-- Published: Monday, 15 February 2016 | Print | Disqus
“The Central Banks are getting Desperate. The interventions are so obvious now you’d have to be on drugs not to notice them.
“On Monday afternoon, at 3PM ‘someone’ stepped in to prop up stocks. They did it again yesterday at 10AM. There were obvious interventions.
“How do we know this was intervention and not real buying?
“Because no real buyer guns the markets 20+ points higher in a matter of minutes.
“Real investors carefully try to buy stock without gunning the market higher. If the market explodes higher, you get a worse entry point.
“Why are Central Banks desperately trying to ‘save’ stocks?
“Because the markets have lost faith in their abilities.”
“‘Someone’ Desperately Intervened to Save Stocks Yesterday,”
Phoenix Capital Research, 02/10/2016
Indeed, investors are increasingly losing faith in the Central Banks ability to “Save” the Markets. Many months of the private for-Profit Fed Zero Interest-Rate Policies have certainly not saved the U.S. Economy or Markets, and indeed, the Negative Interest Rate Policies of Japan, Sweden and other have not saved their Economies or Markets either.
But even worse, Major Central Banks and Governments have long been intervening in virtually all Major Markets, creating extraordinarily damaging distortions.
Therefore, it is essential to Monitor the Interventionals, as Deepcaster does, as well as the Fundamentals and Technicals for Investment and Trading Success.
Consider Nanex Market Analyst Eric Scott Hunsader’s View:
“MarketWatch this week published a profile of market date analyst, Eric Scott Hunsader of Nanex, in Winnetka, Illinois, who may have done more than anyone to expose the crookedness of high-frequency trading, quote stuffing, and spoofing on U.S. exchange and whose work has been crucially publicized by Zero Hedge. While it’s great that Hunsader should get such recognition of his service to the restoration of free and transparent markets, the MarketWatch profile unfortunately omits what may be his greatest service, his disclosure of U.S. Securities and Exchange Commission and Commodity Futures Trading Commission documents showing that Central Banks and governments are secretly trading all major U.S. futures markets…”
And the interventions are not limited to the Equities Markets but extend to the Sovereign Bond Markets—Former Asst. Secretary of the Treasury, Paul Craig Roberts, has amassed considerable evidence that The Fed has Bought U.S. Treasuries through Belgium to support the Bond Market.
And Deepcaster and many others have for years documented the Central Bank Suppression of Gold and Silver Prices to bolster the ostensible value of their (paper/digital) Fiat Currencies and (paper/digital) Treasury Securities.
But in 2016, as Central Bank Policies are increasingly visibly Failing. Investors, Traders and the Public at large are increasingly seeking the Safe Haven of Real Money—Gold and Silver—despite Price Suppressive Banking Cartel (Note 1) Interventions.
See our analyses below regarding how best to profit and protect wealth.
As we demonstrate, The Central Banks’ main goal is the protection of its Clients, the Mega-Banks, and not necessarily (or at all) the Citizenry at large. This is especially True in the case of the private for-profit Fed whose shareholders are the Globalist Mega-Banks themselves.
This explains the “Bankers Parasite Behavior” of which Jim Rickards speaks.
“Bankers’ parasitic behavior, the result of a cultural phase transition, is entirely characteristic of a society nearing collapse. Wealth is no longer created; it is taken from others. Parasitic behavior is not confined to bankers; it also infects high government officials, corporate executives and the elite societal stratum….”
Jim Rickards, The Death of Money, June 2014
A Major Goal of the intensifying Mega-Bank Markets Interventions is arguably continued Mega-Bank Profits from (aka Parasitism on) the Economies which Support them. The following Factual Overview is essential to understand this phenomenon and to Profit and Protect.
First, Regarding Official Statistics, Headline, Mainstream Media and Government Agencies (e.g., BLS in USA and Chinese Agencies in China) support the Bogus /Spun View of Economic Realities.
That is, in order to Profit and Protect despite Cartel (Note 1) Interventions, it is first important to understand that Official Statistics and News Reports in Major Countries are often Bogus.
Considering the U.S., for example, Real Unemployment (January, 2016) is 22.9% and Real Inflation is 8.36% per Shadowstats.com which calculates the statistics the way they were calculated decades ago before the numbers became so politicized. (See the section “Indirect Manipulation” below.).
Consider a Reliable source of Real Numbers — Shadowstats.com — latest report.
