Investor Wealth Preservation and Enhancement via Reality Checks
Stock-Markets / Financial Markets 2011 Feb 18, 2011 - 03:30 PM GMTBy: DeepCaster_LLC
“Ron Paul has written a book, End the Fed, well known in these circles. We have a better idea: Stiff the Fed.
In case you missed it, the financial cable network CNBC actually produced something informative a little while ago. It listed our 15 biggest creditors, the entities to which the captive citizens of the United Snakes of America owes money…
We owe Japan $877.2 billion. China ranks a measly third: they've been shedding U.S. debt like crazy, converting it to stuff we used to do, like mineral and oil production, but they're still just a hair shy of a trillion, $895.6 billion to be precise.
The last two surprised us. Holders of U.S. Savings Bonds, and a category CNBC calls “other investors” rank No. 2, at $1.458 trillion.
And the Number One I.O.U.? Drum roll, please: it is our very own United Snakes Federal Reserve Bank, which has us on the hook for a staggering $5.351 trillion! That's right. We owe the Banksters in our own midst interest-bearing debt more than five times what we owe the Chinese we're always sniveling about…
But somebody shoved $5 trillion of debt up our stern-bearings, and stands to reap a tidy profit on the compound interest which we must pay to service such debt…
Let's go down this list. No way we stiff… or… or…. or….
This leaves us with the Federal Reserve Bank, this mysterious beast in our midst, to whom for no reason known to God we are paying interest. Our interest payments to this weird ghost will in a few years' time consume all of our “discretionary” federal budget, and we won't have paid down a farthing.
Why cannot this nation, like so many millions of U.S. homeowners, simply walk away from the mess this cabal of greedy Fed banksters created? Hand 'em back the keys, and keep our pledges to Canada, Brazil, China, Japan and our own savers at the same time. The interest saved by stiffing the Fed would retire our foreign debt in short order. Besides, it's time Timothy Geithner and Helicopter Benjamin Bernanke got real jobs – like maybe in a Chinese coal mine.”
“Stiff the Fed”
David Bond, The Wallace Street Journal, Silverminers.com, 2/13/11
“General Zine el Abidine Ben Ali , the defunct and deposed president of Tunisia is heralded by the Western media, in chorus, as a dictator…
But Ben Ali was not a "dictator". Dictators decide and dictate. Ben Ali was a servant of Western economic interests, a faithful political puppet who obeyed orders, with the active support of the international community.
Foreign interference in Tunisia's domestic affairs is not mentioned in the media reports. The food price hikes were not "dictated" by the Ben Ali government. They were imposed by Wall Street and the IMF.
The role of Ben Ali's government was to enforce the IMF's deadly economic medicine, which over a period of more than twenty years has served to destabilize the national economy and impoverish the Tunisian population.”
“Tunisia and the IMF's Diktats: How Macro-Economic Policy Triggers Worldwide Poverty and Unemployment”
Michel Chossudovsky, Global Research, 1/20/11
“The IMF and World Bank have practiced their methodologies on a number of developing countries like Tunisia (See copied article above.) The modus operandi is to entice the countries into taking development loans that include plenty of dangling carrots for the local decision makers. The trap is the actual cost of collateralizing real national assets and wealth. To meet their debt obligations, these nations are instructed to focus their production on just a few, exportable goods. Little homesteads are swallowed up, one by one. This practice squeezes out versatile markets that help small enterprises live and thrive. There is a resulting human movement into cities in search of gainful employment. An insidious impoverishment of whole populations ensues as debt obligations are predictably not met and as real assets are transferred first to the obligated government entities, and then to the ultimate creditors. These little nations would be fine today if the international market manipulators in control of the debt had never been allowed to extend their tentacles. Free market mechanisms didn’t have a prayer of working for the average Joe in these places.
We’re next. They’ve had a lot of practice. Soon, the Fed in concert with entities like the IMF, will be bailing out not just a bankrupt national government, but will move in to bail out bankrupt States. We can expect continued transfer of real assets to bankers. Nothing could be more permanent or frightening because one of our founding strengths lies in private property ownership. There is strength in versatility and entrepreneurship.”
Elena Campbell blog, 1/22/11
“’the US economy is now totally dependent on unlimited expansion of debt & credit creation by the Central State & its proxies. Withdraw those, & the gap between the managed-perception economy (the propaganda facade) & the real economy vanishes: reality trumps perception’…
‘JP Morgan boss Jamie Dimon got a humiliating public slap down from the French president after JD whined that bankers were bashed unfairly for the Great Recession. Nicolas Sarkozy told the Manhattan moneyman that bankers made moves that "defied common sense" & harmed millions of people around the world. "Don't be accusatory of us," Sarkozy snapped at Dimon at the World Economic Forum in Davos, Switzerland. "The world has paid with tens of millions of unemployed, who were in no way to blame & who paid for everything.”
