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Market Oracle FREE Newsletter

Trading Any Market

The Coming Debt Cataclysm, Some Investment Opportunities & Defences

Stock-Markets / Financial Markets 2010 Jan 29, 2010 - 01:58 PM GMT

By: DeepCaster_LLC

Stock-Markets

Best Financial Markets Analysis Article“Something is Rotten is the State of Denmark” - Hamlet, 1.4 William Shakespeare 

“Last week we interviewed G. Edwin Griffin, author of the Creature from Jekyll Island. Ed explained that the Federal Reserve has been created to preserve the interests of the bankers. Gold is an enemy of the Fed because, when it is demanded as money, it restricts their ability to re-allocate wealth from the people who create it, the miners, manufacturers, farmers and inventors, to themselves as they create fiat money out of thin air.”


The Federal Reserve Hates Gold and You!Jay Taylor, J Taylor's Gold, Energy & Tech Stocks Newsletter, January 24, 2010

 

“Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder…

…the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.

…the nation’s fiscal year 2009 deficit was roughly $9 trillion, or $24.7 billion per day, as calculated by brilliant and well-respected economist John Williams…

It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth…

If the government decides to expropriate (steal) or commandeer (e.g., force into Treasuries) America’s private wealth in order to buy survival time, such a measure will be designed to destroy the common citizens, not the elite. Insiders will be given advance warning about any such plan, and will be able to transfer their money offshore or into financial vehicles immune from harm. Assuming that the elite moves its money to safety, there would then be $120 trillion in American debt and liabilities supported by only $32 trillion in private net worth, for a deficit of $88 trillion. In that case, each American would owe $285,714.29 to balance the country’s books…

What these statistics mean is that it is absolutely impossible for the government to fund its debt and deficits, even if it steals all of the nation’s private wealth. Therefore, the government’s only solutions are either formal bankruptcy (outright debt repudiation and the dismantling of bankrupt government programs) or unprecedented American monetary inflation and debt monetization. If the government chooses to inflate its way out of this fiscal catastrophe, the United States dollar will essentially become worthless. You can be absolutely certain that a PhD. in economics, such as Dr. Bernanke, is well aware of these realities...

The people no longer have elected representatives; they have elected traitors.

The enslavement of the American people has been orchestrated by a pernicious Master Class that has taken the United States by the throat. This Master Class is now choking the nation to death as it accelerates its master plan to plunder the people’s dwindling remaining assets. The Master Class comprises politicians, the Wall Street money elite, the Federal Reserve, high-end government (including military) officials, government lobbyists and their paymasters, military suppliers and media oligarchs. The interests and mindset of the Master Class are so totally divorced from those of the average American citizen that it is utterly tone deaf and blind to the justifiable rage sweeping the nation…

America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class-sponsored American dictatorship…”

“America's Impending Master Class Dictatorship” Stewart Dougherty, January 22, 2010 www.financialsense.com

Too Big To Fail is revelatory, though not in the way Andrew Ross Sorkin intended. The book offers startling evidence that Hank Paulson and his deputies colluded with Goldman to create a liquidity crisis at AIG, and to manipulate the government funding a backdoor bailout of AIG's CDO counterparties, most notably Goldman. It's not that Sorkin's sources recounted the truth. Quite the opposite. Rather, they told him stories that were so transparently dishonest that the truth emerges by way of negative implication…

The other thing that you must remember is that the dagger hanging over AIG and Goldman -- the eventual payout to the CDO counterparties -- was a zero-sum game between the two financial giants. On June 30, 2008, AIG's net worth was $79 billion and its CDO obligations totaled $62 billion. On August 27, 2008 Goldman's net worth was $42 billion and its share of the infamous CDO portfolio was $22 billion. The stakes were huge…

The party line, expressed in Too Big To Fail and elsewhere, is that an AIG bankruptcy posed a greater systemic risk than a Lehman bankruptcy, because AIG was so much bigger. But that analysis is highly superficial and very misleading. AIG itself was a holding company, which guaranteed the debt of its unregulated financial subsidiary, AIGFP. The lion's share of AIG's revenues and profits, and about 80% of its consolidated assets, were concentrated among its different insurance company subsidiaries. Those insurance companies were solvent. They did not pose any systemic risk. In fact, it's quite likely that they would have continued to operate outside of bankruptcy.

