-- Posted Friday, 17 October 2008 | Digg This Article
| Source: GoldSeek.com
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
“…in every major US financial panic since at least the Panic of 1835, the titans of Wall Street – most especially until 1929, the House of JP Morgan – have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.
Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century.
That process of using panics to centralize their private power created an extremely powerful concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919…”
“Behind the panic: financial warfare over future of global bank power”
F. William Engdahl, October 10, 2008
“…The one clarity we have is that the crisis is resulting in financial concentration and that the bailout constitutes a massive raid by financial crooks on both taxpayers and central bank reserves in the US and Europe…
…If the problem is what the public has been told, namely that defaulting subprime mortgages are reducing the income flows through to the holders of the mortgage-backed securities, why isn’t the bailout money being used to refinance the defaulting mortgages and to pay off the foreclosed mortgages?…
….the authorities have blamed subprime mortgages for the crisis. Why then does their solution fail to address the problem of the mortgages? Instead, the solution directs public money into an increasingly concentrated private financial sector, the management of which is not only vastly overpaid, but also has escaped accountability for the financial chicanery that, allegedly, threatens systemic financial meltdown unless bailed out by the taxpayers.
Perhaps my nose is too sensitive, but this bailout doesn’t pass the smell test…”
“Does The Bailout Pass The Smell Test?”
Paul Craig Roberts, October 13, 2008
Clearly, the Bailouts and Interventions of recent weeks by the U.S. Fed/Treasury/Central Bankers have facilitated an even greater concentration of power in the private-for-profit U.S. Federal Reserve, key Central Banks, and Favored Financial Institutions.
Clearly, too, the U.S. Taxpayer (and, indirectly, many investors) is on the hook for a few trillion dollars in additional debt burden. The only remaining question is “how many trillion?,” as Deepcaster and many other commentators have pointed out.
Finally, also clear is the fact that since the U.S. Treasury is broke (over $10 trillion in debt at this time). Therefore the increased debts will be “paid” as follows: The Fed will print money out of thin air and lend it to the U.S. Treasury and receive in return Treasury Securities on which the American Taxpayer will be obligated to pay “interest.” Of course the Taxpayer will be unable to pay without further borrowing and continuing massive Monetary Inflation - - a vicious cycle in which ever-more money is owed to the private-for-profit Fed and its Favored Financial Institutions.
Ah, there is the rub. The massive Monetary Inflation required to pay (interest, at least) on the burgeoning debt, and the consequent Hyperinflation, is baked into the cake already.
But what is not as much commented on is the fact that this Massive Monetary Inflation means a continuing and Massive Decrease in Purchasing Power for both U.S. Taxpayers and Investors around the world.
As well, their massive Monetary Inflation will likely result in a massive Wealth Transfer to the owners of the private-for-profit Federal Reserve and their Favored Financial Institutions.
This loss in Purchasing Power may be appropriately called The Fed’s New “Inflation Tax.”
The “Inflation Tax” works like this: every dollar the Fed prints in excess of GDP growth makes every dollar each of us holds worth less than before in Purchasing Power terms. But, today, there is no real GDP growth (see below)!
Our goal in this brief article is to suggest how you might avoid, or at least diminish, the Inflation Tax which is headed our way.
Consider first, the way the Bailout was designed to work and in fact is working. The dollars that you Taxpayers borrow from The Fed will go first (temporally) to the Favored Financial Institutions about which we spoke.
They will get to use the money first (temporally) and thereby become richer at the expense of the American Taxpayer and investors worldwide. That is because the inflationary effect (i.e. less purchasing power) of the massive monetary inflation will not have nearly as much impact on those that get to spend the big bucks first. The purchasing power of the dollars when first spent will be greater than when downstream spenders spend them.
Let’s reiterate who gets to spend the money first: the Favored Financial Institutions.
But these are the same institutions that initially profited form the Fed-led Cartel’s policies which led to the housing bubble, the credit bubble, and all the other bubbles, in the first place.
