Investment Opportunity or Economic Catastrophe? Coming Soon
Economics / Credit Crisis 2010 Jan 15, 2010 - 04:15 PM GMTBy: DeepCaster_LLC
“…To put it bluntly, Faber says, ‘we are doomed’…
Faber, a long-time critic of U.S. policies, argues the private sector acted rationally after 2008 by deleveraging and increasing its savings. The government, on the other hand, added more debt and leverage. They can get away with it for now because interest rates are low. Eventually, interest rates will rise, causing the public sector debt bubble to burst under the weight of government entitlement programs like Medicare, Medicaid and Social Security…
The only way out is for the government to print more dollars. Of course, that leads to inflation and a weak dollar. And, even worse, he says, ‘to distract the attention of ordinary people you go to war’… ”
Fed's Record Profit Does Not Change Anything. US Still "Doomed" says Marc Faber Tech-Ticker, 1/12/2010
“Now this is a guaranteed rape job.
In a short conversation this noontime that CNBC apparently has omitted from their archives (Why's that folks?) Rick Santelli was talking about a potential to effectively force money into the Treasury market.
Where would they get this?
From your 401k and IRA accounts!
From Businessweek:
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
Let me tell you what this is - it is an attempt to prevent the collapse of the Treasury market!
Forcing people into Treasuries as an "annuity" is exactly what Social Security allegedly is. Except that Treasury stole the money that was collected in FICA taxes and spent it!
Guess what? They'll do that here too - you're going to "invest" in Treasuries which of course are effectively a CALL option on the future taxing ability of the government.
The problem is that with an aging population and the immigrant problem (illegal immigrants that is), along with offshoring, the aggregate wage base will drop and thus this is the most dangerous investment of all!
What's even worse is that the government has intentionally suppressed Treasury yields during this crisis (and will keep doing so by various means, including manipulating the CPI - the "inflation index" - as they have for the last 30 years) so as to guarantee that you lose over time compared to actual purchasing power...”
401k/IRA Screw Job Coming? Karl Denninger, http://market-ticker.denninger.net, 1/8/10
Given the $12 Trillion plus (and increasing) U.S. national Debt and $70 Trillion plus Total Downstream Unfunded Federal Obligations, concerns that investors (especially China and Japan) will be increasingly reluctant to purchase U.S. Treasury Securities are well-founded.
These concerns have been reflected in the recent run-up on the Ten-Year Note Yields to the 3.8% level.
Indeed, regardless of what happens to ten-year and thirty-year yields in the short-term, the massive, ongoing and increasing U.S. Debt Issuance is bound to increase the upward pressure on U.S. Treasury Securities yields.
Moreover, the UK, France, Germany, Japan and Italy all have projected debt to GDP Ratios in excess of 50%, according to the IMF’s October, 2009 World Economic Outlook.
That is why the possible scenarios outlined by Denninger and Faber above, while hyperbolic, are not out of the question.
Modern Nation-States have actually (Argentina) or potentially (Portugal, Italy, Ireland, Greece, Spain) suffered from Sovereign Debt Defaults. And even the United States may well partially default on its debts via the ongoing U.S. Dollar Purchasing Power Destruction.
But prior to that event the 401k/IRA Mandatory Conversion Threat would become very real.
Indeed, the foregoing Scenario raises the specter of U.S. (and other) Government Wealth Confiscation Schemes potential. After all, FDR’s Gold Reserve Act of 1934 has already set this precedent.
Indeed, Gold and Silver are historically and legitimately the Safe Haven Assets. But not only are they subject to legislative attacks such as the 1934 Act, but their “market” prices have for several years been subject to attacks by a Fed-led Cartel of Central Bankers and Allies.
The most recent manifestation of Cartel* Intervention occurred just this past Tuesday January 12, 2010. The Cartel took down the Gold price over $20 in one day in the midst of what appeared to be a bounce back to the previous high just above $1200/oz.