“Employment and Unemployment—January 2016—Annual Benchmarking of Payroll Data, and Annual Population Revisions to Unemployment Data, Highlighted Heavily-Flawed Labor Reporting. Underlying reality for U.S. labor conditions in January 2016 was in the realm of a 22.9% broad unemployment rate, with headline monthly payroll employment change likely flat-to-minus, month-to-month and slowing sharply year-to-year, as reviewed in the main text. …
“Separately, Household-Survey reporting suffered a double set of distortions. First was the annual revamping of population controls, which made most headline numbers in the Household Survey not comparable between December and January. Changes in factors such as the level of employment, unemployment and labor force all varied (but not necessarily proportionately) along with changes in estimated population. For example, where the headline population rose month-to-month in January by 461,000, population-control changes accounted for 265,000 of the gain; where headline employment jumped by 615,000, population-control changes added 206,000.”
“Effective Reporting Fraud. The problem remains that the BLS does not publish the monthly historical revisions along with the new headline data. As a result, current headline reporting is neither consistent nor comparable with prior data, and the unreported actual monthly variations versus headline detail can be meaningfully large. The deliberately-misleading reporting effectively is a fraud. The problem is not with the BLS using concurrent-seasonal-adjustment factors; it is with the BLS not publishing consistent data, where those data are calculated each month and are available internally to the Bureau.”
And in Summary as of February 6, 2016
“Mounting Concerns for U.S. Economy Have Begun to Trouble the Dollar
“Revisions Weakened Payroll Growth, Confirmed Non-Comparable Seasonal Adjustments
and Disrupted Month-to-Month Household-Survey Detail
“Year-to-Year Payroll Growth Hit a 20-Month Low
“January 2016 Unemployment Rates:
U.3 at 4.9%, U.6 at 9.9%, and ShadowStats at 22.9%
“Worst Quarterly and Annual Real Merchandise Trade Deficits Since 2007
“Fourth-Quarter Construction Spending Contracted
“Repeating a Pattern Last Seen at Onset of the Economic Collapse,
Growth Has Turned Lower for M3 and Higher for M2 and M1
“Monetary Base Has Continued in Year-to-Year Decline”
“Labor Conditions, Employment Benchmark, Trade Deficit and Construction Spending, February 6, 2016,” Shadowstats.com
The Economy is not recovering.
Just as many official Statistics are Not Accurate, Inaccurate often also are Mainstream Media (MSM) Reporting of Major Financial and Economic Events.
For example, as former OMB Director David Stockman points out, The Fed’s 2008 Bailout Actions via TARP et al were basically a multi-hundred Billion Wealth Transfer from Savers and Taxpayers to the Mega Banks and other Financial Institutions. But the Mainstream Media certainly did not present it that way. Instead, they propagated the fiction that the Bailouts were necessary to “save the Financial System.”
“Then, when the Fed’s fire hoses started spraying an elephant soup of liquidity injections in every direction and its balance sheet grew by $1.3 trillion in just thirteen weeks compared to $850 billion during its first ninety-four years, I became convinced that the Fed was flying by the seat of its pants, making it up as it went along. It was evident that its aim was to stop the hissy fit on Wall Street and that the threat of a Great Depression 2.0 was just a cover story for a panicked spree of money printing that exceeded any other episode in recorded human history….
“Because they stopped it in its tracks after the AIG bailout and then all the alphabet soup of different lines that the Fed threw out, and then the enactment of TARP, the last two investment banks standing were rescued, Goldman and Morgan [Stanley], and they should not have been. As a result of being rescued and having the cleansing liquidation of rotten balance sheets stopped, within a few weeks and certainly months they were back to the same old games, such that Goldman Sachs got $10 billion dollars (from The Fed – ed.) for the fiscal year that started three months later after that check went out, which was October 2008. For the fiscal 2009 year, Goldman Sachs generated what I call a $29 billion surplus – $13 billion of net income after tax, and on top of that $16 billion of salaries and bonuses, 95% of it which was bonuses.
“Therefore, the idea that they were on death’s door does not stack up. Even if they had been, it would not make any difference to the health of the financial system. …
“The banks quickly worked out their solvency issues because the Fed basically took it out of the hides of Main Street savers and depositors throughout America….
“Well, once you basically unplug the pricing mechanism of a capital market and make it entirely an administered rate by the Fed, you are going to cause all kinds of deformations as I call them, or mal-investments as some of the Austrians used to call them, that basically pollutes and corrupts the system. Look at the deposit rate right now, it is 50 basis points, maybe 40, for six months. As a result of that, probably $400-500 billion a year is being transferred as a fiscal maneuver by the Fed from savers to the banks. They are collecting the spread, they’ve then booked the profits, they’ve rebuilt their book net worth, and they paid back the TARP basically out of what was thieved from the savers of America.”
