-- Published: Friday, 18 April 2014 | Print | Disqus
“Former Assistant U.S. Treasury Secretary, Paul Craig Roberts, speculates that the U.S. Government has recruited its satellite countries, like Belgium, to compensate for the ‘tapering’ being done with purchases of U.S. Treasuries by the Federal Reserve.”
“U.S. recruits satellites to compensate for Fed’s ‘tapering’ Roberts tells KWN,” gata.org, 04/16/2014
Indeed, “Tiny” Belgium is now the holder of the third largest Hoard of U.S. Treasuries. Fancy that!
It appears the Fed’s “Tapering” is being at least offset by Belgian Buying.
This and other shenanigans like Bogus Official “statistics” (see Note 1 re Shadowstats.com) make the 2013 Equities Bull Run and the recent Equities Market Sell-Off unsurprising to us.
Indeed, much of our writing is devoted to separating Truth from Spin in order to facilitate more Profitable and Wealth Protective Investing. Thus we offer the following mini-buffet.
Regarding one Major Untruth –that the U.S. Economy is recovering – the Reality is quite the opposite. Indeed, one consequence of the Non-Recovering U.S. Economy is the ongoing Impoverishment of the American Middle Class.
Clearly, (and especially in Inflation-adjusted terms) the Real Median Income of U.S. Households has dropped dramatically since 1989, and since 2007, because U. S. Unemployment is High (23% per Shadowstats.com – Note 1) because American workers are competing against low wage Foreign and Immigrant Labor and because the Economy is not recovering.
“Median U.S. Household Income in 1989 - $51.682
“Median U.S. Household Income in 2007 - $55,000
“Median U.S. Household Income in 2012 - $51,017”
Figures are NOT Inflation Adjusted.
Richie King, Quartz, 2014 Data from U.S. Census
Even worse, because the Purchasing Power of the U.S. Dollar has dropped dramatically in recent years (and The Cause is primarily Fed Money Printing and Fed Credit Bubble facilitation), Americans’ Standard of Living has diminished far more than the nominal Income Numbers would suggest. Thus Americans’ Constrained incomes and the Non-Recovering Economy are suppressing corporate Earnings and Prospects.
But the recent Equities Sell-Off and Mixed (at best) Economic Numbers raise the question “What’s Next?” Is it the beginning of a Great Crash, or a New Rally? We answer these questions in the context of our Forecasts, including Timing Forecasts; and most important, we make recommendations for Profit and Protection in light of these forecasts in our recent Letter and Alerts.
One Key Consideration for the U.S. and International Economy, and therefore Equities Market performance, is that Consumption continues to be Constrained because of continuing Impairment of Structural Consumer Liquidity. Diminishing Real Wages and High Debt loads are The Culprits. Therefore, any Recovery is thus prevented. The same is true of other Major Developed Economies.
Bottom line: The Economy is not recovering (cf. Shadowstats.com, see Note 1) and not likely to recover so long as consumer liquidity is impaired.
A related important Point is that Consumers have not been helped by successive doses of Central Bank QE, notwithstanding Fed and other Central Bank Spin to the contrary.
This is not surprising since QE is aimed at propping up Financial Institutions, (several of which own the Private for-Profit Fed) not (contrary to Bank Public Pronouncements) at helping “Main Street.”
Important to note is one (of several) Quite Significant Deleterious Effect of ongoing Fed QE.
The most Important Deleterious Effect of Ongoing QE is the ongoing Destruction of the World Reserve Currency Status of the $US.
From a Multi-Year Perspective, we have recently had an Harbinger of what is to come as the $US value (basis USDX) dropped below 80. Even the Chinese, who hold Trillions in Dollar Denominated Assets are hurt by the diminished purchasing power of the $US.
This recent $US drop was occasioned in part by decreasing U.S. Purchasing Power Parity. Again, Real Wages have been falling. And unpayable Debt has been rising.
And, Ongoing QE (i.e., Money Printing) is the Primary Culprit.
Fed Policy is destroying the $US as the World’s Reserve Currency, and inflicting a Credit Monster of Excess Debt on the World. The Fed-led Transformation from the Savings-funded Economy of a few decades ago to a Debt-funded one is not sustainable since debt loads of Key Sovereigns have become unpayable.
And if intensifying U.S. Sanctions against Russia impel Russia to begin to accept payment for Russia’s oil and Gas in currencies other than the $US and/or if China pays for Iranian oil and Gas in Yuan, the Demise of the $US will be hastened.
