Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Investors Overcoming Profit Pitfalls & Fed Perfidy

Politics / Central Banks Jul 24, 2009 - 06:56 PM GMT

By: Deepcaster

Politics

Diamond Rated - Best Financial Markets Analysis Article“The Fed’s credibility has been tarnished by the easy credit policies it pursued and the lax regulatory oversight that let institutions ratchet higher their balance sheet leverage and amass huge concentrations of risky, complex securitized products…”William Donaldson, Arthur Levitt, Investors’, Working Group Report on Systemic Risk Regulation


For excellent reasons, Messieurs Donaldson and Levitt, former Chairmen of the S.E.C. (and establishment figures par excellence), recently recommended that the private for-profit U.S. Federal Reserve NOT be The Systemic Risk Regulator, contrary to the unwise Obama administration proposal.

Indeed Investors world-wide have suffered greatly and continue to be at great Risk due precisely to reckless (or planned, as the evidence we set forth in “Coping with the Superpower-Cartel Threat!” 1/30/2009 in the ‘Articles by Deepcaster’ cache at www.deepcaster.com indicates) Fed-led Cartel* Policies and Actions.

Clearly The private for-profit Fed’s favored Mega-Banks (think Goldman Sachs and JP Morgan Chase) and, perhaps, its shareholders, have been the Main and virtually only substantial Beneficiaries of the U.S. Taxpayer-funded Bailouts.

This does not bode well for the Economy or The Markets.

Consider:

  1. The financial health of the U.S. Consumer/Taxpayer and, often, mortgage holder (“Households”)  --- who is 70% of U.S. GDP, is worsening, with no relief in sight.
  2. Real U.S. Unemployment is at 20.6% and rising (shadowstats.com)
  3. The Bailouts and Stimulus Bills help mainly the Mega-Financial Institutions, and not the aforementioned Households who are, we reiterate, 70% of GDP.
  4. Trillions are being added to the U.S. Budget deficit, National Debt and downstream unfunded liabilities. The money is being borrowed under great duress by the U.S. Taxpayers at interest from the private for-profit U.S. Federal Reserve which prints it for free. Obviously, this Multi-Trillion Dollar debt (counting unfunded downstream liabilities, now approaching $70 Trillion) can never be repaid without degrading and ultimately likely destroying the U.S. Dollar.
  5. Degradation of the U.S. Dollar over the next very few years entails degradation of the Purchasing Power of those who Invest, earn and save, and especially of retirees.
  6. This Dollar destruction process is also resulting in the Stealthy (and recently not so stealthy) transfer of wealth to the Mega-Financial Institutions (Think Goldman Sachs and JP Morgan Chase), much to the detriment of nearly everyone else in the world including Regional, State and local bankers.
  7. Hundreds of billions in Adjustable Rate Mortgages will reset in the U.S. in the next two years adding to credit woes.
  8. We expect to be hit with a major Northern Hemisphere Swine Flu Epidemic this Coming Winter.
  9. “One thing certain today is that the first wave of millions of unemployed people no longer entitled to (unemployment – ed.) insurance benefits will hit the U.S. between July and September, 2009 – other waves are following” Leap 2020.eu
  10. The U.S. Government (Taxpayers) have already devoted $4.7 Trillion in Bailouts to help the Financial Sector and the U.S. A.’s maximum Bailout Exposure could hit $23.7 Trillion according to Special Inspector General Neil Barofsky.

…just to list a few Fundamental Realities.

Therefore, in our view there are thus only two reasonably likely scenarios for Equities through the rest of 2009, and beyond.

The least likely is that The Cartel* engineers a Flat or, more likely, a choppy Market phase for the next two to three years. The Cartel* would do this because the “political heat” was too intense, with the “Audit The Fed” and “Abolish the Fed, U.S. Treasury Instead”, movements becoming justifiably ever stronger. But Fundamental Realities militate against this scenario. Even The Cartel would have a hard time pulling this off.

But, the more likely scenario is that The Cartel* continues to implement its ‘End Game’ plans. This would provide The Cartel the opportunity to further consolidate its Power by (just to mention one component of this plan) instituting several Regional or a ‘One World’ Currency and in the process weakening or destroying the National Sovereignty of major nations. For more details about the ‘End Game’ and the implication for equities see “Coping with the Superpower-Cartel Threat!” (1/30/2009) at www.deepcaster.com in the ‘Articles by Deepcaster’ cache, and Deepcaster’s August, 2009 letter in the ‘Latest Letter’ cache for details.

