each January…”
Payroll Seasonal-Adjustment Problem”
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
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
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
Fed doesn’t have a clue about markets or economics. They are dangerous
Printing money is not good for the world and will lead to more problems for
“What the Federal Reserve is doing now is ruining an entire class of
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,
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).
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.
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
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.