Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Garnering Profits in The New Abnormal in Gold, Silver, Stocks, Commodities & Interest Rates

Stock-Markets / Financial Markets 2011 Aug 13, 2011 - 04:05 AM GMT

By: DeepCaster_LLC

Stock-Markets

Best Financial Markets Analysis Article“The United States is quickly approaching a fiscal Armageddon and the players in Washington — specifically Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke — don’t understand what is happening or know what do about it, world renowned investor and author Jim Rogers tells Newsmax.TV...

…any halt in the decline of stocks was just a “temporary bottom.”

He said that while America was not at the brink of a fiscal Armageddon right now, the nation is likely to default on its obligations in the future.


“This decade absolutely, probably sooner than this decade… these guys are really, really out of it, they don’t understand what's happening and we’re all paying the price and it’s going to get worse.”

Rogers said that despite what economists say, the country has not left the recession and a depression could happen…

He placed the blame for the country’s economic ills not on Congress or the White House, but on the Federal Reserve.

“The Federal Reserve is the main culprit because they kept bailing people out instead of letting the market clear and instead of letting people go bankrupt and start over,” he said. “If I had to blame one group I would blame the Federal Reserve under (Alan) Greenspan and (Ben) Bernanke.””

“Jim Rogers: Bernanke, Geithner Leading Us Into Fiscal Armageddon”

Henry J. Reske and Kathleen Walter, moneynews.com, 8/9/11

As disruptive as the worsening Eurozone Sovereign Debt Crises and the S&P downgrade of U.S. Debt are*, they do serve one useful Public Function – they usher into Public Consciousness the New Economic and Financial Reality – The New Abnormal we call it.

“The U.S. government deserves the downgrade Standard and Poor's slapped on its ratings, because the country has run up so many debts it will never get out of the hole, say famed commodities investor Jim Rogers…

The agency is being too nice, as Washington probably doesn't even deserve the AA+ rating…

"It seems to me it's physically, humanly impossible for the U.S. to ever pay off its debt," he says. "They can roll it over and continue to play the charade, but the U.S. is bankrupt."

Investors should go long on gold and commodities, which will perform well while equities and currency markets digest the extent of the fallout the downgrade will have.

"You should nearly always buy into panic just like you should sell hysteria," Rogers says.

"I own gold, I'm worried about gold, it's going so up so much, I'm not going to sell it but it looks like it's setting itself up for a nice correction. I hope so. Then I can buy more."”

“Rogers: "Bankrupt" U.S. Will Never Pay Back Its Bills”

Forrest Jones, moneynews.com, 8/8/11

As Every Serious Investor and Financial Analyst (at least all those who are not still completely asleep at the switch) now recognize, a new Financial and Economic Reality is dawning, one with some characteristics which have not been seen since The Great Depression.

One of the Key Characteristics of that New Abnormal is one which we have been emphasizing for Years: “Buy & Hold Rarely Works Anymore”… the exception being the few instances we discussed in our recent Letters and Alerts.

The following is a summary of Key Characteristics of that New Abnormal, and Guidelines for Profiting and Protecting Wealth.

  1. As the recent Equities Markets Selloffs demonstrate, Fear, and Consequent Risk Aversion is the New Order of The Day
  2. While Gold, especially, and Silver are “go to” Safe Haven Assets (because they are Real Money) with Great Profit Potential,
  3. Gold will typically Outperform relative to Silver during times of heightened Risk Aversion, but,
  4. Both Gold and Silver prices are still Vulnerable to Cartel* generated Price Takedowns, as the early May, 2011 and early August, 2011 Takedowns demonstrate, though less so than in previous years, And

    *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.
  1. These Takedowns should be welcome in one respect at least because they provide Buying Opportunities. Our Forecasts in our latest Letter and Alerts indicate Timing and Targets.
  2. Another Key Characteristic of The New Abnormal is Debt Saturation, both for Sovereign Nations and Many Individuals. See our recent Article: “Last Tango Opportunities & Traps - Overview (8/5/11)” in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com. Debt Saturation has Serious Consequences. For example,
  3. This Leads to a Slowing Economy, especially in one in which recent Economic Growth has been artificially created by Debt. No more debt = No More Growth
  1. Sustainable Growth is founded on Investment of Savings, not on increased borrowing by Debt Saturated Sovereigns or businesses.
  2. But the Fed’s response (via e.g. its recent Zero Interest Rate Policy) is to encourage even more Unpayable Debt. Coupled with more Money Printing, this  leads to Hyperstagflation. That is, The Fed-led Cartel’s response to the Crises is, predictably to “Print” More Money to, inter alia, buy Toxic Unpayable Debt. But Money Printing in excess of GDP Growth leads to Hyperinflation (on the Threshold of which we now already stand, with e.g. U.S. CPI at 11.13% per Shadowstats.com**).
  3.  Realize that The Fed’s Commitment (through 2013) to very low (negative Real) Interest Rates, is a de facto commitment to Easy Money – a Form of QE 3.
  4.  And while this will tend to keep Mortgage interest rates low…
  5.  It will also surely cause skyrocketing Commodities-especially Food and Energy – Prices in the Middle and long run (just as QE 1 and 2 have already done) because the Purchasing Power of the U.S. Dollar will continue to be degraded

