-- Posted Friday, 21 December 2007 | Digg This Article
| Source: GoldSeek.com
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
Deepcaster thanks all who complimented us on last week’s Overview of The Market Intervention and Data Manipulation Regime: “Market Intervention Accelerating, Stunning Data Releases Show Risks, Consequences, and The Cartel End Game.” Now, we follow that Overview with Guidelines designed for profit and protection.
Given the positive response from various parts of the world, it is clear that investors are increasingly fed up with market and data manipulation emanating from Washington, DC and elsewhere. We hope that the following will serve as a (partial, at least) antidote.
Gold and Silver
We encourage Gold and Silver Investors and Traders discouraged by the recent Takedown of Gold and Silver to take heart.
To be sure, it was quite depressing on December 13 and 14, 2007 when the price of Gold and Silver was taken down in the face of the jumps in the PPI and CPI inflation indexes.
Of course, Gold and Silver should have rocketed up when those dramatically higher inflation figures were released.
The fact that they were taken down instead, demonstrates that The Cartel* is still potent.
And that is a valuable lesson relearned.
But there is a “silver lining.”
*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Central Bankers to read Deepcaster’s January, 2008 Letter containing a summary overview of Intervention entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com>LatestLetter. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org 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.”
The Silver Lining – A Strategy
Understanding that “War Against Tangible Assts” is a second step toward protection and profit.
The War Against Tangible Assets
It is no surprise to anyone familiar with the Precious Metals markets that Gold and Silver are at the top of The Cartel’s Hit List and have been for several years. This is understandable too, so far as The Cartel is concerned.
We reiterate, The Central Banker Cartel wants to keep investors focused on buying their Treasury Paper and giving legitimacy to their Fiat Currencies. The Cartel’s profits and power depend on keeping investors “hooked” on their paper.
From The Cartel’s perspective, it cannot afford to allow The Precious Monetary Metals or Strategic Commodities to become legitimized as alternative stores and measures of value.
In order to succeed in legitimizing their paper they must create doubts in investors’ minds about the ultimate benefit of holding Gold and Silver (or The Strategic Commodities) as Bedrock “Fortress Assets.” This is one of the major reasons for their periodic attacks on Gold and Silver.
Indeed, the power and viability of The Cartel Bankers entire Fiat Currency and Treasury Securities Regimes, and therefore their power, would be greatly compromised if they did not periodically attack and take down the prices of Gold and Silver.
But The Cartel can not continue to successfully attack indefinitely, because every attack requires some selling of physical bullion into the market, and physical bullion is limited in supply.
That consideration leads us to consider Cartel tactics as a basis for developing our counterstrategy. In order to minimize the damage from The Cartel’s periodic takedowns of Precious Metals prices, and to profit, hopefully, from such takedowns it is important, first, to consider the characteristics of these Cartel-manufactured Takedowns.
Characteristics of Cartel Takedowns
1) The Takedowns typically come swiftly and often after a period of weeks or months of relative market inactivity (e.g. price activity within a trading range).
2) A Price Takedown often begins before the markets open in the U.S. so those who are long feel trapped by, for example, a gap down to a much lower Gold (or other Tangible Assets) price at the U.S. opening.
3) Takedowns are often preceeded by tempting Technical Analytical Formations - - which Deepcaster calls “lures.” These lures tempt Hard Money Advocates to believe that Gold and Silver (or other Tangible Assets) are about to bullishly break out of technical formations.
4) The Cartel’s Achilles Heel: The Cartel must expend physical bullion to implement these Takedowns. BUT simple logic indicates that The Cartel would like to expend as little bullion as possible implementing such Takedowns because of the dwindling aboveground supplies in the face of ever-increasing demand for both Gold and Silver. This fact is The Cartel’s Achilles Heel. Thus, the attacks are swift in hopes of getting “the longs” (many of whom are foolishly on margin) to puke up their positions at reduced prices - - a situation doubly profitable for The Cartel.
Given the aforementioned characteristics of Cartel Engineered Takedowns, how does one proceed to protect and profit? Consider these:
Guidelines Designed for Protection and Profit:
- To the extent one is able, buy near interim bottoms of Cartel Takedowns. Typically, these opportunities have come two or three times a year.
- Do NOT buy Precious Metals or Strategic Commodities on margin. Positions bought on margin are very vulnerable to forced sales.
- Deepcaster’s strong preference is for purchase of actual physical metal in the form of Gold and Silver coins purchased near the bottoms of Takedowns. If one does not intend to hold physical coins oneself, it is important that they be held in a segregated account. The fact is that even though the market price may be temporarily taken down, buying physical means that you own and have physical. The more physical that you and other investors have, the less physical that The Cartel can have or acquire.