The only subsidiary with major problems was AIGFP, whose financial obligations were guaranteed by the parent. But AIGFP was only about one-third the size of Lehman. It's almost impossible to see how AIGFP ever posed a systemic risk, unless everyone's intention to provide a backdoor bailout to the banks. Put another way, it seems that the only reason that the government needed to step in for AIG was to provide a backdoor bailout to its banks.

Goldman's scheme (was) to create a liquidity crisis at AIG, in order to manipulate the government into paying CDO counterparties 100 cents on the dollar…” (emphasis added)

“How Paulson's People Colluded With Goldman to Destroy AIG and Get a Backdoor Bailout” David Fiderer, The Huffington Post, January 25, 2010

The Coming Cataclysm, and the Opportunities and Challenges it provides, cannot be adequately understood without first understanding key aspects of the Machinations of Mega-Financial Institutions.

Goldman’s “100 cents-on-the-dollar” Payday via the AIG Bailout was reportedly $11.9 Billion. And all this was in addition to and separate from the Billions which Goldman received (and subsequently repaid) via the TARP bailout.

Thus Goldman’s liability as a CDO counterparty was apparently obliterated via the AIG bailout, courtesy of the U.S. Taxpayer. Of course, the Middle Class Taxpayer who thus saved Goldman and the other Mega-Financial Institutions received in return Billions more in Debts, presumably “secured” by Toxic Waste.

Moreover, it clearly appears from the evidence in Fiderer’s article, that AIG was not Too Big to Fail. The only AIG subsidiary at risk was AIGFP, only one third the size of Lehman. Clearly Lehman was not too big to fail – after all it did fail, but The System survived. Conclusion: the $180 Billion Bailout of AIG was in fact a Backdoor Bailout of the Mega-banks.

And we now have a report that Fed Chairman Bernanke’s staff recommended that AIG not be bailed out, but Bernanke overruled them. This is understandable since Bernanke works for The private for-profit Fed’s Mega-Bank owners.

Indeed, something is Rotten in the U.S.A.

And that Rottenness is centered around the Mega-Bank owners of the private for-profit U.S. Federal Reserve.

The Bottom line is that No Adequate Systemic Fix, nor any fix for Mega-Bank Dominance of Nations around the world, has yet been instituted – the Volcker proposal does not go nearly far enough; it would be merely a watered down version of Glass-Steagall, which was scuttled by Bill Clinton et. al.

In fact the U.S and other key “Sovereign Nation” Debts (over $70 Trillion prospectively for the U.S.) cannot be repaid, ever, leaving Sovereign Nation Default (unlikely in the case of the U.S.) or Fiat Currency purchasing power degradation (quite likely) as the only long term alternatives. Of course Fiat Currency Purchasing Power Degradation (i.e. Consumer Price Inflation) is an insidious Wealth Tax on Savers, Investors and Taxpaying Citizens around the world.

In light of the foregoing, we offer Investors and Traders some Strategies for Defence and Profit.

To develop adequate Defences and seize Opportunities, one must first understand a bit more about the background and causes of the Coming Cataclysm.

First, the private for-profit Fed is the leader of a Cartel* of Key Central Bankers and their Allies and Agents. The Cartel is clearly aware about the worsening state of the economy and Markets and have developed an ‘End Game’, as we call it. See our “Coping with Power Moves in The Cartel’s ‘End Game’ (4/3/09) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.

One aspect of this ‘End Game’ involves Massive Wealth Transfer from Investors and Citizens around the world, to The Cartel.

