“…when it comes to debt and to the
prospects for future debt, the U.S. is not a ‘clean dirty shirt.’
The U.S., in fact, is a serial offender, an addict whose habit extends beyond
weed or cocaine and who frequently pleasures itself with budgetary crystal
meth….
“The International Monetary Fund, the
Congressional Budget Office and the Bank of International Settlements compute
a ‘fiscal gap’, which is a deficit that must be closed either
with spending cuts, tax hikes or a combinations of both which keeps a
country’s debt/GDP ratio under control…
“Unless we begin to close this gap, then the
inevitable result will be that our debt/GDP ratio will continue to rise, the
Fed would print money to pay for the deficiency, inflation would follow and
the dollar would inevitably decline… Bonds would be burned to a crisp
and stocks would certainly be singed; only gold and real assets would thrive
within the ‘Ring of Fire’.”
Bill Gross, Chairman, PIMCO 10/02/2012
It is refreshing to hear a Lionized Establishment Figure such as Bill
Gross (whose PIMCO has $1.8 Trillion under Management) make a Public
Statement which approaches the Truth.
While Gross’s Statements are True, they do not tell the
“Whole Truth”, and therein lies
Opportunity for Investors.
The Whole Truth is that the “Ring of Fire” is here already
and we have been temporarily Insulated from it only through a
combination of Fed and ECB Interventions (which depress Rates in the
short-term, but guarantee Galloping Price Inflation in the mid and long-term)
and Bogus Official Figures (see Note 1).
Regarding Price Inflation, the Major cause is the Central
Banks/Official Interventions via QE and otherwise.
And now QE4 has just been unofficially announced by Charles Evans,
Chicago Fed President and voting FOMC Member in 2013. He says The Fed should
continue buying (unsterilized!) Treasuries after January when Twist ends.
Indeed, “Unsterilized purchases mean that they will surely be
Price-Inflationary.
By the way, regarding ‘Bogus Official Numbers’, Former
General Electric CEO, Jack Welch, nailed it when, referring to President
Obama’s Poor Debate Performance and the Subsequently Released
Ostensibly Improved Job Numbers,
“Can’t
debate, so they changed the job numbers.”
In fact, the Ostensible Net U.S. 114,000 Jobs created does not even
keep up with (Official) Population Growth of 175,000 per Month.
Real U.S. Population Growth is Twice that with Virtually all of it
generated by Legal and Illegal Immigration.
Regular Readers indicate they appreciate our keeping them updated on
the march to Hyperinflation – CPI in the U.S. is now at 9.33% e.g., per
shadowstats.com (See Note 1).
And with QE3 ongoing and QE4 coming down the Pike, (aimed at keeping
Rates low and propping up the Mega-Banks). The Inflation of which Gross warns
has already begun.
The resulting (from ongoing QE) Price Inflation is already obvious in
the Prices of Tangible Assets which get used up such as Energy and Food.
Gross’s comment “…inflation would
follow…” would have us believe Inflation is not already
here, a serious omission.
But Gross’s reduction of PIMCO’s Total Return Fund’s
holdings of U.S. Government and Treasury Debt from 33% to 21 per cent
recently indicates he knows Inflation is intensifying and wants to get out of
bonds before they are “burned to a crisp”.
Marc Faber’s consistent Forecast is also correct.
“Central bankers are counterfeit money
printers and Federal Reserve Chairman Ben Bernanke should resign for messing
up the U.S. Economy so badly. Bernanke was one of the main proponents of an
ultra-expansionist economic monetary policy that was to blame for the latest
financial crisis. ‘If I had messed up as badly as Bernanke I would for
sure resign. The mandate of the Fed to boost asset prices and thereby
create wealth is ludicrous — it doesn’t work that way. It’s
a temporary boost followed by a crash.’” (emphasis added)
Interview with CNBC, Marc Faber, author of the
Gloom, Doom, and Boom, 9/14/2012
And successful Advisor and Trader, Tom Kee
(Stock Traders Daily) echoes our views.
