-- Posted Friday, 2 March 2007 | Digg This Article
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
Regular readers of Deepcaster’s Letters and Alerts are familiar with our view that several key Official U.S. Government Statistics (e.g. CPI and GDP) are dramatically inaccurate (“Juiced Numbers” we call them) and that Major Markets, including Gold, Silver, Crude Oil and many of the Strategic Commodities are manipulated by The Cartel of Central Bankers.
Regular readers are also familiar with our view that such Market Intervention provides opportunities for profit, such as the one identified in our March, 2007 Letter.
Thus we provide the following summary of our strategy, by way of giving a specific example, for Profiting Despite Intervention.
[For an overview of the Interventional Landscape, we call attention to our Juiced Numbers IV- - “How The Government Gets The Statistics It “Wants,” Markets Get Manipulated, Citizens Get Deluded, and Worse” (in our October, 2006 Letter at www.deepcaster.com) which lays out the considerable evidence for “massaged” Government Statistics and Manipulated Markets based on publicly available information.]
One key consequence of “Juiced” Numbers and Manipulated Markets is that they force prudent investors into investments they might not otherwise make, in order to preserve capital and, hopefully, to make substantial profits.
Indeed, several of Deepcaster’s recommendations would be very different if it were not for Juiced Numbers and Market Intervention. Yet these recommendations have allowed Subscribers to profit.
Deepcaster’s Strategy - - which involves taking account of actual and prospective Market Intervention as well as fundamental and technical considerations - - is designed to allow one to significantly avoid or finesse the minefields of both Juiced Numbers and Market Manipulation, and to profit.
As a result of applying this Strategy, Deepcaster has identified one Asset which it believes is relatively resistant to both market manipulation and economic recession, and appears to have a substantial upside. We developed this specific recommendation based on the following analysis.
First, one must always bear in mind that a primary goal of The Cartel is to protect their “Paper” Treasury Securities and Fiat Currencies. It follows from this that The Cartel sees Tangible Assets, and especially precious metals and strategic commodities, as threats to their “Paper”. Therefore, periodic Takedowns of Tangible Assets prices are conducted by The Cartel.
This manipulation regime quite apparently extends to key statistics also. Therefore, consider the following.
The “Real Statistics” on U.S. Gross Domestic Product (GDP) and Consumer Price Index (CPI) have recently been issued by shadowstats.com. Indeed, in Deepcaster’s view, shadowstats.com is the best single source for information about “Real Statistics” as opposed to “massaged,” Official Government Numbers.
Regarding real Gross Domestic Product, shadowstats.com indicated that “GDP declined” roughly 1.4% in 2006 versus the official 3.4% gain.
Similarly, real Consumer Price Inflation, specifically, shadowstat.com’s Alternate Consumer Inflation Measure, averaged 10.2% in 2006 rather than the 3.2% claimed by the Government Statistics masseurs. (Shadow Government Statistics January/February 2007 Edition issued February 20, 2007.)
A compelling conclusion from the foregoing “Real Statistics” is that we are in the midst of both a recession and substantial inflation - - a condition otherwise known as stagflation.
So what is the best hedge against stagflation? Normally, Deepcaster would immediately recommend gold and or silver. Gold typically maintains its value during both deflationary and inflationary times. It serves as a hedge against both because it is the real store of value and measure of value and as such has outlasted all fiat currencies of which we are aware.
But there is one major problem in holding gold just at this point. And that is that the biggest “Market Maker” in the relatively small cap gold market is that $460+ billion plus derivatives position apparently controlled by The Central Bankers Cartel and devoted to “managing” the Gold Market. The Silver Market is similarly managed.
So while Gold would normally be the “go to” investment at this time we cannot recommend it, except for those willing to suffer through the next Takedown. That is not only because we believe it is subject to periodic substantial takedowns but also because Deepcaster Forecast several weeks ago that a substantial Takedown of gold and silver would occur. Indeed, that Takedown has now begun.
Of course, Deepcaster recommends purchasing Gold and Silver near the “bottoms” of Takedowns. But we are not at the bottom of the Current Takedown yet.
So what are investors’ alternatives? Deepcaster has already recommended plays (designed to go with the Controlled Trend) on Interest Rates and Crude Oil, both of whose markets are heavily manipulated.
Yet there is another tangible asset that provides an excellent vehicle for capital preservation and price appreciation during our current inflationary recession, as described above?
This asset is uranium. The unique characteristics of the uranium industry and its supply and demand fundamentals recommend uranium as an investment resistant to market manipulation, and providing a healthy opportunity for profit. Among the several unique characteristics are:
- First, there is now, and for the foreseeable future likely will be, notwithstanding our stagflationary economy, a substantial demand over supply deficit resulting in the continuing decrease of aboveground supply, and a corresponding likely increase in price.
- Even an overt economic recession (such as was just predicted by Alan Greenspan) is not likely to affect the increasing demand trend for uranium simply because so many new nuclear plants are being built and aboveground supplies are being depleted so rapidly
- The uranium market is not easily manipulated with derivatives. There is no substantial active derivatives market with forward sales. Sales of actual uranium (U308) concentrate takes place among private parties and the results of those sales determine market price.
But just what vehicle one uses to gain exposure to the uranium market is critical. One source recently indicated there are over 500 uranium companies world-wide now, with that number growing rapidly. A significant number of these will likely fail, particularly among those which we would categorize as “junior explorers.”
On the other hand, explorers which identify substantial reserves have the greatest price upside potential. But processors and producers are much less speculative and still provide significant upside potential.
Conclusion: The prospectively ideal uranium industry investment would be in a company such as Deepcaster’s March selection which is strong in uranium exploration, processing and production and which has a substantial and expanding reserve base, and world-wide scope.
While such a company may have share price dips due to a market “correction” such dips must necessarily be temporary, given the unique characteristics of the uranium industry identified above. Thus such a company is a “buy” now.
And when the Current Takedown in Gold and Silver has run its course a magnificent Buying Opportunity for these Precious Metals will then be presented.
Deepcaster
DEEPCASTER LLC
www.deepcaster.com
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
Gravitas, Pietas, Virtus
-- Posted Friday, 2 March 2007 | Digg This Article
