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Gold Opportunity Antidote to Cartel Created Crises

Commodities / Gold and Silver 2011 Aug 27, 2011 - 02:17 AM GMT

By: DeepCaster_LLC

Commodities

Best Financial Markets Analysis Article“Gold Cartel Trifecta And Another Temper Tantrum

"They say the price of gas could soon be under $3 a gallon. Do you know what that means? You can now afford to drive by the house you used to live in, go by the job you used to have, and go see the bank where you used to have money." … Jay Leno


GO GATA!

Gold was on fire last night, rising to $1917 at one point. Then it began to drift off back to $1900. From thereon in it was all vintage Gold Cartel stuff. Gold began to plummet at 3 AM NY time (PLAN A). The AM Fix was $1886.50, with the PM Fix dipping to $1876. As soon as the PM Fix concluded, The Gold Cartel really went to work with one of their patented PLAN B attacks. Gold was pummeled down to $1852.

With the kind of move gold has had, a correction such as this is quite normal. What is so annoying is the way gold corrects and when, as if it’s part of a script. The Gold Cartel makes their moves at certain times, which engenders other selling, and then it feeds on itself.

Speaking of aggravation, The Gold Cartel has once again made its move around an option expiration, this time on silver. It has an option expiration on Thursday. Remember last week we mentioned about the bums doing what they could do to keep silver below $42 for this expiration? Well, here they go…

Wait a second. I just blinked and gold is now $1830 and silver $41.60 … PLAN C in the Access Market. That makes it a Gold Cartel Trifecta. They used all of their tactics in one trading period.”

“Gold Cartel Trifecta And Another Temper Tantrum”

Bill Murphy, lemetropolecafe.com, 8/23/11

The Eloquent Eminent Midas of Le Metropole Café, Bill Murphy, has for years been describing the shocking and continuing attacks by the Fed-led Cartel* on Gold and Silver Prices, and by exposing their nefarious operations, has provided a substantial public service.

But there is a Golden Silver lining to Gold and Silver Price Takedowns (such as the most recent one early this week). They provide a wonderful Profit and Wealth Protection Opportunity providing the timing and form of the Purchases are well-chosen.

“The decision by the Fed, last week, to keep a key interest rates at near zero percent for 2 years… will have profound negative effect on the U.S. dollar and its buying power.  It also signals that even the Fed thinks the economy is not going to get better for at least 2 years… “It appears the “fix” is in as far as the road plan for the U.S. dollar and economy.  The government and the Fed appear to have chosen a path of inflation for America and the world.  This is not an official announced plan but it might as well be.”

Zero percent interest on a key Fed rate confirms my prediction right along with the rising inflation in just about everything except housing.  In an extensive post about inflation this week, Theburningplatform.com said, “The storyline being sold to you by Bernanke, his Wall Street masters, and their captured puppets in Washington DC is that deflation is the great bogeyman they must slay. They make these statements from their ivory jewel encrusted towers as the real people in the real world deal with reality. The reality since Ben Bernanke announced his QE2 policy in August 2010 is:

  • Unleaded gas prices are up 45%.
  • Heating oil prices are up 46%.
  • Corn prices are up 71%.
  • Soybean prices are up 26%.
  • Rice prices are up 13%.
  • Pork prices are up 31%.
  • Beef prices are up 25%.
  • Coffee prices are up 38%.
  • Sugar prices are up 48%.
  • Cotton prices are up 13%.
  • Gold prices are up 42%.
  • Silver prices are up 115%.
  • Copper prices are up 23%.

The official inflation rate is 3.6%, but anybody with an IQ above 70 knows that’s a statistical lie.  According to economist John Williams of Shadowstats.com, the true annual inflation rate is around 11% (if calculated the way Bureau of Labor Statistics did it in 1980).  In his latest report, Williams warns the dollar is in serious trouble because the Fed is not interested in fighting inflation when it needs to continue propping up the banking system.””

“0% Interest Rates Lock in Inflation”

Greg Hunter, USAWatchdog.com, 8/17/11

The aforementioned ‘Price Rises’ report thanks to Greg Hunter not only emphasizes the disastrous effects of Fed Policy (e.g. QE 1 and 2, and Multi-Trillion loans to Foreign Mega-Banks, inter alia) on Investor Citizens around the world, but also points the Way to a considerable Profit Opportunities, on which we focus here.

First, consider the foregoing in conjunction with Peter Schiff’s (CEO-Euro-Pacific Capital) observation about the effects of Fed policy on the economy and job creation.

