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“Hooker – a concealed problem, Flaw, or Drawback”
Dictionary.com
“I'm afraid the stage is already being set right now and it's
certainly a high inflation crisis. You can see the incipient signs of rising
prices in all kinds of areas.
“The rises in commodities prices across the
board is a result of the Federal Reserve trying to monetize the
deficit and give the politicians cover for their irresponsible spending by
printing the money to cover it up so we don't have to go out and borrow it.
“We're not the only ones doing it. The Bank of England is doing
it, the Bank of Japan. China is inflating, even the Swiss for crying out
loud, and the European Central Bank. We have a global problem of money
printing that's going to explode in our faces in the next year or so.
“As far as the unemployment rate, the single best thing we could
ever do is we have to get government out of the picture.
“When World War II ended, the federal government cut spending by
two thirds and this country boomed like you cannot believe. We haven't had a
boom like that since. And they cut spending by two-thirds to achieve it.
“Normally we're running at least a $100 billion deficit a month
... Not only is the country broke, but the red party and the blue party are
both into this thing up to their eyeballs.”
“'High Inflation Crisis'
Looms for U.S.”, Charles Goyette, 3/16/2012
The eight largest Central Banks’
Orgy of Fiat Money Printing continues. They inflated their Balance sheets by
$3 Trillion in 2011 alone. This unprecedented-in-human-history Orgy of Fiat
Money Creation is creating many downstream Negative Consequences and a select
few Opportunities, for those aware of the implications.
It is one such “Hooker
Opportunity” on which we focus Today. We call it a Hooker Opportunity
because it is a Profit Opportunity which also creates Negative Consequences
for most other investments.
All but the Purblind; or those in
Denial, are aware that the ongoing Massive Money Creation is already Creating
Price Inflation in Food and Energy, with more to come. For details regarding
the Consequences and Profit Potential from Massive Money Printing see our
recent Article “Two Critical Investment Keys Going Forward” in
‘Articles by Deepcaster Cache’ at
deepcaster.com and Note 2 below.
And Massive Ongoing Monetary Inflation
implies that the Profit Potential for those Purchasing Gold and Silver now
is Extraordinary. But the Hooker-Opportunity lies in the Energy Sector.
Though U.S. Crude Oil Demand (about one
fourth of World Demand) is down over 12% from its mid-decade peak, and U.S.
inventories have been uptrending since then, Crude
Oil prices have been uptrending since 2008.
Why?
It is not just Mideast War Fear.
Consider:
-- The World consumes about 74 Million
Barrels of Oil Per Day.
-- But production from currently
producing reservoirs drops by about 7 Million Barrels Per Day Annually (i.e.,
year over year).
-- “Shale Oil” Reserves take
years from Discovery to bring to Production and Production Rates are less
compared to the Depleting “Elephant” Fields (e.g. Ghawar in Saudi Arabia) of days gone by.
-- “The Libyan War showed that
Saudi Arabia does not have the 2-3 Million Barrels/Day spare capacity,
contrary to what they claim.
-- Top Producer Russia has seen its
production growth Flatten.
-- Non-OPEC production has Not
Increased.
-- Thus Total World Production has
remained Flat at around 74 MBD since 2005. This Reflects Geological Realities
– The “Easy Oil” has been found already, and although Shale
Oil and Undersea Reservoirs are coming on line, production rates from these
“Hard” Oil Reservoirs are lower, and do not easily (or
ultimately, at all) replace production from the depleting Easy Elephant
Reservoirs.
-- “Peak Oil” properly
defined, means Peak Production, and we are there now, as Billionaire Oilman
Boone Pickens repeatedly correctly emphasizes.
-- In recent years, the Central Banks
have poured Trillions into the International Economy, far in excess of
increases in GDP.
-- Thus the rate of increase of
price increases of Crude and other Tangible Assets has begun to accelerate.
And it is these price increases which have made most of our recent
‘Profits Taken’ possible (see Note 1).
-- Asian consumption now accounts for
nearly one-third of World Demand. For example, China’s Energy use rose
at its fastest rate ever just last year.
In sum, World Production is
Peaking/Flattening, Spare production capacity is Diminishing, Demand is still
Increasing, and the Central Banks are creating ever more Dollars, Euros, etc.
to “Chase” Supply.
Conclusion: High and Higher Crude Oil
Prices will continue to be with us. That is the Profit Opportunity for those
who are long Oil. Consider using the current short-term Mini-Pullback to get
long.
But the Opportunity-Hooker is that Crude
Prices at or much above current $100/bbl levels
will throttle Economic Growth, impel Inflation upward, and wages and
corporate earnings Downward.
“[The] world has not suddenly been ‘fixed’ –
not by the Federal Reserve’s quantitative easing, not by the European
Central Bank’s longer-term refinancing operations, and certainly not by
ultra-low interest rates across the developed world.”
David Rosenberg, Financial Times,
03/20/2012
Respect the Power and Potential of the
Opportunity-Hooker.
Best regards,
Deepcaster,
March 24, 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 January 19, 2012
2.96% / 10.57% (annualized December, 2011 Rate)
U.S. Unemployment reported February 3, 2012
8.3% / 22.5%
U.S. GDP Annual Growth/Decline reported January 27, 2012
1.56% / -2.70%
U.S. M3 reported February 13, 2012 (Month of December, Y.O.Y.)