In any event, long-term, since The Fed (and other cooperating CB’s) will have to continue, and increase, QE again to keep interest rates down and Equities propped up a while longer (cf. Deepcaster.com), the already ongoing debasement of the $US Purchasing Power as a result of the Ongoing Currency Wars will become increasingly evident. Therefore at some point the ongoing modest selling (i.e., refusal to support or purchase) of the $US by Sovereigns will turn into a Rout (as will selling of U.S. Treasuries), likely resulting in the collapse of US Treasury Securities Values as well as the displacement of the $US by the Gold-Backed Chinese Yuan as World Reserve Currency. That is where we are headed, like it or not. In other words, the Winners in the Currency Wars will be the Holders of Tangible Assets ¾ Gold & Silver above all, as well as Agricultural and certain (but not all) Energy Assets.
Of course, The Big Winner will likely be China which is importing Huge Quantities of Gold and acquiring Tangible Assets around the World.
And, unspinning the Spin on the Equities Front, consider that Equities are generally overvalued, overhyped (especially the Tech/Social Media Sector which is why we correctly, earlier, warned about Facebook) and supported by Central Bank QE, and “Communications Policy” et al. This recent little Tech Takedown is just the beginning of the Popping of the Tech Bubble. Before it is over it will be worse than 2001-2002.
Billionaire Carl Icahn is correct when he says current Equities levels are “a Mirage.”
Thus we have recently answered the question whether Equities will still have one “Last Gasp Rally” before a Great Crash begins. Consider that the Fed is still engaged in Market Intervention via QE, albeit in Reducing levels, and the Recovery Fiction has been “sold” to most of the Retail Public. [Indeed, our recently recommended profitable Trades have been facilitated by attention to such Interventionals as well as Fundamentals and Technicals (Note 2).]
In any event, we expect the spikes up to be punctuated by Spikes down as Investors realize stocks are quite overvalued. The recent Mini Crash of the NASDAQ is but one example.
As a final dose of Unspun Reality Therapy, consider that the Equities Market will not be helped by Ostensible Job “Growth,” Noah Sugarman via Greg Guenthner explains why: “It turns out that private sector job gains have lagged the growth in adult working age population since 2008,” explains Rude researcher Noah Sugarman. “In 2008, there were about 2 working-age adults for every private sector job. Today, that ratio has widened from 2 to 2.13. That means we’d actually to total more than 123 million jobs to really get back to where we were before the recession.”
In closing it is important to reiterate our earlier observation that the Shortage of Physical Gold is intensifying. Asian, and especially Chinese and Indian Buying, and taking Delivery of Physical continues at Record levels.
Couple that with China’s record January, 2014 lending (i.e., credit creation) year over year (also a 4 year high) and China’s Credit Bubble and Fed Chair Yellen’s promise to Open the Monetary Spigots in the event of a slowdown, and one can see why Gold and Silver have been rising this year until very recently. Inflation is not only already here, with Real U.S. CPI at 9.20% (cf. Shadowstats.com) but it is now becoming visible on the Horizon. The Great Launch up is coming notwithstanding ongoing Cartel Price Suppression (Note 3) and other Mega-Bank attempts to diminish Investor interest in Gold and Silver.
Looking above, beneath and beyond Main Stream Media Spin is essential for Profit and Wealth Protection.
April 18, 2014
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 April 15, 2014
1.51% / 9.20%
U.S. Unemployment reported April 4, 2014
6.7% / 23.2%
U.S. GDP Annual Growth/Decline reported March 27, 2014
2.59% / -1.40%
U.S. M3 reported April 15, 2014 (Month of February, Y.O.Y.)
No Official Report / 3.77% (i.e, total M3 Now at $15.725 Trillion!)
Note 2: Our attention to Key Timing Signals has facilitated Recommendations which have performed well lately. Consider our six most recent*:
• 75% Profit on Crude Oil Call on April 14, 2014 after 13 days (i.e., about 2000% Annualized)
• 60% Profit on Water Management Company on March 3, 2014 after 454 days (i.e., about 50% Annualized)
• 100% Profit on Crude Oil Call on February 10, 2014 after 27 days (i.e., about 1400% Annualized)
• 30% Profit on Equity Index Puts on February 5, 2014 after 8 days (i.e., about 1440% Annualized)
• 55% Profit on Water Management Company on January 15, 2014 after 406 days (i.e., about 50% Annualized)
• 140% Profit on Equity Index Call on December 27, 2013 after just 10 days (i.e., about 5200% Annualized)
*Past Profitable Performance is no assurance of future Profitable Performance.
Note 3: 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 FORTRESS ASSETS LETTER
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-- Published: Friday, 18 April 2014 | E-Mail | Print | Source: GoldSeek.com