David Stockman, Frmr Head, OMB & Member, House of Representatives, (1977-81) The Great Deformation: The Corruption of Capitalism in America, 2013
The private-for-profit Fed’s Ongoing Intervention in the Markets on behalf of their owners/shareholders, the Mega-Banks, is an old and ongoing story. Unfortunately, it is having several ongoing and worsening Negative Consequences (including those Stockman points out) on Investors, Retirees and Main Street in general.
Not so well publicized is The Fed/Mega Banks’ ongoing interventions to Suppress the Prices of Gold and Silver (and boost the $US) because Gold and Silver are the Legitimate Competitor to the Fed’s (and other Central Banks) Fiat Currency(ies) and Treasury Securities.
And recently, former Asst. Secretary of the U.S. Treasury, Paul Craig Roberts, has exposed another Federal Reserve activity to disguise their continuing manipulation. Indeed, pointing out, many Central Banks actions are Covert. For example, The Fed is not really Tapering in 2013-2014:
“Is the Fed ‘tapering’? Did the Fed really cut its bond purchases during the three month period November 2013 through January 2014? Apparently not if foreign holders of Treasuries are unloading them.
“From November 2013 through January 2014 Belgium with a GDP of $480 billion purchased $141.2 billion of US Treasury bonds. Somehow Belgium came up with enough money to allocate during a 3-month period 29 percent of its annual GDP to the purchase of US Treasury bonds.
“Certainly Belgium did not have a budget surplus of $141.2 billion. Was Belgium running a trade surplus during a 3-month period equal to 29 percent of Belgium GDP?
“No, Belgium’s trade and current accounts are in deficit.
“Did Belgium’s central bank print $141.2 billion worth of euros in order to make the purchase?
“No, Belgium is a member of the euro system, and its central bank cannot increase the money supply.
“So where did the $141.2 billion come from?
“There is only one source. The money came from the US Federal Reserve, and the purchase was laundered through Belgium in order to hide the fact that actual Federal Reserve bond purchases during November 2013 through January 2014 were $112 billion per month….
“Why did the Federal Reserve have to purchase so many bonds above the announced amounts and why did the Fed have to launder and hide the purchase?
“Some country or countries, unknown at this time, for reasons we do not know dumped $104 billion in Treasuries in one week….
“The Fed realized that its policy of Quantitative Easing initiated in order to support the balance sheets of ‘banks too big to fail’ and to lower the Treasury’s borrowing cost was putting pressure on the US dollar’s value. Tapering was a way of reassuring holders of dollars and dollar-denominated financial instruments that the Fed was going to reduce and eventually end the printing of new dollars with which to support financial markets. The image of foreign governments bailing out of Treasuries could unsettle the markets that the Fed was attempting to sooth by tapering….
“Washington’s power ultimately rests on the dollar as world reserve currency. …
“If the world loses confidence in the dollar, the cost of living in the US would rise sharply as the dollar drops in value. Economic hardship and poverty would worsen. Political instability would rise.
“If the dollar lost substantial value, the dollar would lose its reserve currency status. Washington would not be able to issue new debt or new dollars in order to pay its bills….”
“Fed Disguising QE by laundering it through Belgium,” Paul Craig Roberts, paulcraigroberts.org, 05/12/2014
Mega-Bank Market Manipulation extends to Boosting Prices (e.g., recently in Equities Markets) and Price Suppression (as for years in Gold and Silver Markets).
Even the August Financial Times of London has recently run a set of Articles revealing the Central Banks’ “Burgeoning Market Manipulation Support” which the website, Naked Capitalism, accurately summarizes as “Mission Leap” at The Fed. The Central Bank is moving unabashedly into price-setting, and stealth, or formally backstopping, of more and more Markets. — Do we have a move toward Marxist Central Planning here?
These Interventions provide a Challenge to Investors, and a Threat to their Wealth, but also Great Opportunities to Profit and Protect Wealth provided one understands and tracks them, as we explain here.
The Gold Antitrust Action Committee has done a remarkable job in Exposing this price suppression in Gold and Silver Markets.
“Western central banks conceal their gold loans and swaps because information about them is ‘highly market-sensitive and accountability about them would hinder secret currency market interventions by central banks, according to a confidential report by the International Monetary Fund obtained this week by GATA. …
“This is, the explicit but secret policy of Western central banking toward gold is to deceive and manipulate markets, as GATA long has complained. …
“Secret IMF report: Hide gold loans and swaps for market manipulation,”
The GATA Dispatch, Gold Anti-Trust Action Committee, 12/11/2012
Gold and Silver are the Metallic Canaries which, absent Price Suppression, would signal many Economic Negatives, including the Price inflationary effect of The Fed’s and other Central Banks QE. The Fed et al have become increasingly desperate to conceal these Hidden Realities as the Cartel’s (Note 1) dramatic April, 2013 Takedown shows.
