Investor Gains from Looming Financial Armageddon
Stock-Markets / Financial Crash Feb 12, 2010 - 06:22 PM GMTBy: DeepCaster_LLC
“China has ordered managers of its vast currency reserves to withdraw from risky dollar assets and retreat to core debt guaranteed by the US government, a clear sign that Beijing is battening down the hatches for fresh trouble on global markets…
BNP Paribas said the move has major implications for global risk assets. ‘The message from Beijing is that we don't like this environment,’ said Hans Redeker, the bank's currency chief.
When the world’s biggest investor turns risk-averse, that is something you take notice of…”
“China orders retreat from risky assets”. Ambrose Evans-Pritchard, Telegraph.co.uk, 2/10/10
Indeed! Investors and Traders should take note! China’s Funds Managers are very savvy. The Chief Investment Officer, Mr. Zhu, was until recently head of hedge fund operations for U.S. financial giant PIMCO.
As well, China just increased bank reserve requirements resulting in a worldwide tumble in Equities Markets. The Powerful Chinese Dragon is sending a clear signal: if The West does not cut back on its borrowing and spending binge, The Dragon will push them to do it.
Thus, we have yet more evidence that Deepcaster (and a few others) continue to document, that shows it is likely that we can expect further Disasters in the Economy and Markets – Disasters beginning in 2010. (See e.g. “The Coming Cataclysm” (1/29/10) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.) And also there is The Greece Syndrome, likely extending to Spain, Portugal, Italy…and…the UK…and eventually the U.S.A?!
Thus our focus here is to lay out key Guidelines designed to help Investors Protect and Profit from The Coming Armageddon.
Essential background for these Guidelines is provided by former CFTC Chairman Brooksley Born’s observation that The President’s Working Group on Financial Markets (also The Plunge Protection Team) was “vehemently opposed” to Regulations which would have prevented the 2008 Financial Crises.
“‘We didn't truly know the dangers of the market, because it was a dark market,’ says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission (CFTC) -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. ‘They were totally opposed to it,’ Born says. ‘That puzzled me. What was it that was in this market that had to be hidden?’…
…Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008…
Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.” Frontline via John Carney, Business Insider, 10/21/09
Born’s observation that the President’s Working Group was “vehemently opposed” does not surprise Deepcaster in the least. The Working Group is de facto controlled by the private-for-profit Federal Reserve and its (de facto) approved appointees.
And the private for-profit Fed is leader of a Cartel* of Central Bankers and allied Mega-Financial Institutions which stand to gain from their (The Cartel’s) ongoing overt and covert Interventions in the Major Markets.
*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.”
Even the Mainstream Media is, finally, beginning to report on “Cabals”.
“Jan. 29 (Bloomberg) -- The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.
Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system -- apart from the matter of AIG’s bailout -- deserves further congressional scrutiny.”
“Secret Banking Cabal Emerges From AIG Shadows”David Reilly, Bloomberg, 1/30/10
And for good reason Cartel skulduggery is becoming widely exposed. Cartel-affiliated Financial Institutions have been, and are profiting to the tune of Trillions while Investors and middle class taxpayers around the world are losing Trillions.
For example, according to a Report by the Central Bankers’ Bank itself – The Bank for International Settlements (BIS) in Basel Switzerland – Mega Financial Institutions gained some $11.9 Trillion in the market value of their OTC derivatives between June, 2008 and December, 2008, when the Market Crash was causing investors around the world to lose Trillions. See for yourself at the BIS website: www.bis.org (path: Statistics>Derivatives>Table 19).
Does this not provide some evidence that the Fall, 2008 Market Crash was Planned? Indeed, Deepcaster was not the first to provide clear and convincing evidence that the 2008 Market Crash was planned. (See “Surmounting The Cartel’s ‘End Game’ Juggernaut” (9/25/09) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com for details.) Several reputable analysts including the Eminence Grise of the Newsletter writers Harry Schultz, and financial expert F. William Engdahl, have so indicated.
Yet another impediment to Investor Protection and Profit (and to an informed electorate) is the fact that Bogus Official Statistics hide key Realities (like e.g. de facto Wealth Confiscation) from Investors and the general public alike. Unfortunately, the Real Numbers show another Crash is highly likely. Consider the following
“January, 2010 real M3 fell an estimated 5.2% versus January, 2009, following an annual contraction of 3.3% in December, 2009 and 0.3% in November…
Commentary No. 268 of December 30, 2009 discussed the leading relationship between real (inflation-adjusted) year-to-year contractions in the broad money supply (M3 and the SGS-Ongoing M3) and the economy, and a signal for a double-dip downturn. In modern economic history, every time there has been such a year-to-year liquidity contraction, the economy subsequently has turned down, or if already in recession, the economic downturn has intensified. A signal for such an intensification of economic contraction was generated in November and December, and the signal got significantly stronger in January.”
Plunging Inflation-Adjusted Annual M3 Change Generates Intensified Signal of Renewed Economic Downturn. John Williams, Shadowstats.com
The foregoing indication of a dramatic contraction in the money supply is but one more indicator of looming Armageddon in the Economy and markets.
Consider also the following Real Numbers from Shadowstats.com which calculates the Real Numbers for the U.S.A. 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 January 15, 2010
2.72% 9.68% (annualized January Rate)
U.S. Unemployment reported February 5, 2010
9.7% 21.2%
U.S. GDP Annual Growth/Decline reported January 29, 2010
0.10% -4.62%
Bogus Official Statistics serve to conceal the Confiscation of the Wealth of Citizen-Investors worldwide.
Consider as well the Reality of a $70 trillion plus Total U.S. Budget deficit and downstream unfunded liabilities, which can never be repaid without sacrificing the U.S. Dollar.
And the foregoing are but three of many salient negative fundamental indications.
Couple these with a consideration of mid and long-term technicals for the Equities Markets:
- Equities have broken beneath an expanding bearish wedge.
- Several Stochastic indicators are on Sell Signals
- Bearish Short-Term and Long-Term Head and Shoulders Tops are complete and confirmed.
- The downside Targets for these Technicals are genuinely fear-inducing when one consider what they mean for the economy and Markets (See Deepcaster’s Forecasts in his January and February Letters and Alerts for details – all posted at www.deepcaster.com)
- Key Equities Indices have dropped below the lower boundaries of their upward trend channels (e.g. the NDX) – the NDX has also formed a rising Bearish wedge.
So, if Armageddon for the Economy and Markets is coming soon, how do Investors gain and protect?
The Strategy – Guidelines for Identifying Opportunities for Profit and Protection
- Hedge for Profit. Above all, it will be most important not only to hedge one’s portfolios, and to lighten up considerably on the long side, but also to hedge for profit. That is, it is essential to regard the coming Takedowns in the Equities and other key Markets as Profit Opportunities. Be just as willing to “play on the short side” as to invest on the long side.
- 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 (e.g. in 2008) from its highs of over $1000/oz down to around the mid-$700 level 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! Indeed The Dow was at about its current level of 10,000ish, a decade ago. And, adjusted for inflation Dow stockholders have actually lost over 30% of the purchasing power of The Dow’s dollar-value.
- 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 for example, 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.Unfortunately these bills have been watered down in this session of Congress. 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.
Additional insights and details regarding the foregoing 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.
Details of the Strategy designed to profit in spite of Cartel Intervention specifically in the Precious Metals markets are described in “Defeating The Cartel…With Profit” (3/28/2008) 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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