-- Posted Friday, 12 April 2013 | | Disqus
“Since the Financial Crisis erupted in 2007, the US Federal Reserve has engaged in dozens of interventions/ bailouts to try and prop up the financial system. Now, I realize that everyone knows the Fed is “printing money.” However, when you look at the list of bailouts/ money pumps it’s absolutely staggering how much money the Fed has thrown around….
“The Fed is not the only one. Collectively, the world’s Central Banks have pumped over $10 trillion into the financial system since 2007. This money printing has resulted in a massive expansion of Central Bank balance sheets ….
“This money printing has unleashed inflation in the financial system. In the emerging markets, where consumers can spend as much as 50% of their income, this has resulted in food riots and even revolutions as we saw with the Arab Spring in 2011.”
“The Clear Signs of a Global Inflationary Tsunami Are Already Visible Around the World”, Graham Summers, Phoenix Capital
Much of the Mainstream Financial Media (MSFM) and, indeed, Mainstream Media (MSM) would have us believe Price Inflation is “contained”, as would spokespersons for most Developed Countries; Governments and Central Banks. Indeed, these institutional sources are often complicit in facilitating such distortions.
But The Facts on Price Inflation say otherwise. Graham Summers details examples of Threshold Hyperinflation from around the World.
And he Properly attributes it to Fed and other Central Banks Money Printing.
But if investors concentrate on where the Central Bank Money Pump is focused and on Timing, as Deepcaster does, then Profit and Wealth Protection Opportunities are enhanced. So here we focus on Key Examples of Investments, affected by these Distorting Monetary-Fiscal-Political-Media “Communications” Policies.
First, consider Summer’s iteration of Fed Money Pumping
· Cutting interest rates from 5.25-0.25% (Sept ’07-today).
· The Bear Stearns deal/ taking on $30 billion in junk mortgages (Mar ’08).
· Opening various lending windows to investment banks (Mar ’08).
· Hank Paulson spends $400 billion on Fannie/ Freddie (Sept ’08).
· The Fed takes over insurance company AIG for $85 billion (Sept ’08).
· The Fed doles out $25 billion for the automakers (Sept ’08)
· The Feds kick off the $700 billion TARP program (Oct ’08)
· The Fed buys commercial paper from non-financial firms (Oct ’08)
· The Fed offers $540 billion to backstop money market funds (Oct ’08)
· The Fed agrees to back up to $280 billion of Citigroup’s liabilities (Oct ’08).
· $40 billion more to AIG (Nov ’08)
· The Fed backstops $140 billion of Bank of America’s liabilities (Jan ’09)
· Obama’s $787 Billion Stimulus (Jan ’09)
· QE 1 buys $1.25 trillion in Treasuries and mortgage debt (March ’09)
· QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug ’10)
· QE 2 buys $600 billion in Treasuries (Nov ’10)
· Operation Twist reshuffles $400 billion of the Fed’s portfolio (Oct ’11)
· QE 3 buys $40 billion of Mortgage Backed Securities monthly (Sept ‘12)
· QE 4 buys $45 billion worth of Treasuries monthly (Dec ’12)
It is understandable that the Powers-that-be would want to suppress Price Inflationary Signs, because alarmed Investors would otherwise run en masse to Inflation Protective Assets, such as Gold and Silver, and Food Commodities.
And enlightened Investors would also simultaneously run away from the Fed’s and other Central Banks’ depreciating Fiat Currencies and Treasury Securities.
The bottom line is that the $10 Trillion Injected by the Central Banks in the last few years is bound to be increasingly Price Inflationary.
And it already is.
Consider Shadowstats.com Summary of the Real Numbers (as opposed to the Bogus Official Ones) for the U.S.
*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 March 15, 2013
1.59% / 9.62%
U.S. Unemployment reported April 5th, 2013
7.6% / 22.9%
U.S. GDP Annual Growth/Decline reported March 28, 2013
1.67% / -2.20% (i.e., Negative 2.2%)
U.S. M3 reported April 5th, 2013 (Month of March, Y.O.Y.)
No Official Report / 4.20%
And what are the Implications and Consequences of this? They are all Negative Economic and Financial Indicators.
As a specific example of Negative Consequences for one Huge Investor class consider: In an attempt to save their Shareholders/ Mega Banks Owners, the Private-for-Profit Fed is frantically money pumping. But that will lead to the eventual rejection of the $US as the World’s Reserve Currency much to the detriment of $US denominated Asset Holders.
