Investor Gainful Navigation Aids
Stock-Markets / Financial Markets 2011 Oct 08, 2011 - 04:03 AM GMTBy: DeepCaster_LLC
"Governments all over the world have created trillions of currency units since 2007 in the mistaken idea that it would create prosperity. The Americans, but also the Europeans, the Chinese and others, have papered things over for the short run mainly by inflating the stock markets, artificially depressing interest rates, and slowing the fall of the real estate market. All that extra currency has made people think they are richer than they are, and has encouraged extra consumption, which is a large part of the problem. Now they [central bankers] are out of bullets. We are coming out of the eye of the hurricane and it is going to be much more serious than it was in 2007, 2008, and 2009. That is because all those currency units they created are causing tremendous price rises on the retail level. It is going to be devastating for the average guy. A complete breakdown in confidence is happening right now in the US dollar. The Chinese, or at least their central bank, have more US dollars than anybody else, and they want to get rid of them. They are trying to offload those dollars, for instance in Africa, to get rid of them for real wealth. Nearly everybody in the world feels this way. The new deals that they cut, with the Iranians and the Argentines for instance, are almost like barter deals. Nobody wants to use the paper currency of an unreliable third party.
The US dollar is like an Old Maid card. Nobody wants to get stuck holding it. In five years the dollar will have lost its reserve status completely. It may be more like two or three years. To put such a near-term time frame on something is hard that is so momentous in size. There is no way out. It gets vastly worse from here. As unemployment and business failures start going up, the government deficit will rise to $2 trillion per year... Their supposed cuts are inconsequential, trivial, and meaningless. In addition, there is no reason to believe that spending will not skyrocket from here…
The only ultimate cure for this is that interest rates go back up to the 12 or 14% level, which would reward prudent savers and punish borrowers. But that is just a start. Military spending should be cut 90%, with the closure of all foreign bases, covert operations, and aid… The Fed should be abolished and Gold reinstituted as money. The national debt should be overtly defaulted on for numerous reasons, but certainly because it acts as a mortgage on future generations. But none of that is going to happen, rather the opposite will happen. These prescriptions, while economically and morally correct, are a complete political pipedream. They have actually gone beyond the point of no return. There is no way to avoid a genuine catastrophe, much worse than what happened in the 1930s…
Destroying the US dollar is the only way to get rid of all this debt… But they are not considering that the people who will be hurt the worst are the prudent people, people who have saved dollars. They will destroy the prudent parts of society that actually try to produce more than they consume and save the difference. Prudent middle class workers are going to be wiped out, and the people who borrow and are deeply in debt are going to be rewarded by having their debt wiped out. That is perverse. It is going to wipe out the middle class in the US and all over the world… They will wind up destroying the productive parts of the economy to save the government. The parasite will kill the host. It is a total disaster, with wide-ranging consequences, and it is going to happen in this decade…
Over the next year or so Gold & Silver are going much higher. Gold is the only financial asset that is not simultaneously somebody else's liability.”
Doug Casey, Casey Research, 9/4/11
An Essentially Gloomy, but in our view largely Accurate, Forecast has recently been dished up for us by the straight-talking eloquent Doug Casey.
But this Eloquent and Insightful Forecast is short on suggestions for how investors might approach and surmount these challenges… to the extent they can be surmounted.
So we provide Essential Navigation Aids (N.A.).
“Government all over the world have created trillion of currency units since 2007… (that) currency has made people think they are richer than they are… all those currency units are causing tremendous price increases on the retail level.”
- Indeed, the Bailouts and QE 1 and 2 have not only helped mainly the Mega-Bankers, but have also caused dramatic price rises in Essentials like Food and Energy.
And these Price Rises have been masked by Bogus Official Statistics. For example real U.S. CPI is 11.4% and Real U.S. Unemployment 22.8% accordingly to Shadowstats.com**.
N.A. Portfolios should be reoriented toward Tangible Assets in Relatively Inelastic Demand. Agricultural Businesses and Products are the Prime Targets here. And, of course, toward Real Money – Gold and Silver.
Move away from Financial “Assets” and Tangible Assets demand for which is a largely function of Economic Growth and Growth Prospects (e.g. Copper).
“Now they (central Bankers) are out of bullets… it is going to be much more serious than it was in 2007, 2008, and 2009… all those currency Units they created are causing tremendous price rises on the retail level. It is going to be devastating for the average guy.”
