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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Protecting Democracy And Profits From The Globalist Threat

Stock-Markets / Financial Markets 2012 Aug 11, 2012 - 06:43 AM GMT

By: DeepCaster_LLC

Stock-Markets

Best Financial Markets Analysis Article“If governments allow themselves to be entirely bound to the decisions of their parliament, without protecting their own freedom to act, a breakup of Europe would be a more probable outcome than deeper integration.”

 

Italy’s unelected prime minister Mario Monti, 8/6/2012

Shocking but not surprising, is that attitude of Italy’s unelected Prime Minister Mario Monti that “Governments” should not be bound by the decisions of their democratically elected parliaments and should be free to act without regard to the decisions of their citizens.


No surprise either that Monti’s goal is the “Deeper Integration” of Europe in light of his membership in the Trilateral Commission and Bilderberg Group, his affiliation with Goldman Sachs, and his being a founding member of the Spinelli Group, devoted to integration of the EU. No surprise either that another member of the Spinelli Group Steering Committee is Daniel Cohn-Bendit (yes, the so-called “Danny the Red” a leading leftist Radical Activist in the Paris Uprisings of 1968).

The Implication for Investor-Citizens, as well as Citizens, should be clear: the typical member of the Regionalist (i.e. Globalist) Elite acts in their own interest (which is to say the interest of the Mega-Bank Cartel (see Note 1)). So here we provide an overview of how investors can protect both Profits and Democracy from the Globalist Threat.

Not only are the typical Globalist Cartel leaders anti-democratic Globalists, they also prefer to conduct their Affairs in secret. Chris Powell’s observations at the height of the Financial Crisis are still most relevant today.

“Refusing to disclose to Bloomberg News the identities of (the recipients of - Ed.) $2 trillion in government loans… the Federal Reserve Board is making the same argument it made this year in denying GATA access to the Fed’s records involving the U.S. gold reserve - - that “trade secrets” are exempt from disclosure. …any government that can disburse $2 trillion secretly, without any accountability, is not a democratic government. It is government, of, by, and, for the bankers. And maybe now GATA isn’t the only one to think so.” (emphasis added)

 

Chris Powell, Secretary/Treasurer, Gold Anti-Trust Action Committee Inc., December 12, 2008, The GATA Dispatch

The refusal (in the midst of the 2008-2009 Financial Crisis) of the private-for-profit U.S. Federal Reserve to identify the recipients of over $2 trillion in loans funded and/or authorized by the U.S. Congress, “courtesy” of U.S. Taxpayers, serves to re-emphasize the Grave Threat which The Fed-led Cartel poses to democracy.

The Modus Operandi continues to this day – the U.S. Taxpayer continues to borrow money (and pay interest on it) from The Fed which prints it for free out of thin air.

Congress simply rolled over and gave The Fed trillions in Bailout Monies, Authorizations and Guarantees, without any significant requirements of oversight or accountability, or disclosure, mandated. And, as our discussion of The Cartel’s End Game below demonstrates, the threat goes beyond the policy of using U.S. Taxpayer-provided funds without disclosure or accountability. That threat is systemic and ongoing and increasing.

“Most Americans have a sense TARP was a badly managed program that bailed out "fat cat" bankers at the expense of U.S. taxpayers. Well, it's even worse than you think, according to Neil Barofsky, former special inspector general for TARP (SIGTARP).

 

“Officials in both the Bush and Obama administrations took the attitude ‘bankers know best,’ Barofsky recalls. ‘It was somewhat shocking how much control big banks had over their own bailout [and] the overwhelming deference shown by Treasury officials to the banks.’

 

“(In an accompanying video, [this writer]) focused more on TARP's failings to live up to its promise to help individual Americans, not just the big banks.

 

“Congress never would've passed TARP if not for programs included in the program to help homeowners facing foreclosure and generally spur bank lending. ‘TARP was an abysmal failure on those very important goals which was the reason why they got that money to give to the banks in the first place,’ Barofsky says.

 

“TARP ‘did help prevent financial Armageddon,’ he concedes. ‘But there's a reason why Congress required and Treasury promised TARP would do a lot more. It's not complicated to take hundreds of billions [of dollars] and pour them into institutions ... and they don't fail. You really can't evaluate TARP’ exclusively on how it impacted the banks.

 

“Similarly, Barofsky takes offense to Treasury's repeated proclamations that TARP has been profitable.

 

“While the big banks have paid back their loans, the overall program is now projected to lose somewhere between $32 billion to $70 billion, with $109.1 billion owed as of June 30, according to SIGTARP. Most of those losses are tied to AIG -- Treasury still own 61% of the company -- but more than half of the 325 banks that received TARP aid have missed dividend or interest payments.

 

“‘The bottom line is [the government] still expects tens of millions of losses on TARP,’ Barofsky says. ‘The losses are a lot less than originally anticipated but this resorting to trickery really shows you they're trying to cover up how badly TARP has failed in its other goals of helping homeowners and increasing lending to the economy.’”

