Studying The
Cartel* Game Plan, to the (considerable) extent that that Plan can be
inferred from Cartel actions and their consequences (see below), can be a
significant aid in making profitable investment decisions.
Asking key
questions which arise from market or economic developments which appear to be
rationally inexplicable, often reveals important aspects of that Game Plan.
Why was it that,
when the fragility of the Financial System became quite apparent via the
collapse of Bear Stearns in March, 2008, did the price of the Traditional
Safe Haven Assets, Gold and Silver, not skyrocket, but, rather, declined
dramatically?
Why is it that
during recent all-time-record debt and monetary creation, especially in the
U.S.A., do not the interest rates on U.S. Treasury Securities Skyrocket?
Where are the
infamous ‘Bond Vigilantes’?
Why, during
record recent (and ongoing), economic and financial crises, did Gold and
Silver Not exceed their 1980 inflation-adjusted high? (e.g. approximately
$2,300/oz for Gold)
Why, when the
Main Stream Media tells us we are in a deflationary period, does our
authentic experience tell us that almost everything costs so much more?
Why have the
Bailouts and Stimuli overwhelmingly been directed at helping too-big-to-fail
financial institutions, while the U.S. Consumer/Taxpayer and, often Mortgage-
Holder (who is 70% of the U.S. Economy) has received virtually no help at
all, and is in increasingly dire straits?
And how is it
that when Investors in the Equities Markets were losing Trillions in the
Fall, 2008 Market Crash, certain Mega-Financial Institutions made over $13
Trillion? (See “Opportunities & Threats in Derivatives
Shocker” (05/29/2009) at www.deepcaster.com and click on the
‘Articles by Deepcaster’ cache.)
One could
continue the list. These questions can all be answered if one first considers
Cartel* Market Interventional Realities.
It is becoming
increasingly widely known that a Fed-led Cartel* of key Central Bankers and
Favored Financial Institutions regularly overtly and covertly intervene in
the Precious Metals, Equities and Strategic Commodities Markets, among
others.
*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.”
The Motivations
for these Interventions are quite predictable: profit and power. [See
“A Profit Tool & Strategy for Coping with The Cartel”
(08/14/2009) , “Defeating the Cartel... With Profit, Part 2”
(06/19/2009), “Coping with Power Moves in the Cartel's 'End
Game'” (04/24/2009), “Coping with the Superpower-Cartel Threat!”
(01/30/2009) at www.deepcaster.com and click on the ‘Articles by
Deepcaster’ cache.]
One major
motivation of these Interventions is that The Cartel does not want Gold and
Silver to be recognized as for what they are – the Ultimate Stores and
Measures of Value. They want their Fiat Currencies and Treasury Securities to
be so recognized, because this paper is the source of their Profit and Power.
Understanding
these motivations explains periodic Cartel Takedowns of Gold and Silver
prices (see below for how these Takedowns are implemented).
But the
Interventional Regime operates much more broadly than just in the Precious
Metals Markets.
An indication of
just how broadly, and to what ends, is provided by understanding key Cartel
Interventional Tools.
Among these tools
are TOMO’s, POMOS, TARP Funds and policies and TALF Funding and
Policies, and last but not least the nearly $600 Trillion Notional Value of
dark OTC Derivatives reported by The Central Bankers Bank, the Bank for
International Settlements (www.bis.org, path: Statistics > Derivatives
> Table 19).
(See the
following for description of the aforementioned Funds and Tools and their
uses: “Profits v. The Threat: Beauty & The Beast Redux”
(07/10/2009) and “Defeating the Cartel…With Profit, Part 2”
(06/19/09) at www.deepcaster.com and click on the ‘Articles by
Deepcaster’ cache.)
Importantly, a
Critical Major Consequence of the Ongoing Cartel Interventions is that they
create Anomalous and Dysfunctional Dislocations in the Market and Economy.
That is, these
Interventions create Market (and Economic) Consequences and Results which are
often far different from those which would be generated by Free Market
Action.
For example, were
the price of Gold (and Silver) not manipulated, Gold should (given recent and
ongoing Financial and Economic Crises) many months ago have exceeded its
inflation-adjusted 1980 high (i.e. $2,300/oz for Gold), should it not?
And given recent
unprecedented massive Monetary and Credit Creation and Fed Monetization of
U.S. (and other major Nations) Treasury Securities their prices should be
much lower. That is, interest rates should be much higher, should they not?
But they are not.
Why?