“I am much more bearish now than I have been
in a very long time. In fact, I am even more bearish now than I was in 2008,
primarily because the market is now more like it was in the middle of 2007”
“My Apple short and the sour market”
Thomas Klee, marketwatch.com, 10/4/2012
But Kee’s proactive approach (Trading
both Directions in the Market) is one we share. And that is why Deepcaster expects to begin recommending putting on short
positions in the next few weeks.
And while being proactively prepared to “go short”
Investors should simultaneously be prepared to go long “Inflation
Assets” such as Food for example.
Well before the Drought in the U.S. drove grain prices through the
roof, Food Prices were on the rise around the World. They touched off the
‘Arab Spring,’ after all.
But for a whole list of reasons which we have repeatedly enumerated,
Food Price Inflation is here to stay. Consider:
- World Population Growth 80 Million per year, many of
whom have
- Increasing Purchasing Power in the Emerging Markets
- Most Arable land is already under Cultivation and
Maximally Producing
- Modern Agriculture continues to be very
Energy-Intensive and very Portable Energy Intensive (as in Crude Oil)
All the above mean inexorably Increasing Demand against limited
Supplies.
One result: farmers attempt to increase yields through the application
of Fertilizer, with Phosphate being the Number One Fertilizer demanded. (Deepcaster has recently recommended one such company with
great Potential trading just above 40¢/share [see Note 2 below, and
others aimed at riding the Inflation Rocket – see Notes 3 & 4
below.)
Thus the overall QE consequences/Inflation outlook is:
- For the medium and long term this QE3 to
infinity signals that The Fed is willing to Destroy the $US to support the
Banks and Wall Street (and the Middle Class be damned to suffer further
rising food and energy costs).
- However, at any time the $US Takedown could
be a preamble to a Global Rush to Dump the $US Dollar – a
real Disaster. Or course, this is a Consequence of The Fed’s
Dollar-Destructive Policies.
- Perhaps More Important and less obvious, since The Fed is now targeting (via Q.E. 3) Agency
Debt (Mortgage Backed Securities) and not Treasuries, this diminishes the
demand for Treasuries which will likely result in increasing yields and thus,
increasing Interest Rates somewhat in the short term.
- The Central Banks will continue QE to Infinity with Hyperstagflationary consequences in the Medium and Long
Term.
One consequence is that more likely than not, we have seen the Top in
U.S. Treasuries, and that Mother of all Bubbles in World History is starting
to deflate as we earlier forecast.
And as we have repeatedly pointed out, serious inflation is already
here, with Real U.S. Inflation over 9% per shadowstats,
and is only likely to worsen in the Months and Years to come. (If any of our
Readers are aware of Reliable and Authentic Real Inflation Measures
for any of the other Major Countries’ Economies, we would like to hear
about them.)
One look at the Continuous Commodities Index shows 15% annual average
inflation over the last ten years; that alone should be sufficient to dispel
any Central Banker or Main Stream Media claims that we are in a Deleveraging
Deflation. And other Real Numbers confirm the intensifying inflation.
In sum, we are already approaching Hyperstagflation.
Even so, a Positive consequence is that for Gold and Silver, the Price
outlook is Most Encouraging.
Gold and Silver have now strongly launched up as we earlier forecast.
Recently and very short term, The Cartel has been effective in orchestrating
a Price Takedown. But the Good News recently is that no Takedown has
been sustained for long.
For example, recently Gold was unable to close above resistance zone
of $1785-$1800. This mimics a similar failure in October, 2011 and Jan/Feb,
2012. Subsequent to those failures, Gold reversed and Tanked down to the
$1525-$1550 level. But not this time, so far anyway.
In sum, in the past few days Market Action has been very Precious
Metals Bullish. Thus we have made recommendations aimed at profiting from
this Bull.
This time there has been very significant Buying beginning at
$1770ish and strengthening down around the $1740 level. If $1770 to $1780-ish
level holds, and it is likely it will, then the next stops should be $1825
and then $1900. We address the question of “when” in our recent
Alerts.
And for Silver:
- The next major resistance is $37.50, then $40, and
then $44.
- Resistance for Silver is $34ish and that has held
pretty well in spite of ongoing Cartel Takedown Attempts.