It is important to consider the Prospects for Gold and Silver in light of implementation of The Cartel ‘End Game’ because Gold and Silver are legitimately the ‘Safe Haven’ assets in troubled times such as these.

In our view, were the Gold (and Silver) Markets truly free, Gold would already be at least $2,400/oz (the approximate inflation-adjusted 1980 high).

But the fact that Gold is not already at least $2,400/oz (given the foregoing disastrous Realities and Prospects) testifies to the fact that The Cartel still effectively controls Paper Gold and Silver prices, unfortunately.

Most readers are aware of clear and convincing evidence for Cartel* manipulation of the Precious Metals and other Markets, but those who are not should consider the following note:

*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, 2008 Letter containing a summary overview of Intervention entitled “A Strategy for Profiting from the Cartel’s Dark Interventions & Evolving Techniques” and Deepcaster’s July, 2009 Letter entitled  "A Strategy For Profiting From The Cartel’s Dark Interventions & Evolving Techniques - II" in the “Latest Letter” Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org 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.”

Those interested in what the Fundamentals, Technicals, Interventionals and Political Realities (the four great determinants of Precious Metals prices) tell us about the likely price performance for the Precious Metals for the rest of 2009 should read Deepcaster’s August, 2009 ‘Forecasts and Portfolio Strategy Letter’ which can be found in the ‘Latest Letter’ cache at www.deepcaster.com.

Unfortunately, as much as it aggravates us to say it, all indications are that The Cartel still exercises substantial control over the paper Gold and Silver Market Prices.

Moreover, in our view the only way to be sure one actually owns Gold and Silver is to buy physical Bullion and Coins and take possession yourself.

One reason to take physical possession yourself is because it is doubtful whether many Gold and Silver ETFs actually possess the Precious Metals they say they do, as Eric de Carbonnel points out:

“1) GLD does not allow redemptions of its gold bullion

GLD’s failure to allow redemptions in gold is suspicious. In fact, only two gold ETFs worldwide allow redemptions in gold, and both of them are located in Switzerland: Gold ETF from Zurich Kantonalbank (ZKB) and Julius Baer (JBGOUA).

Michael Pennington makes this point effectively in his article WHY I BELIEVE THE GOLD AND SILVER ETF'S ARE SCAMS:

‘The most important aspect of investing in gold and silver is to take possession of your physical metal. When these ETF's were created, they made it impossible for any investor to take possession of their gold or silver. This should be a major red flag alone.’ ”

Risks in owning GLD
Eric deCarbonnel, Market Skeptics, February 22, 2009

Enough said!

Further Testimony to The Cartel’s Power is the fact that, as we have documented repeatedly, U.S. T-Note and T-Bond prices (and therefore interest rates) can be managed by some $418 Trillion (as of December, 2008) in OTC dark Interest Rate Derivatives Contracts as publically revealed by the Ultimate Official Source itself – The Central Banker’s Bank – The Bank for International Settlements in Basel, Switzerland (see www.bis.org, Path: Statistics > Derivatives > Table 19).

Clearly, the ten year U.S. Treasury Note and 30 year U.S. T-Bond are The Pride and Joy of the Fed-led Cartel.

Indeed, The Cartel can not afford to let long rates go too high (e.g. over 4% on the ten year) for fear of really wrecking the Mortgage Market and broader Economy as well.

Neither can they let long rates go too high (i.e. allow long Notes and Bonds to become too weak) for fear of further delegitimizing their paper Treasuries and thus further legitimizing Gold and Silver as the Ultimate Stores and Measures of value.

In sum, the U.S. Dollar is likely doomed (by the Dollar destructive policies of the private for-profit Fed) to collapse in the long-term.

But The Cartel can not afford to implement their ‘End Game’ scheme (one component of which apparently involves eventually destroying the U.S. Dollar) too quickly, lest they generate increased heat from the U.S. Congress (in the form of support for Audit The Fed and Abolish The Fed bills) – heat which might interrupt the ongoing implementation of their entire nefarious “End Game”. See “Coping with the Superpower-Cartel Threat!” (1/30/2009) at www.deepcaster.com in the ‘Articles by Deepcaster’ cache.

Indeed as Professor Antal Fekete points out, the very structure of the private for-profit Fed/Treasury Securities Regime (which involves the U.S. Taxpayer paying interest to the Fed on money the Fed prints for free) involves a Stealth-Wealth transfer from Investors and Nations to the Mega-Bankers of The Cartel.