“[O]n Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. …
“…with naked shorts, no physical metal is actually sold…
“Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.
“Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?
“What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.
“Who can afford to lose that kind of money? Only a central bank that can print it.”
“Assault on Gold Update,” Paul Craig Roberts, Frmr Asst Treasury Sec’y Reagan Administration, PaulCraigRoberts.org
Roberts also explains one Major Reason The Fed is short selling bullion.
“The fact that the Federal Reserve is short selling bullion means that there is something desperate going on. I assume it is related to the USDollar. If the dollar drops sharply in exchange value, the Fed cannot control the interest rate and the bond price, and so all of the bubbles would blow up. All of the recent reports of countries moving away from the dollar to settle their international payments have most likely caused a great many countries to look at getting out of dollars. We not only have the BRICs moving away from the use of the dollar, but also China, Japan, and all of the East Asians. Recently we have even seen reports out of Australia that they are going to deal directly with China in their own currency. So this drop in demand for dollars when the Fed is creating one trillion new dollars every year means the exchange value of the US dollar is untenable.” (Emphasis added –ed.)
Dr. Paul Craig Roberts, quoted in “Global Money War Report,”
via Jim Willie, goldenjackass.com, 04/21/2013
This Ongoing Suppression of Gold and Silver Prices tends to legitimize and bolster the Ostensible Value of Major Nations’ Treasury Securities and Fiat Currencies as stores and measure of value vis-à-vis Gold and Silver.
Remarkably, The BIS, The Central Bankers’ Bank, advertised in June, 2008 that one of its “Products” was “Interventions” in the Gold Market, as well as Currencies.
The Price Suppression Scheme is International, involving many Banks as Mr. Rigaudy’s characterization implies.
“Our Products – Forex and Gold Services > Interventions”
The Bank for International Settlements (BIS): An Introduction
Jean-François Rigaudy, Head of BIS Treasury, June, 2008
Indeed, the aforementioned recent example of the Cartels Precious Metals Price Takedown shows The Cartel’s (Note 1) increasing desperation and determination to hide the Negative Effects of QE from the Public. But increasing purchases of Gold and Silver by, and Delivery to, China and India make it increasingly hard for The Cartel to maintain its Price Suppression Scheme. Indeed, Deepcaster has forecast the timing of a Great Launch up of Gold and Silver Prices in its latest Letter and Alerts.
Further, it is essential to review several facets of, and Key Points in the History of and current record of Manipulation which are crucial to understand the variety of Effects, and how to Profit and Protect from them (and see e.g., Notes below). Consider…
Indeed, there are several Negative consequences of this Mega-Bank Cartel Market Manipulation for Investor Citizens around the World.
“We have had a Fed engineered serial bubble, that has created the appearance of wealth, that has caused people to consume beyond their means through borrowing, and that has flushed the income and wealth of our society up to the top, as a result of the Fed turning the financial markets into a casino. These are pure casinos, they are not capital markets, they are not adding to the productive capacity of our economy, they simply are a bunch of robots trading with each other by the millisecond as a result of the Fed giving them zero cost overnight money, and giving them all kinds of hand signals on what to front-run.
“The Fed is destroying prosperity by funding demand that we can't support with earnings and production, causing massive current accounts deficits and the flow of funds overseas and the build up in China, OPEC and Korea of massive dollar reserves which is a totally unsustainable, unsupportable system, and we are coming near the edge of where that can continue to remain stable.”
Stockman, December, 2010
Indeed! The Debt and Equities Bubbles of early 2016 demonstrate the prescience of Stockman’s comment.
Among the Mega-Banks holding huge Precious Metals and other Derivatives Positions are familiar names (JPM Chase held a Derivative Portfolio of some $70 Trillion Notional value in 2010, for example).
“This report (Q1 2010 Bank Derivatives report – ed.) contains more evidence that a flood of paper gold and silver instruments are being used to divert investor capital away from the purchase of the actual physical metals in order to suppress prices…
“Two bullion banks, JPM and HSBC, continue to dominate the precious metals derivatives market with positions that are outrageously oversized compared to the underlying metals markets…”
“Manipulative Gold & Silver Derivative Positions Continue to Grow!”
