Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Dow 30k before End of 2020? - 13th Jul 20
Credit Market Investments Turned Into End-User Risk Again - 13th Jul 20
Investors Are Going All-In on This Coronavirus Proof Industry - 13th Jul 20
5 Vital Insights That You Can Gain From Instagram Trackers - 13th Jul 20
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Investors Positioning for Five Impending Investment Critical Events

Stock-Markets / Financial Markets 2011 Oct 29, 2011 - 02:00 AM GMT

By: DeepCaster_LLC

Stock-Markets

 

Best Financial Markets Analysis Article“The end crisis will be postponed until the sovereigns go bankrupt.” Marc Faber, 10/27/11

Eurozone issues are critical for many reasons including the fact that they are a harbinger of those facing the World’s largest Economy and Reserve Currency. Issuer, the USA, in the not too distant future.


Marc Faber has it right. Debt Transfers from Private Creditors to Sovereigns (i.e. Taxpayers) will eventually bankrupt the Sovereigns.

The key point is that the Resolution at the Euro Summit earlier this week will provide only a temporary and Insufficient “Solution” because:

  • The Trillion plus Euro leveraged EFSF Euro Fund is not large enough if there are any further (quite likely) downgrades of sovereign credit (for, e.g. both France and Italy).
  • The Plan still piles more debt on unpayable debt
  • Greece still has $250 Billion Euros of Sovereign Debt, after being allowed to write down only $100 Billion. The write-down is insufficient to get the Greek economy rolling again because, even after this Write-down. Greek Debt remains at about 120% of GDP.
  • And for the not-much-discussed-lately Elephant in the room, the USA, Debt to GDP just passed 100% officially (and it is worse when one considers Real U.S. GDP is a negative 2.89%). See Note 2** below.

 

It's possible that we could do another round of quantitative easing…”

 

William Dudley, New York Federal Reserve President, 10/24/11

Therefore, because the Euro Summit did not solve anything for the long run, the following Impending Investment-Critical “Events” take on added significance.

We briefly analyze these “Events” and offer suggestions on profitably addressing them:

  • The first in the U.S. Federal Reserve meeting slated for Nov. 1 and 2, 2011. In addition to Fed Governor Dudley’s hint of more possible Q.E., Fed Vice Chairman Janet Yellen has also hinted at such. Perhaps the most likely is a Fed purchase of Toxic Mortgage Backed Securities, to get them off the Bank’s books – another Big Chunk of Monetary Candy to help the Mega-Banks (Again!).

This suggestion comes from Fed Governor Daniel Tarullo and it would likely be promoted as a way to lower interest rates and help the still-weakening (see recent Case-Shiller report) housing Market.

Such a MBS purchase, or similar plan would, again, be most inflationary (and thus harmful to the middle class and working poor), but would temporarily boost the Equities Markets with another Sugar High, just as news of the Eurozone Deal has temporarily done for the Equities Markets.

Of course, all those excess (over any GDP growth) Dollars would eventually create more Food and Energy Price Inflation. On the other hand, a failure to enact any such Q.E. would likely result in a termination of the relaunched Equities Rally. In any event, in the middle and long term the Equities Rally is likely doomed anyway.


“…we have an Exchange STABILIZATION Fund here in the US and they have a STABILITY mechanism over there. Call me a purist but since when did the damn government have the right to interfere in any markets to make them more "stable". My view is that ALL of the instability currently in these markets is being caused by the government. If they got the hell out of the way we would actually have a TREND and it would be a STABLE one. The only problem for them is that the trend would be DOWN. That is something that these meddling clowns cannot tolerate. That is where the instability is coming from (traders trying to guess what these fools are going to do next).”


Dan Norcini, traderdannorcini.blogspot.com, 10/5/11

  • The G-20 Meeting of November 3 and 4, 2011 will, at the least, provide more Hot Air about how the developed worlds’ Economic Problems are being successfully addressed. (But, so far, not being addressed with the Solutions of Capitalism. Rather, Mega-Banks losses are being commonized via bailouts, while Profits are still privatized.)

If the Markets are “Believers” in the G20 Hot Air (and with a lot of market boosting from the U.S. Working Group on Financial Markets), such would likely touch off another leg of the fitful Year End Equities Rally.

A key point is that either a U.S. Fed MBS Purchase Plan and/or a Eurozone and/or G-20 Rescue Plan is likely to be most Inflationary which would give quite a boost to Precious Metals and essential Commodities Prices (e.g. Food). Of course, any such boost in Precious Metal Prices will likely be vigorously opposed by The Cartel* which can be expected to intensify their price capping operations.

“The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold.”

 

Shijie Xinwenbao, China

  • Eurozone Finance Ministers meet November 7 and 8, 2011 with the prospect of providing additional details regarding the ostensible Resolution of the Eurozone Crises. The Market’s Reaction will depend on the perception of how credibly effective or ineffective the Plans will be.
  • But the Real Market Rubber will meet the Road with the release of the U.S. Treasury International Capital (TIC) data from September 2011, scheduled for November 16, 2011.

TIC Figures reflect the Purchases and Sales of U.S. Securities by Foreign Investors, including Foreign Institutions. Significantly, Foreign Institutional Net Purchases decreased by over $8.7 billion in August per the October Report. Were this phenomenon to continue, it would be Very Bad News for the U.S. Bond Markets resulting inter alia in a spike in Interest Rates.

Watch carefully for the next TIC report scheduled for release November 16, 2011. It will report on the TIC Transactions and status for September 2011.

If the Figures show a Net Outflow substantially in excess of the $8.7 billion August Figure, it will be an ominous sign that Investors are fleeing the U.S. Treasury Market, a likely precursor to much higher Interest rates and increasing Financial System Stresses, or Collapse.

Caveat: While we have no evidence that TIC figures are anything other than accurate, there is considerable evidence that other Official Numbers are Bogus. See Note 2** below regarding Shadowstats.com.

  • Finally, the U.S. Congressional “Super Committee’s” Deadline for making $1.5 Trillion in spending cuts looms large on November 23, 2011. Implementation of cuts of that magnitude would not only dampen Economic Growth but will clearly also cause considerable Social and Political Conflict.

And to the extent that the Fed, the U.S., and Eurozone administration resort to further stimulus (as in Q.E. 3, Q.E. 4, etc), which we think they almost surely eventually will, it will be highly inflationary, eventually resulting in Hyperstagflation. But a failure to make credible cuts would likely cause a further erosion of confidence and resulting Market Crash.

But the consequence of such additional stimulus will be more Energy and Food Price Inflation. And, of course, dramatically higher Gold and Silver prices will result also in spite of (temporarily effective) Cartel Price Takedowns.

In sum, a major investment focus should be Tangible Assets in relatively inelastic demand with as Food and Food Producers. Another focus should be High Yield relatively low risk Securities, some of which should be domiciled in Asia or Latin America (See Note 3). Of course, Gold and Silver purchased near the bottom of Cartel-generated Takedowns should be a Top Priority too.

Finally, we expect a considerable amount of money will be made in leveraged short funds, as our subscribers learned in the Fall, 2008 when 5 leveraged short funds which we recommended became nicely profitable. Thus we expect to recommend then for our Speculative Portfolio in the next few weeks when the timing appears to be propitious.

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

© 2005-2019 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

6 Critical Money Making Rules