No Official Report / 3.87%
And Official Source Disinformation
continues, consider Shadowstats comments on the
January 6, 2012 release of U.S. Employment data:
“The
reported seasonally-adjusted 200,000 jobs surge in December 2011 payrolls
included a false, seasonally-adjusted gain of roughly 42,000 in the
“Couriers and Messengers” category. That gain was an artifact of
the seasonal-adjustment process and will remove itself in the January 2012
numbers.
“The
problem is that this 42,000 gain is part of a seasonal pattern that fully
reverses itself each January…”
“December
Payroll Seasonal-Adjustment Problem”
www.shadowstats.com,
John Williams, 1/6/12
Note 2: Deepcaster addresses the questions of Profit and
Protection in light of Fiat Currency Purchasing Power Destruction and
provides Guidelines in his article – “Essentials for Wealth
Acquisition Acceleration” found in ‘Articles by Deepcaster’ Cache.
Using such Guidelines facilitated Deepcaster’s
making buy and sell recommendations resulting in remarkable profits recently
if acquired and liquidated when we recommended, approximately*:
45% Profit on
Platinum ETF on February 8, 2012 after just 42 days (i.e., about 390% annualized!)
40% Profit on March 2012 $55 Dollar GDX
Calls on January 27, 2012 after just 23 days (i.e., about 635% annualized!)
34% Profit on Gold Royalty Streaming Company on December 5, 2011 after just
166 days (i.e., about 74% annualized!)
42% Profit on Volatility Index Futures ETN on October 3, 2011 after just 292
days (i.e. about 52% annualized!)
36% Profit on Double Short Euro ETF on September 7, 2011 after just 43 days
(i.e. about 300% annualized!)
35% Profit on Double Long Gold ETN on August 23, 2011 after just 41 days
(i.e. about 280% annualized!)
26% Profit on Double Long Gold ETN on August 17, 2011 after just 35 days
(i.e. about 260% annualized!)
25% Profit on Gold Stock on August 8, 2011 after just 201 days (i.e. about
45% annualized!)
150% Profit on Gold Stock Calls on July 13, 2011 after just 56 days (i.e.
about 975% annualized!)
*Past Profitable Performance is no assurance of future Profitable
Performance.
Note3: “A
Great Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities,
Crude Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates”
– February Letter
“The
Fed doesn’t have a clue about markets or economics. They are dangerous
people.
Printing money is not good for the world and will lead to more problems for
the world….
“What the Federal Reserve is doing now is ruining an entire class of
investors.”
Jim Rogers, Bloomberg Interview, 6/29/11
We are not so Negative about the Near-Term Prospects for Nominal
Asset Price Growth in Certain Sectors as we were six months or
a year ago.
That is mainly because the E.U., Mega-Banks, and the Fed, have already de
facto launched a Massive Quantitative Easing 3, with more likely to come.
This QE will serve as a Major Force impelling (but not necessarily
successfully) Nominal Asset Prices UP in certain Sectors, for example,
for Equities.
But before one becomes too enthusiastic about the Prospects one should
consider the implications of our Forecast for Nominal Assets Prices Strength
in certain Sectors.
The practice of issuing Bogus (U.S. and other Key official) Inflation figures
obscures the Fact that Monetary Inflation (generated mainly by reckless Q.E.)
is very rapidly depreciating the purchasing Power of most Fiat Currencies
– by about 11% per year in the U.S. e.g. (per shadowstats.com).
Our High
Yield Portfolio is aimed at achieving Total Return in excess of Real
Inflation. Stocks in that Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%,
26%, 6.7%, 8%, 10.6%, 10% and 15.6% when they were added to the Portfolio.
Also
important to note is that, while massive Q.E. is a Major Inflationary Force
tending to pump up Prices in certain sectors, there are Powerful Deflationary
forces operating as well – the depreciating Housing Markets in the U.S.
and China come to mind. Real Estate in some areas in China is down over 25%,
but Food prices are up 9% year over year.
The key to identifying The Great Opportunities (and Great Potential Losses) is knowing which Sectors will likely have Inflating
Asset Prices and which will have Deflating ones.
Investors failing to Evaluate Inflation/Deflation Prospects on a Sector by
Sector Basis will have missed Great Opportunities and fallen into a
Dangerous Trap.
Deepcaster’s Letter --“A Great
Opportunity and A Dangerous Trap; Forecasts: Gold, Silver, Equities, Crude
Oil, U.S. Dollar, U.S. T-Notes, T- Bonds, & Interest Rates; February
Letter” -- posted in the ‘Latest Letter & Archives’
Cache at www.deepcaster.com, identifies
which Sectors will likely be helped (albeit temporarily) by this Massive QE3
and which will likely be hurt, and provides Forecasts for all. And in his
March Letter, “The Pause Before The Great Bull; 3 Buy Recos! Forecasts: Gold, Silver, Equities, Crude Oil, U.S.
Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, March
Letter”, Deepcaster makes 3 Buy
Recommendations designed for Protection and Profit.
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