Adrian Douglas, Marketforceanalysis.com, 6/26/10
Other Negative Consequences of Massive Fed and other Mega-Bank QE (Money “Printing” and Credit Facilitation) were presciently identified by Bob Chapman (R.I.P.) and Warren Buffet.
“Banana Ben, like his equally pernicious predecessor, Easy Al, is trying to paper over declining US living standards by orchestrating asset bubbles. Ironically, …
“Soon Ben will be at his Rubicon. He must then either monetize everything or allow short rates to explode higher. This of course would precipitate the dreaded debt deflation that solons have tried to avert.”
Bob Chapman, International Forecaster, 12/18/10
And, we should add that Janet Yellen and her Fellow FOMC Members are doubling down on Banana Ben’s Policies.
“Charlie and I are of one mind in how we feel about derivatives and the trading activities that go with them: we view them as time bombs, both for the parties that deal in them and the economic system.”
Warren Buffet, February 21, 2003
The Fact that The Fed was not tapering when it said it was but rather was (and is) increasingly monetizing. This Phenomenon could reasonably be considered one of The Time Bombs to which Buffet refers. Yes, The Fed and other central Bankers are still Massively Monetizing (i.e. printing/digitizing Money and Buying) Sovereign and other Debt, and thus creating even Massive Asset Bubbles in the Treasury and Corporate Bond and Equities Markets as well.
For example, in the December, 2011 to February, 2012 period The ECB injected One trillion Euros’ into the International Economy on top of all the Fed QE and other injections.
Thus, this Immense and Ongoing QE provides Great Profit and Wealth Protection Opportunities (see Notes 3 and 4) as well as Great Systemic Threats, as we explain.
Indeed, near the end of the Fall, 2008 Equities Market Crash (i.e. as of December 2008) there were about U.S. $548 Trillion in Notional OTC (i.e. Dark, Not Exchange Traded; thus traded mainly by Mega-Banks) Derivatives still outstanding worldwide.
Yet nearly eight years later (as of September 2015 – the latest BIS Report date) that total was at about $434 Trillion Notional Value of Interest Rate Derivatives alone! according to the Central Banker’s Bank, the Bank for International Settlements (http://www.bis.org/statistics/derstats.htm > D5: D5.1 & D5.2). Consider that the entire world GDP is only about $70 Trillion.
Warren Buffet is surely correct to label such massive quantities of Derivatives as “Time Bombs” because the leverage inherent in them is both a threat to Investors and to the financial system.
Clearly, a Conclusion that Systemic Risk (generated by Derivatives Exposure which existed, e.g., at AIG prior to the Crash) has somehow been substantially lessened by the actions of the private for-profit Fed, the European Central Bank, the U.S. Government, or any other source, is wrongheaded. Indeed, Taxpayers bailed out AIG to the tune of $180 Billion to “save” the Mega-Banks and other institutions holding such, because AIG insured those Derivatives. A Giant Moral Hazard going forward.
In addition, there is the risk of the Trillions of “Dark (i.e., non-public) Derivatives”.
Given the Massive Size and Impact of the over $700 Trillion in Dark OTC Derivatives, Investing or Trading without addressing the issue of ongoing and prospective Cartel* Market Interventions is a recipe for disaster.
Thus, we offer this Overview and Update regarding The Interventional Universe to provide a Springboard for the Profits and Protection Strategy which we outline here and in our Letters and Alerts. And we offer Buy Recommendations designed to profit from Forecast Mega-Moves. See Notes 2, 3 and 4 below, for example, re Buy Recommendations and Recent Profits Taken.
[This February 2016 Article is the Sixteenth in a series of Deepcaster's work originally entitled “Juiced Numbers”. It provides an Updated Overview and Summary of Market Intervention and Data Manipulation. It reflects Analysis of key recent Releases from (and actions of) the BIS (Bank for International Settlements – The Central Banker’s Bank), BLS (Bureau of Labor Statistics) and The U.S. Federal Reserve, as well as Highlights of recent Interventions, and updates regarding The Cartel* “End Game.” For the sake of Brevity, we refer to our earlier articles in this series.]
Bailouts and Stimuli have afforded The Cartel a whole panoply of additional tools for Market Intervention which they did not possess even ten years ago. These tools make tracking “The Interventionals” ever more challenging. In sum, this report provides even more evidence of increased Risk of Hyperstagflation and/or Systemic Collapse, and of the beginning of the attempted implementation of The Cartel’s Nefarious “End Game” (see “Saving Investments, Sovereignty, & Freedom from the Cartel ‘End Game’ (1/13/11) in the ‘Articles by Deepcaster’ cache at deepcaster.com).