And now they get to profit from the bubbles’ bursting at the Taxpayer and Investor expense. Why do we say “and investor expense?” Because investors will not get a return on their money for, typically, several months or years. That is, they’ll be investing with currencies with more purchasing power and getting back returns (if any at all) in Fiat Currencies with less purchasing power in later years.
This process has already begun. Within the two weeks preceding this writing, The Fed has already increased the money supply by half a trillion dollars. And the Federal Debt has jumped $1.25 trillion in the past year and $650 billion in the last six weeks, according to shadowstats.com.
And, surely no one believes any longer the Propaganda that the Bailout Bill was necessary to save the financial system from collapse. Recent events and events-to-come have, and will, prove that contention wrong. And Paul Craig Roberts (see above) has identified one (of several) steps which could have been taken if The Fed had really wanted to unfreeze the Credit Markets. The System is not nearly “saved” yet, is it? Nor are the Credit Markets unfrozen.
Moreover, there will be even more serious Crises to come. Consider, for example, the Credit Default Swaps market (Default Swaps are a form of insurance on loans). According to the Bank for International Settlements (as of 12/07) the amount of Over-the-Counter Darkly Liquid Interest Rate Swaps Derivatives Contracts was $309,588,000,000 - - that is $309 trillion!
Billionaire Wilbur Ross recently said that as many as 1000 banks (i.e. typically smaller, non-favored, financial institutions) could go under. Ross is probably right. And the U.S. Taxpayer/Consumer (who is 70% of GDP) who is increasingly unable to pay his debts will increasingly default and fail economically. The consequences for the economy will be disastrous.
Think of the massive implosion in the Credit Default Swaps Market which is coming. Consider where LIBOR and the TED Spread (measures reflective of banks willingness to lend to other banks) will be when the Credit Default Swaps market begins to tank as a result of increasing counter-party failure.
Indeed, the Lehman bankruptcy has already caused a reported $400 billion counterparty failure in the CDS Market.
Of course, the Fed-led Cartel* of Key Central Bankers is trying to manage all of this through their Market Interventional Regime. That Interventional Regime is designed not only to Manipulate the Major Markets (in particular the Precious Metals, Equities, and Strategic Commodities Markets) but also to hide key economic and financial realities from the American people and Investors worldwide.
One aspect of this Regime is a Data Manipulation component. Real U.S. Consumer Price Inflation is running at around 13% annually, Real U.S. Unemployment at about 14.5% annually, and Real U.S. GDP is at a negative 2%, while real M3 (monetary creation) is running at 14% annually according to the quite credible calculations of shadowstats.com. Shadowstats.com calculates the numbers as they were prior to the “gimmicking” that became widely used beginning in the early 1990s.
*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Central Bankers and Favored Financial Institutions to read Deepcaster’s July, 2008 Letter containing a summary overview of Intervention entitled “Market Intervention, Data Manipulation Still Accelerating -- 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.”
In any event, the foregoing brief sketch gives one a flavor of what is coming: more crises, more disasters, more demands for Bailouts to “save” the system.
The major negative results we focus on here are the destruction of the Purchasing Power of the U.S. Dollar and certain other Fiat Currencies, as well as the attempted ongoing implementation of the Cartel “End Game.”
As Engdahl and Roberts (above) point out, the evidence is increasing that the recent financial panic and economic distress is and has been planned as a part of Cartel Strategy to increase power and, in our view, to implement its “End Game.”
To understand the Cartel’s likely “End Game” we must understand the Root Cause.
The Root Cause of The Systemic Threat
The root cause of The Threat lies in the structure, functioning and policies of the private-for-profit “U.S.” Federal Reserve.
Various international private banks, several of which are headquartered in Europe, own the “United States” Federal Reserve Bank.
These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:
“I still can’t get over the whole Federal Reserve racket.”