The answer likely
lies in the TOMO, POMO, TARP and TALF funding referred to above and in the
derivatives positions reported at the BIS website in Table 19 on
www.bis.org, path: Statistics > Derivatives > Table 19 (see above and
Table below).
Note the Notional
Values of the following in Table 19 below:
-- $395 Billion
in OTC Gold Derivatives Contracts available for Gold Market Manipulation.
-- $418 Trillion
in OTC Interest Rate Derivatives Contracts available for Bond Market/Interest
Rate Manipulation.
-- $4.03 Trillion
in OTC Commodities Derivatives Contracts available for Crude Oil and Other
Commodities Price Manipulation.
-- $49.7 Trillion
in OTC Currency Contracts available for Currency Price Manipulation.
Comparing the
Total Market Value of OTC (dark, private, and not Exchange Traded)
Derivatives in June, 2008 (pre-Crash) with December, 2008, one finds that
certain Major Financial Institutions gained over $13 Trillion in the same
period that (i.e. the Fall, 2008 Equities Markets Crash) Equities Markets
Investors were losing Trillions (see “Opportunities & Threats in
Derivatives Shocker” (05/29/2009) at www.deepcaster.com and click on
the ‘Articles by Deepcaster’ cache).
But why are these
huge gains Not Obvious and/or, reported by Major Financial Institutions? In
answering the questions consider that the private for-profit Fed refuses to
reveal key information about their financial assets and transactions to the
U.S. Congress. Could it be that the private for-profit Fed’s MegaBank
Shareholders are among the beneficiaries of the $13 Trillion in Profit
referred to above?
And the Question
of The Year is: why for example has the vast Monetary and Credit Creation in
recent years not created dramatic Consumer Price Inflation.
Ah, but it has!
And that inflation Continues to this very day.
BUT, should not
that Inflation and other consequences of Market Manipulation dramatically
show up in official Statistics?
Indeed they
should, BUT, unfortunately, many Key official Market Statistics are
gimmicked.
Indeed, Official
Gimmicking of Official Statistics serves the purpose of masking key Economic
and Financial Realities, and has for years.
In one key
reality they mask is a massive stealth wealth transfer from (mainly middle
class) investors/taxpayers to the Mega Financial Institutions. Lost of over
30% of the purchasing power of the U.S. dollar is but one manifestation of
this vast wealth transfer.
Consider the Real
Numbers for CPI and Unemployment (and other key data) – which are major
consequences of the Actions and Policies of The Cartel operating its
Interventional Regime, courtesy of Shadowstats.com (Shadowstats calculate
these Real Statistic the “old-fashioned way” they were calculated
before the gimmicking began the 1980’s and 1990’s.
Official
Numbers
vs. Real Numbers
Annual Consumer
Price Inflation reported August 14, 2009
-3%
5.5% (annualized August Rate)
U.S. Unemployment
reported September 4, 2009
9.5%
21.1%
U.S. GDP Annual
Growth/Decline reported August 27, 2009
-3.9%
-5.9%
A brief look at
the Table above shows The Real Consequences of The Cartel Interventional
Regimes policies.
Additionally
consider the effects of the aforementioned Monetary and Credit Excesses on
the U.S. Dollar. It’s purchasing power has declined dramatically in the
21st Century (over 30% in the last six years), and, is likely to decline much
more.
In Effect,
Cartel-created Dollar Purchasing Power Destruction is a Huge Stealth Tax on
Investors, Savers, Retirees, and Income Earners.
So, how can the
typical Investor Cope with The Cartel, and Profit as well?
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*
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 to which we
referred above, 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, and, as we write, is again approaching
$1,000/oz.
So the question
now, at the beginning of September, 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 very recently addressed this question in a
Forecast he issued for the likely fate of 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 Cartel
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:
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.
Accumulate Hard
Assets near the Interim Bottoms of Cartel- engineered Takedowns.
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. Paying attention 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 profitably.
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.
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, 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.
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.
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:
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 a large Majority of the U.S. House of
Representatives co-sponsors); and The Abolish The Fed Bill is H.R. 2755. www.carryingcapacity.org
is a nonprofit organization which actively supports these bills.
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.
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.co
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 Strategy, which are essential to
profiting from 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.
Protection and
profit required Proactivity and attention to the Interventionals,
Fundamentals and Technicals, not “Buy and Hold.” We reiterate,
“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 wealth protection and
profits as well.
Source: Bank for
International Settlements - www.bis.org, Path: Statistics > Derivatives
> Table 19
Best Regards,
Deepcaster
LLC
Deepcaster.com
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