- Yes, we should expect more Inflation. Indeed, we should expect Hyper-stagflation, eventually because of those additional “Currency Units”.
But the Central/Mega Bankers are not entirely out of bullets, unfortunately.
From them we can expect more of the same (Money “Printing” and credit creation) in a desperate attempt to revive the economy (and save their own skins), more money printing and credit creation.
And it is this additional Money printing in excess of GDP growth, which will eventually be Hyperinflationary, exacerbating an already increasing Inflation (e.g. U.S. CPI is already at 11.4% per Shadowstats.com).
N.A. Thus the Assets of Savers and Retirees will be dramatically diminished; therefore the Antidote is the same as for #1.
“The U.S. Dollar is like an Old Maid card. Nobody wants to get stuck holding it for five years, the dollar will have lost its reserve status completely. There is no way out… As unemployment and business failures start going in the government deficit will rise to $2 Trillion/Yr.”
- Yes, Alas, the Private for-Profit Fed is destroying the U.S. Dollar for the benefit of the International Banking Cartel*. It is just a Matter of time. See Deepcaster’s exposes of the Cartel’s ‘End Game’ “Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’ (1/13/11)” found in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com.
But it is not just the U.S. Dollar. Other Fiat Currencies such as the Euro are doomed as well. And now there is no longer any Fiat Currency Refuge from Fiat Currencies because the last significant one, the Swiss Franc, was recently pegged to the Euro.
N.A. Gold and Silver are clearly the Antidotes to the Fiat Currency Disease.
However, both are subject to ongoing Price Suppression attacks by a Cartel* of Central Bankers, and Allies, because strength in Gold and Silver prices tends to delegitimize their Fiat Currencies and Treasury Securities.
*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 profitably.
But the ongoing Cartel intervention in the Gold, Silver, Equities and other Markets, while still potent, is becoming less and less sustainably effective.
“Graham Summers from Gains Pains Capital summarized well. The European stock markets have reversed in the last week, to produce great danger signals, a message that measures taken are failing. Summers wrote, ‘If a coordinated intervention on the part of five central banks cannot even give us one week of gains in the European banks, nor lower the cost of Dollar swaps, then we are in the absolute End Game for central bank intervention. Remember, this was not just a single money pump from the Fed. This was five central banks working together. And they could not even paper over the European banking system's problems for one week. The mainstream financial media is out claiming that the reason we have already undone the gains produced by the intervention was that the central banks did not do enough. It is interesting that having spent more money than WWI, WWII, and the New Deal combined, central banks are still thought to not be doing enough. Never does anyone ask MAYBE THE CENTRAL BANKS CANNOT FIX THIS MESS? Let's be blunt here. The Fed and pals just pasted a huge $multi-trillion band-aid over the system in 2008. They did not fix anything. The fact they are now losing control of the system again and we are fast approaching the next Lehman event should be proof positive that central banks have no idea how to get us out of this mess. We could be on the verge of another 2008 episode.’”
Graham Summers from Gains Pains Capital, in
“Gold Investment Report, Precious Metal & Energy, Currencies & Stock Indexes”
Jim Willie CB, the Golden Jackass, 9/21/11
“Their supposed cuts are inconsequential, trivial, and meaningless. In addition, there is no reason to believe that spending will not skyrocket from here…”
- Indeed, even $4 Trillion in cuts would not make the U.S. Debt Payable. Similarly, Debts of the PIIGS, and France, and the UK are also likely ultimately unpayable.
N.A. The C.B.’s will try to print/lend their way out, which will further degrade the Purchasing Power of the Fiat Currencies.
Essential Tangible Assets are the Essential Refuge, and Profit Center.
“The only ultimate cure for this is that interest rates go back up to the 12 or 14% level, which would reward prudent savers and punish borrowers. But that is just a start. Military spending should be cut 90%, with the closure of all foreign bases, covert operations, and aid…”
- Interest rates will eventually have to return to 10 to 12%, and dramatic cuts in spending on the military will be fiscally necessary.
N.A. The time is approaching when the biggest Asset Bubble in History, U.S. long-dated Treasuries will start to burst. Get prepared to get short, and we will make the call when we think the time has come.
“The Fed should be abolished and Gold reinstituted as money.”
- Yes.
N.A. we have long advocated this as necessary. Work to Audit and then Abolish The Private for-profit Fed. President John F. Kennedy took a Giant Step toward accomplishing this Goal by authorizing the issuance of U.S. Notes to ultimately supplant Federal Reserve Notes. Shortly thereafter he was killed and U.S. Notes disappeared from circulation.
