-- Published: Friday, 27 March 2015 | Print | Disqus
“The three super-bubbles that I just mentioned (dollars, stock, and bonds) are all in the process of finishing a move. It is hard to say which one will fall first but it is the fall of the dollar which will have the biggest impact on the world. The dollar is not really strong. It has been falling for 50 years. The dollar is currently showing some temporary strength, but that is only because it is the mirror image of every currency in the world. Gold is the best indicator of what is happening to currencies, and all currencies have fallen 97 – 99 percent against gold in the last 100 years. Since the world crisis stated in 2007 and 2008, global debt has gone up by $60 trillion. But the World can never repay this debt. QE is only there to try to save a bankrupt financial system, as central banks buy their own debt. Full 90 percent of ECB bond issuances will be monetized and 100 percent of the Japanese issuances. This means that countries first issue their own debt and then buy it, the ultimate of all Ponzi schemes. Coming back to the three super-bubbles in the United States. Of the dollar, stock market and bonds, I would expect two, if not three, to stat a major and sustained fall this year. This fall will be the beginning of a long and very hard collapse of the world economy. Therefore I see a very difficult time of the world starting in 2015.”
Egon Von Greyerz, Matterhorn Capital Management
“Removing the Word ‘Patient’ does not mean we are ‘Impatient’.”
– Fed Chair, Janet Yellen
Inexorably, Relentlessly a Global Climacteric is coming, though it is to date obvious only to a very few.
It will profoundly affect not only our investments but also all major Nations and their citizenry.
And we will begin to see Visible Major Moves in The Global Climacteric in the next few weeks.
Indeed, we just saw some Precursors recently which the Main Stream Media either “neglected” to publicize or have trivialized.
To understand this Global Climacteric and how to Profit and Protect from it, consider the following and our most recent Letter and Forecasts posted at Deepcaster.com.
Ms. Yellen removed the “Patient” but then undercut that removal entirely by saying The Fed was not impatient, thus sending the signal that the Easy Money (no Fed rate hike) could continue for quite a while.
At that, the $US Fell back to 98ish and the Euro and Gold and Silver Rose.
But the $US is still (for a while) King of the Currency Hill, or more accurately, the Least Dirty Shirt in the Fiat Currency laundry.
But the Key Point is the one made by Von Greyerz, “The dollar is currently showing some temporary strength, but that is only because it is the Mirror image of every currency in the world.”
The U.S. is, supposedly, the Strongest Economy but consider what a Truth-Telling Boston University Economist has to say about that.
“I told them the real 2014 deficit was $5 trillion, not the $500 billion or $300 billion or whatever it was announced to be this year. Almost all the liabilities of the government are being kept off the books by bogus accounting. The government is 58% underfinanced. Social Security is 33% underfinanced. So, the entire government enterprise is in worse fiscal shape than Social Security is, but they are both in terrible shape. [On future prospects] If you take all the expenditures that the government is expected to make, as projected by the Congressional Budget Office (CBO), all the spending on defense, repairing the roads, paying for the Supreme Court Justice salaries, Social Security, Medicare, Medicaid, welfare, everything, and take all those expenditures into the future, and compare that to all the taxes that are projected to come in, then the difference is $210 trillion. That is the fiscal gap. That is our true debt.”
Lawrence Kotlikoff (economist, in testimony before the US Senate, a professor of Economics at Boston University)
Professor Kotlikoff’s comments are most accurately defined by Shadowstats.com’s superb statistics regarding the true state of the American Economy. Note especially that U.S. GDP is a Negative number and Real CPI is over 7% and Real Unemployment is 23.1% (see Note 4).
So, in Deepcaster’s view, we think it unlikely The Fed will raise rates this year. If they were to do that, the Equities Markets would Tank because there is no underlying strength in the U.S. or International Economy.
And the U.S. Debt can never be paid; it will have to be monetized.
Thus a Great Shift away from the $US as World’s Reserve Currency is beginning ¾ truly a Global Climacteric.
But The Key Point goes beyond the U.S.
Japan’s Debt is over 200% of GDP and they are engaging in an Orgy of Monetization.
And the European Central Bank is embarking on a €600 Billion Monetization Binge also.
And even China is easing.
The “Devaluation Currency Wars” are in High Gear.
Well, this Currency War has Many Consequences, many as yet unseen, some unintended. And they spell Profit for the Prepared and Disaster for the Unprepared, which is why Deepcaster has already begun recommending positioning to prepare (See Notes 1 and 2).
But this War is a Zero Sum Game. So how does it end?
In other words, how is the Great Power Shift and ensuing Mega-Move away from the $US as the World’s Reserve Currency manifesting itself?
China is the leading Force behind the BRICS Development Bank, called the New Development Bank (NDC) as well as the Asia Infrastructure Investment Bank (AIIB).
These Banks are designed to supplant The Fed/Mega-Bank Cartel-controlled (Note 3) World Bank and IMF.
Key Point. Not only have all the BRICS Nations joined the AIIB but also Britain and New Zealand, and Australia.
The U.S. was not encouraged to join — a clear Threat to the future of the $US as the World’s Reserve Currency. And the U.S. discouraged its aforementioned Key Allies from joining the AIIB but they did anyway.