Consider the following - - let’s take a situation where the U.S. government needs money. The U.S. doesn’t just issue United States Notes, which, of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.
This is what the U.S. does - - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the private owners of The Fed - - Ed. Note) The mind boggles.
The damnable result is that the Fed effectively controls the U.S. money supply. The Fed is …not even a branch of the U.S. government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments.
How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”
Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007
After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…”
Insightful economic forecaster Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.
“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar. All this has been achieved through its ability to continually inflate the money supply.
And, between 1985 and 2005, the Federal Reserve Board has increased the money supply by five times. This extraordinary money creation is merely the catalyst for debt creation. In a fiat money system, money is debt…there is absolutely no way this money can ever be repaid except by continued inflation. But, now that the credit bubble is blown up, inflation is no longer an option; bankruptcy looms.”
“The Federal Reserve…What Has It Done For You Lately? ”
Ian Gordon, December 29, 2007 (www.axisoflogic.com)
To put it bluntly, the “devaluation” of which Gordon speaks is loss of Purchasing Power.
When the United States has, in recent years, been threatened with recession (e.g. 1987 and 2001), the Greenspan-led Fed responded to each threat by ever more massive fiat money (debt) creation. The problem is that each time the fiat money supply is inflated by an ever-greater amount, more money must be printed in order to stave off recession or depression. One recent calculation has indicated that approximately $6 must now be created (i.e. printed) in order to drive each additional $1 of GDP.
Such profligate printing merely delays financial disaster, but does not avoid it. Such a disaster could, and should, be avoided by linking currency to the Monetary Metals – Gold & Silver – but The Cartel strenuously resists that. The Cartel works to protect their lucrative “paper” money regime of fiat currencies and Treasury Securities at all costs. Failure to do so would dilute their power and profits. (In order to protect this Paper Money Regime they must periodically attempt to take down the price of Gold and Silver - - see below.)
Systemic Threat Increases
Monetary inflation reflected in (the now hidden by The Fed) M3 is now increasing at nearly 14% annualized per year (www.shadowstats.com) - - a less than 5 year doubling time. Of course, this reckless Fed-generated Monetary Inflation is gradually translating into Price Inflation, though that price inflationary effect has been temporarily dampered by importing cheap goods and ostensibly cheap labor into the United States via the de facto Open Borders policy and has been disguised by Data Manipulation (see Data Manipulation section of July, 2008 Deepcaster Letter Market Intervention, Data Manipulation Still Accelerating - - Increasing Risks, The Cartel “End Game,” and Latest Forecast for Gold, Silver, Equities, Crude, U.S. Dollar and Treasuries” in the “Latest Letter/Archives” at www.deepcaster.com).
Of course, among the negative consequences resulting from rampant monetary inflation, de facto open borders, outsourcing, and easy credit has been serious wage depression and job loss for American workers, as well as the destruction of much of the United States’ domestic manufacturing capacity. These consequences have negative ripple effects throughout the world.
Deepcaster and Richard Russell are of the same mind regarding the consequences of the Fed-created monetary inflation and easy credit. Regarding the continued inflation of the money supply:
1) The U.S. Dollar will eventually (pushed by Fed policies) self-destruct (though we are just now at the beginning of a short-term U.S. Dollar “bounce” as Deepcaster has earlier forecast) and
2) “…The system must eventually destroy itself. It is not a matter of whether, it is simply a matter of when and how…” Richards Remarks, March 27, 2007
So if “the system must eventually destroy itself” and The Cartel likely knows this, what has been, and is likely in the future to be, their response?
