Gold Golden Antidote to Our Being Fleeced!
Commodities / Gold and Silver 2010 May 14, 2010 - 01:53 PM GMTBy: DeepCaster_LLC
“Goldman Sachs Group Inc. traders didn't lose any money at the end of each trading day during the first quarter…
Traders raked in more than $100 million daily for 35 days and made no less than $25 million daily during the rest of the three-month period, according to a regulatory filing.”
“Goldman Traders Had a Perfect Quarter”
Joe Bel Bruno, The Wall Street Journal, 5/11/10
“The market action last week was flagrant manipulation – whether intentional or otherwise. The 10-minute crash and rebound harmed the public and rewarded Wall Street firms with enormous profits. Public stop orders were all taken out at discounted prices. And anyone who actually tried to buy into the 1,000-point decline in the Dow was turned away by the wide bid/ask spreads…
The little guy lost the battle last week.
Don't forget, though, the pendulum swings both ways. I suspect years from now, we'll look upon last week as the exact moment Wall Street's excessive screwing of the public was exposed and the big firms' profit machines finally went too far.”
“The One Thing That's Clear About the Market Right Now”
Jeff Clark, The S&A Short Report, 5/11/10
“The latest quarterly reports from the big Wall Street banks revealed a startling fact: None of the big four banks had a single day in the quarter in which they lost money trading.
For the 63 straight trading days in Q1, in other words, Goldman Sachs, JP Morgan, Bank of America, and Citigroup made money trading for their own accounts.
Trading, of course, is supposed to be a risky business: You win some, you lose some. That's how traders justify their gargantuan bonuses--their jobs are so risky that they deserve to be paid millions for protecting their firms' precious capital. (Of course, the only thing that happens if traders fail to protect capital is that taxpayers bail out the bank and the traders are paid huge "retention" bonuses to prevent them from leaving to trade somewhere else, but that's a different story).
But these days, trading isn't risky at all. In fact, it's safer than walking down the street.
Why?
Because the US government is lending money to the big banks at near-zero interest rates. And the banks are then turning around and lending that money back to the US government at 3%-4% interest rates, making 3%+ on the spread. What's more, the banks are leveraging this trade, borrowing at least $10 for every $1 of equity capital they have, to increase the size of their bets. Which means the banks can turn relatively small amounts of equity into huge profits--by borrowing from the taxpayer and then lending back to the taxpayer.
Why is the US government still lending banks money at near-zero interest rates? Ostensibly, for the same reason that the government bailed out the banks in the first place: So the banks will lend money to small businesses, big businesses, and other participants in the "real economy."
But the banks aren't lending money to the real economy…
The government's zero-interest-rate policy, in other words, is the biggest Wall Street subsidy yet.” (emphasis added)
“Huge, Ongoing Wall Street Subsidy Allows Banks to Coin Money Every Day at Savers' Expense” Tech Ticker, 5/13/10
“The biggest Wall Street banks slashed their small business loan portfolios by 9% between 2008 and 2009…”
“TARP watchdog: Big banks slashed small business credit lines” Catherine Clifford, CCN Money, 5/13/10
First, we consider several example of fleecing, whether intentional or not, in order to clearly see the Golden Antidotes.
The recent $1 Trillion EU (kick-the-can-down-the-road-Three-years) Bailout of Greece was a fleecing too. U.S. taxpayers/investors are on the hook for another $64 billon! [The IMF will provide $320 billion and since U.S. Taxpayers provide about 20% of IMF funding, their “hit” is about $64 billion.]
And that Bailout is not mainly a Bailout of Greece either – certainly not mainly a Bailout of the Greek People.
Rather it is mainly a Bailout of those Mega-Banks who lent to Greece. Can’t let the Mega-Bankers take a hit, can we?
And our many readers who are Eurozone Investor/Taxpayers cannot be too happy either. The EUR $500 Billion the EU leaders committed them to pay will mainly go to, er, repay the Mega-Bank Lenders.
And what about those bills to Audit The private for-profit Fed sponsored by Rep. Ron Paul and favored by a large majority of the American people?