For example, throughout the ongoing Financial Crises The Fed-led Cartel’s* ‘End Game’ Juggernaut was (and is) Rallying Profitably Along – “profitably” to the Tune of a $11.9 Trillion gain for certain Mega-Financial Institutions in the last 6 months of 2008, when Equities Investors worldwide were losing Trillions in the Equities Markets Crash. (See The Central Banker’s Bank’s (The Bank for International Settlements) website www.bis.org (Path:  Statistics>Derivatives>Table 19) and “05/29/2009 Opportunities & Threats in Derivatives Shocker” in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.)

These Massive Profits were doubtless “facilitated” by The Fed-led Cartel’s Interventional Regime which we describe in detail in the articles noted here. Indeed, there is clear and convincing evidence that The Federal Reserve leads a Cartel of key Central Bankers and favored Mega-Financial Institutions in an ongoing Regime of Overt and Covert Manipulation of the Precious Metals Equities, Strategic Commodities Equities and other Markets, as we also demonstrate in the articles noted below.

*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, 2009 Letter entitled  "A Strategy For Profiting From The Cartel’s Dark Interventions & Evolving Techniques - II" in the “Alerts” and “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.”

But there are Steps which Investors worldwide can take to help derail the Juggernaut protect their Wealth, and profit along the way.

Consider that a key component of this wealth transfer has involved, and continues to involve debasing the value of the U.S. Dollar, which resulted primarily from “the ultra-loose monetary policy of The “Federal Reserve”. Since The Fed was established in 1913 the U.S. Dollar has lost over 95% of its Purchasing Power, as reported by Rep. Ron Paul and others.

One of several negative consequences is that Investors who have saved (they thought) wealth in Dollars over a lifetime have seen the purchasing power of those dollars dramatically eroded by over 35% in the last 8 years alone, and the erosion continues.

To elaborate a bit, there is considerable evidence that “ultra-loose monetary” and credit policies, and the consequent housing credit crises and 2008 Market Crash were the result of the conscious policy of the Fed-led Cartel.

Consider the following observation by Harry Schultz:

“…what is the reason for this “seemingly random monetary mess that multiplies its momentum every day?  The answer, in one word, control.  The elite/insiders already have control of the financial system, but they wanted more, much more…and it was not random, it was planned.” (emphasis added)

 “How will all the above manifest itself in your life?  The answer:  “All you own will shrink...your income, assets, net worth, will shrink year after year in real terms inflation adjusted and possibly also nominally.”

HS Letter, April 27, 2008.

Harry Schultz, Eminence Grise of the Newsletter writing Fraternity sees the Threat to Profits and Wealth posed by the Fed-led Cartel* quite clearly.

The bottom line is that Fed Policies and actions are The Primary Cause of the Economic and Financial Crises from which we suffer today, as we show below and elsewhere.

Consider F. William Engdahl’s contention that the 2008 Credit Crunch and Market Crash were planned:

“…in every major US financial panic since at least the Panic of 1835, the titans of Wall Street – most especially until 1929, the House of JP Morgan – have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking.  The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like.  They are, in short, old hands at such financial warfare to increase their power.

Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century.             That process of using panics to centralize their private power created an extremely powerful concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919…” (emphasis added)

Behind the panic:  financial warfare over future of global bank power F. William Engdahl, October 10, 2008

Consider the implications of the F. William Engdahl quote regarding “global bank power.”  As Engdahl points out, the evidence is increasing that the recent financial panic and economic distress is and has been pre-planned as a part of Cartel Strategy to increase power and, in our view, to implement its “End Game.”

In light of these considerations it is not surprising that the International Mega-Banks were the first to be Saved in the financial crisis. That is, a Major Negative Consequence of the Fall, 2008 Market Crash was a Taxpayer Financial bailout of several Key Mega-Banks. Yet the Bailouts allowed them to move on to subsequent great profitability, while the Middle Class Taxpayers who incurred even greater debt to enable the bailouts, got virtually nothing. To understand the Cartel’s likely “End Game” and Deepcaster’s Strategy for protection and profit, we must understand the Root Cause.

