-- Published: Friday, 20 April 2018 | Print | Disqus
FORTRESS ASSETS PORTFOLIO | LETTERS, ALERTS & ARTICLES
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Of several Threats to the Markets and Economy, there is one which is both Paramount and probable to be realized. But this Great Threat also provides an opportunity for Great Profit and Wealth Protection for those who are aware and prepare.
Consider the “Canary in the Coal Mine,” the $US.
The $US has been bouncing down in the 89-91 Range basis USDX, recently as “Safe Haven” fears of a Mideast War or “Trade War” (largely unjustified) diminished a tad. Nonetheless. the $US share of foreign Currency Reserves held by Central Banks declined for the 4th straight Quarter according to the a recent IMF Report underlining the long-term weakening $US Trend.
This is no surprise to Deepcaster (who forecast it), that is, the U.S. Dollar Weakening Trend is not new. Not too many months ago, it was at 100 basis USDX. Thus, the down trend is continuing, with the $US flirting with 89 basis USDX recently.
In sum, though short-term, the $US may continue to bounce up periodically, it is still in a Down Trend which we forecast to continue mid- to long-term.
Indeed, there are two intensifying Threats to the $US as World Reserve Currency (in addition to The Feds’ QE/QT Policies)—China’s Implementation (aided by Iran, Turkey and Russia) of the (Gold-Backed) Petro-Yuan.
The other Threat is the prospect of increasing U.S. Debt (now at $21Trillion) by a $Trillion or more a year which has highlighted the Reality of increasing Inflation, contrary to Bogus Official Numbers. (See Shadowstats’ Chart, Note 1.)
That Drop in the $US (from 100ish several months ago) shows the Fundamental underlying weakness of the Apparently Healthy Economy and Equities Markets. I.E., they have been high because they have been relying on Easy Money (and consequent leverage Opportunities, but also entailing the increasing Debt Threat) from the Central Banks.
As well, The Fed and others have started to withdraw stimulus by engaging in QT—Quantitative Tightening. QT plus Interest Rate Increases will surely eventually substantially deflate Bubble Assets like Stocks. And, indeed, with the U.S. 10-Year yield approaching 3%, the Equities Price Deflation has already begun.
In addition, the prospect of more money printing (to cover the increasing Interest on Debt) has kept both the $US and U.S. Bonds weak and likely will weaken them further.
Indeed, all the aforementioned catalysts for recent moves in The Bond Market and the $US Now reflect what we have been forecasting, that Stagflation is coming; that is a stagnant economy with inflation.
Thus, Bond prices and the $US have begun to tank as we earlier forecast, mainly because Sovereigns, Businesses and Consumers are all too overleveraged (and we reiterate, stagflation is coming). But these Mega-Trends have already created Profit Opportunities—see Note 2, and will continue to do so.
In sum, the aforementioned Debtors have all become too over-leveraged mainly because The Private, For-Profit Fed and other Major Central banks have kept Rates too low for too long and thereby artificially elevated Equities and other Financial Assets to benefit the Mega-bankers and Wall Street.
And, indeed, with the prospect of U.S. Debt increasing by $1Trillion or more annually, the Bond Market’s Debt Ceiling Alarm Bell is already Ringing Loudly. (See one easy Action which would cut the U.S. Debt increase nearly in half at CarryingCapacity.org.) Key Conclusion: When Debt Defaults mushroom, that will Trigger Key Sector Crashes.
And, already, the resulting “Debt Skepticism” has hit the Corporate Bond Market. “Fewer orders are coming in relative to what’s for sale … Companies that sell notes are paying more interest … investment grade Debt Market is losing steam.” Bloomberg 03/19/2018
And thus, Smart Investors are moving to higher quality Corporate Debt, but some of that prospective protection will eventually be found to be illusory.
Indeed, when the U.S. 10-Year yield was trading around 2.5% SocGen intimated that a 100 basis point rise in interest rates could cause 20% of all overleveraged S&P Companies to default.