Well they got watered down big-time into what we call “Empower The Fed and Provide a Fig-leaf Cover for Politicians” Bill.
That “Empower The Fed and Provide a Fig-leaf Cover for Politicians” Bill just approved by some 96 Senators would allow only a one-time Audit of The Fed and only an Audit of The Fed’s Emergency Funding Activities.
And it looks to us like The Fed will get to define what constitutes “Emergency”…
Look for a very Narrow definition.
So in this year’s election ask your Senators and Representative if they voted for the stand-alone Version of the Ron Paul “Audit The Fed” bills. And ask your Senators if they voted for the Vitter Amendment.
If they answer “NO”, you will know they did not support any meaningful Audit of The Fed.
And then there is The Grand Fleecing.
All that Fiat Currency they are “printing” and all those Debt Obligations they are creating for Taxpayers to bear, have already begun to create the beginnings of a hyperinflation. And this Inflation has been, and is, diminishing the purchasing Power of Ordinary Taxpayers/Investors’ Fiat Currencies and Retirement Savings. But we have a Golden Antidote to this.
But, first, realize you would likely not be aware of this nascent hyperinflation from the (Bogus!) Official Numbers.
The Powers-that-be have hidden this “Deception” from us via their Bogus Statistics. So consider the “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 (per Shadowstats.com)
Annual Consumer Price Inflation reported April 14, 2010
2.31% 9.47% (annualized April 2010 Rate)
U.S. Unemployment reported May 7, 2010
9.9% 22.0%
U.S. GDP Annual Growth/Decline reported April 30, 2010
2.55% -1.48%
And there is one other Regime implementing A Grand Fleecing we should identify before we describe the Golden Antidotes.
And that is that a Fed-led Cartel of Mega-Bankers and their Agents have for years not only been suppressing Gold and Silver Prices, but also intervening in other Markets including Equities and, especially, Strategic Commodities. These Interventions themselves often serve as another form of “Fleecing”.
*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 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.
So far as the Price Suppressions Gold and Silver are concerned, The Cartel’s motivations for this are clear.
To the extent that Gold and Silver become ever more widely recognized as the Ultimate Stores and Measures of Value, that tends to delegitimize the Mega-Banker’s Crown Jewels – Treasury Securities and Fiat Currencies.
Fortunately, all of us Investor – Taxpayers around the world have Profitable and Protective Antidotes to the aforementioned Outrages: Gold and Silver.
Indeed, the Price Appreciation and Wealth Protection Prospects for Gold and Silver are very Bright (Pun intended).
But given repeated Cartel attacks on Gold and Silver Prices in recent years, it is important to develop a Strategy to Maximize Profits and Minimize losses from these attacks. Key Aspects of that Strategy are:
- The Recognition that while the Cartel is still Potent, it is much less potent than it was even a few months ago due especially to:
- The years-long efforts of the leaders and members of GATA in exposing Precious Metals price suppression
- The particular Allegations that Major Gold Repositories do not have the physical Gold they say they do. See the following allegation regarding GLD and Deepcaster’s recent article (in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com) regarding the allegation concerning the London Bullion Market Association.
“…another CNBC guest, David Lutz, managing director of the Stifel Nicolaus brokerage and investment banking firm in St. Louis, having been asked for his recommendations in regard to gold, disparaged the gold exchange-traded fund GLD as follows: "I wouldn't necessarily look at the GLD because they don't invest in the physical gold.””
“CNBC, GLD is dissed for not investing in physical gold”
Chris Powell, GATA, 5/12/10
These reports are doubtless leading Major Gold Investors to demand delivery and possession of Physical Gold.
And we recommend that you follow their lead with a significant portion of the funds you allocate to Precious Metals purchases.
Indeed, because Physical held in one’s personal possession is so precious, some forms of it trade at as much as a 20% premium to the spot price of “paper” Gold.
But not all forms of Physical are Equal, as it were.
Some forms are much more liquid than others, and some are much more susceptible to counterfeiting, as e.g. by Tungsten-lacing.
