“Since the Financial Crisis erupted in 2007,
the US Federal Reserve has engaged in dozens of interventions/ bailouts to
try and prop up the financial system. Now, I realize that everyone knows the
Fed is “printing money.” However, when you look at the list of
bailouts/ money pumps it’s absolutely staggering how much money the Fed
has thrown around….
“The Fed is not the only one. Collectively, the world’s
Central Banks have pumped over $10 trillion into the financial system since
2007. This money printing has resulted in a massive expansion of Central Bank
balance sheets ….
“This money printing has unleashed inflation in the
financial system. In the emerging markets, where consumers can spend as much
as 50% of their income, this has resulted in food riots and even revolutions
as we saw with the Arab Spring in 2011.”
“The Clear Signs of a Global
Inflationary Tsunami Are Already Visible Around the World”, Graham
Summers, Phoenix Capital
Much of the
Mainstream Financial Media (MSFM) and, indeed, Mainstream Media (MSM) would
have us believe Price Inflation is “contained”, as would
spokespersons for most Developed Countries; Governments and Central Banks.
Indeed, these institutional sources are often complicit in facilitating such
distortions.
But The
Facts on Price Inflation say otherwise. Graham Summers details examples of
Threshold Hyperinflation from around the World.
And he
Properly attributes it to Fed and other Central Banks Money Printing.
But if investors
concentrate on where the Central Bank Money Pump is focused and on Timing, as
Deepcaster does, then Profit and Wealth Protection
Opportunities are enhanced. So here we focus on Key Examples of Investments,
affected by these Distorting Monetary-Fiscal-Political-Media
“Communications” Policies.
First,
consider Summer’s iteration of Fed Money Pumping
· Cutting
interest rates from 5.25-0.25% (Sept ’07-today).
· The Bear
Stearns deal/ taking on $30 billion in junk mortgages (Mar ’08).
· Opening
various lending windows to investment banks (Mar ’08).
· Hank Paulson
spends $400 billion on Fannie/ Freddie (Sept ’08).
· The Fed
takes over insurance company AIG for $85 billion (Sept ’08).
· The Fed
doles out $25 billion for the automakers (Sept ’08)
· The Feds
kick off the $700 billion TARP program (Oct ’08)
· The Fed buys
commercial paper from non-financial firms (Oct ’08)
· The Fed
offers $540 billion to backstop money market funds (Oct ’08)
· The Fed
agrees to back up to $280 billion of Citigroup’s liabilities (Oct
’08).
· $40 billion
more to AIG (Nov ’08)
· The Fed
backstops $140 billion of Bank of America’s liabilities (Jan ’09)
· Obama’s
$787 Billion Stimulus (Jan ’09)
· QE 1 buys
$1.25 trillion in Treasuries and mortgage debt (March ’09)
· QE lite buys
$200-300 billion of Treasuries and mortgage debt (Aug ’10)
· QE 2 buys
$600 billion in Treasuries (Nov ’10)
· Operation
Twist reshuffles $400 billion of the Fed’s portfolio (Oct ’11)
· QE 3 buys
$40 billion of Mortgage Backed Securities monthly (Sept ‘12)
· QE 4 buys
$45 billion worth of Treasuries monthly (Dec ’12)
It is
understandable that the Powers-that-be would want to suppress Price
Inflationary Signs, because alarmed Investors would otherwise run en masse to
Inflation Protective Assets, such as Gold and Silver, and Food Commodities.
And
enlightened Investors would also simultaneously run away from the Fed’s
and other Central Banks’ depreciating Fiat Currencies and Treasury
Securities.
The bottom
line is that the $10 Trillion Injected by the Central Banks in the last few
years is bound to be increasingly Price Inflationary.
And it
already is.
Consider
Shadowstats.com Summary of the Real Numbers (as opposed to the Bogus Official
Ones) for the U.S.
*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 March 15, 2013
1.59% / 9.62%
U.S. Unemployment reported April 5th, 2013
7.6% / 22.9%
U.S. GDP Annual Growth/Decline reported March 28, 2013
1.67% / -2.20% (i.e., Negative 2.2%)
U.S. M3 reported April 5th, 2013 (Month of March, Y.O.Y.)
No Official Report / 4.20%
And what are the
Implications and Consequences of this? They are all Negative Economic and
Financial Indicators.
As a
specific example of Negative Consequences for one Huge Investor class
consider: In an attempt to save their Shareholders/ Mega Banks Owners, the
Private-for-Profit Fed is frantically money pumping. But that will lead to
the eventual rejection of the $US as the World’s Reserve Currency much
to the detriment of $US denominated Asset Holders.
“I
believe the world is starting to back away or avoid the US (world reserve
currency) dollar, and I sense that the “backing away” is
beginning to accelerate. Where will the dollar-avoiders go? My guess is that
there will be urgent calls for a new, acceptable “joint currency”
made up of the Chinese Yuan, the Swiss franc, gold, and maybe a few other
currencies. This will be the new world reserve currency, but first there will
be debates, arguments and a lot of time wasted.