Arguably a $13 Trillion transfer occurred in the six months from June, 2008 to December, 2008, while Investors were losing trillion in the Equities Markets Crash. During that six months period the Market Value of the Total OTC Derivatives Contracts increased by over $13 Trillion! See “Opportunities & Threats in Derivatives Shocker” (05/29/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com. Follow the money!

Further, consider Professor Fekete’s brilliant observation on what is, in effect, financial and monetary Perfidy.

“Paying U.S. bonds at maturity in Federal Reserve notes (i.e. U.S. Dollars) does not establish redeemability. The latter is just evidence of debt secured by the former as collateral revealing that bonds are not really redeemable at all. An interest-bearing bond is replaced by a non-interest-bearing bond, that is, by an inferior instrument (i.e. the Federal Reserve Notes – ed.). All you do is shuffle various forms of irredeemable debt. When the world wakes up to this prestidigitation, the international monetary system will not be able to survive the shock-waves. The chaos that will engulf the world is appalling.

The solution is relatively simple. The world’s monetary gold should be remobilized. This can be accomplished by opening the U.S. Mint to the free and unlimited coinage of gold. There should be no attempt to fix, cap, or otherwise control the dollar price of gold.”

Open letter to Paul Volcker
Professor Antal Fekete, San Francisco School of Economics

So, how do nations, and Individual Investors cope with this Perfidy?

 

First, we must briefly describe how the Fed-led Cartel’s Interventional Regime apparently operates. Then we will provide guidelines to help overcome Cartel Advantages.

Considering Gold and Silver, it is becoming ever more widely known that, The Cartel* regularly intervenes to drive down prices of Gold and Silver in the market. These Precious Metals are the primary targets of The Cartel’s interventions because they legitimately compete with The Cartel’s Fiat Currencies and Treasury Securities as Measures and Stores of Value.

As well it is becoming increasingly apparent that The Cartel regularly intervenes in the Equities and Strategic Commodities Markets. Reflecting the acknowledgment of massive ongoing overt and covert intervention, no less an authority than the Dean of the Newsletter writers Richard Russell recently finally acknowledged:

“This government will stop at nothing, even including manipulation. What the Fed does not want is a swooning stock market, surging Gold, or sinking bonds.”

           Richard Russell, 05/06/09
www.lemetropolecafe.com

Deepcaster entirely agrees with Richard Russell’s recent conclusion, (and, indeed has been writing about these Interventions for several years now), but we would add one addendum. The evidence is overwhelming that Covert (as well as Overt) manipulation in all aforementioned sectors has been ongoing for several years. It is not just a recent phenomenon. Confirming this view, the Secretary-Treasurer of the Gold Anti-trust Action Committee (www.gata.org), Chris Powell, has written an excellent comprehensive article “There are No Markets Anymore, Just Interventions.”

Fortunately, Deepcaster has developed a Strategy for Profiting from Gold and Silver despite Cartel Interventions. The highlights of that Strategy are laid out at the end of this article.

But before laying out The Strategy, it is important to identify key Cartel Advantages so we are in a better position to surmount them for Profit and Protection.

  1. One considerable advantage of the Fed-led Cartel is that thus far it ultimately controls, de facto, the structure and regulation of the financial markets and the character and pace of economic activity. Allowing The Fed to be the Systemic Risk Regulator would only solidify their Control!

In recent years, The Private-For-Profit Fed’s policy of facilitating excessive borrowing, excessive Monetary Expansion, and the creation of hundreds of trillions of dollars in notional value of Over-The-Counter (dark) derivatives has been the Primary Cause of today’s Financial and Economic Crises.

Specifically, the Excessive Monetary and Credit expansion, and proliferation of Trillions of Dollars of unregulated (dark derivatives), were the Primary Cause of the financial market and economic Crises and the credit freeze-ups which first became evident in 2008.

In this regard, see Deepcaster’s article “Opportunities to Escape Paper ‘Wealth’ ” (11/07/2008) sets forth detailed Guidelines designed to help avoid the 401(k) devaluation or freeze up problems. It can be found in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.

2. A second major advantage which the accrues to The Cartel and its Favored Financial Institutions, is their access to Dark Pools of liquidity. These are de facto “Private Markets” which are opaque, and generally unregulated, and in which hundreds of billions in securities and derivatives are traded. These Dark Pools include “Project Turquoise” and “Baikal.”