Moreover, it provides evidence that the private for-profit Fed’s and its allied Mega-Banks’ Policies and Actions are the Primary Cause of the Economic and Financial Crises from which we suffer today.
Therefore, Deepcaster has a Systemic Solution and a Strategy for profiting and protecting from the Interventional Regime’s actions and policies, and coping with its ‘End Game’ Strategy for which the following is Essential Background.
The Covert Interventional Context – Overview
Deepcaster is periodically asked to explain, and provide evidence for, our view that a U.S. Federal Reserve-led Cartel* (apparently composed of the U.S. Federal Reserve, Major Central Bankers and key Primary Dealers manipulates a wide variety of markets. [Apparently one “Operational Vehicle” through which The Cartel works is called “The President’s Working Group on Financial Markets” established by Congress after the 1987 crash, and which is often informally and widely referred to as “The Plunge Protection Team” or PPT.]
Essential to maximizing profits and to avoiding losses is to recognize that the Fed-led Cartel (Note 1) manages two complementary Interventional Regimes – one quite public, and the other dark one, at least as powerful, covert. (A glimpse into this Covert Regime was afforded via the Partial Audit mandated by the Dodd-Frank Bill.) Thus, a critical key to profit and loss is tracking the “Dark Interventionals” (which often leave “Tracks” so to speak) as best one can, as well as the public ones.
Moreover, whether an Intervention is Overt or Covert is often a matter of degree. Overt Intervention often has a Covert aspect (e.g. how was that TARP Bailout Money used and who received it?), and Covert ones are often difficult to detect, but nonetheless can often be tracked using publicly available information. Consider for example, Paul Craig Roberts’ Exposés of Covert Interventions above.
It is important to note also that by “Cartel Intervention” we do not (usually) mean that the Cartel totally controls prices in any particular market, at all times. Various markets are affected in varying degrees, at varying times, by Cartel manipulation attempts.
In markets such as the (relatively) Small Cap markets for Gold and Silver Bullion and especially Mining Stocks, Cartel manipulation attempts can have much more impact and are, at times, and for certain time periods, tantamount to control.
COVERT DIRECT INTERVENTION
Covert Direct Intervention to manipulate a variety of markets appears to be accomplished primarily via four categories of vehicles:
1) “Repo” Injections from The Fed (TOMO’s & POMO’s though POMO injections have become more widely reported recently)
2) Over The Counter (OTC) Derivatives (reported at www.bis.org, see above)
3) “Bailout” monies and Authorizations which Congress unwisely gave the Fed without requiring full disclosure or Oversight and, in particular, the TARP and TSLF (Term Securities Lending Facility) injections by The Fed, QE1, QE2, QE3 and the ongoing QE4, and other Vehicles such as the Primary Dealer Credit Facility (PDCF)
4) Debt Monetization and Credit Facilitation by The Fed and other Banks such as the ECB and its $1 Trillion Dec. 2011, February 2012 LTRO Operation, or The Fed’s covertly Purchasing U.S. Treasuries through Belgium in 2013-2014 (see above).
[For fuller Explanation, see Deepcaster’s Article “PROFIT & PROTECTION FROM CARTEL INTERVENTION -- Including New Interventional Tools Description “ (12/23/09) in the ‘Articles by Deepcaster’ Cache at www.deepcaster.com and for details regarding Cartel use of Repos, Derivatives, Bailout Monies and other Vehicles see the July, 2009 Letter.]
The Challenge: Determining the Impact of The Interventionals
The challenge for Investors and Forecasters is to determine where (i.e. in what Sector/s) and how (immediately, in increments, etc.) the Repo-backed funds and/or TARP/TSLF/Bailout/QE/LTRO Funds and/or OTC Derivatives (“Interventional Funds”) etc. will be employed. Deepcaster and those very few others, who monitor the Interventional Funding (and related Cartel and Allies’ actions) to the extent that is feasible, make educated Forecasts of where and how such funds are likely to be used based on patterns, tendencies, and judgments virtually all of which can be gleaned or inferred from publically reported information. But no outsider can know for sure.
Those who doubt whether the Cartel has the capacity to manipulate the markets (and especially the larger markets like the multi-trillion dollar currency and bond markets) are invited to inform themselves about the U.S. Trillions plus of OTC Derivatives (see www.bis.org Path: Statistics>Derivatives) at Fed Primary Dealer J.P. Morgan Chase, or those at Fed Primary Dealer Goldman Sachs and Fed Primary Dealer Citibank.