Probably not coincidentally, the Tuesday Takedown preceded this week’s auction of Treasury securities by just one day – a clear message to doubters that The Cartel still controls Precious Metals Prices and that Treasuries are “the safe place” to be.
Of course, we emphatically disagree that Treasuries are The Safe Place to be, but we hear it nonetheless.
These price Takedowns are understandable when one considers that increasingly wide acknowledgment of Gold and Silver’s legitimacy as the ultimate Stores and Measures of Value, threatens the legitimacy of The Cartel’s Treasury Securities and Fiat Currencies.
*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, 2009 Letter entitled "A Strategy For Profiting From The Cartel’s Dark Interventions & Evolving Techniques - II" in the “Alerts” and “Latest Letter” Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org 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.”
Deepcaster has developed a Strategy for acquiring Gold and Silver designed to profit despite these periodic attacks, see “Defeating The Cartel…with Profit” (Part 1 - 03/28/2008 and Part 2 - 06/19/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.
Yet another Challenge is presented by the ongoing issuance of Bogus ‘Official Statistics’ by Official Sources. Official Data Distortion and Manufacturing has become so egregious that even the Establishment Economist Michael Boskin (President George W. Bush’s Economic Advisor) has said that making policy decisions on “misleading, biased, or manufactured numbers is dangerous”.
Consider the following Real Numbers from Shadowstats.com which calculates the Real Numbers the way they were calculated in the 1980’s and 1990’s before Official Data Manipulation began in earnest.
Official Numbers vs. Real Numbers
Annual Consumer Price Inflation reported December 16, 2009
1.84% 8.77% (annualized December Rate)
U.S. Unemployment reported January 8, 2009
10% 21.9%
U.S. GDP Annual Growth/Decline reported December 22, 2009
-2.64% -5.71%
When the risk of forcible conversion (via a mandated conversion of 401k/IRA Funds into a Treasury Securities “Annuity”) is considered together with Real Inflation Numbers, the question of how one deploys Retirement Funds and Savings becomes quite important.
Consider as well that not only did a portfolio of Dow stocks show zero gain in the last decade, but according to Official Inflation figures, that Dow Portfolio would have lost 30%.
When considering the Real Inflation Numbers that Portfolio lost much more than 30%.
Finally, in addition to considering the Real Numbers it is essential to consider the consequences of the Fed’s monetizing increasing amounts of bad debt.
Consider this from Bob Chapman:
“We wonder if the public realizes that all the bad debt bought up by the Fed, more than $2 trillion, will in part eventually have to be assumed by the taxpayer. Some realize the problem, and they seem to be in denial, the rest simply don’t understand. In time the gravity of the situation will become reality. The present economic buoyancy is mainly based on inventory recapitalization and accumulation, but the underlying demand has to appear and with unemployment hovering around 23% how can policymakers believe that a recovery can carry through?...As quantitative easing and higher interest rates take their toll do these elitists have the fortitude to carry their program through? We dispute that they do. The distortions are going to be deep and large, particularly in both residential and commercial real estate. The later actions will bring the US and world economy into total deflationary economic and financial depression…
The Fed, as we have in the past, pointed out intercedes into and manipulates markets... The Fed purchases are presently estimated to be in the vicinity of $1 trillion or about 2/3’s of existing issues in mid-range yields. One of the big questions is who were the sellers and what were the prices paid by the Fed. They have thus far refused to release this information. The Fed has recently said they will start to slowly sell these securities. The question is at what price? The Fed may have relieved the holders, mostly banks, of the MBS, but at what price? This is simply another taxpayer bailout of the people who caused the problem in the first place. As a result the public is furious and they have sternly passed their anger on to their representatives in Congress, who were responsible for massive support of Ron Paul’s HR1207 and the bill to audit and investigate the Fed. This and the health care legislation will see many Democrats not returning to Congress next year. The public mistrusts the Fed now more than the IRS.