Harry Schultz, ‘Big Picture’ Contribution to Aden Forecast, 2/11/11
“A common refrain that we often read nowadays comes from "analysts" who seem to believe that they are able to correctly forecast tops in the gold, and/or silver markets from peering into the Commitment of Traders reports.
The thinking generally goes along this line - "speculators are holding their largest net long position since such and such time and therefore gold is undoubtedly ready to top out. "
One sometimes gets the distinct impression from reading their comments that having a large amount of speculators in a market is some sort of curse that plagues a market and is to be avoided at all costs.
Here's a news flash - markets cannot move higher WITHOUT speculative interest and they cannot mount strong sustained up moves without significant speculative interest in buying them. In other words, speculators drive our commodity markets. It is their buying or their selling which push markets up or down…
The point in this is simple - Managed Money holds the key to the paper gold market. If they rebuild their longs - price will rise higher and sharply higher depending on the size of that build. If they were to begin liquidating again for any reason, price will head lower at the Comex.”
“Detailing the Necessity of Speculative Interest in Gold Price Advances”
Dan Norcini, traderdannorcini.blogspot.com, 2/12/11
Many of you have heard the story of the Grasshopper who sang all Summer, while food was plentiful, but stored none of it away, quite unlike the Ant who busily stored food away, throughout that same summer.
Come winter the Grasshopper starved and froze, while the Ant was well fed and secure with his underground stores.
Moral: The Ant Realistically Addressed an Unpleasant Coming Reality while the Grasshopper remained in Lethal Denial.
Translating that Story to today, we see the Talking Heads of the Main Stream Media waxing Poetic about the Ostensible Ongoing “Recovery”, while the highest government officials blather on about how more ‘Stimulus Spending via More Debt is’ essential to Recovery.
Problem is, it was, and is, Excessive Debt, facilitated by the private for-profit Fed and allied Mega-Banks, which put the International Economy into a pickle to begin with.
In Reality, continuing excessive Credit (i.e. Debt), and Money Creation is a guaranteed Road to Hyperinflation.
Indeed, there is more debt outstanding now than there was prior to the 2008 Financial and Markets Crises. Note well.
Worse Yet, neither the Obama Administration nor leaders of Other Major Western Nations (with the exception of Iceland who, inter alia, made their Mega-Bankers take a Big Haircut) have advanced Realistic Plans to Cope with the Worsening Debt, Economic and Employment Crises. The Obama Administration’s proposed Spending Cuts are a mere and utterly inadequate Pittance when compared to the $14 Trillion (and growing!) U.S. National Debt and $100 Trillion plus downstream unfunded liabilities.
Apparently policy makers have learned nothing from history – The Weimar Republic sought to stimulate via money printing (result: Disaster); President Roosevelt sought to stimulate with the New Deal spending programs (Result: the Stock Market crashed again in 1937) and Japan has sought to stimulate since their Crash began in 1990 (Result: No economic Recovery and a 200% Debt to GDP Ratio, second only to Zimbabwe).
Takeway: Markets will eventually have their way regardless of the “Kick The Can Down The Road” Actions of Politicians and Mega-Bankers who want to keep their profitable-lending game going.
One other Challenge faced by Investors desirous of basing their decision on Reality is that key Official Statistics are Bogus.
Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest.
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported February 17, 2011
1.63% 9.07% (annualized January, 2011 Rate)
U.S. Unemployment reported February 4, 2011
9.0% 22.2%
U.S. GDP Annual Growth/Decline reported January 28, 2011
2.79% - 2.21%
U.S. M3 reported February 12, 2011 (Month of January, Y.O.Y.)
No Official Report - 2.21%
It should be pretty clear by now to all who have studied the matter at all, that the Ongoing Apparent Recovery, as reflected in nearly two years of rising Equities prices, has been artificially induced (by e.g. ongoing Fed Q.E./POMO pumps about which we have written much) and is not sustainable.
Indeed, Real U.S. GDP is a negative 2.21%
But some Reality ‘Therapy’ has appeared in the Main Stream Media. For example, Graham Summers (seekingalpha.com) author of the September 28, 2010 piece “The Only Reason Stocks Rallied this Month” in which he demonstrates that daily Fed POMO Injections were “the only Reason Stocks Rallied”.
And in another Market Sector, another not-widely-reported Reality is that not only has the Fed-led Cartel* continued (albeit somewhat less successfully than in the past) its ongoing battle to suppress Gold and Silver prices but has been Manipulating others, as well.
*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 Deepcaster’s website 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 Manipulation is not without Consequences, nor can it last forever.
