-- Posted Friday, 8 March 2013 | | Disqus
“The Fed is printing a lot of money. They are forcing people into markets. You shouldn’t be buying securities because you’re forced to buy them by zero rates. You should buy them because you think they’re great value. They’re great value only relative to sero interest rates. They’re not great value on an absolute basis….
“If you print enough money, everything is subsidized – bonds, stocks and real estate….
“I don’t know when it’s going to end. But my guess is it’s going to end very bedly. And it’s going to end very badly because, again, when you get the biggest price in the world, interest rates being manipulated, you get a misallocation of resources and this is going to end in one of two ways: with a malinvestment bust which we got in 07-08 […] Or it could end with just monetizing the debt and ‘off we go’ inflation. So that’s a very binary outcome. They’re both bad.”
Stan Druckenmiller, Legendary Hedge Fund Manager, CNBC, 03/05/13
Given Stan Druckenmiller’s Stellar Investment and Trading Record – 30% return over 30 years – including a most profitable stint as George Soros’ Portfolio Manager at the Quantum Fund, it is no surprise that his two Forecast Alternatives have it Nailed.
But both Outcomes are Possible Simultaneously, and both are highly likely!
The Fed’s and other Central Banks’ Money Printing is surely facilitating Serious Malinvestment, which almost inevitably leads to a Bust i.e., to Economic Stagnation or even Depression.
But that Money Printing is also already leading to Inflation (e.g., 9.24% in the USA per Shadowstats – Note 1)
Result: Stagflation is impending, or, more likely, Hyperstagflation.
This gives rise to the Question, given this Scenario, how does one Profit and Protect?
Normally, with Inflation in the Wind, Gold and Silver would be soaring, and Gold especially given the prospect of Economic Stagnation, as well.
But they are not. Why?
John Embry of Sprott Asset Management probably has it right when he says there are two reasons. 1) The Powers-that-be (aka The Cartel – Note 2) want to hide the fact that the International Financial System is in such bad shape and 2) They are trying to position themselves to take advantage of it.
This entails suppressing the Price of Gold and Silver (Note 2), so they can buy it themselves.
And Buy they are. Central Banks all over the World are Buying increasing amounts of Physical Gold, and as we have reported, are planning to Buy More.
And Physical Silver supplies are even tighter. Inventories are minimal and both Industrial and Investment Demand is increasing.
But the Increasing Demand for Physical coupled with the Cartel Suppression of the Paper Price is leading to an increasing Divergence between the Paper Price and the Price for Physical for Delivery. Conclusion: get Physical and get Gain.
In sum, regarding Precious Monetary Metals, Jim Sinclair’s advice is ours. Do not sell. Hold your positions or add to them, as appropriate for your portfolio. One, or likely both, of the Druckenmiller scenarios will play out and trump Cartel Price Suppression Activities Eventually.
So what other Opportunities for Profit and Protection Spring from Druckenmiller’s and Deepcaster’s Forecasts and the Actual Economic and Financial Situation?
Regarding Equities, the Central Banks-Generated Liquidity via QE etc. generates continuous Pressure to lift them Ever Higher.
But the Fundamentals (unemployment, Debt Saturation, Economic Stagnation) simultaneously Pressure them lower. So we will get both Bear and Bull at different times – Deepcaster forecasts Timing in his latest Letter and Alerts.
And, finally, acquire Assets which are both Inflation and Deflation resistant. First among these are Agricultural Assets or interests in them, several of which we have recommended – Farmland, Food Producers and those who supply or support them. Get Green Gold.
Best regards,
Deepcaster
March 8, 2013
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 February 21, 2013
1.59% / 9.24%
U.S. Unemployment reported March 8, 2012
7.7% / 23.0%
U.S. GDP Annual Growth/Decline reported February 28, 2013
1.61% / -2.20% (i.e., a Negative 2.2%)
U.S. M3 reported February 17, 2013 (Month of January, Y.O.Y.)
No Official Report / 4.59%
Note 2: We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions - III” and Deepcaster’s July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, 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.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.
DEEPCASTER LLC
www.deepcaster.com
DEEPCASTER FORTRESS ASSETS LETTER
DEEPCASTER HIGH POTENTIAL SPECULATOR
Wealth Preservation Wealth Enhancement
-- Posted Friday, 8 March 2013 | Digg This Article
| Source: GoldSeek.com