Even if the Fed does not raise interest rates soon the market will do it for them, and that looks like it is in progress.”The International Forecaster Bob Chapman, January 9, 2010
“The result of this tremendous infusion of money and credit has been the survival of banking, Wall Street and insurance, and a fall in household net worth of almost $7 trillion. We’d call that an uneven, unbalanced performance. The culprits have been bailed out and the public has paid for it. The next natural question is what will the Treasury and the Fed do for an encore? The treasury is running a $1.7 trillion deficit, and is the go to source for employment. The Fed says it is going to withdraw liquidity from the system and that they intend to raise interest rates in July or there abouts. If this is the case you had best prepare for a deflationary depression. We do not believe the Fed for one second. Do they really believe this will save the dollar? We do not think so….
That leads us to our latest information gleaned through private Fed meetings. They believe the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications. In the last quarter of the year we could even see Martial law, which is more likely in the first six months of 2011… Our position is that bank lending will not improve nor will unemployment. If this is accompanied by official devaluation and default everything could break loose. The elitists realizing this will arrange another 9/11-type event with the usual cast of characters and we expect conflict will spread into Pakistan and that Israel will attack Iran enveloping the Middle East in flames. That would send oil prices considerably higher and cause a collapse of world stock markets, with the exception of gold and silver shares. The excuse to impose Martial law would be apparent. The country could go into lockdown. Transportation could be limited, food and gas rationed, banks closed and many other major inconveniences. The current mainline media, Wall Street and governmental propaganda about economic recovery would end, they never having to prove that a recovery ever existed. During the first six months of 2010, Americans and others will continue to live in their world of unreality. These hopeless fools are again being taken down the garden path. The world as we know it is about to change dramatically, so prepare for it…
In the meantime we observe that foreign exchange reserves denominated in US dollars has fallen from 64.5% to 61.8% in the last six months of 2009. This represents huge sales of dollars most of which was in the form of Treasury and Agency bonds…” The International Forecaster Bob Chapman, January 6, 2010
While acknowledging it is an uphill battle, there are steps Investors can take to Protect and Profit from the ongoing Cartel Juggernaut of Market Intervention and Data Manipulation. In order to fully understand what steps need to be taken we need first to briefly review certain of The Cartel’s Policies, Actions, and their Consequences.
Consider that the Fed-led Cartel’s policies appear to be resulting in a massive Wealth Transfer from Investors/Taxpayers around the world to the Fed-led Cartel and their favored financial institutions -- $11.9 Trillion in the last 6 months of 2008 alone when Equities Investors were losing Trillions (See Deepcaster’s article “Opportunities & Threats in Derivatives Shocker” (5/29/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com and see www.bis.org, path: Statistics > Derivatives, Table 19).
Of course, a key component of this wealth transfer involves debasing the value of the U.S. Dollar which, results from “the ultra-loose monetary policy of The “Federal Reserve”. Since The Fed was established in 1913 the U.S. Dollar has lost over 95% of its Purchasing Power, as reported by Rep. Ron Paul and others.
One of several negative consequences is that Investors who have saved (they thought) wealth in Dollars over a lifetime have seen the Purchasing Power of those dollars dramatically eroded by, for example, over 35% in the last 8 years alone, and the erosion continues.
To elaborate a bit, there is considerable evidence that “ultra-loose monetary” and credit policies, and the consequent housing credit crises and Market Crash were the result of the conscious policy of the Fed-led Cartel.
Consider the following observation by Harry Schultz:
“…what is the reason for this “seemingly random monetary mess that multiplies its momentum every day? The answer, in one word, control. The elite/insiders already have control of the financial system, but they wanted more, much more…and it was not random, it was planned.” (emphasis added)
“How will all the above manifest itself in your life? The answer: “All you own will shrink...your income, assets, net worth, will shrink year after year in real terms inflation adjusted and possibly also nominally.” HS Letter, April 27, 2008.
Harry Schultz, Eminence Grise of the Newsletter writing Fraternity sees the Threat to Profits and Wealth posed by the Fed-led Cartel* quite clearly.
The Cartel* ‘End Game’, as Deepcaster has named it, apparently involves Stealthily transferring ever more Wealth and Power to The Cartel at the expense of Investors/Citizens around the world. (See below, and “Coping with the Superpower Cartel Threat” (1/30/09) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.)
