Essentials for Investor Wealth Acquisition Acceleration
Stock-Markets / Financial Markets 2011 Jul 30, 2011 - 07:28 AM GMTBy: DeepCaster_LLC
“The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank.
Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.
Of the $16.1 trillion loaned out, $3.8 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows…
The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis.”
“Audit: Fed gave $16 trillion in emergency loans”
Stephen C. Webster, rawstory.com, 7/21/11
The Staggering Magnitude of Fed (and other Central Bank) Money Printing and Credit (i.e. Debt) Creation can lead to only one Conclusion for most Investors around the World and one Question: Conclusion: The Purchasing Power of my Fiat Currency will continue to Diminish, and, Question: How do I protect myself and profit?
“I have written frequently (but not recently) about the wave of “economic terrorism” which Wall Street launched against Europe – with the full support/blessing of the U.S. government. With that campaign of terrorism having nearly reached fruition, I will review these events one more time…
Essentially, it began with Goldman Sach’s “rape” of AIG. AIG was the “guinea pig” of this experiment. The banksters had already perfected their terrorist weapons: interest-rate swaps and credit default swaps. Now they needed to determine if they actually “worked” – i.e. if their scam-victims were gullible enough to be fooled by bankster double-talk, and if our legal systems would “tolerate” this massive, systemic fraud…
The Wall Street banksters (and some European banking Oligarchs) then systematically targeted every city, state, and large public institution foolish enough to listen to the banksters’ con…
…what has recently become apparent is that such terrorist attacks on Europe were merely the means to an even greater end: to completely plunder all the wealth of these nations.
In furtherance of this objective, the banking crime syndicate (and the ultra-wealthy bond parasites whom they represent) have formulated a three-pronged scheme to drain every last drop of wealth from these economies (and nations):
- Using these fraudulent bond debts to attach a legal claim on the large, national gold-hoards which these nations claim to still possess
- Attaching “loss guarantees” to the bad-debts of the Euro debt-sinners
- Ramming through a full economic integration of all these Euro-zone nations
I will address these economic “crimes against humanity” in order…”
“Economic Rape of Europe Nearly Complete, Part I & II”
Jeff Nielson, lemetropolecafe.com, 7/23/11 & 7/25/11
Increasing Economic and Financial Uncertainty, Conflicting Analyses and Numbers, make it important to identify Essential Facts so Wealth Protection and Wealth Acquisition Acceleration can be achieved.
First, Key Facts, then, with that factual basis, Wealth Acquisition Acceleration Guidelines.
- Money and Credit Creation (Monetary Inflation) in excess of Real GDP causes Price Inflation.
Price Inflation means the Purchasing Power of the Monetarily Inflating Currencies is being and will continue to be degraded, e.g. the Purchasing Power of the U.S. Dollar has declined about 97% in the last hundred years, and about 30% in the last decade (basis USDX, and much more basis Gold).
- This excessive Fiat Money and Credit (i.e. Debt) Creation has already brought us to the threshold of Hyperinflation if one considers the Real Numbers rather than the Bogus Official Statistics.
**Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported July 15, 2011
3.56% 11.13 % (annualized June, 2011 Rate)
U.S. Unemployment reported July 8, 2011
9.2% 22.7%
U.S. GDP Annual Growth/Decline reported June 24, 2011
2.33% -2.60%
U.S. M3 reported July 16, 2011 (Month of June, Y.O.Y.)
No Official Report 2.29%
- Ongoing Fed-led Excessive Money and Debt Creation is the Primary Cause of recent Price Inflation in Energy Food, and other Essential Commodities.
- This Price Inflation is impoverishing the Middle Class around the developed world. In the U.S. for example, adjusted for inflation, the average wage is lower than it was in 1971, Real U.S. Unemployment is 22.7% and Real U.S. CPI is 11.13%.
- Middle Class impoverishment across the developed world (as reflected e.g. in the worsening housing crisis in the U.S.) coupled with unpayable Sovereign and Private Debts, make Economic Recovery soon, highly unlikely.
- The foregoing Middle class impoverishment is understandable given that the Bailouts and QE have mainly enriched the Mega-Banks as Stephen Webster’s Article points out.