“I believe the world is starting to back away or avoid the US (world reserve currency) dollar, and I sense that the “backing away” is beginning to accelerate. Where will the dollar-avoiders go? My guess is that there will be urgent calls for a new, acceptable “joint currency” made up of the Chinese Yuan, the Swiss franc, gold, and maybe a few other currencies. This will be the new world reserve currency, but first there will be debates, arguments and a lot of time wasted.
“But there is no doubt in my mind, the world has “had it” with the US dollar and its Federal Reserve printing press, and it’s simply a matter of time before the dollar becomes unacceptable around the planet.”
Richard Russell, Dow Theory Letters, 03/28/2013
Of course, a sensible Investor step is to move into Gold and Silver and away from Treasury Securities and Fiat Currencies. However…
For many of the aforementioned reasons, The Mega Bank Cartel has long been involved in suppressing the Prices of Gold and Silver.
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 atwww.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.
But even with all the very substantial evidence of Cartel Suppression of Gold and Silver Prices, the MSFM refuses to report that the Non-Profit gata.org has meticulously documented evidence of this ongoing Price suppression.
Unfortunately, given the ongoing Censorship of Real News like the Foregoing, the average Investor is “Bubble Blind” even though we are all subject to Greater Financial Risk than prior to the 2008-2009 Market Crash, as David Stockman correctly notes
“We’re in the World of the Bubble Blind”
Indeed it is important for Investors in general, and Precious Metal Partisans (including Deepcaster) specifically, to Note that The MSFM and MSM are often complicit in the ongoing attempt to suppress Gold and Silver Prices (and indeed in advancing the Banking Cartel Agenda in general). Consider Investment Legend Jim Sinclair on the Cartel Takedown of Precious Metal Prices earlier this week.
“Today was a coordinated attack on gold. We had the Goldman Sachs recommendation to short gold. We also had the Federal Reserve Open Market Committee notes quite unusually released before the opening. Then we had the mainstream media focus on the sale of Cyprus gold, and Mrs. Lagarde on the wire telling people everything was fine with the economy.
“The market in gold has significantly changed....
“It’s no longer the investment banks vs a community of investors who feel that gold is undervalued, but rather it has shifted, as you can see in trade figures, to major accumulation by sovereign central banks such as Russia and China.
“It is also important to note that in Europe gold has been marked-to-market as far as their reserves are concerned. So the focus of today’s totally transparent attempt to discredit gold is that, yes, it will have an effect on the paper market, but it will have no effect whatsoever on the physical market where in fact the sovereigns trade.
“Sovereigns don’t trade on the COMEX, they never would. Rather sovereigns trade in the physical market in London and elsewhere, and they take delivery of the gold they have purchased.
“The intention of central planners is to remove concern from the general public….”
Jim Sinclair’s, jsmineset.com, 04/102013
Important to Note here
-- The Precious Metals Price Suppression occurs in the Paper Market
-- The Sovereigns Purchase Gold in the Physical Market and take Delivery (Kudos to the Wise Texans and Germans for demanding physical Delivery of their Gold) and
-- Premiums for Physical are already increasing in spite of (arguably because of) the Price Takedowns.
Nota Bene to the Wise: Investors – Get Physical!
And Note Legendary Investment Writer Richard Russell regarding Media complicity with the Mega-Banks Agenda.
“With its all-out printing program in progress, the last thing the Fed wants to see is gold rising (a sign of a depreciating dollar). Thus, the fantastic anti-gold propaganda by the Fed and the government and by all the other inflationists. Meanwhile, many states are petitioning to make gold and silver legal money.”
Richard Russell, DowTheoryLetters.com, 04/10/2013
The message here is Get Physical and Take Personal Delivery – No Bank Vaults.
Finally, an ongoing Development which, if it Materializes, would have a Catastrophically Negative effect on U.S. Federal and State Budgets, and Finances, and thus on Investors/Taxpayers, and all those around the World who suffer when the U.S. Economy and U.S. Dollar denominated Asset Holders suffer.
And it is one of those issues on which most of the MSFM and indeed, MSM, are Complicit in Spinning, Distortion or Outright Censoring the Truth, much to the detriment of Investor Taxpayers. A brief overview of the Facts
-- the MSM reflexibly recite the government estimate that no more than 12 million Illegal Aliens are in the United States; however
-- at least 24 million Illegal Aliens were already in the U.S. in 2004 & probably closer to 30 million today (balance.org and Bear Stearns 2004 report). All would likely be amnestied under the proposed Immigration “Reform” Bill .