Of course, The Fed-led Cartel’s increasing Power and Profits are threatened by Rep Ron Paul’s ‘Audit the Fed’ Bill (H.R. 1207) which fortunately has garnered two thirds Majority of the U.S. House of Representatives as co-sponsors and over half of the Senate on a companion Bill. However, it is threatened by Congressman Barney Frank’s parliamentary maneuvering resulting in merging it with a larger Bill that could actually result in enlarging the power of the Fed. We are not optimistic that the Final Bill will result in thoroughgoing Audit of The private for-profit Fed.
Moreover, the private for-profit Fed predictably responded to the Audit Threat with a not-so-veiled counter-Threat delivered via Chairman Bernanke’s Testimony to Congress.
“Federal Reserve chairman Ben Bernanke unleashed an alarming veiled threat of financial terrorism when he was questioned by Rep. Duncan on Thursday about his response to the fact that a majority of Congress (is) co-sponsoring Ron Pauls H.R. 1207 bill to audit the Federal Reserve.
Bernanke clearly regarded the bills intent as hostile to the institution he represents:
“My concern about the legislation is that if the GAO is auditing not only the operational aspects of the programs and the details of the programs but making judgments about our policy decisions (it) would effectively be a takeover of policy by the Congress and a repudiation of the Federal Reserve (which) would be highly destructive to the stability of the financial system, the Dollar and our national economic situation.”
The brunt of Bernankes statement is as crystal clear as a threat from a common street thug -- back off from the Fed, or the economy gets it.
The chairman clearly implies that any attempt to restore monetary powers constitutionally granted to the Congress would be seen as a takeover and that the defensive and repudiated Fed would respond destructively.
Of course Congress’ constitutional power over money is enumerated in Article I, Section 8 of the U.S. Constitution:
“The Congress shall have power To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;” “
Bernanke Threatens Economic Collapse If Fed Audited
Aaron Dykes, Infowars, Friday, June 26, 2009
Indeed, The Fed’s recent statements, that they intend to transfer the $50 billion plus profits they made from the TARP bailout, appears to be a Red Herring. They refuse to tell the U.S. Congress, or anyone else, how much profit they made from their vastly larger (than TARP) ongoing operations.
It is thus understandable two thirds of the Members of the U.S. House of Representatives have signed on to a Bill (H.R. 1207) to audit the private for-profit U.S. Federal Reserve.
Whether all the signatories are fully aware of it or not, Fed Policies and actions are The Primary Cause of the Economic and Financial Crises from which we suffer today, as we show below and elsewhere.
The Root Cause of our Current Crises and The Systemic Threat to Democracy and Profits
Of great concern is F. William Engdahl’s contention that the 2008 Credit Crunch and Market Crash were planned: “…in every major U.S. financial panic…the titans of Wall Street…have deliberately triggered bank panics behind the scenes to consolidate their grip on U.S. Banking…”
As background to understanding the ongoing implementation of The Cartel’s Interventional Regime and “End Game” consider Engdahl’s position:
“…in every major US financial panic since at least the Panic of 1835, the titans of Wall Street – most especially until 1929, the House of JP Morgan – have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.
Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century. That process of using panics to centralize their private power created an extremely powerful concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919…”
Behind the panic: financial warfare over future of global bank power
F. William Engdahl, October 10, 2008
Consider the implications of the F. William Engdahl quote regarding “global bank power.” As Engdahl points out, the evidence is increasing that the recent financial panic and economic distress is and has been pre-planned as a part of Cartel Strategy to increase power and, in our view, to implement its “End Game.”
In light of these considerations it is not surprising that the Mega-Banks were the first to be “Saved” in the Fall, 2008 financial crisis (via e.g. funneling $160 billion plus via AIG to the Mega-Banks who received 100% of the amount they were at risk in their CDS transactions). That is, a Major Negative Consequence of the Fall, 2008 Market Crash was a Taxpayer Financial bailout of several Key Mega-Banks. Yet the Bailouts allowed them to move on to subsequent great profitability.