Indeed both Opportunities for and Threats to Investors are generated by Cartel Policies and the Massive OTC Derivatives positions. Consider:
“With Key Mega-Financial Institutions around the World claiming in 2008 that they risked collapse if they were not bailed out, one must ask which ones benefited from the $15 Trillion plus Increase in Gross Market Value of their OTC Derivatives in the six months between June, 2008 and December, 2008 when the Equities Markets were crashing and Investors around the world were losing trillions? A logical Conclusion: Key Central Bankers and Favored Financial Institutions of The Fed-led Cartel*, quite possibly including the shareholders of the private for-profit U.S. Federal Reserve” (cf. BIS Table 19 cited above)”
Deepcaster, May 29, 2009
Key Statistics continue to be gimmicked by Official Sources in Major Countries including especially the USA and China much to the detriment of American Citizens and Investors Worldwide. One result of this is that the extent to which Mega-Bank Policies result in the Confiscation or Devaluation of Investor Wealth, is hidden.
Investors and citizens-at-large are misled by Official Statistics which have been gimmicked in the USA, as shadowstats.com demonstrates. All of the following Real Numbers for the USA are calculated by shadowstats.com, which calculates them according to traditional methods used in the 1980s, and early 1990s, before The Political Adjustments currently being utilized began in earnest.
As the Real Numbers mentioned below demonstrate, the USA’s ongoing economic and financial crisis is not merely a “normal” business cycle Recession, but an ongoing System-Threatening Crisis. Indeed, we are on the Threshold of a Hyperinflationary Depression. (See below)
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported January 21, 2016
0.73% / 8.36%
U.S. Unemployment reported February 5, 2016
4.92% / 22.9%
U.S. GDP Annual Growth/Decline reported January 29, 2016
1.80% / -1.72%
U.S. M3 reported February 4, 2016 (Month of January, Y.O.Y.)
No Official Report / (e) 3.93% (i.e., total M3 Now at $17.071 Trillion!)
Knowing the Real Numbers facilitated Deepcaster’s and others Investment Recommendations and his making five short (and subsequently quite profitable) recommendations to subscribers just before the 2008 Financial Crisis.
To understand the motives and Goals for Fed and Cartel Policies and actions consider:
A Brief Anatomy of the “U.S.” Federal Reserve
Indeed, the Profit Motive lies behind Fed Actions. Even the most causal student of Economic History knows that the United States’ Federal Reserve system, or “The Fed” as it is called, is not a U.S. government owned or controlled entity.
Various international private banks, several of which are headquartered in Europe, own “shares” in the “United States” Fed. Moreover, this “United States” Fed leads a Cartel of Central and Private Banks* who collectively intervene in a wide variety of markets, as Deepcaster demonstrates here. All this is obviously quite financially incestuous, and, to the extent The Fed regulates these Banks, it is a clear Conflict of Interest.
These International Bankers, acting through their “U.S.” Fed, profit both by creating money out of “thin air” and by collecting “interest” from U.S. Taxpayers on the Treasury Securities it has bought with U.S. Dollars (Federal Reserve Notes) it has created out of thin air. The Dean of the Newsletter Writers, Richard Russell, eloquently describes all this:
“I still can’t get over the whole Federal Reserve racket…
“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.”
Richard Russell (RIP), “Richards Remarks,” dowtheoryletters.com, 3/27/2007
[Historical note: recall that President John F. Kennedy was unhappy with Fed policy and therefore caused U.S. Notes to be printed by the U.S. Treasury as Constitutionally Authorized and as a substitute for Federal Reserve Notes. The issuance of these U.S. Notes ceased shortly after President Kennedy's Assassination a few months later.]
The one conclusion that one can make from the foregoing is that the failure to take account of the power, force and pervasiveness of Fed-led Cartel Manipulations (i.e. The Interventionals) is an invitation to financial and investment disaster (see 12/23/09 Article, Ibid. See also Note 4 regarding Deepcaster’s attention to Key Timing Signals and Interventionals and accurate statistics which has facilitated Recommendations which have performed well in the last eight months).
The Interventional Regime – Motive, Causes and Consequences
Clearly, The Cartel has created a Financial System subject to ever-greater Systemic Risk. Why?
Harry Schultz, the Eminent Guru of the Financial Newsletter writing fraternity, puts the question in this way when writing about the Financial Crisis –
“what is the reason for this seemingly random monetary mess that multiplies its momentum every day? The answer, in one word, control. The elite/insiders already have control of the financial system, but they wanted more, much more…and it was not random, it was planned.” (emphasis added)
Harry Schultz, HSLetter
Since the cornerstone of The Cartel’s power lies in maintaining the legitimacy of their Fiat Currencies and Treasury Securities, the last thing they want is to have Gold, Silver and Tangible Assets held by investors to increasingly be seen as the Ultimate Stores and Measures of Value rather than their Fiat Currencies and Treasury Securities, in other words, as money. Thus they will continue attempts at Takedowns of Gold and Silver and other Hard Asset prices.
