The Fed is printing a lot of money. They are forcing people into markets. You shouldnt be buying securities because youre forced to buy them by zero rates. You should buy them because you think theyre great value. Theyre great value only relative to sero interest rates. Theyre not great value on an absolute basis
. If you print enough money, everything is subsidized bonds, stocks and real estate
. I dont know when its going to end. But my guess is its going to end very bedly. And its going to end very badly because, again, when you get the biggest price in the world, interest rates being manipulated, you get a misallocation of resources and this is going to end in one of two ways: with a malinvestment bust which we got in 07-08 [
] Or it could end with just monetizing the debt and off we go inflation. So thats a very binary outcome. Theyre both bad. Stan Druckenmiller, Legendary Hedge Fund Manager, CNBC, 03/05/13 Given Stan Druckenmillers Stellar Investment and Trading Record 30% return over 30 years including a most profitable stint as George Soros Portfolio Manager at the Quantum Fund, it is no surprise that his two Forecast Alternatives have it Nailed. But both Outcomes are Possible Simultaneously, and both are highly likely! The Feds and other Central Banks Money Printing is surely facilitating Serious Malinvestment, which almost inevitably leads to a Bust i.e., to Economic Stagnation or even Depression. But that Money Printing is also already leading to Inflation (e.g., 9.24% in the USA per Shadowstats Note 1) Result: Stagflation is impending, or, more likely, Hyperstagflation. This gives rise to the Question, given this Scenario, how does one Profit and Protect? Normally, with Inflation in the Wind, Gold and Silver would be soaring, and Gold especially given the prospect of Economic Stagnation, as well. But they are not. Why? John Embry of Sprott Asset Management probably has it right when he says there are two reasons. 1) The Powers-that-be (aka The Cartel Note 2) want to hide the fact that the International Financial System is in such bad shape and 2) They are trying to position themselves to take advantage of it. This entails suppressing the Price of Gold and Silver (Note 2), so they can buy it themselves. And Buy they are. Central Banks all over the World are Buying increasing amounts of Physical Gold, and as we have reported, are planning to Buy More. And Physical Silver supplies are even tighter. Inventories are minimal and both Industrial and Investment Demand is increasing. But the Increasing Demand for Physical coupled with the Cartel Suppression of the Paper Price is leading to an increasing Divergence between the Paper Price and the Price for Physical for Delivery. Conclusion: get Physical and get Gain. In sum, regarding Precious Monetary Metals, Jim Sinclairs advice is ours. Do not sell. Hold your positions or add to them, as appropriate for your portfolio. One, or likely both, of the Druckenmiller scenarios will play out and trump Cartel Price Suppression Activities Eventually. Regarding Equities, the Central Banks-Generated Liquidity via QE etc. generates continuous Pressure to lift them Ever Higher. And, finally, acquire Assets which are both Inflation and Deflation resistant. First among these are Agricultural Assets or interests in them, several of which we have recommended Farmland, Food Producers and those who supply or support them. Get Green Gold. Best regards, March 8, 2013 Note 1: Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider Bogus Official Numbersvs.Real Numbers(per Shadowstats.com) Annual U.S. Consumer Price Inflationreported February 21, 2013
1.59% / 9.24%
U.S. Unemploymentreported March 8, 2012
7.7% / 23.0%
U.S. GDP Annual Growth/Declinereported February 28, 2013
1.61% / -2.20% (i.e., a Negative 2.2%)
U.S. M3reported February 17, 2013 (Month of January, Y.O.Y.)
No Official Report / 4.59% DEEPCASTER LLC www.deepcaster.com DEEPCASTER FORTRESS ASSETS LETTERDEEPCASTER HIGH POTENTIAL SPECULATOR Wealth Preservation Wealth Enhancement
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