Market Intervention, Data Manipulation & The Cartel “End Game”
First, in order to stave off the day or month or year of Reckoning (which, we reiterate, is coming mainly as a consequence of their dramatic monetary inflation and “easy credit” policies), the Fed-led Cartel* of Key Central Bankers and Favored Financial Institutions has created, and for the past several years has operated, an extraordinary “financial regime” built on increasing trillions of dollars (nearly $600 trillion as of December, 2007 - - see www.bis.org (path: statistics>derivatives>Table 19 and ff.) of OTC Derivatives available for the manipulation of major markets ranging from Precious Metals to Crude Oil and Energy, to Equities and Strategic Commodities (see Deepcaster’s July, 2008 Letter).
To be sure The Cartel’s massive and increasing use of derivatives to intervene (via Primary Dealers) in a wide variety of markets is fraught with danger (e.g. through counterparty failure as we are now seeing). Deepcaster, Warren Buffett and Jim Sinclair have pointed out the dangers of OTC derivatives. Indeed, Buffett calls them “toxic” and Sinclair has aptly described the financial system as “sitting on a $20 trillion trembling mountain of derivatives…think Weimar Republic.” Unfortunately, Deepcaster, Jim Sinclair, and Warren Buffett are correct.
Second, The Cartel has developed a nefarious “End Game” plan which we describe below.
Real-World Consequences
But even so, the pressures of the Real Economy (e.g. increases in food and energy costs) coupled with this relentless and irresponsible fiat money (debt) creation by The Fed have begun to seriously stress and threaten the entire financial system, as the Credit Freeze-Up beginning last August, 2007 and subsequent financial sector disasters show. As we pointed out in our June 2008 Letter, the Credit Freeze-Up, CDO Crisis, Toxic Derivatives and other Threats have not gone away. These Threats are latent and growing, and beginning to erupt again. They are erupting in many forms, including Bank Failures.
We reiterate, these failures have, ironically, been catalyzed by the policies of the most powerful Bank of them all - - The U.S. Fed-led Banking Cartel.
Yet, some individual banks are “favorite sons” of The Cartel and others are…victims. Consider a recent example eloquently described by Ellen Brown in “The Secret Bailout of JPMorgan,” May 13, 2008, www.webofdebt.com/articles; and “what’s the Difference Between Lehman Brothers and Bear Stearns?,” June 14, 2008, ibid. and “Putting the Federal Bank in the Federal Reserve,” July 24, 2008, webofdebt.com.
But, as the worsening Housing Crisis, Credit Freeze-up, Banking Failures, among increasing numbers of negatives show, The Cartel’s policies generate increasing Systemic Risk which results in their “Paper Regime” becoming ever harder to manage.
Indeed, perhaps the most salient item of evidence that The Fed-led Central Bankers Market Intervention Regime is becoming harder to manage is that The Cartel requires, and thus creates, ever-increasing trillions of dollars of derivatives to “manage” all the various markets in which The Cartel intervenes. Indeed, those amounts of derivatives are increasing exponentially. A favorite Fed Interventional Vehicle, the Repurchase Agreement Pool, is several times larger today than it was just a few years ago.
So what are the Central Bankers to do as their Market Intervention Regime becomes harder to manage? What are they doing?
They surely must want to avoid allowing the financial system to collapse around them (in a manner in which its failure would be linked to them) lest they be subject to the wrath of the populace of the major nations. They must thus develop a solution - - an “End Game” as it were - - to cope with what Deepcaster, Richard Russell, and others view as the inevitable collapse.
Deepcaster has described The Cartel’s apparent ‘End Game’ in detail in its June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations “ and its August 13, 2006 Alert “Massive Financial-Geopolitical Scheme Not Reported by Big Media” posted in the “Archives” at www.deepcaster.com. Fortunately, a Bill has been introduced in the U.S. Congress (H.Con.Res.40) which opposes this nefarious scheme.
The Crisis Intensifies - – The “End Game” Implementation Begins
A most compelling conclusion from the foregoing is that The Cartel expects (and likely are even pushing) the U.S. Dollar to go into further and further decline, over the medium term, and to continue their other policies, until there is a “No-Salvation, No-Return Systemic Crisis.” (Very short-term, Deepcaster has earlier forecast the U.S. Dollar to “bounce” in the 3rd quarter of 2008 and, indeed, it is bouncing now - - but that does not affect the fact that the primary long-term trend for the U.S. Dollar is down.)