The Root Cause of the Crises, and The ‘End Game’ Threat lies in the secrecy, structure, functioning and policies of the private-for-profit “U.S.” Federal Reserve.

Various international private banks, several of which are headquartered in Europe, own the “United States” Federal Reserve Bank. The European Banks were among the founding banks whose representatives, including Paul Warburg who wrote the charter at the Jekyll Island Georgia meeting, as documented in “The Creature from Jekyll Island”, by G. Edward Griffin, which we highly recommend.

These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:

“I still can’t get over the whole Federal Reserve racket. Consider the following - - let’s take a situation where the U.S. government needs money.  The U.S. doesn’t just issue United States Notes, which, of course it could.  These notes would be dollars backed by the full faith and credit of the United States.  No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.

This is what the U.S. does - - it issues Treasury Bonds.  The U.S. then sells these bonds to the Fed.  The Fed buys the bonds.  Wait, how does the Fed pay for the bonds?  The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds.  The money that the Fed creates from nowhere then goes to the U.S.  The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued.  (With great profit to the private owners of The Fed - - Ed. Note)  The mind boggles.

The damnable result is that the Fed effectively controls the U.S. money supply.  The Fed is …not even a branch of the U.S. government.  The Fed is not mentioned in the Constitution of the United States.  No Constitutional amendment was ever created or voted on to accept the Fed.  The Constitutionality of the Federal Reserve has never come before the Supreme Court.  The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments. How did the Fed get away with this outrage?  A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent.  Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”

Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007

After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…” Thus we have an early statement about the threat to Democracy occasioned by The Fed.

As Richard Russell points out the creation of ever-increasing debt and interest payments is unsustainable. Thus there will inevitably be a Day of Reckoning, a Cataclysm which is fast approaching.

In order to stave off the Day of Reckoning (which, we reiterate, is coming mainly as a consequence of The Fed’s dramatic monetary inflation and “easy credit” policies), and to implement its own ‘End Game’, the Fed-led Cartel* of Key Central Bankers and Favored Financial Institutions has created, and for the past several years has operated, an extraordinary “financial regime” built on dramatically increasing trillions of dollars (about $604 trillion as of June, 2009 – see www.bis.org (path:  statistics>derivatives>Table 19 and ff.) of Dark OTC (i.e. Not Exchange Traded) Derivatives available for the manipulation of major markets ranging from Precious Metals to Crude Oil and Energy, to Equities and Strategic Commodities (see Deepcaster’s July, 2008 Letter at www.deepcaster.com).

To be sure The Cartel’s massive and increasing use of derivatives to intervene (Overtly and Covertly via Primary Dealers) in a wide variety of markets is fraught with danger (e.g. through actual and prospective counterparty failure as we are now seeing, as well as prospective Systemic Failure).  Deepcaster, Warren Buffett and Jim Sinclair have pointed out the dangers of OTC derivatives.  Indeed, Buffett calls them “toxic” … ”weapons of financial destruction” and Sinclair has aptly described the financial system as “sitting on a… trembling mountain of derivatives … think Weimar Republic.”  Unfortunately, Deepcaster, Jim Sinclair, and Warren Buffett are correct. Indeed, the evidence indicates that The Cartel has already begun implementing a nefarious “End Game” plan.

Deepcaster has described The Cartel’s apparent ‘End Game’ in detail in its June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations “ and its August 13, 2006 Alert “Massive Financial-Geopolitical Scheme Not Reported by Big Media” posted in the “Archives” at www.deepcaster.com.  Fortunately, a Bill was introduced in the last U.S. Congress (H.Con.Res.40), which opposes this nefarious scheme. 