Deepcaster’s mid and long-term targets are adjusted for Inflation. So adjusted
Gold and Silver Prices have yet to hit their 1980 highs. And indeed those
CPI-U Inflation-Adjusted Highs (per shadowstats.com) are our Mid-Term Targets:
For Gold
- $2,517 per ounce per official CPI-U-adjusted $ and
- $9,445 per ounce per shadowstats.com adjusted $
For Silver the 1980 (official)
Inflation adjusted peak would be $146 per ounce
In shadowstats-adjusted-Dollars $549 per
ounce would be the Target.
No wonder that the Silver Up-Trend Channel is signaling a $100 plus
high within the next year. Silver would have to drop below $29 to break out
of its uptrend channel – not likely.
Of course, the march up to and beyond the foregoing Numbers will
likely be interrupted by the Great Equities Crash of 2013.
In sum, Investors should heed Bill Gross’ advice. Gold and
Tangible Assets are the places to Be to Surmount the Ring of Fire.
And Jack Welch’s advice not to rely on Bogus Official Numbers is
also Well-Taken.
Best regards,
Deepcaster
October 4, 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 September 14, 2012
1.69% / 9.33%
U.S. Unemployment reported October 5, 2012
7.8% / 22.8%
U.S. GDP Annual Growth/Decline reported September 27, 2012
2.14% / -2.15%
U.S. M3 reported September 15, 2012 (Month of August, Y.O.Y.)
No Official Report / 3.15%
Note 2: The $US dropped nearly
200 basis points at one point in the last two 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. This week’s $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% for the past decade and the Real
Inflation Number (9.33% per year from shadowstats.com) reveal Serious Inflation
is with us and is Intensifying.
And Especially Food Price Inflation.
To increase Yields, Farmers increasingly employ Fertilizer.
And last week’s Reco – a
Fertilizer Producer – was trading near its 52 week low at under
40¢ per share. 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.
Note 3: “Debauch –
to dissipate; to corrupt morally; to lead away from excellence or virtue; to
reduce the value, quality, or excellence of…”
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.
But both Actions Guaranteed recently Accelerating Price Inflation and
thus Deepcaster recommends a Buy Reco (trading around a mere $2.30 per share) to ride that
Inflation Rocket.
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 a Fed-sugared High. And, of course, it is a pre-election Gift to
President Obama.
Important Consequences will ensue.
To see the Great Profit Potential flowing from this QE and our latest
Buy Reco aimed at Profiting from it, read Deepcaster’s recent Alert, “Surmounting
Debauchery with Profit; Buy Reco to ride Inflation
Rocket; Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest
Rates; Gold, Silver, Crude Oil; Equities,” recently in ‘Alerts
Cache’ at www.deepcaster.com.
Note 4: Major Central Banks’ accelerating Money
Printing including especially The Fed’s and ECB’s recent
commitment to Unlimited Monetary Inflation is already leading to Accelerating
Price Inflation (e.g., 9.33% CPI in the USA per shadowstats.com).
This impending Inflation
Rocket Provides Very Substantial Profit Opportunities referred to in these
notes.
To afford Subscribers
and Non-Subscribers Alike the opportunity to see Deepcaster’s
Current and Future Recommendations aimed at Riding this Price Inflation
Rocket to Profit, Deepcaster makes the following
Limited Time Offer:
Everyone who newly subscribes or extends their current subscriptions
starting Noon Philadelphia (Eastern) time September 28, 2012 and until 24
hours after our emailed Offer Termination Notice will receive 'Bonus Days'
added on to our listed subscription time period as follows:
--All who subscribe or extend their current subscriptions for any of the
three subscription periods which are less than a year will have 30 days added
to the listed subscription time period, and
--All who subscribe or extend their current subscriptions for any of the
subscription periods of one year or more will have 60 days added to the
listed subscription time period.
This offer ends 24 hours after the emailed Termination Notice from us.
Current subscribers who renew their subscriptions during the aforementioned
Special Offer time period will receive the number of days re-subscribed for
as indicated on the Subscription Page, plus the Bonus of 30 or 60 days (as
the case may be) ADDED to the number of days remaining on their existing
Subscriptions. Just login and click on “PLEASE CLICK HERE to renew your
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DEEPCASTER LLC
www.deepcaster.com
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