Indeed, Bob McHugh expresses it well when he says:
“The U.S. Dollar is being devalued by the Federal Reserve…
QE 2 was nothing more than devaluation of the Dollar for the benefit of only Wall Street Money Center banks. This is a fraud on the American people who got nothing from QE 2, no jobs, no reduction of their debts, no increase in the value of their homes, no reduction of taxes, no cash, nothing. QE 2 was also responsible at least in part for massive food and energy inflation which is damaging global economic growth. How? Because Wall Street found itself with too much cash after selling fixed income Treasury and garbage securities to the Fed, and bid up commodity prices with this cash as it sought trading profits from commodity purchases with this newfound cash. Bernanke will one day be known as the man who was a key catalyst driving global economies into the abyss.”
McHugh’s Weekend Market Newsletter, 7/22/11
- This enrichment has been at the expense of Investor Taxpayers who are either directly or indirectly (via e.g. Fiat Currency Purchasing Power Degradation) on the hook to pay for/underwrite the Bailouts/Sovereign Debts.
- National Assets (e.g. Gold-hoards) are being confiscated by the Mega Banking Cartel as Jeff Nielson (and others) points out above. Indeed, certain Major Nations will likely be faced with only two choices. Either: National Bankruptcy and loss of National Assets and Sovereignty OR Debt Repudiation and consequent Mega-Bank Failure.
- Economic Recovery in the Developed World any time soon is not possible unless and until the Middle Class Recovers.
- Creating more Debt is no Solution to the problems of too much Debt whether for the USA, the PIIGS, or other Countries. The Can cannot be kicked down the Road much farther when The End of the Road (a Precipice) is very near.
- The Key to Wealth Protection and Wealth Acquisition Acceleration is found in the following Observation and conclusion.
“During the last decade of Greatly Increased Money and Debt Creation, the price of Gold soared by over 500% and Silver by over 1000%.”
Conclusion: buy Gold and Silver as both a Wealth Protection and Wealth Acquisition Accelerator.
But this Conclusion comes with an important Timing Caveat: because of the Fed-led Cartels* ongoing attempts at Suppression of Gold and Silver Prices, properly timing ones purchases is essential.
*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.
Gold
Throughout the Process from Monetary Inflation (e.g. in the “cheap money” 1st decade of the 21st century and in QE 1 and 2) to Price Inflation (e.g. beginning now) to Price Hyperinflation and then Depression, Gold tends to appreciate (Caveat: But beware of “Paper Gold” and Cartel* Price Suppression Attacks). Indeed, it has appreciated dramatically in the last decade in Fiat Currency Terms, performing much better than Equities-in-general which, considering Inflation, have actually lost value.
Initially, in the Fiat Currency Monetary Inflation phase, Gold, as The Ultimate Money, appreciates because all Major Fiat Currencies decline in Purchasing Power vis a vis Gold, (albeit in varying Degrees) as they have for the last decade.
And then, as Price Inflation becomes Price Hyperinflation, Gold Soars as Fiat Currencies’ Purchasing Power Plunges. Indeed, we reiterate we have already arrived at the Hyperinflation threshold with the Real U.S. CPI at 11.15% per Shadowstats.com**.
After that Hyperinflation, as Economic Depression Sets in (and thus when Fiat Currencies have lost much of their value) Gold tends to Retain its value vis a vis the Damaged or Destroyed Fiat Currencies.
One other consideration relates to Gold (and other Precious Metal) Mining Shares. Their Value tends to track Bullion prices only somewhat, because they are after all, and above all, Stocks. Thus, overall Stock Market performance is likely to be a substantial determinant of their Price at any given time, rather than their Value as actual or potential Precious Metal producers.
Maximizing Value in Precious Metal shares (as opposed to Bullion) is thus in large part a matter of Timing… Generally speaking, they are better purchased near the Bottom of Equities Markets Downlegs, and/or Cartel Takedowns. Deepcaster’s Recommendations regarding Timing have resulted in Significant Profits for those who followed our recent recommendations***.
Silver
Silver, The Poor Man’s Monetary Metal, can in the Hyperinflationary Process be expected to perform similarly to Gold, except for the fact that it is also an Industrial Metal, used, and used up, by Industry.
While Gold has recently powered up to trade around its all-time Nominal High around $1620ish/oz, Silver has in recent years been stronger even yet, recently trading around its all time high of $50.
But it is important to note that while Silver has in recent years been acting more like the Monetary Metal that it is, rather than the Industrial Metal that it also is, its price is also in part a function of perceived Economic Prospects.
For example, the prospect of sustained Higher Oil Prices justifiably exacerbates fears that such high prices will dampen Economic Activity, thus dampening demand for Industrial Metals, including Silver. On the other hand, the Price of Silver as Safe Haven Money has spiked UP along with Gold in the Past Decade. Indeed, Silver prices are spurred by a Critical and Worsening Supply Shortage of Physical.