Consider the case of Goldman-Sachs. Not only did Goldman receive billions in TARP funds (subsequently repaid) but they also received $11.9 billion via the AIG bailout.
One result was that Goldman survived and is reportedly to pay an average of $500,000 plus to each employee in compensation.
Meanwhile, the U.S. Consumer/Taxpayer and often Investors/Mortgage Holder who is 70% of the U.S. Economy is left with Greater Debt (to fund the Bailouts) and interest payments on that debt to the private for-profit U.S. Federal Reserve. Goldman et.al, but for the bailouts, would have collapsed. But the U.S. Consumers/Taxpayers, however, have not been “saved” at all. Indeed, the Mega-Banks have increased Credit Card Interest Rates to usurious levels. No gratitude there.
To understand the Cartel’s apparent “End Game” we must understand the Root Cause.
The Root Cause of The ‘End Game’ Threat lies in the secrecy, structure, functioning and policies of the private-for-profit “U.S.” Federal Reserve.
Various international private banks, several of which are headquartered in Europe, own the “United States” Federal Reserve Bank. The European Banks were among the founding banks whose representatives, including Paul Warburg who wrote the charter at the Jekyll Island Georgia meeting, as documented in “The Creature from Jekyll Island”, by G. Edward Griffin.
These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:
“I still can’t get over the whole Federal Reserve racket.
Consider the following - - let’s take a situation where the U.S. government needs money. The U.S. doesn’t just issue United States Notes, which, of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.
This is what the U.S. does - - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the private owners of The Fed - - Ed. Note) The mind boggles.
The damnable result is that the Fed effectively controls the U.S. money supply. The Fed is …not even a branch of the U.S. government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments.
How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”
Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007
After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…” Thus we have an early statement about the threat to “democracy” occasioned by The Fed.
As Richard Russell points out, the creation of ever-increasing debt and interest payments is unsustainable. Thus there will inevitably be a Day of Reckoning, a Day which is fast approaching.
In order to stave off the Day of Reckoning (which, we reiterate, is coming mainly as a consequence of The Fed’s dramatic monetary inflation and “easy credit” policies), and to implement its own ‘End Game’, the Fed-led Cartel* of Key Central Bankers and Favored Financial Institutions has created, and for the past several years has operated, an extraordinary “Interventional Regime” built on dramatically increasing trillions of dollars (nearly $600 trillion as of June, 2009 - - see www.bis.org (path: statistics>derivatives>Table 19 and ff.) of Dark OTC Derivatives available for the manipulation of major markets ranging from Precious Metals to Crude Oil and Energy, to Equities and Strategic Commodities (see Deepcaster’s December, 2009 Special Alert at www.deepcaster.com).
To be sure The Cartel’s massive and increasing use of derivatives to intervene (Overtly and Covertly via Primary Dealers) in a wide variety of markets is fraught with danger (e.g. through actual and prospective counterparty failure as we are now seeing, as well as prospective Systemic Failure). Deepcaster, Warren Buffett and Jim Sinclair have pointed out the dangers of OTC derivatives. Indeed, Buffett calls them “toxic” … ”weapons of financial destruction” and Sinclair has aptly described the financial system as “sitting on a… trembling mountain of derivatives … think Weimar Republic.” Unfortunately, Deepcaster, Jim Sinclair, and Warren Buffett are correct. Indeed, the evidence indicates that The Cartel has developed a nefarious “End Game” plan, an overview which we describe here.
Details of The Cartel’s apparent ‘End Game’ can be found in Deepcaster’s June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations “ and its August 13, 2006 Alert “Massive Financial-Geopolitical Scheme Not Reported by Big Media” posted in the “Archives” at www.deepcaster.com. Fortunately, a Bill was introduced in the U.S. Congress (H.Con.Res.40), which opposes this nefarious scheme.
