Key Tips for Surmounting Rigged Financial and Commodity Markets
Stock-Markets / Financial Markets 2013 Jun 22, 2013 - 12:30 PM GMTBy: DeepCaster_LLC
“We no longer have a free market. The world's financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers.
“Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever.
“The Fed, the ECB, the Bank of England, the Bank of Japan, et al., own $10 trillion in bonds. China, the petro-powers, et al., own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25 percent of global GDP. They are the market. That is why Fed taper talk has become so neuralgic and why we all watch Chinese regulators for every clue on policy….
“…a paper co-written by Frederic Mishkin -- Bernanke's close friend and a former board member -- warning that it is becoming ever-harder for the Fed to extricate itself safely from QE, and the door may shut altogether from 2014.
“’Crunch Time: Fiscal Crises and the Role of Monetary Policy’said the Fed's own capital base could be wiped out ‘several times’ once borrowing costs spike. It said trouble could compound at an alarming pace, with yields spiking up to double-digit rates by the late 2020s. By then Fed will be forced to finance spending to avert the greater evil of default.
“Then we had the minutes of the Federal Advisor Council arguing that it is "not clear" whether QE is really boosting the economy, while the toxic side-effects are all too clear. It warned of "unsustainable bubbles" in asset prices. It said zero rates are pushing pension funds under water on their liabilities, and even claimed that QE may be causing firms to defer investment.
“Since then the Bank for International Settlements has issued a full frontal attack on the credibility of QE, saying it "doesn't work" and is doing more harm than good. Even the Boston Fed's ultra-dove Eric Rosengren has talked of early tapering, a clear sign that the Fed's centre of gravity has shifted..”
“Ambrose Evans-Pritchard: If Bernanke really shakes tree, half the world may fall out,” The Telegraph, London, via gata.org, June 18, 2013
Yes, Evans-Pritchard is correct, we no longer have a free market and have not had one for several years.
The Central Banks and Sovereign Wealth Funds own $20 Trillion of Bonds and (not mentioned by Evans-Pritchard) Control, to the extent they wish to, hundreds of $Trillions of Derivatives.
The Reality is that the Central Banks and Funds are the “Markets” when they choose to be, which is often.
Nonetheless, Rigged Markets afford Opportunities to Profit and Protect and we offer the following Observations to help Readers do so.
- That which cannot continue, will not.
We have made this observation before specifically regarding QE.
QE creates Asset bubbles and inflation, indeed probably Hyperinflation. Get prepared. It is coming. Real Inflation in the U.S. is already a Threshold Hyperinflation 8.99% per shadowstats.com.
- The Fed will likely not be able to “Taper” and Terminate QE according to its recent schedule. The consequences would be too dire.
We have seen a harbinger of the consequences – recent Equities Markets Takedowns on even the talk of tapering.
But QE Must End eventually so what comes next? Next, in addition to asset bubbles bursting and hyperinflation. “Bail-ins.”
- Simply put, “Bail-ins” occur when Depositors in Banks are deemed to be Creditors and a portion of their Deposits Confiscated. Get prepared for “Bail-ins” with Cyprus as the Model.
- Therefore, put a significant portion of your assets outside of the Banking System.
Jim Sinclair is worth noting again on this point
“My Dear Extended Family
“But still you do nothing. Why?
“You do not diversify. Why?
“You do not direct register. Why?
“You still do not certificate. Why?
“You let ignorant brokers talk you out of protecting yourself. Why?
“You keep your shares in street name of CEDE and Company and do not even know it. Why?
“You trust computer based banks. Why?
“Everything you have done with computer based banks is in public record and this is not a problem for you. Why?
“I am on a mission to inform you, yet you look the other way as if asleep. Why?”
“The international bankster plan now is delay and dissuade, so hurry up and do the needed NOW!
“1. Many people are finding that withdrawing large sums from the banking system that used to be done on the same day by bank wire now takes two weeks or more.
“2. Any new account you wish to open anywhere in the world, you must open in person.
“…Regarding banks most likely to be bailed in, they are those that took bail-out money.