That the U.S. economy (about 25% of the international economy) is headed in the direction of Serious Stagflation (a Kondratieff Winter) is pretty clear from the very credible shadowstats.com statistics. We reiterate that Real Consumer Price Inflation is running at nearly 13% a year, U.S. Unemployment at 14% a year and, the Money Supply Growth (M3) is increasing at nearly 14% a year or a doubling time of nearly 5 years, according to shadowstats.com.
Moreover, Real U.S. GDP “growth” is a negative number - - about a negative 2% annualized according to shadowstats. Indeed, shadowstats.com views the Official 2nd Quarter GDP numbers as “political garbage,” due in large to the government’s use of a vastly unrealistic Implicit Price Deflation number.
It would appear that The Cartel-charted-course toward a Stagflationary Recession/Depression, and thus toward the attempted implementation of their “End Game,” is on course.
The clue to the character of The Cartel “End Game” is the Strategic and Prosperity Partnership Agreement signed by Presidents Bush, Fox of Mexico and Martin of Canada in Waco, Texas in March, 2006.
This multi-faceted Agreement was signed without the approval of Congress, or the knowledge of most of the American people.
It is clear from the multifaceted “End Game” Plan reflected in this Agreement why the Bush Administration has been so resistant to defending U.S. borders.
It is also clear that One Key Component of the End Game Plan is the dissolution of the United States Dollar and other currencies into a new currency, the “Amero.” Indeed, two bits of anecdotal evidence that this plan is being taken seriously are:
1) That the “Swiss Portfolio” Investment Advisory Company has already touted the “Amero Alternative” on its website; and
2) The London investment firm Jeffries International Ltd.’s Vice President, Steven Pervis, said that the coming “Amero” will have “a big impact on everybody’s life.”
One clear inference is that if The Cartel is pushing the Amero as the eventual, and their favored, alternative to the U.S. Dollar, The Cartel certainly intends to continue its interventional efforts at suppressing the prices of Gold and Silver in order to prevent their attaining increasing legitimacy as money, and thus as competitors to their Fiat Currencies and Treasury Securities.
In the event of the success (from The Cartel’s perspective) of the implementation of the End Game Plan, doubtless The Fed intends to transmogrify itself into The (still private and very profitable) Central Bank responsible for issuing the Amero. Additional details regarding The Cartel’s “End Game” are provided in Deepcaster’s August 3, 2008 Alert and June 2007 Letter available at www.deepcaster.com.
Of course, the key question for the long-term is whether The Cartel will be able to pull it off. Certainly they have been instrumental in creating a financial climate which has crisis potential.
In that event, is it not highly likely that The Fed would be unable to continue as a privately owned for-profit entity? One can hope.
A Solution Versus Current Trends
Rather, and as an alternative to The Cartel’s planned “End Game,” there could then arise genuine a United States National Bank issuing United States Notes (as did President J.F. Kennedy briefly before he was killed) solidly backed by the monetary metals, Gold and Silver.
But, in the short-term, the U.S. Fed-led Cartel continues to expand its power. For example, it is important to reiterate that: the Powers-That-Be, ensconced at The Fed and U.S. Treasury, have recently sought and obtained even more power without accountability. Any downstream liabilities are, of course, planned to be laid off on the U.S. Taxpayers. We are grateful to Rep. Ron Paul for disclosing shocking details of the Housing Bailout Bill recently rammed through Congress, and grateful to GATA and others for reporting them:
“- The two troubled federal mortgage agencies, Freddie Mac and Fannie Mae, will be given unlimited access to the U.S. Treasury without requiring any further approval from Congress.
- The U.S. national debt ceiling will be raised by $800 billion, which suggests that the bailout is expected to cost a lot more than the country is being told.