 

“TARP Was Even Worse Than You Think: “An Abysmal Failure,” Barofsky Says”

Aaron Task, The Daily Ticker, 7/27/2012

Concerning the threat to Investors Profits, this Massive Monetary Inflation via Q.E. 1, 2 (and similar ECB actions) entails a continuing and Massive Decrease in Purchasing Power for both U.S. Taxpayers and Investors around the world.

As well, the massive Monetary Inflation continues to result in a massive Stealth Wealth Transfer to the owners of the private-for-profit Federal Reserve (and ECB’s Client Banks) and their Favored Financial Institutions.

This loss in Purchasing Power may be appropriately called The Fed’s ongoing (since the Fed’s Founding in 1913) “Inflation Tax.”

The “Inflation Tax” works like this: every dollar the Fed prints in excess of GDP growth makes every dollar each of us holds worth less than before in Purchasing Power terms. Indeed, over 95% less since The Fed’s founding. But, today, there is no real U.S. GDP growth (see Note 2 below) and there has not been for many months.

One goal of this brief article is to suggest how you might avoid, or at least diminish, the Inflation Tax, and indeed to Profit.

Thus the same institutions that initially profited from the Fed-led Cartel’s policies (e.g. excess monetary and credit provision) which led to the housing bubble, the credit bubble, and all the other bubbles, in the first place get to profit from the bubbles’ bursting at the Taxpayer and Investor expense. Why do we say “and investor expense?” Because investors will not get a return on their money for, typically, several months or years. That is, they are investing with Fiat Currencies with more purchasing power and getting back returns (if any at all) in Fiat Currencies with less purchasing power in later years.

Surely no one believes any longer the Propaganda that the Bailout Bill was necessary to save the financial system from collapse (although it was necessary to save certain Mega-Banks from collapse). Recent events (and events-to-come) have, and will, prove that contention wrong. If The Fed had really wanted to unfreeze the Credit Markets it could have imposed loan quotas as conditions for Financial Institutions’ receiving Bailout Money and/or Guarantees and they still could reduce or eliminate the “interest” they pay banks for keeping money on deposit at the Fed, thus encouraging them to lend it out. Nah, too easy! (Such a policy might unfreeze the credit markets and stimulate GDP growth. And why would The Cartel want to do that? They are making too much money and gaining increasing power by continuing to play the “Crisis Card.”) So…The System is not nearly “saved” yet, is it? Nor are the Credit Markets unfrozen.

In fact, Bernanke and crew are not flooding markets with liquidity - - just flooding Favored Financial Institutions with liquidity. Main Street is still relatively “dry” and has been since the bailouts.

Of course, the Fed-led Cartel* of Key Central Bankers is trying to manage all of this through their Market Interventional Regime. That Interventional Regime is designed not only to manipulate the Major Markets (in particular the Precious Metals, Equities, and Strategic Commodities Markets (see Note 1)) but also to hide key economic and financial realities from the American people and Investors worldwide.

One aspect of this Regime is a Data Manipulation component. Real U.S. Consumer Price Inflation is running at around 9.3% annually, Real U.S. Unemployment is over 22%, and Real U.S. GDP is at a negative 2.15%, according to the quite credible calculations of shadowstats.com. Shadowstats.com calculates the numbers as they were calculated prior to the “gimmicking” that became widely used beginning in the early 1980s and 1990s. (see Note 2)

In any event, the foregoing brief sketch gives one a flavor of what is coming: more crises, more disasters, more demands for Bailouts and Q.E. to “save” the system.

Consider the following in order to better understand the negative effects of the destruction of the Purchasing Power of the U.S. Dollar and certain other Fiat Currencies, as well as the attempted ongoing implementation of the quite anti-democratic Cartel “End Game.”

“…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…”

 

“ 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 planned as a part of Cartel Strategy to increase power and, in our view, to implement its “End Game.”

To understand the Cartel’s likely “End Game” we must understand the Root Cause.

The Root Cause of The Systemic Threat to Democracy and Investor Profits

The root cause of The Threat lies in the 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.

These International Mega-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…” Certainly, an early statement about the threat to “democracy” occasioned by The Fed.

Insightful economic forecaster Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.

“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar. All this has been achieved through its ability to continually inflate the money supply.

And, between 1985 and 2005, the Federal Reserve Board has increased the money supply by five times. This extraordinary money creation is merely the catalyst for debt creation. In a fiat money system, money is debt…there is absolutely no way this money can ever be repaid except by continued inflation. But, now that the credit bubble is blown up, inflation is no longer an option; bankruptcy looms.”

 

“The Federal Reserve…What Has It Done For You Lately? ”

Ian Gordon, December 29, 2007 (www.axisoflogic.com)

To put it bluntly, the “devaluation” of which Gordon speaks is loss of Purchasing Power.