Masking the True State of the Economy and Financial Markets, is another aspect of The Cartel Regime – Data Manipulation, as we describe above.
Clearly, the Obama Administration’s proposal to further empower The Fed is a recipe for disaster for Investors and citizens alike.
Fortunately and in light of all of the foregoing Deepcaster has developed a Strategy for Protecting Wealth as well as Profiting and notwithstanding near-term outcomes of the battle over Fed Power:
The Strategy – Guidelines for Identifying Opportunities for Profit and Protection
- Get the Real Data. As many Investors suspect, Crucial Official Government and Agency Economic and Financial Data are of highly questionable validity. The Data set forth above from shadowstats.com is a good starting point.
Educate yourself about the realities of the marketplace using Alternative Data Sources such as Deepcaster, Gold Anti-Trust Committee (www.gata.org), and shadowstats.com. Gathering and staying attuned to authentic information regarding the marketplace can save one much financial grief as well as positioning one for profit.
- Take Account of both Overt and Covert Cartel Intervention. Many of these same investors who suspect Official Statistics also rightly suspect that the private-for-profit U.S. Federal Reserve and/or Central Banks overtly and covertly manipulate Major Markets. But they might not be aware that covert Market Interventions and Data Manipulation are likely far more pervasive than generally believed, as detailed in Deepcaster’s articles mentioned above.
As well, such investors may not have thought systematically about how one copes with and profits from such Intervention and Data Manipulation. Consider one example of Cartel Intervention: the Traditional and Legitimate Safe Haven from inflation, deflation, and risk, is Gold. Yet, Gold has, during the recent periods of extreme financial market turmoil, been taken down in price from its highs of over $1000/oz down to around the mid-$700 level (e.g. in 2008) when it should have skyrocketed.
In early March, 2008 Gold was over $1000/oz. when the Bear Stearns Crisis revealed the fragility of the Financial System. Gold should surely have skyrocketed then. Instead, it was brutally taken down. Were its price not manipulated, Deepcaster’s view is that its price would be over $3,000.00 per ounce today.
Deepcaster and others, including the Gold AntiTrust Action Committee, have offered considerable evidence that the Cartel* of Central Bankers and Favored Financial Institutions are the culprits behind these dramatic and devastating Takedowns. See Deepcaster’s Alert of 12/25/07 “A Strategy for Profiting from Cartel Intervention in Gold, Silver, Crude Oil and Other Tangible Assets Markets” in the Alerts Cache at www.deepcaster.com.
But there is a Profitable Refuge from Market Intervention and Data Manipulation. That Profitable Refuge lies in the Strategy described in the aforementioned Alert, certain characteristics of which we outline here:
- Recognize that the “Buy and Hold” strategy rarely succeeds anymore. The Eminence Grise of Newsletter writers, Harry Schultz perhaps put it the best when he stated that “buy and hold no longer works anymore, even with Gold.” Recent Market Developments should suffice to demonstrate this principle!
- Track the Covert Interventionals as well as the Technicals and Fundamentals and Overt Interventionals. Tracking the Footprints, as it were, of the Covert Interventionals (e.g. the Repo and TSLF Pools) daily can often, but not always, give one excellent clues about The Cartel’s next likely Interventional Move - - such clues are essential to preserving wealth and making profits. Deepcaster’s tracking of The Interventionals, for example, allowed him to recommend five short positions going into September, 2008, (i.e. before the Market Crash) all of which he has subsequently recommended be profitably liquidated. Deepcaster’s recent article “Cartel Angst Equals Investor Advantage” (9/18/2009 can be found in the ‘Articles by Deepcaster’ at www.deepcaster.com) lays out a specific strategy for use in investing and trading in the heavily manipulated Gold and Silver Market.
- Perhaps most important, be prepared to go both long and short Major Market Sectors - - long near the bottoms of Interim Takedowns and short near Sector Tops. The Interventionals are essential to helping identify these tops and bottoms. In Deepcaster’s view, it will be increasingly difficult to achieve a net profit for one’s portfolio if one is unwilling and/or unable to “go short” as well as “long”.