Deepcaster has recently recommended Purchases of One Form of Physical Gold and Silver, that is quite liquid, not easily susceptible to counterfeiting, and commands a considerable premium over the spot price of Paper Gold (and Silver). See Deepcaster’s Alerts “Real Moves & Fake-outs Launching; see Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds; & Buy Reco.” (date: week ending 5/14/10) and "Cartel Failing? Precious Metal Buy Reco! Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & Bonds" (date: week ending April 16, 2010) in the ‘Alerts Cache’ at www.deepcaster.com.
Nor should you give Short Shrift to Gold and Silver Miners.
But purchasing shares of these should be done with particular care, because, being “paper” (or, usually, electronic entries on some remote server) Miners shares are susceptible to periodic Cartel attacks and Price Takedowns.
Thus, they should be accumulated near interim lows resulting from Cartel Interventions.
In order to estimate these interim lows one needs not only to consider Fundamentals and Technicals, but also Interventionals.
Deepcaster has developed a Strategy which takes into account all three and which is set forth in “Profiting From Cartel Intervention” (06/30/06) in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com.
In sum, had the price of Gold not been suppressed, it would, in our view, now be priced in excess of $3,000/oz (and Silver in excess of $80/oz).
We expect to see those prices in the next few years, or sooner.
Consider Richard Russell’s thoughts:
“The public doesn't understand that the stock market is in the process of topping out. Even as business news turns rosy, stock holders are beginning to show losses. So while the public is losing money in the stock market, they are missing out in one of the greatest bull markets in history the gold bull market, which is now heating up. The smart money of the world is fleeing fiat currencies and loading up on gold as well they should.”
Richard Russell, Dow Theory Letters
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 250 co-sponsors) and S604 in the Senate; and The Abolish The Fed Bill is H.R. 2755.Unfortunately these bills have, thus far been dramatically watered down in this session of Congress. Nonetheless continuing pressure to pass these Bills is important because it is in the long term interest of almost all investor - taxpayers Worldwide. 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 (and the recent U.S. Dollar bounce) The Cartel is sacrificing the U.S. Dollar over the long-term 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.
- Use a substantial portion of the funds you allocate to Precious Metals purchases, to buy and take delivery and personal possession of physical Gold and Silver. This will weaken the Cartel and likely enrich you
Perhaps Investor – Taxpayers who are outraged by the fleecing will find some solace in the following News items.
“Federal prosecutors in New York are conducting a broad criminal investigation into whether major Wall Street financial firms misled investors, a person familiar with the matter said on Thursday.
The person said the preliminary criminal probe is being conducted with U.S. securities regulators and involves JPMorgan Chase, Citigroup, Deutsche Bank, UBS, Morgan Stanley and Goldman Sachs Group Inc.”
“Major Wall Street firms face criminal probe: source”
James Vicini, Reuthers, 5/13/10
Our question in closing: Will there be a whitewash?
Unlike most Namby Pamby (and/or Sold-out) Members of Congress, the Icelanders are not messing around. Must be that Viking Tradition.
“REYKJAVIK — More than a year and a half after Iceland's major banks failed, all but sinking the country's economy, police have begun rounding up a number of top bankers while other former executives and owners face a two-billion-dollar lawsuit…
Four former Kaupthing executives, who all live in Luxembourg, have meanwhile been arrested in Iceland in the past week and Interpol has issued an international arrest warrant for that bank's ex-chairman, Sigurdur Einarsson.
Former head of the bank's domestic operations, Ingolfur Helgason, and former chief risk officer Steingrimur Karason were arrested late Monday on arrival from Luxembourg, just days after former Kaupthing boss Hreidar Mar Sigurdsson, along with Magnus Gudmunsson, who headed the bank's unit in Luxembourg, were taken into custody.”
“Bankers jailed, sued as Iceland seeks culprits for crisis”
Haukur Holm, Agence France-Presse, 5/13/10
Best Regards,
By DEEPCASTER LLC
www.deepcaster.com
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