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As the miscreants in Washington negotiate solutions to the
“fiscal-cliff” and debt-ceiling crises, trial balloons have been
floated that agreement has been reached to use a new CPI measure—the
C-CPI-U, which tends to understate inflation even more than the
CPI-U—as way of deceptively reducing cost-of-living adjustments to
Social Security, etc. Not too surprisingly, public reaction appears to be
turning increasingly negative, as the concept gets broader exposure in the
popular press.
Public Furor
Mounts Over Proposed Use of the C-CPI-U to Short-Change Social Security
Recipients on Their Cost of Living Adjustments. The chain-weighted CPI-U (C-CPI-U) is the fully substitution-based
inflation series that is under serious consideration by those in Congress and
the White House as a replacement for the CPI, with the goal of cutting Social
Security cost-of-living adjustments (COLA) by stealth. A
fully-substitution-based inflation index used in COLA calculations would
reflect lower inflation than would the CPI-U or CPI-W (used for Social
Security), resulting in fraudulently- and artificially-reduced cost-of-living
adjustments to social programs, retirement funds, etc.
If the people controlling the U.S. government were honest, they simply
would tell the COLA recipients that payments were being cut as part of the
effort to balance the budget. Yet, no one in Washington has the political
courage to suggest such a thing, openly, hence the regular deception that so
often surfaces in the headline budget bargaining. …
Reducing COLA
by artificially reducing CPI reporting is not new. Had the politicians not
pursued similar policies successfully in the 1980s and 1990s, Social Security
payments would be more than double current levels… annual SGS –
CPI Inflation… (using) the 1980-based measure came in at 9.4% in
November …” (emphasis
added)
Shadowstats.com,
“November CPI, Industrial Production”, 12/14/12
The proposed forced Investment of
Present and Prospective Retirees 401(K) Assets in U.S. Treasury Paper about
which we earlier wrote, is now followed by yet another prospective attack on
Retirees Security, and indeed on the Wealth Security of those who hold $US
Denominated Assets.
The Prospective Rigging of the CPI
Calculation Protocol would , yet again, make the
“Official” CPI even further removed from The Inflation Reality.
The Reality is that the current U.S.
Inflation Rate, 9.4%, is already
Threshold Hyperinflationary.
And, of course, Official Numbers-Rigging
is not limited to the U.S. We have earlier noted Chinese and Eurozone
Numbers-Rigging as well.
But the Key Point for Investors is understanding the Motivation
behind Government and Mega-Banks pushing for e.g., Mandatory Government
Securities Investment, and changing the way Inflation is calculated.
The Powers-that-Be in the Global Banking
and Finance community know that the ever-increasing Money Printing – QE
to Infinity – is already leading to increasing Price Inflation, which
they wish to hide, and thus eventually to Massive Sales of Paper Treasury
Securities (for which they wish to have Buyers, e.g., via 401(K) Funds).
Of course, Part and Parcel of The
Powers’ attempt to extricate themselves from the Crises of their own
making is the Ongoing, for years, Campaign by The Cartel (Note 1) to suppress
the Price of Gold and Silver.
That is because
increasing recognition of the legitimacy of Gold and Silver as Real Money
tends to devalue their Paper Treasury Securities and Fiat Currencies.
Regarding the Ongoing Takedown of Gold
and Silver Prices, the Advice of Precious Metals Guru, Jim Sinclair, is worth
heeding.
Dear My Dear Extended Family,
Hi Jim,
How should I read the negative pressure over gold and gold stocks?
What’s going to change this negative scenario?
Respectfully,
Arlen
Dear CIGA Arlen,
This is capitulation everywhere. This event has been a manufactured
market move since $1800, with clearly planned and executed intervention. The
gold price take downs during low volume periods internationally is a known
price moving only tactic.
I simply shut off the machine because all the regular causes for the
gold price will make themselves effective with time. A manufactured market
event will not change the trend. Even the most professional can be reduced to
sheeple by their emotions.
I refuse emotions and emotional people in a market context. To save yourself from all this that has happened and will continue
to happen requires commitment and courage.
You have it or you do not. Admit who you are and act accordingly.
Like every mistake made by Westerners, what you see today is simply
driving gold into Asian control.
Jim
“How To Read The Negative Pressure
Over Gold And Gold Stocks”
Jim Sinclair, jsmineset.com, 12/18/2012
And
My Dear Extended Family,
You cannot fix the problems of the Western Economic system by breaking
the telltale thermometer, which is the price of gold.
There is not one professional who does not know sales in extreme
volume at a time of low activity internationally have but one purpose, and
that is to reduce the price of gold.
Charts and TA in such a manipulated, manufactured market, as
understood by you, are totally useless. This is a move of desperation by the
Fed via the gold banks based on the false premise that attacking symptoms
without meaningful economic intervention is going to cure the problem.
Gold is going to $3500 and above. The US dollar is headed to .7200 and
lower.
We are once again giving away greatness by driving gold into the
coffers of Asia at bargain process that a powerful academic bureaucrat has
selected. It is just that simple.
Nobody said survival from the onslaught of the demons would be easy,
but it will be successful.