 

According to the Bank for International Settlements (The Central Bankers’ Bank), the total notional value of OTC (i.e. Over-the-Counter, private, not exchange traded and thus “dark”) Derivatives of December, 2008 was 592 Trillion U.S. Dollars. (See www.dis.org -- path > statistics > derivatives > table 19ff.) When one consider that The Fed has taken “only” about $2.2 Trillion of Toxic Derivatives onto its Balance Sheet one realizes that there is considerably more potential for system-threatening toxicity. Needless to say these Dark Markets allow all sorts of chicanery to exist, because there are few public records to scrutinize or any public reporting of trades in certain sectors.

So much for the Fiction of the Markets providing a level playing field, fair and open to all participants, in which price is determined by public trading at prices known to all. More details regarding this topic can be found in “Protecting & Profiting From the Dark OTC Derivatives Contagion” (10/24/2008) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.

3.A third substantial Cartel advantage is the ability to manipulate and/or manufacture Key Statistics. Key Official Statistics are often far removed from the Realities of the economy and market place. For example, consider the latest Official Numbers versus the Real Numbers thanks to Shadow Government Statistics.

Official Numbers      vs.      Real Numbers

Annual Consumer Price Inflation
-1.4%                            6% (annualized June Rate)
                                     Shadow Government Statistics report July 15th, 2009

U.S. Unemployment
9.5%                              20.5%
                                     Shadow Government Statistics report July 13th, 2009

U.S. GDP Annual Growth/Decline
-2.5%                            -5%
                                     Shadow Government Statistics report June 25th, 2009

All the above Real Numbers are calculated by Shadow Government Statistics the old-fashioned way i.e. with the methods used before the official gimmicking of these numbers, which began in the 1980’s and 1990’s. See www.shadowstats.com Alternate Data

4. The Fourth Advantage relates to the Favored (versus disfavored) Financial Institutions -- the so-called Legacy Banks or Mega-Banks, which are well connected to The Fed-led Cartel. Because of their size and connections (some of them are The Fed’s Primary Dealers and, likely, some are also the private for-profit Fed’s own shareholders!) they are in a vastly superior position compared to medium size or small size institutions.

In addition, they have been “bailed out” by the US Taxpayers (with money, we reiterate, that the taxpayers borrow at interest from private for-profit The Fed which prints it for free out of thin air or with a few keystrokes). But given their dominant position, certain Major Financial Institutions can and are starving the medium and smaller ones of credit. This will allow the Mega Banks to acquire them and their performing assets(!) for just pennies on the dollar.

Indeed, this phenomenon bears an eerie resemblance to the Depression-era 1930’s, when assets were scarfed up ‘on the cheap’ by the major financial institutions.

The starvation of the credit is not limited to mid-sized and smaller Financial Institutions, but extends to investors and taxpayers as well.  They have increasing difficulty getting credit; or if they can get credit, find it provided at usurious rates.

There is thus increasing evidence that this is a conscious policy (which is a component of the Cartel “End Game” as we call it) – to acquire the assets of small investors and institutions cheaply and for the benefit of the big international institutions, some of which, we reiterate, are likely owners of the Private-For-Profit U.S. Federal Reserve. The reader is invited to examine the evidence in “Investor Advantage -- Revisiting the Cartel’s ‘End Game’ ” (3/6/09) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com. Thus, we apparently have a replay of the 1930’s all over again. A very few get wealthier; the vast majority (including most investors and savers) are impoverished.

5. A Final Cartel Advantage essential to Note -- the ability to create unlimited quantities of Fiat currencies. The vast amount of monetary creation by The Fed in recent years (ranging from above 8% to over 16% annualized since 2006, see Shadowstats.com’s Alternate Data) coupled with the multi-trillion dollar U.S. deficit and the downstream unfunded future liabilities of the U.S. government/Taxpayer (approaching $70 trillion plus and climbing), eventually spells doom for the U.S. dollar as well as hyperinflation for the consumer.