Nevertheless, consider the following key aspect of the ‘End Game’ which has that have been implemented through various departments of the government agencies and NGOs.

Masking the True State of the Economy and Financial Markets, is one key aspect of The Cartel Regime – Data Manipulation.

Consider the following Real Numbers from Shadowstats.com which calculates the Real Numbers for the U.S.A. the way they were calculated in the 1980’s and 1990’s before Official Data Manipulation began in earnest.

Official Numbers      vs.      Real Numbers

Annual Consumer Price Inflation reported January 15, 2010

2.72%                                      9.68% (annualized January Rate)

U.S. Unemployment reported January 8, 2010

10%                                21.9%

U.S. GDP Annual Growth/Decline reported December 22, 2009

-2.64%                            -5.71%

We emphasize, Real U.S. GDP “growth” is a negative number -- a negative 5.71%, according to shadowstats.com, as opposed to Official Figures showing just a negative 2.64%.

That the U.S. economy (about 25% of the international economy) is headed in the direction of Serious Stagflation (a Kondratieff Winter) is pretty clear from the very credible shadowstats.com statistics cited above. Predictions of Recovery any time soon are a combination of Media Hype and Fed “Communications policy”.

As well, the U.S. Dollar’s purchasing power has declined over 30% in the past half-decade and it appears that The Cartel expects (and likely are even pushing) the U.S. Dollar to go into further and further decline, over the medium term, and to continue their other policies, until there is a “No-Salvation, No-Return Systemic Crisis” – a Cataclysm.

It would appear that The Cartel-charted-course toward a Stagflationary Recession/Depression, and thus toward the further implementation of their “End Game,” is on course. For more details on the ‘End Game’ see the articles referred to above.

 