- If you also buy shares (more below), give preference to those shares of “Junior” companies (which, typically, are not yet in production but) which have abundant reserves. Deepcaster has developed a Short List of several such candidate companies (see Deepcaster’s Latest Alert in the ‘Alerts Cache’ at www.deepcaster.com).
The shares of such “junior” companies tend to be somewhat resistant to Takedowns simply because when their share prices are dramatically depressed through a Cartel Takedown those Juniors with atypically large precious metal reserves become ever cheaper in the eyes of prospective acquirers. Indeed, many of these companies with very ample reserves (particularly the smaller capitalization ones) are now candidates for buyouts or takeovers based on the value of those reserves. The potential for being acquired provides a potential equity “kicker” for such an owner of shares in these Juniors.
- Be very wary before buying the shares of Precious Metals Exchange-Traded Funds. The bullion ostensibly held in certain widely held Exchange-Traded Funds is not being adequately audited, in Deepcaster’s view. For example, certain Funds allow their ostensible bullion holdings to be held by un-audited sub-custodians. Even though one may think that one owns shares in actual bullion via an Exchange-Traded Fund, for some funds it is not clear that one could adequately audit one’s holdings, much less actually take possession of them. Those funds, which appear to Deepcaster to have adequate audit mechanisms, are also listed in the Latest Alert in the “Alerts Cache” at www.deepcaster.com.
- If one buys producers, buy well-managed unhedged producers with large reserves near the bottoms of Takedowns. Several of the larger gold production companies have hedged downstream sales. Needless to say, this hedging is inimical to potential profit downstream, when Gold prices rise. Why risk your investment funds buying companies with hedges which imposes a limited upside and you are subject to a great downside as the result of a Cartel attack.
- How one holds one’s Gold and Silver assets is extremely important. For example, shares of major Gold producers are most vulnerable to Takedowns. (In this connection, examine the “precious metal share lending arrangement” between Oppenheimer & Co. and JPMorgan Chase - - what could this lending arrangement be for except to help implement The Cartel-initiated takedowns - - see Deepcaster’s earlier work).
- Sell at least one-half of your producer shares near “tops” and await the next Takedown and interim bottom to buy again. This is known as “taking profit.”
- Sell into strength and buy weakness near interim bottoms.
Following the aforementioned Guidelines has facilitated Deepcaster’s profitable recommendations which are displayed at www.deepcaster.com.
Technical Considerations
For technicians, indicators which are particularly helpful in implementing the aforementioned strategy are, for trending markets, Momentum and MACD indicators. And for chopping markets consider Stochastics and Williams%R. And, always, consider Fibonacci Numbers and Retracement Levels, as well as Bollinger Bands.
The Interventionals
In addition, it is crucial to monitor The Interventionals and it is this additional input which Deepcaster aims to give.
“Junior Candidates”
Gold & Silver shares which are especially resistant to takedowns are those “juniors” which have very large reserves.
Deepcaster also views well managed “royalty companies” favorably because they participate in the upside of successful producers but have limited risk on the downside.
Two such “royalty companies” which are well worth considering, as well as a “short list” of Junior Candidates, are listed in Deepcaster’s Latest Alert at www.deepcaster.com in the Alerts Cache.
Obviously, among the criteria which should be considered before purchasing shares of the aforementioned are:
- Management quality
- Financial status and prospects
- Temporal proximity to production
- Proximity to processing facilities
- Potential risks
- And, of course, the Interventionals, Fundamentals and Technicals
Timing and Other Considerations
Forecasting the timing for major moves is a matter of considering not only at the Fundamentals and Technicals but also the Interventionals.
Similarly, in the other controlled markets such as Crude Oil, it is essential to consider the Interventionals for clues as to market direction and timing. As well, the aforementioned Guidelines should be applied to investments in Crude Oil and other Strategic Commodities, with appropriate adjustments (e.g. Guidelines 3 through 8 do not apply to Crude Oil).
Given their goals, it is clear to us The Cartel would like Precious Metals and Strategic Commodities investors to be lured into investing long and to be left holding the bag when the next Takedown comes.
Buying weakness and selling into strength based on the Fundamentals, Technicals and Interventionals can help avoid this trap. Accordingly, Deepcaster periodically makes recommendations based on its estimates of approaching interim tops and approaching interim bottoms for Precious Metals and Strategic Commodities.
Deepcaster
December 21, 2007
DEEPCASTER LLC
www.deepcaster.com
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
Gravitas, Pietas, Virtus
-- Posted Friday, 21 December 2007 | Digg This Article | Source: GoldSeek.com