Moreover, increasing numbers of convertibles are failing to hit their conversion price, thus increasing default and business failure risk.
Considered all together, this impending concatenating Debt Default Disaster is The Greatest Threat of which we speak.
Surmounting The Threat with Gold and Silver (but only bought in a certain form) and quality Mining Stocks (which moved to a Buy at the end of March) and which are now launching, is one of Three Keys to Profit and Wealth Protection, as we earlier forecast. The only Major but surmountable Impediment to their moving strongly and regularly higher is ongoing intensifying price suppression efforts by the Mega-Bank Cartel (Note 3). But there are plenty of Triggers for continuing the launch higher, and it will continue albeit fitfully.
For example, the prospects of increasing U.S. and other Major Sovereigns’ National Debt and business and consumer Debt Defaults and the North Korean and Mideast Chaos Threats, plus the reported Chinese intention to resist attempts at Trade Fairness plus a Weaker $US, and recently the Equities Market Takedown prospects, plus fears of a Mideast War, all are Triggers which contributed to the ongoing Precious Metals pop up recently and will continue to do so.
However, the launch will not be smooth. In recent weeks, the Euphoria over the anticipation (hope) that a Tax Bill really would increase Economic Growth, plus positive Economic Numbers (notwithstanding the fact some are Bogus), plus Bitcoin et al demand, enabled The Cartel to take down Precious Metals Prices—Gold to the low-$1300s and Silver to the low $16s—recently. And that is why they were able to take them down again, very recently.
[And that is why the Regulators have not clamped down more harshly on Bitcoin and the other Cryptocurrencies—which are not Stores of Value—is because “investments” in Cryptos reduce upward Price Pressure on Gold and Silver.]
As well, Investors were husbanding cash to re-enter the Equities Markets. However, already the beginnings of the Next Equities Crash Leg is causing more Investors to move into Precious Metals as Safe Havens.
But, as we forecast some time ago, there is one Precious Metal which is especially well-positioned to “Rocket Launch” especially powerfully on these Triggers—Silver! And indeed it has. See our recent Alerts for the analysis.
But, though Gold and Silver are the Most Important Profit and Wealth protective Investments going forward, there are at least two others which should be part of every Portfolio.
One is High Yield Equities, but only those in certain Key Sectors. Deepcaster has recently recommended Buying Equities in one Key Sector that have recently yielded 15% and 6%.
To see these High Yielders and to consider the Critically Important third Key Wealth Protective Sector, see Deepcaster’s recent Alerts and Letters.
Above all, stay attuned to signs of intensifying $US Weakness, intensifying Inflation, and increasing Debt Defaults!
April 20, 2018
Note 1: Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported April 11, 2018
2.36% / 10.12%
U.S. Unemployment reported April 6, 2018
4.07% / 21.7%
U.S. GDP Annual Growth/Decline reported March 28, 2017
2.58% / -1.58%
U.S. M3 reported April 5, 2018 (Month of March 2018, Y.O.Y.)
No Official Report / 4.41%(e) (i.e., total M3 Now at $18.57 Trillion!)
Note 2: Deepcaster’s forecast of these Mega-Trends has facilitated the following Recent Profits Taken.
- 60% Profit on a Premier Lithium Miner after only 21 months on March 23, 2018 (i.e., about 44% Annualized)
- 35% Profit on a High Yield Bond Fund Short after only 34 days on February 6, 2018 (i.e., about 400% Annualized)
- 50% Profit on a P.M. Streaming Company after only 6.5 years on February 1, 2018 (i.e., about 7.5% Annualized)
- 115% Profit on a Premier Lithium Miner after only 18 months on January 4, 2018 (i.e., about 80% Annualized)
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 Report, “Profit, Protection, Despite Cartel Intervention —2018 Update” on the ‘Two Free Reports’ page 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.
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-- Published: Friday, 20 April 2018 | E-Mail | Print | Source: GoldSeek.com