“The Fix is In. It was bad enough that the Fed held rates far too low, but at least a fig leaf of uncertainty kept the most brazen speculators in partial paralysis. But by specifically telegraphing policy, the Fed has now given cover to the most parasitic elements of the financial sector to undertake transactions that offer no economic benefit to the nation. Specifically, it will simply encourage banks to borrow money at zero percent from the Fed, and then use significant leverage to buy low yielding treasuries at 2 to 4 percent. The result is a banker’s dream: guaranteed low risk profit. In other words it will encourage banks to lend to the government, which already borrows too much, and not lend to private borrowers, whose activity could actually benefit the economy.”

Peter Schiff, CEO of Euro Pacific Capital

As Peter Schiff emphasizes (and we pointed out last week in “Profitably Surmounting Plutocratic Perfidy”) Fed Policy is zero interest rate policy for 2 years is (a de facto QE 3) actually greatly Detrimental to Economic Recovery and Job Creation.

If the Fed were really serious about jumpstarting the economy, it would long ago have eliminated the 25 BPS it pays banks to keep “Excess” Reserves at The Fed.

This would have encouraged Banks to lend to the Real Economy. As it is now, banks are encouraged by the 2 year ZIRP (Zero Interest Rate Policy) commitment to Hoard Funds and Speculate with Ultra-low-cost Capital.

Meanwhile, Economic Prospects and Realities for Small Businesses and Households continue to worsen.

As well, as Mark J. Lundeen nicely notes:

“Dr. Bernanke’s QE had nothing to do with stimulating the economy, but everything to do with maintaining the bank’s collateral at fictional Valuations…

Today mortgage rates are below 4%, the lowest since 1964, but lately few people qualify… So what kind of mortgage rate is that?

… the kind that allows the U.S. Banking System to stay in business and continue overpricing their illiquid Mortgage Backed Securities...”

Mark J. Lundeen, Market Comments for 19 August, 2011

Yet, again, we see an easy money (for the Mega-Banks) policy coupled with a Pro-Debt Expansion policy for Sovereign Debt has resulted and continues to result in Mega-Profits for the Mega-Banks, and increasing pain and insolvency for everyone else around the world, including Sovereign Nations.

But the Worm is Turning, as they say.

Debt Saturation of Sovereign Nations is one Main Reason.

Realistically, Debts of Several Key Sovereign Nations, and not merely Debt of the PIIGS, can never be repaid.

Such a situation enforces Austerity. But Austerity Impels Sovereigns toward Increasing (the International Economy have never been in genuine recovery mode since 2008 BTW – see Shadowstats.com**) Economic Contraction… hardly a Road to Economic Recovery.

So the private for-profit Fed and its Mega-Banks Allies/Shareholders are left one Recourse to keep their Profit-Maximization Game Going – More Money “Printing” (i.e. More QE Stimulus however named) and Price Takedown Attacks on the Monetary Metals – Gold and Silver. Indeed, a Key Component of their ‘End Game’ has for years been, and still is, The Cartel’s* ongoing Regime for Suppressing Precious Metals Prices. (See Deepcaster “Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’ (1/13/11)” in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com.)

That is because the increasing recognition of Gold and Silver as the Ultimate Real Money tends to weaken the legitimacy of the Mega-Bankers Fiat Currencies and Treasury Securities.

*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.

But since this Money “Printing” (plus Easy Money for the Mega-Banks) has been, and is, and prospectively, will be, well in excess of GDP (now actually Negative -- see Shadowstats.com), it will guarantee increasing Price Inflation (already at the Hyperinflationary Threshold of 11.21% per Shadowstats.com). (Nonetheless, Price Inflation of the Monetary Metals has enabled substantial profit taking in the Deepcaster’s Portfolio***.)

And this guarantees continuing Food and Commodities Price Increases, generating increasing Social Unrest around the World.

Thus herein lies the Key Opportunity Antidote to the Cartel Generated Crises: Over the next Months and Years, the Prices of Essential (e.g. Food) Real Assets (including Real Money - Gold and Silver) will continue to Soar, while the Value of Paper Assets will Decline.

Therein lies the Great Profit and Wealth Opportunity going forward.

Thus, so far as Gold and Silver are concerned, consider the Cartel Takedowns such as the recent one eloquently described by GATA leader Bill Murphy above, as Gifts. Buy more.

Best regards,

By DEEPCASTER LLC

www.deepcaster.com
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© 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

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