**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 August 5, 2011
9.1%                             22.7%

U.S. GDP Annual Growth/Decline reported August 1, 2011
1.62%                                    -2.83%

U.S. M3 reported August 6, 2011 (Month of July, Y.O.Y.)
No Official Report            2.56%

These aforementioned observations suggest the following Guidelines for Preparation for the ongoing and Coming Crises.

  1. When possible and protective, Go Local or National. The Mega-Banks and Many State and Community Banks are Interconnected to all of the rest of our detriments. (Consider how many U.S. Banks are directly or indirectly Exposed to Greek and Portuguese or now French! Bank Debt.)

    It is worth the research effort to identify banks and other businesses with less-than-average, or relatively little “Globalist” Exposure. It is wise to study the variety of publically available measures of bank, and business, strength.

    Think “Bank of North Dakota” as the model, as described in detail by Ellen Brown.
  2. Buy Protective Hedges, via e.g. Double or Triple Leveraged, ETFs (see our Portfolios) and liquidate Equities-in-General at the right time -- a forecast for which we issued in a recent Alert.
  3. Buy High Yield Securities whose Total return (Gain plus Yield) is likely to exceed Real Inflation – 11.15% per shadowstats.com**, such as the high yield portfolio we recommend.
  4. Buy Gold and Silver, but at propitious time and in a form likely to best weather Cartel* Takedown Attempts.

    “Silver was mauled without mercy as it met with the fate of copper. This is to be expected during times of risk aversion. For all the silver bulls out there, please understand this basic principle - Silver will not outperform gold during a period of risk aversion. Period - Comex silver stocks do not matter. All that matters is that risk trades get yanked off and silver gets hit harder than gold because even though it has an historic role as a safe haven metal, it cannot shed its industrial metal role completely during such times. The Gold/Silver ratio will therefore move in the favor of gold during periods of risk aversion when fear trades are the rule. When the risk trades go back on and traders feel very comfortable taking risk, then silver will outperform gold to the upside.” (emphasis added)

“Extreme Volatility in Gold as market digests rumors and risk aversion trades”

Dan Norcini, traderdannorcini.blogspot.com, 8/4/11

 

Note: Recent Profits Taken in our Gold and Silver Portfolios demonstrate the Power of this Method*** (see note below).

Regarding Gold and Silver Purchases

  1. Understand that a Cartel* of Central Bankers and their Mega-Bank Allies have for years been suppressing Precious Metal prices.
  2. 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.
  3. Nonetheless, The Cartel’s Price Suppression Regime is still Potent as the Early May 2011 and early August, 2011 Precious Metal Price Takedowns show, once again.
  4. 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 earlier correct forecast that Precious Metal prices would be taken down as they were in early May (And that is why Deepcaster recommended taking profits on Silver twice earlier this year and just this Monday, August 8)
  5. Develop a Strategy for Buying near Interim Lows during takedowns (see below) and taking profits (at least partial profits near interim highs)
  6. If one chooses to liquidate a portion of one’s Paper Gold and Silver, do so before a Takedown begins in earnest
  7. Use Takedowns as an Opportunity to Convert Paper Silver and Gold 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.
  8. Buy Food Producers and Distributors

    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. The Problem is exacerbated by the facts that most of the World’s best arable land is already under cultivation, and that modern agriculture is very Fossil Fuel (i.e. Portable Fuel) Energy Intensive.

For example, earlier this year we recommended two such Food Producers and one Water Producer and Management Company, all of which we believe to be deeply undervalued (one trading at under $6/share, one under $2/share and one under $1/share).
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 had a P/E Ratio under 4 when we recommended and profits have grown over 20%/yr.

As we write it is trading at around 43 cents per share U.S., near its 52 week low.

Given that P/E Ratio, profit Growth and share price, you can see why we have called “Food” a “Sleeper” Subsector.

In sum, there are opportunities now to develop a Profitable and protective portfolio to weather ongoing and impending Crises. Ongoing and Impending Crises plus Government/Cartel Intervention in many markets, provide these excellent Opportunities.

Best regards,

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

© 2005-2022 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