The Strategy – Guidelines for Identifying Opportunities for Profit and Defences

  1. Get the Real Data.  As many Investors suspect, Crucial Official Government and Agency Economic and Financial Data are of highly questionable validity.  The Data set forth above from shadowstats.com is a good starting point. Educate yourself about the realities of the marketplace using Alternative Data Sources such as Deepcaster, Gold Anti-Trust Committee (www.gata.org), and shadowstats.com. Gathering and staying attuned to authentic information regarding the marketplace can save one much financial grief as well as positioning one for profit.
  1. Take Account of both Overt and Covert Cartel Intervention.  Many of these same investors who suspect Official Statistics also rightly suspect that the private-for-profit U.S. Federal Reserve and/or Central Banks overtly and covertly manipulate Major Markets. But they might not be aware that covert Market Interventions and Data Manipulation are likely far more pervasive than generally believed, as detailed in Deepcaster’s articles mentioned above. As well, such investors may not have thought systematically about how one copes with and profits from such Intervention and Data Manipulation. Consider one example of Cartel Intervention: the Traditional and Legitimate Safe Haven from inflation, deflation, and risk, is Gold.  Yet, Gold has, during the recent periods of extreme financial market turmoil, been taken down in price, when it should have skyrocketed. For example, in early March, 2008 Gold was over $1000/oz. when the Bear Stearns Crisis revealed the fragility of the Financial System.  Gold should surely have skyrocketed then.  Instead, it was brutally taken down.  Were its price not manipulated, Deepcaster’s view is that its price would be over $3,000.00 per ounce today. Deepcaster and others, including the Gold AntiTrust Action Committee, have offered considerable evidence that the Cartel* of Central Bankers and Favored Financial Institutions are the culprits behind these dramatic and devastating Takedowns. See Deepcaster’s Alert of 12/25/07 “A Strategy for Profiting from Cartel Intervention in Gold, Silver, Crude Oil and Other Tangible Assets Markets” in the Alerts Cache at www.deepcaster.com. Indeed, were The Cartel to allow Gold and Silver to Skyrocket, that would threaten The Cartel’s Wealth and Power. [But Deepcaster has developed a Strategy designed to protect and Profit from these Takedowns. See “Defeating the Cartel...With Profit” (03/28/2008 (part 1) and 06/19/2009 (part 2)) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.] But there is a Profitable Refuge from Market Intervention and Data Manipulation. That Profitable Refuge lies in the Strategy described in the aforementioned Alert, certain characteristics of which we outline here:
  1. Recognize that the “Buy and Hold” strategy rarely succeeds anymore. The Eminence Grise of Newsletter writers, Harry Schultz perhaps put it the best when he stated that “buy and hold no longer works anymore, even with Gold.”  Recent Market Developments should suffice to demonstrate this principle!
  1. Track the Covert Interventionals as well as the Technicals and Fundamentals and Overt Interventionals. Tracking the Footprints, as it were, of the Covert Interventionals (e.g. the Repo and TSLF Pools) daily can often, but not always, give one excellent clues about The Cartel’s next likely Interventional Move - - such clues are essential to preserving wealth and making profits. Deepcaster’s tracking of The Interventionals, for example, allowed him to recommend five short positions going into September, 2008, (i.e. before the Market Crash) all of which he has subsequently recommended be profitably liquidated. Deepcaster’s recent article “Cartel Angst Equals Investor Advantage” (9/18/2009 can be found in the ‘Articles by Deepcaster’ at www.deepcaster.com) lays out a specific strategy designed to profit from investing and trading in the heavily manipulated Gold and Silver Market in spite of the Manipulation.
  2. Derivatives Risk, and “Market Magnetism” Militate in favor of Sector Investing The demise of Lehman Brothers, Bear Stearns, AIG and CIT are only a few of the indicators that OTC (i.e. not publically traded and thus “dark”) Derivatives can bring down any individual company. The Fall, 2008 Crash reduced the Notional amount of OTC Derivatives outstanding by “only” some $91 Trillion. There still exist, as of the latest (June, 2009) BIS report (www.bis.org, path: Statistics>Derivatives>Table 19), some $604 Trillion in Toxic or Potentially Toxic Derivatives World Wide. But short of a total systemic collapse, OTC derivatives risks threaten some companies more than others. Unfortunately, these risks are often not visible, even in the most detailed SEC Filings and Financial Reports. Moreover, even the strongest securities often get pulled down with a general Market Downdraft. This “Market Magnetism” also militates in favor of Sector investing on both the short and long side.
  1. Perhaps most important, be prepared to go both long and short Major Market Sectors – long near the bottoms of Interim Takedowns and short near Sector Tops. The Interventionals are essential to helping identify these tops and bottoms.  In Deepcaster’s view, it will be increasingly difficult to achieve a net profit for one’s portfolio if one is unwilling and/or unable to “go short” as well as “long”. The Blossoming of the 200% and 300% (and other) leveraged ‘short’ and ‘long’ ETF’s described above provide a superb opportunity to go short and long with ease, but not, as we explain in recent articles, without considerable risk.