- All credit card transactions will have to be reported to the Internal Revenue Service, as if the country isn’t under enough government surveillance already.” (emphasis added)
“Ron Paul discloses housing bailout bill’s money and power grab”
The Gata Dispatch, July 24, 2008
Clearly, the Federal Reserve should be abolished and replaced by a truly National Bank which could then issue currency linked to Gold and Silver.
Joining Deepcaster and Rep. Ron Paul in its call for abolition of the “U.S.” Federal Reserve is legendary investor Jim Rogers, who also advocated letting Freddie Mac and Fannie Mae go bankrupt
The Cartel’s Constraints Generate Profit Opportunities
Though The Cartel’s Interventional Machinery is still quite powerful, it is unable to manipulate all markets at will all the time because it is constrained by several Realities. These include: politics, the necessity to run “under the radar” (i.e. to maintain plausible deniability) regarding its Market Interventions, and the very real constraints of a marketplace in which tangibles-in-limited-supply (e.g. energy and food) are of major importance.
So how does an Investor cope with all this?
A Strategy for Profit and Protection
Normally, (that is to say in a Genuine Free Market situation) the go-to “Safe Haven” Assets in times of Financial Crisis would be the Precious Monetary Metals Gold and Silver, as well as other assets such as Strategic Commodities. We say “normally” because nearly every time another Financial Market Crisis has come prominently into the public eye in recent years The Cartel* of Central Bankers has successfully taken down the price of what would normally be the Safe Haven Assets - - the Precious Monetary Metals. A prime example occurred during the much-publicized demise of Bear Stearns in March, 2008, which was accompanied by a vicious Takedown of Gold and Silver. In a non-manipulated Market, given the fact that Bear Stearns reflected great weaknesses in the Financial System, Gold and Silver should have skyrocketed.
Yet, the September, 2008 Crisis appeared to be different. Gold launched from the mid $700s/oz. to around $900/oz. during September, 2008. Similarly, Crude Oil experienced a $25 spike on Monday, September 22, 2008.
So the question now, in mid-October, 2008, is it different this time around? Have Gold and Silver finally thrust off the shackles of Cartel Intervention? Or will The Cartel be able once again to cap and take down the prices of these Precious Monetary Metals and Strategic Commodities? Deepcaster has addressed this question in a Forecast he recently issued for the likely fate of Gold, Silver, Crude Oil & the U.S. Dollar in the Latest Letter Cache at www.deepcaster.com.
One thing is certain: The Cartel will certainly attempt again to take down Gold, Silver and Crude Oil at the earliest opportunity because the Strategic Commodities and Precious Monetary Metals are Competitors as Stores and Measures of Value with the Central Bankers’ Treasury Securities and Fiat Currencies.
Yet there is a Strategy which accommodates Cartel Interventional attempts and at the same time provides excellent Profit Opportunities, whether the Interventional attempts are successful or not.
A major premise of The Strategy is that one can certainly remain a Hard Assets Partisan (as Deepcaster is) while at the same time insulating oneself from future Takedowns. The following points provide an outline of The Strategy (particularly as applied to the Gold and Silver Markets) and are designed to help avoid Portfolio unpleasantness, or even possible financial ruin, in the future, as well as to profit along the way:
1) Recognize that The Cartel is still Potent, as difficult as that may be psychologically for Deepcaster and other Hard Asset Partisans to acknowledge. The Cartel is still the Biggest Player in many markets and, if the timing and market context are propitious, the Biggest Player makes Market Price. In addition, The Cartel has the advantage of de facto controlling the structure and regulation of various marketplaces and that is a tremendous advantage; just as the Hunt Brothers years ago discovered much to their dismay and misfortune, when they tried to corner the Silver Market.
2) Accumulate Hard Assets near the Interim Bottoms of Cartel- induced Takedowns.
