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:
1)
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.
2)
Accumulate
Hard Assets near the Interim Bottoms of Cartel- engineered Takedowns.
3)
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.
4)
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.
5)
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.
6)
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.
7)
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.
8)
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.
9)
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.
10)
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:
a)
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.
b)
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.
c)
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.com.
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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