“But
there is no doubt in my mind, the world has “had it” with the US
dollar and its Federal Reserve printing press, and it’s simply a matter
of time before the dollar becomes unacceptable around the planet.”
Richard Russell, Dow Theory Letters,
03/28/2013
Of course,
a sensible Investor step is to move into Gold and Silver and away from
Treasury Securities and Fiat Currencies. However…
For many of
the aforementioned reasons, The Mega Bank Cartel has long been involved in
suppressing the Prices of Gold and Silver.
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, 2009, Special Alert containing a summary overview of Intervention
entitled “Forecasts and December, 2009 Special Alert: Profiting From
The Cartel’s Dark Interventions - III” and Deepcaster’s
July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S.
Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts
Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected
by the Gold AntiTrust Action Committee atwww.gata.org, including testimony before the CFTC, 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.” Attention to The Interventionals facilitated Deepcaster’s
recommending five short positions prior to the Fall, 2008 Market Crash
all of which were subsequently liquidated profitably.
But even
with all the very substantial evidence of Cartel Suppression of Gold and
Silver Prices, the MSFM refuses to report that the Non-Profit gata.org has
meticulously documented evidence of this ongoing Price suppression.
Unfortunately,
given the ongoing Censorship of Real News like the Foregoing, the average
Investor is “Bubble Blind” even though we are all subject to
Greater Financial Risk than prior to the 2008-2009 Market Crash, as David
Stockman correctly notes
“We’re
in the World of the Bubble Blind”
Indeed it
is important for Investors in general, and Precious Metal Partisans
(including Deepcaster) specifically, to Note that
The MSFM and MSM are often complicit in the ongoing attempt to suppress Gold
and Silver Prices (and indeed in advancing the Banking Cartel Agenda in
general). Consider Investment Legend Jim Sinclair on the Cartel Takedown of
Precious Metal Prices earlier this week.
“Today
was a coordinated attack on gold. We had the Goldman Sachs recommendation to
short gold. We also had the Federal Reserve Open Market Committee notes quite
unusually released before the opening. Then we had the mainstream media focus
on the sale of Cyprus gold, and Mrs. Lagarde on the
wire telling people everything was fine with the economy.
“The
market in gold has significantly changed....
“It’s
no longer the investment banks vs a community of
investors who feel that gold is undervalued, but rather it has shifted, as
you can see in trade figures, to major accumulation by sovereign central
banks such as Russia and China.
“It is also
important to note that in Europe gold has been marked-to-market as far as
their reserves are concerned. So the focus of today’s totally
transparent attempt to discredit gold is that, yes, it will have an effect on
the paper market, but it will have no effect whatsoever on the physical
market where in fact the sovereigns trade.
“Sovereigns
don’t trade on the COMEX, they never would. Rather sovereigns trade in
the physical market in London and elsewhere, and they take delivery of the
gold they have purchased.
“The
intention of central planners is to remove concern from the general
public….”
Jim
Sinclair’s, jsmineset.com, 04/102013
Important
to Note here
-- The
Precious Metals Price Suppression occurs in the Paper Market
-- The Sovereigns
Purchase Gold in the Physical Market and take Delivery (Kudos to the
Wise Texans and Germans for demanding physical Delivery of their Gold) and
-- Premiums for Physical
are already increasing in spite of (arguably because of) the Price Takedowns.
Nota
Bene to
the Wise: Investors – Get Physical!
And
Note Legendary Investment Writer Richard Russell regarding Media complicity
with the Mega-Banks Agenda.
“With
its all-out printing program in progress, the last thing the Fed wants to see
is gold rising (a sign of a depreciating dollar). Thus, the fantastic
anti-gold propaganda by the Fed and the government and by all the other inflationists. Meanwhile, many states are petitioning to
make gold and silver legal money.”
Richard
Russell, DowTheoryLetters.com, 04/10/2013
The message
here is Get Physical and Take Personal Delivery – No Bank Vaults.
Finally, an
ongoing Development which, if it Materializes, would have a Catastrophically
Negative effect on U.S. Federal and State Budgets, and Finances, and thus on
Investors/Taxpayers, and all those around the World who suffer when the U.S.
Economy and U.S. Dollar denominated Asset Holders suffer.
And it is
one of those issues on which most of the MSFM and indeed, MSM, are Complicit
in Spinning, Distortion or Outright Censoring the Truth, much to the
detriment of Investor Taxpayers. A brief overview of the Facts
-- the MSM reflexibly recite the government estimate that no more
than 12 million Illegal Aliens are in the United States; however
-- at least 24 million Illegal Aliens were already in the
U.S. in 2004 & probably closer to 30 million today (balance.org and Bear
Stearns 2004 report). All would likely be amnestied under the proposed
Immigration “Reform” Bill .