Couple the foregoing with two facts.
1) the Chinese are also establishing a Chinese International Payment System (CIPS) to allow Banks to transfer funds without using the U.S. Banking system or the $US. Presumably it will be a vehicle for bypassing The SWIFT System.
2) the Chinese, Russians and Indians are all buying Massive Quantities of Physical Gold and Taking Delivery.
The Great Power Shift is toward a Gold-backed Chinese Yuan as the new World’s Reserve Currency.
Thus $US Displacement (and thus The (informal) Reduce-US-Power Movement) Movement is well underway.
A $US Destructive Mega-Move is approaching.
Thus the Key is Timing, on which we Focus in our Forecasts.
One possible trigger, for both the $US and Treasury Securities, is the Worm which will turn (Down) beginning in a few months when The Fed launches its next round of QE, as Negative Economic Trends and the likely intervening Market Crash will oblige it to do, and likely in Q4 or Q1, 2016.
But when The Fed starts Printing QE again — as it almost surely will — to boost the Equities Markets (which will likely have fallen by then on weak fundamentals), the $US and U.S. Treasuries both will then likely start to tank with the $US moving back down to 85ish basis USDX. At some point after that, the Chinese will likely de-peg the Yuan from its $US trading range, and the Yuan (Gold-backed!) will then be the World’s Reserve Currency.
Indeed, the Swiss have already set a precedent by depegging from the Euro.
The Fundamental Problem is too much Debt worldwide — Global Debt is up $57 Trillion! since 2007, just before the Financial Crisis. And China’s Debt has quadrupled since 2007! with much of that money going into now unused infrastructure, i.e., the famous empty cities. But China has increasing amounts of Physical Gold.
The Recent Several years of excesses of Monetary Inflation (primarily intended to protect the profits of The Private-For-Profit Fed’s Mega-Bank Shareholders/Clients) i.e. QE and Excess Credit, have been Capital Destructive (the more printed, the less each Unit is Worth in Purchasing Power terms). Thus we already see the consequence – Economic Deflation around the World with the Middle Class and Savers and Retirees horribly squeezed.
And worse, the repeated rounds of Monetary Inflation will eventually lead to Hyper-Price Inflation, and already have for Middle Class U.S. Citizens who have to pay increasing prices for Housing, Food and Medical Care. Result: increasing Stagflation, the worst of both worlds.
Therefore, preparing Now to Profit and Protect from the Impending Climacteric is in order.
March 27, 2015
Note 1: Our attention to Key Timing Signals and Interventionals and accurate statistics has facilitated Recommendations which have performed well lately. Consider our profits taken in recent months in our Speculative and Fortress Assets Portfolios*
• 60% Profit on a Telecommunications Company on March 11, 2015 after just just over 3 years (i.e., about 20% Annualized)
• 45% Profit on a Currency Double Short ETF on January 22, 2015 after just 9 months (i.e., about 59% Annualized)
• 23% Profit on a leveraged ETN on the Volatility Index on January 6, 2015 after just 119 days (i.e., about 70% Annualized)
• 85% Profit on a REIT on December 31, 2014 after just three years (i.e., about 25% Annualized)
• 105% Profit on a leveraged ETN on the Volatility Index on October 15, 2014 after just 36 days (i.e., about 1090% Annualized)
• 70% Profit on Russell 2000 Small Cap Sector Put on October 10, 2014 after just 2 days (i.e., about 12,275% Annualized)
• 70% Profit on Russell 2000 Small Cap Sector Put on October 1, 2014 after just 8 days (i.e., about 3215% Annualized)
• 55% Profit on Double Short Euro Call on August 6, 2014 after just 106 days (i.e., about 200% Annualized)
• 65% Profit on Energy Storage & Management Company on July7 15, 2014 after just 342 days (i.e., about 70% Annualized)
• 95% Profit on Crude Oil Call on June 11, 2014 after just 73 days (i.e., about 470% Annualized)
*Past Profitable Performance is no assurance of future Profitable Performance.
Note 2: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, Negative Real GDP growth, and 7.55% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults.
One Sector full of Opportunities is the High-Yield Sector. Deepcaster’s High Yield Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (7.55% per year in the U.S. per Shadowstats.com).
To consider our High-Yield Stocks Portfolio recommendations with our most recent recommendation sporting a recent Yield of 16%, as well as others with Yields of 10.6%, 18.5%, 10.7%, 26%, 8%, 15.6%, 8.6%, 10%, 6.7%, 14.9%, 8.8%, 10.4% and 15.4% when added to the portfolio, go to Deepcaster.com and click on ‘High Yield Portfolio.’
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 July, 2014 Letter entitled "Profit, Protection, Despite Cartel Intervention" in the ‘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, and manipulation in other Markets. 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.
Note 4: 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 25, 2015
-0.03% / 7.55%
U.S. Unemployment reported March 6, 2015
5.54% / 23.1%
U.S. GDP Annual Growth/Decline reported March 27, 2015
2.38% / -1.64%
U.S. M3 reported March 8, 2015 (Month of February, Y.O.Y.)
No Official Report / 5.71% (i.e., total M3 Now at $16.54 Trillion!)
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-- Published: Friday, 27 March 2015 | E-Mail | Print | Source: GoldSeek.com