Moreover, recently Prospects for another Economic Downturn provided the Cartel with a pretext and Opportunity (in late April, early May, 2011) to drive Silver down from $50ish/oz to a low of $33ish/oz.
Thus we have, and will continue to have, this Very Volatile situation in the Precious Metals Arena with the Contenders being: The Cartel vs. Economic and Financial Reality.
Any perceived diminishment of The Intensifying Crises around the World and/or a Major Equities Takedown will surely bring renewed and intensified Cartel Suppression Attacks on the Precious Metals Prices. But Cartel Price Suppression attacks on the Precious Metals has, in large part due to increased demand and tightening supply of physical (especially for Silver), been less successful recently than in past years.
Therefore, we have Forecast the approximate timing and Targets for an even more Vigorous Cartel Attack on Precious Metal in our most recent Alerts.
And that will provide a test of The Cartel’s Precious Metal Price Suppression Power, which has been diminishing of late.
In the Middle and Long Run, Gold and Silver are likely going higher, much higher.
Food
The Third Protective Category with Wealth Protection and Wealth Acceleration Potential is Agricultural Products (and Producers) in relatively Inelastic Demand. Whether in a Hyperinflation, or in a Depression, people will buy Food first above all else.
Fortunately, in this Sector, there are still “Sleeper” Opportunities.
Indeed, there are still several companies in this Sector which are quite undervalued.
Deepcaster recommended two earlier this year -- one trading at just over $5/share and the Other at just under $2/share.
And more recently, we recommended a third ‘Sleeper’ Sector Industry leader, which has a huge and expanding Asian Market and a recent P/E Ratio of under 4, and which trades under 45 cents/share (in $U.S.) and has Tremendous Appreciation Potential.
To Consider these three “Best of the Best” Sleeper Sector Investments, read our March, 2011 Letter – “Main Gold, Silver & ‘Sleeper’ Sector Price Movers; ‘Sleeper’ Buy Reco.; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar, and U.S. T-Notes & T-Bonds; March 2011 Letter”, and Alert -- “Golden Green Opportunity Buy Reco.; Forecasts: Commodities, Gold, Silver, Equities, Crude Oil, U.S. Dollar, and U.S. T-Notes & T-Bonds” in the ‘Alerts Cache’ at www.deepcaster.com.
Strategy Guidelines
In sum, in the Medium and Long Run, we see the aforementioned Equities Bearish Factors overwhelming the Bullish Ones, which will have Severe Negative Consequences for Equities-in-General and for certain Commodities which are in relatively Elastic Demand.
Given this Negative Scenario Safe Havens with Great Profit Potential are Gold, Silver (with Timing Caveats, especially for Shares) and Agricultural Commodities (including Prime Farmland) in relatively inelastic demand (such as Grains and Foodstuffs in general), and businesses focusing on them.
Deepcaster’s General Guidelines and Considerations for the aforementioned Sectors and in light of Cartel Market Manipulation (i.e. especially in the Precious Metals Market) are fivefold:
- Buying on Dips, coupled with a Willingness to Tolerate Great Price Volatility
- The Core Holdings of Ones’ Precious Metals Position are best held in one particular form (see our Precious Metal Recommendations) of the Physical Metals, in Personal Possession
- that Well Managed reasonably priced Miners with Substantial Reserves be bought on Dips (e.g. near the Bottoms of Cartel engineered Takedowns), and, if one is a Trader, a portion sold near interim highs
- that a portion of One’s Holdings be in a Dividend Paying Precious Metals Fund such as one which we have Recommended, and
- Regarding Silver, since it is also an Industrial Metal, it is especially vulnerable to Slowdown in Economic Activity and (especially for the Shares) Takedowns in the Equities Markets.
In sum, we expect another Markets Crisis is coming and the Fortress Assets Gold, Silver and Food are the place to be.
We reiterate, finally, that, given the aforementioned Negatives, a Crisis is likely already “baked into the cake.” The Fed’s (and Eurozone Bankers) Fiat Currency Purchasing Power Degradation via Q.E. cannot go on forever, and, in any event, additional Q.E. worsens the Inevitable Crash because it serves only to pile more Debt upon already Unpayable Debt.
The Wise are Well-Advised to prepare for the Coming Hyperinflation, by seizing Impending Fortress Assets Buying Opportunities.
Considered together the foregoing Facts and Guidelines provide the Essentials for Wealth Acquisition Acceleration.
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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