  1. Be aware of and Active in the overall Geopolitical Landscape in order to gain an adequate understanding of how that Landscape might affect the present and future direction of the Markets. It is essential that one understand the motivations of the major players in the market and the resources at their disposal. For example, a Major Motivation of the U.S. Federal Reserve and other key Central Banks is the protection and enhancement of the legitimacy of their Treasury Securities and Fiat Currencies as Measures and Stores of Value. Therefore, one can understand that one of their Major Goals will be to attempt de-legitimize Gold, Silver and the Strategic Commodities, including especially Crude Oil, as Stores and Measures of Value. With this in mind, the periodic takedowns of Gold and Silver and, since July, 2008, of Crude Oil, become understandable. Moreover, such an insight applied daily to the market can result in a tremendous edge in understanding and forecasting market performance, present and future. Moreover, regarding the assets at The Cartel’s disposal, if one tracks for example, the Repurchase Agreement and TSLF Pools regularly, as Deepcaster does, and is aware of the other Interventional tools that The Cartel has at its disposal, then one gains a considerable edge.
  1. Buy Physical Gold and Silver on Dips The History of Fiat (i.e. not backed by Gold or Silver) Currencies (they fail) is the harbinger of The Future. Only Gold and Silver have withstood the test of time as the Ultimate Store and Measure of Value, the Safe Haven in spite of Wars and Economic and Financial Disasters. And with the U.S. Dollar’s position as the world’s Reserve Currency weakening, Gold and Silver’s price appreciation prospects (in Fiat Currency terms) are better than ever. But as regular readers know, the Price of Gold and Silver in the Markets is vulnerable to Takedowns by The Cartel*. Deepcaster earlier forecast the ongoing Cartel Takedown, near the bottom of which we intend to recommend buying physical Gold and Silver, plus selected top quality “juniors” and producers (see our Recent Alert -- " MAJOR MOVES LAUNCHED. NOW WHAT?" for forecast Takedown Timing in the ‘Alerts Cache’ at www.deepcaster.com). A key point to recognize is that the price of Paper Gold and Silver (e.g. Futures, Securities, including ETF Shares) is much easier for The Cartel to manipulate than the price of the physical metal. Indeed, during the last significant Precious Metals Takedown, the Price of Physical Silver fetched a 20 to 25% (or more) premium over paper Silver (e.g. Futures prices). We expect such a premium will be available in the future as well.
  1. Finally, Hard Assets Partisans have the opportunity to become involved in political action to protect their wealth and profit.  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, U.S. Dollar Devaluation 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:
    1. Become involved in the movement to Audit and then abolish the private-for-profit U.S. Federal Reserve as Deepcaster, former Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, all have advocated. The ‘Audit The Fed’ Bill is H.R. 1207 (and has the support of over two-thirds of the U.S. House of Representatives) and S604 in the Senate; and The Abolish The Fed Bill is H.R. 2755. www.carryingcapacity.org is a nonprofit organization which actively supports these bills.
    2. Join the Gold AntiTrust Action Committee, which works to eliminate the manipulation of the Gold and Silver markets (www.gata.org).  GATA is a nonprofit organization, which makes a great contribution by gathering evidence regarding the suppression of prices of Gold, Silver and other commodities.
    3. Work to defeat The Cartel ‘End Game.’  Deepcaster has laid out the evidence regarding the Ominous Cartel “End Game” in “Coping with Power Moves in the Cartel's 'End Game' “ (04/24/2009) in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.  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
  1. Support the Move to Break up the Mega-Banks and distribute their “Pieces” to Regional State and Local Banks. “Too Big to Fail” is “Too Big to Exist”.

Conclusion:

Protection and profit require Proactivity and attention to the Interventionals, Fundamentals and Technicals, not “Buy and Hold.” We reiterate, “Buying and Holding” for the long term 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. Monitoring the Interventions facilitated Deepcaster’s earlier accurate forecasts regarding ongoing Moves in Major Market Sectors. To see Deepcaster’s Latest Forecasts, go to www.deepcaster.com and click on ‘Alerts Cache’.

Additional insights and details important to profiting from and defending against The Cartel’s Policies, are laid out in Deepcaster’s article of 3/06/09 entitled “Investor Advantage: Revisiting The Cartel’s ‘End Game’ ” in the ‘Articles by Deepcaster’ cache at www.deepcaster.com.

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 wealth protection and profits as well.

Best Regards,

By DEEPCASTER LLC

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

© 2010 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.

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Comments

philo
29 Jan 10, 22:27
We are doing God's work...

How is it that Goldman Sachs's Lloyd Blankfein has not been crucified for contending that "we are doing God's work". Blankfein is being totally blasphemous!!!

The press media have been very silent on this. So has been nearly everyone else?? What power does this guy wield???

Blankfein is an insult to all those serving in religious houses.


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