Consider
several of the Investors-Negative and Economy-Negative Effects of Mass
Immigration. First…
Remittances
Never to be
Forgotten is where a Worker's Money goes. Does he/she spend it in the United
States, with stimulative effects for the economy
and American producers? Or does the money go away? Given that
remittances -- money that legal and illegal immigrants send back to
their country of origin -- reaches as high as $45 billion annually, one knows
that a minimum is spent back into the U.S. economy. How much more profitable
it is to hire American workers who spend money at home! As the export market
to Europe shrinks, never has it been more important to grow the domestic
economy (and thus grow domesticate businesses) by encouraging workers to
spend where they earn it!
For example, Mexico receives more
remittances from its nationals working in the U.S. than any other country.
The large flow of US$ exiting the economy both depresses demand in the
domestic market and adds to the negative balance in current accounts. The
total of remittances sent to all countries combined reached its peak in 2007,
approaching $45 billion total for the year.
The following link shows constant
increase reflecting the number of Mexicans working in the US, and also variation depending upon the strength in sectors such as
construction.http://www.migrationinformation.org/datahub/remittances/Mexico.pdf
Costs of Amnesty Bill
-- the Net Cost to Taxpayers would be in the $
Trillions. The New Americans, authored by the National Research Council in
1996 reports that the average Middle American immigrant to the U.S. has less
than an eighth grade education. With this skill set, immigrants' earning
power remains limited, their tax contributions meager, and their use of
public services including de facto free healthcare and public education
considerable. All who have access to an emergency room MUST BE provided
sufficient healthcare to stabilize their medical condition including
childbirth, children receive a public education (usually including expensive
English As A Second Language - ESL -tutoring) and…
-- 36% of
legal and illegal immigrant-headed households are also on some welfare
program (cis.org).
-- Existing
Immigration law requires Legally admitted immigrants to prove they will not
be a burden on the U.S. Taxpayer, however 1.3 million
Legal Immigrants are already on U.S. Food Stamp Rolls. Meanwhile, the USDA is planning to furlough Meat
Inspectors for ostensible lack of funds!
--
the Heritage Foundation, which estimated that 17.7 Million Illegal aliens
were in the United States already in 2004, calculated that EACH Immigrant
headed household generated a NET (i.e. after subtracting Taxes paid) Cost of
$1.3 Million to taxpayers.
-- the Net
(i.e., after subtracting Taxes Legal and Illegal Immigrants paid) Cost of
these Households from 2004 through 2013 was $3.9 Trillion (Heritage
Foundation, Rector, et al.) and, of course, Trillions more if the Illegal
Alien Amnesty (aka ‘Reform’) Bill passes.
U.S. Worker Surplus
-- contrary
to Media and Industry Hype, the U.S. does not have a Shortage of
Native-Born Science, Technology, Engineering and Mathematics (STEM)
graduates. Indeed, there is a 6% to 12% (depending on the Sector)
Unemployment Rate among U.S. University STEM graduates (vdare.com). For
example, 7.4% of Native-born Computer
Science Grads are unemployed.
-- thus
there is not a STEM labor shortage necessitating an increase in, or indeed
any significant number, of H1B Visas (Matloff, U.C.
Davis, Computer Science Professor)
Negative Effect on U.S. Unemployed and
Underemployed
--
Amnestying the 24 million-plus Illegal Immigrants in the U.S. would itself
increase pressure on Budgets and Taxpayers. Indeed such additional workers
such as legalized illegals are in Direct Competition with the 30 Million
Unemployed or underemployed Americans for Jobs, and Welfare and Unemployment
Benefits.
In January
2013 alone, Foreign-born employment in the U.S. increased by 112,000 while
Native-born employment decreased by 95,000. This is a typical monthly trend
(Rubenstein, ESR Research and vdare.com).
--"Had a Moratorium been in effect since 1996,
the 20.5 Million native-born Americans unemployed or underemployed as of
December, 2012 would be as much as 9.85 Million lower today – a
reduction of nearly 50%." Ed. Rubenstein, ESR Research, vdare.com.
In sum, if
the prospective “Reform” (DC-speak for Amnesty et al.) Bill passes, it will impose Multi-Trillion Additional Net
Costs on U.S. Federal and State Budgets and thus be a Dramatic Drag on U.S.
Economic Growth and over-taxed Investors.
Thus it is
important for Investors to stay apprised of Factual developments on this
front.
Readers of
Liberal persuasion are encouraged to visit the non-profit balance.org for
updates and those of Conservative persuasion to visit the non-profit
carryingcapacity.org for updates.
In sum, MSM
and MSFM “Reporting” is often Complicit with Mega-Bank and
Politicians’ Self-interested Agendas.
Thus it is
essential for Investors’ Profit and Wealth Protection to seek
Independent Information Sources, however ‘Politically Incorrect’
these sources may be labeled as being.
Best
regards,
Deepcaster
April 12, 2013
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