The Blossoming of the 200% and 300% (and other) leveraged ‘short’ and ‘long’ ETF’s described above provide a superb opportunity to go short and long with ease, but not, as we explain in recent articles, without risk.
- Be aware of and Active in the overall Geopolitical Landscape in order to gain an adequate understanding of how that Landscape might affect the present and future direction of the Markets. It is essential that one understand the motivations of the major players in the market and the resources at their disposal.
For example, a Major Motivation of the U.S. Federal Reserve and other key Central Banks is the protection and enhancement of the legitimacy of their Treasury Securities and Fiat Currencies as Measures and Stores of Value. Therefore, one can understand that one of their Major Goals will be to attempt de-legitimize Gold, Silver and the Strategic Commodities, including especially Crude Oil, as Stores and Measures of Value. With this in mind, the periodic takedowns of Gold and Silver and, since July, 2008, of Crude Oil, become understandable. Moreover, such an insight applied daily to the market can result in a tremendous edge in understanding market performance, present and future.
Moreover, regarding the assets at The Cartel’s disposal, if one tracks the Repurchase Agreement and TSLF Pools regularly, as Deepcaster does, and is aware of the other Interventional tools that The Cartel has at its disposal, then one gains a considerable edge.
- Finally, Hard Assets Partisans have the opportunity to become involved in Political Action to diminish the power of The Cartel. It is truly outrageous that the average unsuspecting citizen, and prospective retiree, can and does put his hard won assets in Tangible Assets and/or Retirement Accounts only to have those assets effectively de-valued by Cartel Takedowns, U.S. Dollar Devaluation and other Cartel actions. This is extremely injurious to many average citizens in many countries who are saving for the rainy day or retirement and have their retirement and/or reserves effectively taken from them. In order to help prevent this and similar outrages, we recommend taking three steps:
- Become involved in the movement to Audit and then abolish the private-for-profit U.S. Federal Reserve as Deepcaster, former Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, all have advocated. The ‘Audit The Fed’ Bill is H.R. 1207 (and has over 200 co-sponsors) and S604 in the Senate; and The Abolish The Fed Bill is H.R. 2755. www.carryingcapacity.org is a nonprofit organization which actively supports these bills.
- Join the Gold AntiTrust Action Committee, which works to eliminate the manipulation of the Gold and Silver markets (www.gata.org). GATA is a nonprofit organization, which makes a great contribution by gathering evidence regarding the suppression of prices of Gold, Silver and other commodities.
- Work to defeat The Cartel ‘End Game.’ Deepcaster has laid out the evidence regarding the Ominous Cartel “End Game” in “Coping with Power Moves in the Cartel's 'End Game' “ (04/24/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com. Clearly The Cartel is sacrificing the U.S. Dollar to prop up Favored International Financial Institutions and to maintain its power. But this sacrifice cannot continue forever. See Deepcaster’s July 2008 Letter in the ‘Latest Letter’ Archives at www.deepcaster.com.
Conclusion: If this aforementioned Strategy is employed effectively, it can result both in an increasing Core Position in Gold and Silver, and in considerable profit along the way.
Additional insights and details regarding this Strategy, which are essential to profiting from The Cartel’s Policies, are laid out in Deepcaster’s article of 3/06/09 entitled “Investor Advantage: Revisiting The Cartel’s ‘End Game’ ” in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.
Indeed, the Key Point of the Strategy for Protection and Profit is careful attention not only to the Fundamentals and Technicals but also to the Interventionals. These Overt and Covert Cartel-generated Interventions have the power to move markets as those who study the matter can attest.
Thus, the Key to Profit and Protection is a Strategy: Successful Investors must become Long-Term Position Traders, with their trading choices informed by the Interventionals, as well as the Fundamentals and Technicals. Moreover engaging in the Actions suggested above can help prevent The Cartel’s obtaining Superpower status, and aid in achieving wealth protection and profits as well.
Best Regards,
By DEEPCASTER LLC
www.deepcaster.com
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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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