The Fed’s $1.4 Trillion increase in the Monetary Base, the U.S.A.’s $14 Trillion plus debt, the Eurozone Sovereign (i.e. Mega-Bank) Bailouts-via More Debt Orgy, all will have Ugly consequences.
Result: The Great Equities (and Other Key Markets) Correction we have been forecasting has been delayed, but will not be denied.
The only question is “When”, a question we address in our Forecasts in our most recent Letter posted in the ‘Latest Letter’ Cache at www.deepcaster.com. And we also indicate why Gold, Silver, and Investments in one ‘Sleeper’ Sector we recommend offer the Best Opportunity for Surmounting the Hyperinflationary ‘Beast’ which is just awakening, and for Profiting. Let’s consider why.
One of the Primary Movers of Gold and Silver Prices is “Managed Money”, as Astute Trader Norcini Points out above, and the other is The Cartel*. Managed Money has been a Prime Mover in upward Trending Precious Metal Markets for a Decade because the Precious Metals are seen, rightly, as both a profitable Safe Haven from Excessive Monetary and Debt Creation, and the resulting Fiat Currency Purchasing Power Degradation.
Though Cartel influence in suppressing Precious Metals prices has been weakened in recent months, it is still Potent. Indeed, the CFTC refusal to impose position limits on the reported Major Silver Manipulator JP Morgan Chase allows JPM to sell unlimited Paper Silver Contracts into the Market to drive down the price. Of course, the ultimate Antidote for this is to purchase Silver and take delivery and personal possession.
Gold has been bouncing around $1,380/oz and Silver just under $31 as we write. Thus Gold is about $50 and Silver just a few cents under their 21st Century Highs. Technicals are Mixed. Both Metals are in a Strong Uptrend, but both seem to have stalled recently, forming triple top patterns.
But recently rising interest rates (which make Treasury and other Paper ostensibly more competitive to Gold) plus ongoing Cartel Price capping attempts are Threats short-term to a continuing Uptrend.
From a long-term Perspective, Gold is surely the place to have a substantial portion of one’s Assets. Our forecasts for the short and long-term are contained in our latest letter.
Regarding Silver, Silver is, after all, both an important Monetary Metal and an Industrial Metal. As an industrial Metal its price is in part determined by perceptions of future Economic Activity.
But the Silver Joker in the Silver Deck is the Physical Supply Crunch. It is simply getting harder and harder to find and get delivery of Physical Silver.
Thus The Cartel could lose control of the Silver Price at any time, though they are still barely in control.
Indeed, we emphasize that Silver has recently rallied back up near $31/oz. If it closes decisively over $31 we are off to new 21st century highs.
Longer term, $400.00/oz. Silver is not at all out of the question.
The Third ‘Safe Haven’ for Wealth Preservation and Enhancement is a Sub-Sector of the Equities Sector, so we first consider Equities-in-General to provide context for that ‘Sleeper’ Subsector.
The Equities Rally has been weakening in recent days, but has not broken down, yet.
The Mid and long-term Technicals have been signaling we are overdue for a correction for several weeks now.
Indeed, only Very Deep Pockets (likely Cartel) Buying kept Equities from an all-out-Crash when the Egyptian crisis broke three weeks ago.
Clearly, The Cartel is a Major Force propping up the Equities Markets in recent months as Graham Summers and others have noted.
But Although Q.E. 2 is not set to expire until Summer, the Markets will soon begin to anticipate future Fed Moves and respond accordingly.
So a Forecast of a General Equities Takedown is not unreasonable.
In light of the prospective Equities Market Weakness, the question arises: Other than Short Positions, are there Sectors which would likely be relatively less affected by an Equities Takedown? Yes, we answer: Food Businesses – especially those in Emerging Markets.
Let’s consider why.
More than Energy or Even Precious Metals, Food and Potable Water must be at the top of Consumer Shopping lists everywhere around the world. With demand increasing from the 80 million plus annual world population increase, and increased resources of a growing Middle Class, especially in BRIC countries, to buy more and better Food, Food Producers are in the Catbird Seat.
Thus, we have recently recommended two such Food Producers and one Water Producer and Management Company, all of which we believe to be deeply undervalued, in our latest Letter and Alerts.
One is China’s largest producer and Seller of Fresh Fruits and Vegetables. It also grows Rice and breeds and sells livestock and has over 20,000 employees.
It recently had a P/E Ratio under 4 and profits have grown over 20%/yr.
As we write it is trading at 65 cents per share U.S. or just below $5 HK, near its 52 week low.
Given that P/E Ratio, profit Growth and share price, you can see why we call it a “Sleeper” Subsector.
Gold, Silver, and Food and potable Water Producers are the Way to Wealth Preservation and Enhancement in Times of Turmoil such as these.
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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