Cautions for Investors and Traders Regarding Interventions
Interest Rate Manipulation & The Bond Market
Increased Systemic Risk and “Earned” Liquidity versus “Borrowed” Liquidity
A Systemic Solution
The Cartel End Game
A Strategy for Investors & Traders
In sum, in addition to Physical Gold and Silver and quality Miners, Key Tangible Assets acquired at the Right Time (see Deepcaster’s recent Recommendations) are the Keys to Profit and Wealth Protection.
Also essential for Profit and Protection are Short positions put on at the right time. (See Note 2.)
Therefore, Deepcaster provides an extensive list of Sectors in which one should “Buy the Dips” or alternatively Short the Bounces, in his February, 2016 Letter in ‘Latest Letter and Archives’ at Deepcaster.com.
February 12, 2016
Note 1: * 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 2: Recent Profits Taken: Our attention to Key Timing Signals and Interventionals and accurate statistics has facilitated Recommendations which have performed well lately. Consider our profits taken in the last six months in our Speculative and Fortress Assets Portfolios*:
• 65% Profit on Short Junk Bond position on February 11, 2016 after just 52 days (i.e., about 465% Annualized)
• 30% Profit on Short Financial ETF position on February 9, 2016 after just 18 days (i.e., about 655% Annualized)
• 30% Profit on Short Junk Bond position on February 8, 2016 after just 49 days (i.e., about 225% Annualized)
• 90% Profit on Short Small Cap Equities ETF on January 20, 2016 (i.e., about 30% Annualized)
• 75% Profit on Short Small Cap Equities ETF on January 15, 2016 (i.e., about 25% Annualized)
• 28% Profit on a Long Treasury Bond Treasury Bond Position on January 12, 2016 after just 71 days (i.e., about 140% Annualized)
• 45% Profit on Long Treasury Bond Treasury Bond Position on October 1, 2015 after just 22 days (i.e., about 775% Annualized)
• 265% Profit on Short NASDAQ Position on September 29, 2015 after just 57 days (i.e., about 1690% Annualized)
• 110% Profit on Short Russell 2000 Position on August 21, 2015 after just 3 days (i.e., about 13500% Annualized)
• 65% Profit on Short Russell 2000 Position on August 20, 2015 after just 2 days (i.e., about 12000% Annualized)
• 40% Profit on Short Retail Sector ETF Position on August 7, 2015 after just 4 days (i.e., about 3630% Annualized)
• 80% Profit on Short Retail Sector ETF Position on July 27, 2015 after just 6 days (i.e., about 4850% Annualized)
*Past Profitable Performance is no assurance of future Profitable Performance.
Note 3: For several weeks now we have been providing you Key Sector Forecasts for 2016. We summarized all of them in our February Letter just posted.
And thus Far, nearly all of those forecasts are being fulfilled.
But today, we provide both new and updated forecasts in Key Sectors. So consider our Forecasts in Deepcaster’s latest Alert, “Sector Forecasts Being Fulfilled—New Sector Forecasts: Gold & Silver; Crude Oil & Copper; Equities; US$/€, U.S. T-Notes, T-Bonds, & Interest Rates,” just posted in ‘Alerts Cache’ on Deepcaster.com.
Note 4: If there were ever a year in which one Simple Investing and Trading Strategy is likely to be Successful, it is 2016.
Yes, Investors and Traders still need also to consider many Fundamental and Technical variables and Potential Black Swans.
Nonetheless, in 2016, one Simple Strategy (coupled with considering Variables and Potential Black Swans) is likely to generate both Substantial Profit and Wealth Protection.
To see The Key Strategy and Consider how it could be used profitably, just consider our Forecasts in our recent Alert, “THE Key Strategy for 2016; Forecasts: Equities; Gold & Silver; US$/€, U.S. T-Notes, T-Bonds, & Interest Rates; Crude Oil & Copper,” posted in ‘Alerts Cache’ on Deepcaster.com.
DEEPCASTER FORTRESS ASSETS, HIGH POTENTIAL
SPECULATOR & HIGH YIELD PORTFOLIOS
Wealth Preservation Wealth Enhancement
Financial and Geopolitical Intelligence
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-- Published: Monday, 15 February 2016 | E-Mail | Print | Source: GoldSeek.com