“The national debt should be overtly defaulted on for numerous reasons, but certainly because it acts as a mortgage on future generations. But none of that is going to happen, rather the opposite will happen. These prescriptions, while economically and morally correct, are a complete political pipedream. They have actually gone beyond the point of no return…
Destroying the US dollar is the only way to get rid of all this debt… But they are not considering that the people who will be hurt the worst are the prudent people, people who have saved dollars…”
- The Debt is already being defaulted on because the Fed is systematically degrading the Purchasing Power of the U.S. Dollar.
N.A. See our article regarding the Cartel’s ‘End Game’ – “Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’ (1/13/11)”.
“Prudent middle class workers are going to be wiped out, and the people who borrow and are deeply in debt are going to be rewarded by having their debt wiped out. That is perverse…
They will wind up destroying the productive parts of the economy to save the government. The parasite will kill the host. It is a total disaster…”
- Unfortunately, those Prudent Middle Class Workers who do not, or cannot, protect themselves will indeed be wiped out. But it’s not the “government” per se which will thereby be saved, but rather the international Mega-Bank Cartel.
N.A. Tangible Asset Acquisition and Political Action such as we describe in Deepcaster article – “1/100% Interest Fed ‘Loans’ To Mega-Bankers--Investor Antidotes (6/2/11)” are the Ultimate Remedies for the Middle Class. (See also -- “2011 Profit & Protection Essentials; Bubbles to Pop & Bullish Sectors (12/30/10)” in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com)
“Gold & Silver are going much higher. Gold is the only financial asset that is not simultaneously somebody else's liability.”
- Yes, Gold and Silver are going much higher.
N.A. Buying Gold & Silver and Gold & Silver Mining Shares at the right time and in the right form will ultimately provide Protection and Profit (see our “Profit, Protection Despite Cartel Intervention (12/22/10)”).
N.A. See our “Black Swan World: Golden Antidotes (3/31/11)”
Gold and Silver are the only Monetary Assets which are not also someone’s liability.
In sum, consider the following Guidelines indicating how Investors may take advantage of the Opportunities presented, and help avoid at least some of the risks and losses in the Precious Metals context:
- Understand that a Cartel* of Central Bankers and their Mega-Bank Allies have for years been suppressing Precious Metal prices.
- Understand that it is now harder for The Cartel to successfully suppress prices, because there is an increasingly severe supply shortage of Physical Gold and Silver, especially of Silver, because ever more investors are becoming aware that certain Mega-Banks do not have the Physical Gold and Silver they claim and thus these wise Investors are taking physical possession, and delivery.
- Nonetheless, The Cartel’s Price Suppression Regime is still Potent as the recent price Takedown of Gold and Silver show.
- Realize that these Price Suppression Interventions form Patterns and reveal tendencies, aka Interventionals, which are useful in forecasting the next Intervention. They facilitated Deepcaster’s earler correct forecast that Precious Metal prices would be taken down as they have been in recent weeks (And that is why Deepcaster recommended taking profits on Gold and Silver positions several times earlier this year in advance of Takedown).
- Develop a Strategy for Buying at Interim Lows during takedowns (see below) and taking profits (at least partial profits near interim highs)
- If one chooses to liquidate a portion of one’s Paper Gold and Silver, do so before a Takedown begins in earnest
- Use Takedowns as an Opportunity to Convert some Paper Silver and Gold profits into Physical Silver and Gold. Not only do you get to buy these Precious Metals “on the cheap” but you also give the Mega-Bank Market Riggers Fits, because they have a greatly diminished supply of these Physical Precious Metals, but unlimited quantities of “Paper Gold and Silver”. Deepcaster has recommended a particular Physical Form of these Metals which is resistant to Takedowns.
- The miner shares are subject to severe Cartel Price Suppression also, but well-timed purchases of share can result in substantial profits. Deepcaster’s weekly Alerts aim to give advance notice. Do not 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 especially vulnerable to periodic Cartel attacks and Price Takedowns.
Thus, they are most profitably 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.
In sum, there will be a time when Cartel price capping is ineffective and Gold & Silver make record moves upward. The benefit of employing the aforementioned guidelines is that one will likely be long in one’s speculative as well as core positions when this happens.
By DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation Wealth Enhancement
© 2011 Copyright DeepCaster LLC - All Rights Reserved
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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