debt chicaneryDo you own any Bonds? Does your Retirement Account hold any Bonds? Better check. And in particular check the Yield.
Consider the recent fate of Bonds issued in Argentina or Turkey. And consider what the Real Inflation Rate is in Emerging Market Countries.
The Deception/Delusion (whichever one prefers) is not only about the Real Rate of Inflation. What about “Bail-Ins” and “Super Priority” Rights of Mega-Financial Institutions in the event of another Financial Crisis?
And does the country of issuance have Capital Controls? Is the after-tax Yield really sufficient to compensate for the Real Rate of inflation and Risk to Principal?
If Answers to any of these Questions Disturb you, just realize where a large Part of the Blame lies. The Fed and other Central Bankers have and are devaluing money and interest Rates to the point where Money can be borrowed at very low rates.


1 oz Silver Buffalo As Low As 79 Cents Over Spot!

 


Submitted by Deepcaster: 

“Housing numbers were abysmal for January 2014. This is yet another evidence that there is a huge disconnect between Wall Street and Fedspeak, versus the real economy. The truth is, the economy stinks. Big picture stock market patterns are telling us the economy will get much worse, and an economic depression could be coming.”

 

Robert McHugh, 02/19/2014

 

Do you own any Bonds? Does your Retirement Account hold any Bonds? Better check. And in particular check the Yield.

 

If the Yield is 3% or 4% or even 5%, consider whether the Real Rate of Inflation is actually eroding the Value (Purchasing Power) of that Yield to a Negative Number (i.e., to a Negative Real Interest Rate).

 

For the U.S. for Example, if one looks beyond the Bogus Official Numbers, one sees that the Real Inflation Rate is 9.17% per Shadowstats.com (Note 1 – Chart).

 

Does the after-tax yield keep pace with Inflation? Really?

 

And the same considerations, and questions, should be addressed for Bonds denominated in other currencies, and whether the official Numbers in those Countries are Bogus as well.

 

And what about Risk to Principal? Return “of” one’s money is ultimately more important than return “on” one’s money – Think Cyprus.

 

Consider the recent fate of Bonds issued in Argentina or Turkey. And consider what the Real Inflation Rate is in Emerging Market Countries.

 

The Deception/Delusion (whichever one prefers) is not only about the Real Rate of Inflation. What about “Bail-Ins” and “Super Priority” Rights of Mega-Financial Institutions in the event of another Financial Crisis (see our earlier Articles on these subjects)?

 

And does the country of issuance have Capital Controls? Is the after-tax Yield really sufficient to compensate for the Real Rate of inflation and Risk to Principal?

 

If Answers to any of these Questions Disturb you, just realize where a large Part of the Blame lies. The Fed and other Central Bankers have and are devaluing money and interest Rates to the point where Money can be borrowed at very low rates.

 

This has created Massive Economic, Financial and Asset Distortion – i.e., Bubbles. No wonder Savvy Investor, Carl Icahn, called current Equities levels a “Mirage.” But Bubbles Burst.

 

But do you want to be caught owning any of that paper?

 

And do you want to be caught hold any of the paper in light of another Deception/Delusion (Take your pick!) – such as “The Economy is Recovering”? Indeed, Fundamental and Technicals and Interventionals Signal Differently. Indeed, they Signal that “The Big One” is Impending. Consider recent signals via Shadowstats.

 

Strongest Signal for a Recession Since September 2007

 

“January Retail Sales Activity Plunged by 0.6% for the Month

 

January Annual Inflation: 1.6% (CPI-U), 1.7% (CPI-W), 9.2% (ShadowStats)

Underlying CPI Inflation Picks Up; Economic Activity Is in Decline.  Early indications abound of a probable downturn in the current quarter (January through March of 2014).  The increasingly likely contraction in headline first-quarter 2014 gross domestic product (GDP) has been signaled by the January 2014 reporting detail on employment (Commentary No. 598), industrial production (Commentary No. 600), housing starts (Commentary No. 601) and retail sales (Commentary No. 599 and today’s Commentary).  A particular issue has arisen with real retail sales, discussed in today’s (February 20th) Commentary, along with the consumer price index (CPI).