“Here is the list. Do the necessary please and do it now, For your sake, not mine!”
IBID, Jim Sinclair
jsmineset.com, 06/12/2013
- Stay Focused on Real Trends and Real Numbers, not the Spun, Distorted or Promotional ones Marketed by the Mainstream Media.
Deepcaster and other Independent publishers can help Investors do that.
The following summary of Real Trends and Real Numbers from John Williams of Shadowstats is helpful.
“…The U.S. economy is showing signs of a second-quarter 2013 contraction; headline consumer inflation remains contained; and ongoing banking-system stress is suggested in the latest monetary data….
“The expansion of QE3, at the beginning of calendar-year 2013, encompassed new purchasing of U.S. Treasury securities. To date (June 12th), the Federal Reserve effectively has monetized 78.4% of net new U.S. Treasury debt since January 2, 2013. With the U.S. Treasury playing accounting games that should hold the gross federal debt at its debt ceiling through Labor Day, the Fed’s monetization should top 100% of net issuance, year-to-date, within the next two months. Even so, at the onset of the current debt-ceiling limitations on new issuance, the Fed’s monetization year-to-date (May 20th) already was at 69.3%.
“Banking System Under Stress? Year-to-year change in money supply versus monetary base is detailed in the Hyperinflation Watch section. In the post-2008 period of extreme accommodation by the Fed, there has been some correlation between annual growth in the St. Louis Fed’s monetary base and annual in M3, as measured by the ShadowStats-Ongoing M3 Estimate. The correlations between the growth rates are 58.1% for M3, 39.9% for M2 and 36.7% for M1, on a coincident basis.
“While there has been no significant flow-through to the broad money supply from the expanded monetary base—banks still are not lending normally into the regular flow of commerce—there appears to have been some minor effect. The ShadowStats contention has been that the Fed’s easing activity has been aimed primarily at supporting banking-system solvency and liquidity, not at propping the economy or containing inflation. When the Fed boosts its easing, but money growth slows, as seen at present, there is a potential indication there of mounting financial stress within the banking system. More will follow on this in later missives.
“May 2013 Inflation and Economic Activity: Bottoming Inflation, Contracting Economy. On the inflation front, both the headline PPI and the CPI turned to the plus side in May, as the distorting seasonal factors—tied to energy inflation—began to migrate from inflation-suppression to inflation-boosting. The impact on headline inflation reporting should be heavily to the upside for the next several months. Separately, as recent dollar strength has started to wane, oil prices again are pushing higher—tied both to currencies and to Middle Eastern tensions. Inflationary pressures should continue to mount from U.S. dollar problems (see Hyperinflation Summary), not from an economic recovery.
“Indeed, the economy is slowing. …
“Beginning to Approach the End Game. Nothing is normal: not the economy, not the financial system, not the financial markets and not the political system. The financial system still remains in the throes and aftershocks of the 2008 panic and near-systemic collapse, and from the ongoing responses to same by the Federal Reserve and federal government. Further panic is possible and hyperinflation remains inevitable.”
“May CPI, Housing Starts, Real Retail Sales, Real Earnings, Systemic Solvency,” Commentary No. 534, John Williams, Shadowstats.com
- Regarding Bail-Ins. Get a Significant Portion of your Assets outside of the Banking System by purchasing Physical Gold and Silver.
What about the recent, and continuing, Precious Metals Paper Price Takedowns, you may ask.
We believe the Paper Price Takedowns are an Opportunity – to acquire Physical at lower Prices (This is an Opportunity to acquire cheap Mining Shares as well, but the Priority att this time should be to acquire one’s Full Allocation of Physical.)
Or if one is skeptical about this Advice (Tip #6) just consider what the Central Banks and India and China are actually doing. The Central Banks are facilitating the Paper Price Takedowns and then buying Physical on the Cheap. And Chinese and Indian Investors are buying Physical in Record Amounts.
And Premiums for Physical have been Rising.
Consider what this Precious Metals Physical Market is Actually telling us! And Act Accordingly.
Best regards,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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