Consider several of the Investors-Negative and Economy-Negative Effects of Mass Immigration. First…
Never to be Forgotten is where a Worker's Money goes. Does he/she spend it in the United States, with stimulative effects for the economy and American producers? Or does the money go away? Given that remittances -- money that legal and illegal immigrants send back to their country of origin -- reaches as high as $45 billion annually, one knows that a minimum is spent back into the U.S. economy. How much more profitable it is to hire American workers who spend money at home! As the export market to Europe shrinks, never has it been more important to grow the domestic economy (and thus grow domesticate businesses) by encouraging workers to spend where they earn it!
For example, Mexico receives more remittances from its nationals working in the U.S. than any other country. The large flow of US$ exiting the economy both depresses demand in the domestic market and adds to the negative balance in current accounts. The total of remittances sent to all countries combined reached its peak in 2007, approaching $45 billion total for the year.
The following link shows constant increase reflecting the number of Mexicans working in the US, and also variation depending upon the strength in sectors such as construction.http://www.migrationinformation.org/datahub/remittances/Mexico.pdf
Costs of Amnesty Bill
-- the Net Cost to Taxpayers would be in the $ Trillions. The New Americans, authored by the National Research Council in 1996 reports that the average Middle American immigrant to the U.S. has less than an eighth grade education. With this skill set, immigrants' earning power remains limited, their tax contributions meager, and their use of public services including de facto free healthcare and public education considerable. All who have access to an emergency room MUST BE provided sufficient healthcare to stabilize their medical condition including childbirth, children receive a public education (usually including expensive English As A Second Language - ESL -tutoring) and…
-- 36% of legal and illegal immigrant-headed households are also on some welfare program (cis.org).
-- Existing Immigration law requires Legally admitted immigrants to prove they will not be a burden on the U.S. Taxpayer, however 1.3 million Legal Immigrants are already on U.S. Food Stamp Rolls. Meanwhile, the USDA is planning to furlough Meat Inspectors for ostensible lack of funds!
-- the Heritage Foundation, which estimated that 17.7 Million Illegal aliens were in the United States already in 2004, calculated that EACH Immigrant headed household generated a NET (i.e. after subtracting Taxes paid) Cost of $1.3 Million to taxpayers.
-- the Net (i.e., after subtracting Taxes Legal and Illegal Immigrants paid) Cost of these Households from 2004 through 2013 was $3.9 Trillion (Heritage Foundation, Rector, et al.) and, of course, Trillions more if the Illegal Alien Amnesty (aka ‘Reform’) Bill passes.
U.S. Worker Surplus
-- contrary to Media and Industry Hype, the U.S. does not have a Shortage of Native-Born Science, Technology, Engineering and Mathematics (STEM) graduates. Indeed, there is a 6% to 12% (depending on the Sector) Unemployment Rate among U.S. University STEM graduates (vdare.com). For example, 7.4% of Native-born Computer Science Grads are unemployed.
-- thus there is not a STEM labor shortage necessitating an increase in, or indeed any significant number, of H1B Visas (Matloff, U.C. Davis, Computer Science Professor)
Negative Effect on U.S. Unemployed and Underemployed
-- Amnestying the 24 million-plus Illegal Immigrants in the U.S. would itself increase pressure on Budgets and Taxpayers. Indeed such additional workers such as legalized illegals are in Direct Competition with the 30 Million Unemployed or underemployed Americans for Jobs, and Welfare and Unemployment Benefits.
In January 2013 alone, Foreign-born employment in the U.S. increased by 112,000 while Native-born employment decreased by 95,000. This is a typical monthly trend (Rubenstein, ESR Research and vdare.com).
--"Had a Moratorium been in effect since 1996, the 20.5 Million native-born Americans unemployed or underemployed as of December, 2012 would be as much as 9.85 Million lower today – a reduction of nearly 50%." Ed. Rubenstein, ESR Research, vdare.com.
In sum, if the prospective “Reform” (DC-speak for Amnesty et al.) Bill passes, it will impose Multi-Trillion Additional Net Costs on U.S. Federal and State Budgets and thus be a Dramatic Drag on U.S. Economic Growth and over-taxed Investors.
Thus it is important for Investors to stay apprised of Factual developments on this front.
Readers of Liberal persuasion are encouraged to visit the non-profit balance.org for updates and those of Conservative persuasion to visit the non-profit carryingcapacity.org for updates.
In sum, MSM and MSFM “Reporting” is often Complicit with Mega-Bank and Politicians’ Self-interested Agendas.
Thus it is essential for Investors’ Profit and Wealth Protection to seek Independent Information Sources, however ‘Politically Incorrect’ these sources may be labeled as being.
April 12, 2013
-- Posted Friday, 12 April 2013 | Digg This Article | Source: GoldSeek.com