“In addition to the various downside revisions to the economy in prior months and the reporting of weak-to-minus monthly activity in January, real retail sales (inflation-adjusted based on the CPI-U) clearly are signaling a recession.  Year-to-year change in the post-World War II series is plotted in the accompanying graph, and generally it has signaled a pending recession whenever growth dropped below 2.0%.  It hit 1.0% in January 2014, the strongest recession signal seen since September 2007.  The formal recession began in December 2007. …”

“Commentary Number 602, January CPI, Real retail Sales and Earnings,” John Williams, Shadowstats.com, 02/20/2014

 

[Indeed, monitoring the Preliminary Signals that the Big One is impending in recent Months has facilitated our making a series of Profitable Recommendations (Note 2 below). We aim to do the same for the Impending Big One.]

 

And other Data support the conclusion that it is a very High Probability that The Big One is Impending Soon.

 

It is important to note that the Dow topped at 16,588 on 12/31/13.

 

This is close to the 17,000 top which we forecast months ago.

 

And recently the Equities Market has been Rising on Declining Volume, but Declining on Rising Volume – a very Bearish Signal. Consider one specific example supporting the foregoing Bearish conclusion in addition to the ones we earlier laid out.

 

On Friday February 14, the Dow was up over 100 points (albeit on Negative Data) on Low Volume – a sign that Big Institutional Investors are Selling.

 

Nonetheless, short term, it is still somewhat more likely than not that there will be, one more brief Rally to a somewhat higher tops (e.g. closer to our Dow 17,000 Target). However, the Equities Market could nonetheless launch into The Great Crash at any time. Stay tuned for our forecasts.

 

BUT Regardless of whether The Crash starts now or in a few weeks, Equities Markets are putting in a Multi-year top.

 

Key Fundamentals, Technicals and Interventional confirm this.

 

In sum, given the Negative Fundamentals and Technicals, e.g., the Equities rising Bearish wedge and the Negative Divergence between the NYSE A/D line and stock prices, a Major Move Down of The Great Crash could begin at any time.

 

And here we issue one more Warning! There are many reasons to believe that The Coming Crash will be deeper and longer-lasting than the 2008-2009 Crash.

 

And it is important to Dispel One Other Deception/Delusion – that the Prospects for the Gold Price are Bearish. In fact, consider that ongoing Cartel (Note 3) Price Suppression attempts are being overwhelmed by Physical Demand.

 

1 oz Gold OPM Bars As Low As $14.99 Over Spot at SDBullion!

 

Indeed, the Shortage of Physical Gold is intensifying. Asian and especially Chinese Buying and taking Delivery of Physical is at Record levels.

 

Couple that with China’s record January, 2014 lending y/o/y (also a 4 year high) 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 are rising. Inflation is on the Horizon.

 

Thus, our view is that a Great Launch Up is impending.

 

Also supporting this forecast is the fact that Gold recently closed above its 200 DMA.

 

Indeed, the Chinese think The Great Launch UP is coming soon and the following Credible Report so indicates:

 

“…how come there is such a big difference between Chinese demand reported by the WGC, 1066 tons, and wholesale demand, 2197 tons? Why is the WGC missing 1132 tons? One reason is because the Chinese are hiding it. Since 2008 the Chinese have great interest to hoard in the dark in order to diversify their US dollar reserves, strengthen their economy and protect it from external shocks. The China Gold Association (CGA) changed the way they measure demand and all other Chinese gold institutions ceased publishing reports on demand since 2011…

 

“Why consumer demand as presented to the world has been understated since 2008 is because the China Gold Association is manipulating the demand category net investment to suppress other categories like jewelry and bar.”

 

“The World Gold Council Clueless on Chinese Gold Demand?”

In Gold We Trust

 

And lest one think that there is safety in “Cash” (i.e., in some Fiat Currency), consider Alasdair Macloed

 

“When US money supply measured by M2 stood at $11 trillion in December 2013, I calculate that total broad money of the next largest 50 countries ranked by GDP amounted to the equivalent of a further US$67 trillion at current exchange rates. And that’s only on-balance sheet: we must add in global shadow banking, estimated by the Financial Stability Board to have been an extra $67 trillion in 2011, probably about $75 trillion today, given its recent rapid growth in China. So when we look at US broad money supply, we should be aware there is a further mountain of money thirteen times as big ultimately based on the dollar.

