Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Positioning for Five Impending Investment Critical Events

Stock-Markets / Financial Markets 2011 Oct 29, 2011 - 02:00 AM GMT

By: DeepCaster_LLC

Stock-Markets

 

Best Financial Markets Analysis Article“The end crisis will be postponed until the sovereigns go bankrupt.” Marc Faber, 10/27/11

Eurozone issues are critical for many reasons including the fact that they are a harbinger of those facing the World’s largest Economy and Reserve Currency. Issuer, the USA, in the not too distant future.


Marc Faber has it right. Debt Transfers from Private Creditors to Sovereigns (i.e. Taxpayers) will eventually bankrupt the Sovereigns.

The key point is that the Resolution at the Euro Summit earlier this week will provide only a temporary and Insufficient “Solution” because:

  • The Trillion plus Euro leveraged EFSF Euro Fund is not large enough if there are any further (quite likely) downgrades of sovereign credit (for, e.g. both France and Italy).
  • The Plan still piles more debt on unpayable debt
  • Greece still has $250 Billion Euros of Sovereign Debt, after being allowed to write down only $100 Billion. The write-down is insufficient to get the Greek economy rolling again because, even after this Write-down. Greek Debt remains at about 120% of GDP.
  • And for the not-much-discussed-lately Elephant in the room, the USA, Debt to GDP just passed 100% officially (and it is worse when one considers Real U.S. GDP is a negative 2.89%). See Note 2** below.

 

It's possible that we could do another round of quantitative easing…”

 

William Dudley, New York Federal Reserve President, 10/24/11

Therefore, because the Euro Summit did not solve anything for the long run, the following Impending Investment-Critical “Events” take on added significance.

We briefly analyze these “Events” and offer suggestions on profitably addressing them:

  • The first in the U.S. Federal Reserve meeting slated for Nov. 1 and 2, 2011. In addition to Fed Governor Dudley’s hint of more possible Q.E., Fed Vice Chairman Janet Yellen has also hinted at such. Perhaps the most likely is a Fed purchase of Toxic Mortgage Backed Securities, to get them off the Bank’s books – another Big Chunk of Monetary Candy to help the Mega-Banks (Again!).

This suggestion comes from Fed Governor Daniel Tarullo and it would likely be promoted as a way to lower interest rates and help the still-weakening (see recent Case-Shiller report) housing Market.

Such a MBS purchase, or similar plan would, again, be most inflationary (and thus harmful to the middle class and working poor), but would temporarily boost the Equities Markets with another Sugar High, just as news of the Eurozone Deal has temporarily done for the Equities Markets.

Of course, all those excess (over any GDP growth) Dollars would eventually create more Food and Energy Price Inflation. On the other hand, a failure to enact any such Q.E. would likely result in a termination of the relaunched Equities Rally. In any event, in the middle and long term the Equities Rally is likely doomed anyway.


“…we have an Exchange STABILIZATION Fund here in the US and they have a STABILITY mechanism over there. Call me a purist but since when did the damn government have the right to interfere in any markets to make them more "stable". My view is that ALL of the instability currently in these markets is being caused by the government. If they got the hell out of the way we would actually have a TREND and it would be a STABLE one. The only problem for them is that the trend would be DOWN. That is something that these meddling clowns cannot tolerate. That is where the instability is coming from (traders trying to guess what these fools are going to do next).”


Dan Norcini, traderdannorcini.blogspot.com, 10/5/11

  • The G-20 Meeting of November 3 and 4, 2011 will, at the least, provide more Hot Air about how the developed worlds’ Economic Problems are being successfully addressed. (But, so far, not being addressed with the Solutions of Capitalism. Rather, Mega-Banks losses are being commonized via bailouts, while Profits are still privatized.)

If the Markets are “Believers” in the G20 Hot Air (and with a lot of market boosting from the U.S. Working Group on Financial Markets), such would likely touch off another leg of the fitful Year End Equities Rally.

A key point is that either a U.S. Fed MBS Purchase Plan and/or a Eurozone and/or G-20 Rescue Plan is likely to be most Inflationary which would give quite a boost to Precious Metals and essential Commodities Prices (e.g. Food). Of course, any such boost in Precious Metal Prices will likely be vigorously opposed by The Cartel* which can be expected to intensify their price capping operations.

“The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold.”

 

Shijie Xinwenbao, China

  • Eurozone Finance Ministers meet November 7 and 8, 2011 with the prospect of providing additional details regarding the ostensible Resolution of the Eurozone Crises. The Market’s Reaction will depend on the perception of how credibly effective or ineffective the Plans will be.
  • But the Real Market Rubber will meet the Road with the release of the U.S. Treasury International Capital (TIC) data from September 2011, scheduled for November 16, 2011.

TIC Figures reflect the Purchases and Sales of U.S. Securities by Foreign Investors, including Foreign Institutions. Significantly, Foreign Institutional Net Purchases decreased by over $8.7 billion in August per the October Report. Were this phenomenon to continue, it would be Very Bad News for the U.S. Bond Markets resulting inter alia in a spike in Interest Rates.

Watch carefully for the next TIC report scheduled for release November 16, 2011. It will report on the TIC Transactions and status for September 2011.

If the Figures show a Net Outflow substantially in excess of the $8.7 billion August Figure, it will be an ominous sign that Investors are fleeing the U.S. Treasury Market, a likely precursor to much higher Interest rates and increasing Financial System Stresses, or Collapse.

Caveat: While we have no evidence that TIC figures are anything other than accurate, there is considerable evidence that other Official Numbers are Bogus. See Note 2** below regarding Shadowstats.com.

  • Finally, the U.S. Congressional “Super Committee’s” Deadline for making $1.5 Trillion in spending cuts looms large on November 23, 2011. Implementation of cuts of that magnitude would not only dampen Economic Growth but will clearly also cause considerable Social and Political Conflict.

And to the extent that the Fed, the U.S., and Eurozone administration resort to further stimulus (as in Q.E. 3, Q.E. 4, etc), which we think they almost surely eventually will, it will be highly inflationary, eventually resulting in Hyperstagflation. But a failure to make credible cuts would likely cause a further erosion of confidence and resulting Market Crash.

But the consequence of such additional stimulus will be more Energy and Food Price Inflation. And, of course, dramatically higher Gold and Silver prices will result also in spite of (temporarily effective) Cartel Price Takedowns.

In sum, a major investment focus should be Tangible Assets in relatively inelastic demand with as Food and Food Producers. Another focus should be High Yield relatively low risk Securities, some of which should be domiciled in Asia or Latin America (See Note 3). Of course, Gold and Silver purchased near the bottom of Cartel-generated Takedowns should be a Top Priority too.

Finally, we expect a considerable amount of money will be made in leveraged short funds, as our subscribers learned in the Fall, 2008 when 5 leveraged short funds which we recommended became nicely profitable. Thus we expect to recommend then for our Speculative Portfolio in the next few weeks when the timing appears to be propitious.

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.

DEEPCASTER LLC Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in