For a summary of specific examples of how The Fed and it’s owners facilitate bubbles, and profit from them and their bursting; how Fed and ECB practices are the main cause of an increasing Systemic Threat; the Cartel’s Market Intervention and Data Manipulation, the Cartel’s ‘End Game’ and the Real World Consequences of that, and how the Implementation of The Cartel’s ‘End Game’ plan has already begun see Deepcaster’s 12/19/2008 Article “Protecting Democracy and Profits from The Cartel Threat” in ‘Articles by Deepcaster’ at www.deepcaster.com.

A Solution Which Addresses Current Realities

 

Rather, and as an alternative to The Cartel’s planned “End Game,” the U.S. Treasury could begin to function as it is constitutionally authorized to do, as The United States National Bank issuing United States Notes (as President J.F. Kennedy briefly authorized the Treasury to do before he was killed) at least partially backed by Real Assets such as the Monetary Metals, Gold and Silver.

But, in the short-term, the U.S. Fed-led Cartel continues to expand its power. For example, it is important to reiterate that: the Powers-That-Be, ensconced at The Fed and U.S. Treasury, have recently sought and obtained even more power without accountability.  Any downstream liabilities, of course, continue to be laid off on the U.S. Taxpayers. We are grateful to Rep. Ron Paul for disclosing shocking and anti-democratic details of the Housing Bailout Bill rammed through Congress at the beginning of the 2008 Financial Crisis, and grateful to GATA and others for reporting them:

“- The two troubled federal mortgage agencies, Freddie Mac and Fannie Mae, will be given unlimited access to the U.S. Treasury without requiring any further approval from Congress.

 

-  The U.S. national debt ceiling will be raised by $800 billion, which suggests that the bailout is expected to cost a lot more than the country is being told.

 

All credit card transactions will have to be reported to the Internal Revenue Service, as if the country isn’t under enough government surveillance already.” (emphasis added)

 

“Ron Paul discloses housing bailout bill’s money and power grab”

The Gata Dispatch, July 24, 2008

Clearly, the Federal Reserve should be audited and then abolished and replaced by a truly National Bank operated by the U.S. Treasury which could then issue currency linked to Gold and Silver.

Joining Deepcaster and Rep. Ron Paul in its call for and then abolition of the “U.S.” Federal Reserve is legendary investor Jim Rogers. Were The Fed to be abolished, a major threat to Western Democracies and Investor Profits would be removed.

The Cartel’s Constraints Generate Profit Opportunities

Though The Cartel’s Interventional Machinery is still quite powerful, it is unable to manipulate all markets at will all the time because it is constrained by several Realities. These include: politics, the necessity to run “under the radar” (i.e. to maintain plausible deniability) regarding its Market Interventions, and the very real constraints of a marketplace in which tangibles-in-limited-supply (e.g. energy and food) and especially increasing demand for physical Gold and Silver, are of major importance.

So how does an Investor cope with all this?

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 another Financial Market Crisis has come prominently into the public eye in recent years The Cartel* has successfully taken down the price of what would normally be the Safe Haven Assets – and especially 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, fortunately for Investors, The Cartel has been increasingly unable to sustain its recent Takedowns of Gold and Silver Prices.

So the question now, in August, 2012, 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 answered these questions in a Forecast recently issued for Gold, Silver, Crude Oil & the U.S. Dollar in the Alerts 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 significantly 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:

  • 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 discovered years ago much to their dismay and misfortune, when they tried to corner the Silver Market. But Major Buyers including especially China have increased their buying of Physical, which has increasingly tended to put a floor under the market. Therefore, it is reasonable and often profitable to:
  • Accumulate Hard Assets near the Interim Bottoms of Cartel- induced Takedowns.
  • In order to know when one is near the bottom of a Cartel-generated takedown, it is essential to take account of the Interventionals as well as the Technicals and Fundamentals.
  • 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. (see Deepcaster’s recommendations).
  • 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.
  • 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.
  • 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 (or bottom), it is essential to monitor the Interventionals, as well as Fundamentals and Technicals.
  • 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.
  • At the next Interim Bottom, cover your shorts and liquidate your puts and go long again to begin the process all over again.
  • As well, Invest in High Dividend Securities aiming for a Total Return in excess of Real Inflation (now at 9.3% in the U.S., e.g., see Note 3 below).
  • 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 only to have those assets effectively de-valued by Cartel Takedowns. 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:
    • Become involved in the movement to audit and then abolish the private-for-profit U.S. Federal Reserve as Deepcaster, Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, all have advocated. Carrying Capacity Network (carryingcapacity.org) is a Nonprofit which also supports these goals. Rep. Paul’s Audit The Fed Bill already recently passed the House with strong bipartisan supp
    • 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.
    • 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

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.

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, a 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 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.

Best regards,

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

© 2012 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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