 

“As long as bank lending, industrial investment and consumption are all expanding, the sun smiles. It’s when it stops that problems arise, and why markets reacted badly to the idea of tapering and are increasingly nervous about China’s credit bubble and attempts to rein it in.

“More specifically the danger arises from a slow-down and possible reversal of cross-border investment, particularly with emerging economies. …

“So whatever analysis of individual countries might tell us, it has been easy to miss the threat of a deepening global recession, a risk increased by diminishing cross-border flows. What a time for the Fed and the Peoples Bank of China to decide to reduce the rate of monetary expansion for the two largest economies! These actions are too late to achieve the hoped-for orderly exit from excessive monetary expansion.

“If cross-border investment flows reverse, as they are now threatening to do, banks and multinational businesses will run for cover and the carry-trade will rapidly unwind. And when fear of losses finally triumphs over greed for profits the weaker currencies are usually the first to suffer.

“The relationship between these currencies and the dollar is now being tested in the markets. Eventually, of course, the Fed will have to resume unlimited monetary expansion to buy off a global economic and financial crisis. …

“The last crisis was just the banks. This time we are looking at a potential popping of a full-blown global currency bubble, which was generated as the solution to the last crisis. And this new bubble is all supported on an inflated US monetary base of $3.8 trillion. That’s bubbly gearing of nearly 40 times, or 163 times the monetary base on the eve of the Lehman crisis.”

“All currencies are an inverse pyramid based on the dollar,”

Alasdair Macloed, Goldmoney.com, 02/21/2014

 

Yes, indeed, The Fed will have to “resume unlimited monetary Expansion.” Consequence: The Purchasing Power of the $US will be destroyed and Gold and Silver Backed currencies (e.g., the Chinese Yuan), will Rule.

 

Do not allow Deceptions and Delusions to Impede your Preparation for Profit and Protection for what is Coming.

 

Best regards,

 

Deepcaster
February 21, 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 February 20, 2014
1.58%     /    9.17%

 

U.S. Unemployment reported February 7, 2014
6.6%     /     23.2%

 

U.S. GDP Annual Growth/Decline reported January 30, 2013
2.74%        /     -1.40%

 

U.S. M3 reported February 16, 2014 (Month of January, Y.O.Y.)
No Official Report     /     3.07% (i.e, total M3 Now at $15.544 Trillion!)

 

Note 2: Our attention to Key Timing Signals has facilitated Recommendations which have performed well lately. Consider our six most recent:

 

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)

 

40% Profit on Equity Index Call on December 19, 2013 after just 2 days (i.e., about 7500% Annualized)

 

135% Profit on Equity Index Call on October 28, 2013 after just 13 days (i.e., about 3800% 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 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.


  1. I closed out my 401k and took the hit on it to pay off $250k in medical bills. All because Social Security denies every application for disability unless you are one of the ones claiming a useless disability like being to fat. Those get approved right away. You could not pay me to invest in a paper asset these days!

  2. “Do you own any Bonds? Does your Retirement Account hold any Bonds? Better check. And in particular check the Yield.  If the Yield is 3% or 4% or even 5%, consider whether the Real Rate of Inflation is actually eroding the Value (Purchasing Power) of that Yield to a Negative Number (i.e., to a Negative Real Interest Rate).”
     
     
    No, I do not own any bonds.  I sold them all at a 16% profit in 2007.  While that was a bit early, I’d rather be a couple of years early than a week too late.
     
    But my wife owns some UST bonds… about $40k worth, so not much.  They pay 4% interest.  Yes, that is below the real rate of inflation per ShadowStats and I agree with their numbers but it is also a lot more than can be earned on most other fixed income investments these days.  Personally, I would have sold them last year and put the money into gold but that’s just me.  She has different ideas and they belong to her.  She says that these are her “security cushion”.  Oh, well.  Better that than cashing them in and squandering the money, I suppose.  :-/
     

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