Respectfully,
Jim
“A Move of Desperation By The
Fed”
Jim Sinclair, jsmineset.com, 12/20/2012
And the Advice of brilliant Commodities
Trader Dan Norcini is worth heeding as well.
“Nothing
will unnerve the paper gold shorts more quickly and do more to undercut their
confidence than to strip them of the real metal and force them to come up
with more hard gold bullion to make good on deliveries. “Stand and
Deliver or Go Home” should be the rallying cry of the gold longs to the
paper gold shorts.”
Trader Dan Norcini
Regarding Official Political data,
fortunately, there are Official as well as privately
Numbers which tend to better reflect Economic and Financial Realities
knowledge of which is essential for successful investing.
In China, for example, electricity usage
is a better indicator of GDP than say their Massaged and Political GDP
Numbers.
Generally, the Prices, Prospects and
Trends of Essential Assets which get used, and get used up, are the very Best
Indicators upon which to base wise Investment Decisions.
They are the best Indicators because,
since they get used up, their prices are hardest to manipulate.
That is why we Metaphorically say that
the Price of Crude Oil “tells the Truth”. Similarly, the Price of
Essential Food Grains, Wheat, Corn and Soybeans, “Tell the Truth”
about Inflation and Economic Activity generally, as well increasing demand
the World’s 80 Million per year population growth.
For Profit, Protection and the Real Numbers
which reflect Inflation and Economic Activity, track the Prices of the
aforementioned Assets which get used up. Regarding our specific
Recommendations for profit and protection, see Notes 2, 3 and 4.
Captain Hook’s advice regarding
the $US is applicable to most Fiat Currencies.
“…Western
central banks are having their bullion reserves run down to keep their
scheming ways from being discovered, which will eventually cause the need for
a price adjustment upwards. The bad news associated with this is unfortunately
most Westerners will not participate because they neither understand nor own
many precious metals, which will make surviving a financial meltdown
difficult indeed.
… “without a doubt the ‘big
event’ that is coming down the pike eventually that will define the
endgame for the American Empire is when it becomes apparent to everybody
(including American’s themselves) the $ is on its way out as the
world’s reserve currency, and they accelerate the sale of $ denominated
and US based assets, which includes debt securities. (i.e.
if they are held as investments.) This process is of course already well
underway, with direct trade and petro-dollar exclusion deals between
countries becoming increasingly common. But the real problem for the $ will
come when it loses it’s safe haven status – that’s when
there will be no saving the $ from the type of dramatic waterfall event
implied possible by the Fibonacci resonance related projection… .
“First they will
sell US assets, and then the $, with both of these conditions favorable for
higher interest rates and precious metals prices. This is when the Dow to
Gold ratio will reach unity, or lower, as the masses realize the emperor has
no clothes, meaning the US is as much a financial basket case as Greece, and
the only way to preserve one’s wealth is to exit fiat currency related
economy(s).
“And
there’s only one way to do that – in desired tangibles –
with gold and silver at the top of the list.”
Captain Hook via Goldseek.com
For Protection against the Rapidly Eroding
Purchasing Power of Fiat Currencies, favorably consider investing in
Essential Assets which get used up and above all Buy Physical Gold and Silver
and Quality Mining Shares on the Dips.
Deepcaster
December 22, 2012
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 Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer
Price Inflation reported October 16,
2012
1.41% / 9.64%
U.S. Unemployment reported October
5, 2012
8.3% / 22.8%
U.S. GDP Annual Growth/Decline
reported September 27, 2012
2.21% / -2.15%
U.S. M3 reported October 16, 2012
(Month of September, Y.O.Y.)
No Official Report / 3.32%
Note 2: The $US dropped nearly
200 basis points at one point in the last three weeks. No surprise since the
Fed’s U.S. Dollar-Destructive Q.E. to Infinity Action, coupled with the
ECB’s Similar Action the week before, boosted the Euro vis-à-vis
the Dollar, as we earlier Forecast. The very recent $US bounce does not
change its weakening Trend.
This Debauchery of the
$US weakens its Purchasing Power and thus increases Burdens on the agonized
disappearing Middle Class.
The Bernanke claim that
buying $40 billion per month in Mortgage Backed Securities would Stimulate
the Economy and help the Housing Market is just a Fictitious Cover Story. In
fact, it is just another Gift to the Mega-Banks who hold Underwater Paper,
and to Wall Street which proceeded to rally on The Fed-sugared High.
Both the Continuous
Commodities Index which show Average Annual Price
Inflation of 15% and the Real Inflation Number (9.3% per year from
shadowstats.com) reveal Serious Inflation is with us and it Intensifying.
And Especially Food
Price Inflation.
To increase Yields,
Farmers increasingly employ Fertilizer.
And a recent Reco – a Fertilizer Producer – was trading
near its 52 week low at under 40¢ per share when we first recommended
it. It has moved up nicely since we recommended you buy in. But it has such
great potential that we raise our original “buy under” price to
45¢ per share.
To see our recent Buy Reco aimed at Profiting from the Fed’s Inflation
Rocket, read Deepcaster’s recent Alert,
“Buy Reco (under 40¢/share) to Ride
Inflation Rocket; Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, &
Interest Rates, Gold, Silver, Crude Oil, & Equities,” recently
posted in ‘Alerts Cache’, on deepcaster.com.
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