3) In order to know when one is near the bottom of a Cartel-generated takedown, it is essential to take account of the Interventionals as well as the Technicals and Fundamentals.
4) For example, regarding Gold & Silver, near such Interim Bottoms, accumulate a combination of the Physical Commodity (Deepcaster prefers “low premium to melt” bullion coins) and well-managed Juniors with large reserves. (Deepcaster provides a list of such Junior Candidates in our December 20, 2007 Alert “A Strategy for Profiting from Cartel Intervention” available in the Alerts Cache at www.deepcaster.com.) The “Physical” and “Juniors” are for holding for the long-term as a Core Position.
5) Then, to the extent one wishes to speculate on the next “long” move, one should buy the major producers or long-term call options on them. These latter positions are for ultimate liquidation at the next Interim Top and are not for holding for the long-term.
6) However, there will be a time when The Cartel price capping is ineffective and Gold & Silver make record moves upward. The benefit of this Strategy is that one will likely be long in one’s speculative positions when this happens.
7) Near the next Interim Top, liquidate the long options and majors. Again, in order to know when we are close to the next Interim Top, it is essential to monitor the Interventionals, as well as Fundamentals and Technicals.
8) Near that Top, sell short or buy puts on Majors. We re-emphasize the Majors as preferred vehicles for trading positions because such positions are more liquid and tend to be quite responsive to Cartel moves.
9) At the next Interim Bottom, cover your shorts and liquidate your puts and go long again to begin the process all over again. We emphasize that it is essential to consider the Interventionals as well as the Fundamentals and Technicals in order to determine the approximate Interim Tops and Bottoms.
10) Finally, Hard Assets Partisans have the opportunity to become involved in Political Action to diminish the power of The Cartel. It is truly outrageous that the average unsuspecting citizen, and prospective retiree, can and does put his hard won assets in Tangible Assets only to have those assets effectively de-valued by Cartel Takedowns. This is extremely injurious to many average citizens in many countries who are saving for the rainy day or retirement and have their retirement and/or reserves effectively taken from them. In order to help prevent this and similar outrages, we recommend taking three steps:
a) Become involved in the movement to abolish the private-for-profit U.S. Federal Reserve as Deepcaster, ex-Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, all have advocated. Rep. Paul has introduced a Federal Reserve Abolition Act, H.R.2755.
b) Join the Gold AntiTrust Action Committee which works to eliminate the manipulation of the Gold and Silver markets (www.gata.org). GATA is a non-profit organization which makes a great contribution by gathering evidence regarding the suppression of prices of Gold, Silver and other commodities.
c) Work to defeat The Cartel ‘End Game.’ Deepcaster has laid out the evidence regarding the Ominous Cartel “End Game.” Clearly The Cartel is sacrificing the U.S. Dollar to prop up Favored International Financial Institutions and to maintain its power. But this sacrifice cannot continue forever.
If this aforementioned Strategy is employed effectively, it can result both in an increasing Core Position in Gold and Silver, and in considerable profit along the way.
Additional insights regarding this Major Strategy which are essential to profiting from the Fed’s New Inflation Tax are laid out in detail in Deepcaster’s article of 9/26/08 entitled “Protection and Profit from Bailouts Failed to Doom.”
But suffice it to say that the Key Point of the Strategy for Protection and Profit is careful attention not only to the Fundamentals and Technicals but also to the Interventionals. These Cartel-generated Interventions have the power to move markets as those who study the matter can attest.
Protection and profit required Proactivity and attention to the Interventionals, Fundamentals and Technicals, not “Buy and Hold.” Buy and Hold rarely succeeds anymore as current market conditions attest.
The Key to Profit and Protection is a Strategy: Successful Investors must become Long-Term Traders, with their trading choices informed by the Interventionals, as well as the Fundamentals and Technicals.
Deepcaster
October 17, 2008
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
-- Posted Friday, 17 October 2008 | Digg This Article | Source: GoldSeek.com