Indeed the debasement of the U.S. dollar has already begun – it has dropped over 30% in the last few years, basis the USDX.  This debasement is, in effect a Stealth Tax on the US consumer and U.S. Dollar Holders world-wide. To recapitulate the Money Supply facts, Shadow Government Statistics money supply (M3) growth at about 8% (at the beginning of 2006) contrary to official figures, which reported 4.5%. In March 2006, The Fed stopped releasing M3 figures and shortly thereafter M3 began to shoot up to 16% in 2008 and then back down to still-substantial 6.5% as we write. Whether an 8% or 16%, this staggering rate of monetary inflation necessarily entails substantial price inflation (because, inter alia, it greatly exceeds GDP growth). Indeed it eventually entails hyperinflation.

So how can average investors and taxpayers surmount these challenges? Deepcaster has developed A Strategy for Profit and Protection with Gold and Silver in spite of the Interventions. We lay out the Highlights of that strategy here (further details are available in the article “Defeating the Cartel... With Profit” (3/28/09) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com).

A Strategy for Profit and Protection

Normally, (that is to say, in a Genuine Free Market situation) the go-to “Safe Haven” Assets in times of Financial Crisis would be the Precious Monetary Metals Gold and Silver, as well as other assets such as Strategic Commodities.

We say “normally” because nearly every time yet another Financial Market Crisis has come prominently into the public eye in recent years The Cartel* of Central Bankers has successfully taken down the price of what would normally be The Safe Haven Assets - - the Precious Monetary Metals.  A prime example occurred during the much-publicized demise of Bear Stearns in March, 2008, which was accompanied by a vicious Takedown of Gold and Silver.  In a non-manipulated Market, given the fact that Bear Stearns reflected great and increasing weaknesses in the Financial System, Gold and Silver should have skyrocketed.  But instead they were dramatically taken down.

Yet, the late 2008 - early 2009 Crises appear to be different.  Gold launched from the mid $700s/oz. to around $900/oz. during September, 2008, fell back to the low $700s and then launched again toward $900 in December, 2008 and has actually exceeded $900 several times in 2009.

So the question now, at the end of July, 2009, is it different this time around?  Have Gold and Silver finally thrust off the shackles of Cartel Intervention?   Or will The Cartel be able once again to cap and take down the prices of these Precious Monetary Metals and Strategic Commodities?   Deepcaster has addressed this question in a Forecast he recently issued for the likely fate of Gold, Silver, Crude Oil & the U.S. Dollar in his August Letter in the ‘Latest Letter’ cache at www.deepcaster.com.

One thing is certain:  The Cartel will certainly attempt again to take down Gold, Silver and Crude Oil at the earliest opportunity because the Strategic Commodities and Precious Monetary Metals are Competitors as Stores and Measures of Value with the Central Bankers’ Treasury Securities and Fiat Currencies.

Yet there is a Strategy which accommodates Cartel Interventional attempts and at the same time provides excellent Profit Opportunities, whether the Interventional attempts are successful or not.

A major premise of The Strategy is that one can certainly remain a Hard Assets Partisan (as Deepcaster is) while at the same time insulating oneself somewhat from future Takedowns.  The following points provide an outline of The Strategy (particularly as applied to the Gold and Silver Markets) and are designed to help avoid Portfolio unpleasantness, or even possible financial ruin, in the future, as well as to profit along the way:

  1. Recognize that The Cartel is still Potent, as difficult as that may be psychologically for Deepcaster and other Hard Asset Partisans to acknowledge.  The Cartel is still the Biggest Player in many markets and, if the timing and market context are propitious, the Biggest Player makes Market Price.  In addition, The Cartel has the advantage of de facto controlling the structure and regulation of various marketplaces and that is a tremendous advantage; just as the Hunt Brothers years ago discovered much to their dismay and misfortune, when they tried to corner the Silver Market.
  2. Accumulate Hard Assets near the Interim Bottoms of Cartel- induced Takedowns.
  3. In order to know when one is likely near the bottom of a Cartel-generated takedown, it is essential to take account of the Interventionals as well as the Technicals and Fundamentals.  Monitoring to the Interventionals facilitated Deepcaster recommending five short equities positions as of early September (just before the Fall Crash) all of which we subsequentially recommended be liquidated quite profitably.
  4. For example, regarding Gold & Silver, near such Interim Bottoms, accumulate a combination of the Physical Commodity (Deepcaster prefers “low premium to melt” bullion coins) and well-managed Juniors with large reserves.  (Deepcaster provides a list of such Junior Candidates in our December 20, 2007 Alert “A Strategy for Profiting from Cartel Intervention” available in the Alerts Cache at www.deepcaster.com.)  The “Physical” and “Juniors” are for holding for the long-term as a Core Position.
  5. Then, to the extent one wishes to speculate on the next “long” move, one should buy the major producers or long-term call options on them.  These latter positions are for ultimate liquidation at the next Interim Top and are not for holding for the long-term.
  6. However, there will be a time when The Cartel price capping is ineffective and Gold & Silver make record moves upward.  The benefit of this Strategy is that one will likely be long in one’s speculative positions when this happens.
  7. Near the next Interim Top, liquidate the long options and majors.  Again, in order to know when we are close to the next Interim Top, it is essential to monitor the Interventionals, as well as Fundamentals and Technicals.
  8. Near that Top, sell short or buy puts on Majors.  We re-emphasize the Majors as preferred vehicles for trading positions because such positions are more liquid and tend to be quite responsive to Cartel moves.
  9. Near the next Interim Bottom, cover your shorts and liquidate your puts and go long again to begin the process all over again.  We emphasize that it is essential to consider the Interventionals as well as the Fundamentals and Technicals in order to determine the approximate Interim Tops and Bottoms.
  10. Finally, Hard Assets Partisans have the opportunity to become involved in Political Action to diminish the power of The Cartel.  It is truly outrageous that the average unsuspecting citizen, and prospective retiree, can and does put his hard won assets in Tangible Assets and/or Retirement Accounts only to have those assets effectively de-valued by Cartel Takedowns and other Cartel actions. This is extremely injurious to many average citizens in many countries who are saving for the rainy day or retirement and have their retirement and/or reserves effectively taken from them.  In order to help prevent this and similar outrages, we recommend taking three steps:

a. Become involved in the movement to Audit and then abolish the private-for-profit U.S. Federal Reserve as Deepcaster, ex-Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, all have advocated. The ‘Audit The Fed’ Bill is H.R. 1207 (and has over 280 co-sponsors!); and The Abolish The Fed Bill is H.R. 2755. www.carryingcapacity.org is a nonprofit which strongly supports these bills via its “Abolish The Fed/U.S. Treasury Instead!” Campaign.

b. Join the Gold AntiTrust Action Committee, which works to eliminate the manipulation of the Gold and Silver markets (www.gata.org).  GATA is a non-profit organization, which makes a great contribution by gathering evidence regarding the suppression of prices of Gold, Silver and other commodities.

c. Work to defeat The Cartel ‘End Game.’  Deepcaster has laid out the evidence regarding the Ominous Cartel “End Game.”  Clearly The Cartel is sacrificing the U.S. Dollar to prop up Favored International Financial Institutions and to maintain its power.  But this sacrifice cannot continue forever. See Deepcaster’s July 2008 Letter in the ‘Latest Letter’ Archives at www.deepcaster.com.

 
If this aforementioned Strategy is employed effectively, it can result both in an increasing Core Position in Gold and Silver, and in considerable profit along the way.

Additional insights and details regarding this Major Strategy, which are essential to profiting from the Fed’s Policies, are laid out in Deepcaster’s article of 3/06/09 entitled “Investor Advantage: Revisiting The Cartel’s ‘End Game’.”

Protection and profit require Proactivity and attention to the Interventionals, Fundamentals and Technicals, not “Buy and Hold.”  “Buy and Hold” rarely succeeds anymore as current market conditions attest.

Indeed, the Key Point of the Strategy for Protection and Profit is careful attention not only to the Fundamentals and Technicals but also to the Interventionals.  These Overt and Covert Cartel-generated Interventions have the power to move markets as those who study the matter can attest.

Thus, the Key to Profit and Protection is a Strategy:  Successful Investors must become Long-Term Position Traders, with their trading choices informed by the Interventionals, as well as the Fundamentals and Technicals. Moreover engaging in the Actions suggested above can help prevent The Cartel’s obtaining Superpower status and aid in achieving protection and profits as well.

“ ‘Perfidy’ – Deliberate beach of faith; calculated violation of Trust” The American Heritage Dictionary

Best regards,

By DEEPCASTER LLC

www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation         Wealth Enhancement

© 2009 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.


Comments

patrick kennedy
26 Jul 09, 05:10
oil

Oil for sure is going to be keep up keep to $60 as it is part of the whole new green energy policy as you know - and maybe should be excluded. So I can not see how in one of the forecasts you were projecting circa $45.

The cartel will keep oil at $58 plus IMO

Always Interested

Patrick Kennedy


Post Comment

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

6 Critical Money Making Rules