Image: Jonny O'Callaghan

Image: Jonny O’Callaghan

Submitted by Deepcaster:

Everybody talks about what they are not going to do, which is exactly what they are going to do.  –Jim Oberweis, Oberweis Investment Management, 02/12/13

Yes, indeed, Mr. Oberweis. The Major Powers have begun a Competitive Currency Devaluation “War” = Phase 2 of the Ongoing Financial Crisis. But this War has only just begun. This is why the G-20’s “DRAFT” Pledge, while it may be agreed to, will never be implemented.
When, not if, this War starts to Rage out of control in the next few months, that will mark the beginning of Phase 3, which is inexorably approaching.  Investors and Traders alike must be prepared for Phase III.

And those Investors and Traders who have prepared for Phase 3 can get rich, while those who are unprepared will be devastated.

Freedom Girl Now Available From the Silver Bullet Silver Shield Collection at!!

Freedom Girl

G-20 Pledge to Refrain from Competitive Devaluation – DRAFT”

Bloomberg, 2/14/2013


Everybody talks about what they are not going to do, which is exactly what they are going to do.

Jim Oberweis, Oberweis Investment Management, 02/12/13


Yes, indeed, Mr. Oberweis. The Major Powers have begun a Competitive Currency Devaluation “War” = Phase 2 of the Ongoing Financial Crisis. But this War has only just begun. This is why the G-20’s “DRAFT” Pledge, while it may be agreed to, will never be implemented.


When, not if, this War starts to Rage out of control in the next few months, that will mark the beginning of Phase 3, which is inexorably approaching.


And Investors and Traders alike must be prepared for Phase III.


And those Investors and Traders who have prepared for Phase 3 can get rich, while those who are unprepared will be devastated.


Phase I, now in the process of ending has been marked by Sovereign Debt Hypersaturation among nearly all the World’s Major Fiat Currency Powers.


Not just the PIIGS Nations, but also France, the U.K., Japan and the U.S.A. have Debts which can never be repaid given any sustainable rate of Economic Growth and Taxation System. (Even China has a Debt Saturation Problem, though they have more resources than most to cope with it.)


So their Central Banks (and, consequently, others) have begun a Race to Devalue their Currencies (Phase 2) vis á vis each other.


But as those nations with overvalued currencies experience the pain from, e.g., diminished Exports; they are impelled to devalue even faster than their fellow G-20 Members. And thus the Currency Devaluation War is intensifying and spreading far and wide – Venezuela recently joined the “Devaluation Club.”


Thus we have the intensifying “War”, which is really a Race to Major Fiat Currency Purchasing Power Degradation, that is, to Price Inflation, then; when the Currency Devaluation War spins out of control, Hyperinflation (e.g., the U.S. is already Threshold Hyperinflationary with CPI at 9.4%, (per


Thus The Race to Phase 3, Hyperinflation, has begun.


In this Process, it is critically important not to be misled or deceived by Participant Governments, Central Banks and other Mega Banks’ False or Misleading Claims.


Savvy and Experienced Jim Sinclair provides an excellent summary of what can not happen going forward, despite the aforementioned Big Boys Claims to the Contrary.


We add an explicit Rationale for Sinclair’s Claims just in case one is needed.



“There is no way that any entity, be it private, public or both, is going to manipulate away the debt situation faced today.”


Jim Sinclair, MineSet, 2/11/2013




True. Thus the only way Central Banks believe they “Cope” with the Debt Hypersaturation situation is for Central Banks to Devalue the Currencies in which the Debt is Denominated. This is The Road to Price Hyperinflation. Of course, there are other ways to cope, including partial Debt Repudiation, but The Central Bankers are not keen on facilitating their Banker Client/Owners taking a loss.


“There is no way that the US is going to become a net exporter of energy in amounts that could even slow down this rate of growth in the debt.” IBID



True. Indeed, it is unlikely the U.S. will ever become a net exporter of Hydrocarbon Based Energy in any event. The Reserves made available via Fracking have higher Depletion Rates and lower Recovery and net Energy Production Rates than Prior “Easier” Sources.


“There is no way this flat line recovery is going to turn into a boom in business.” IBID



There is no Flat line Recovery as demonstrates. Indeed, the USA has never come out of recession. The U.S. recession continues and its Negative GDP continues to contract (See Note 1).


“There is no way that the unemployment figures are going to have a sustained improvement short of all the unemployed giving up hope and shifting to the underemployed list.” IBID



This is True in Spades, especially in the U.S., given that it may be about to embark on a Massive and Foolish Importation of Jobseekers via Immigration “reform” when it already has 25 Million Unemployed including tens of thousands of unemployed graduates in Science, Technology, Engineering and Mathematics. See


“There is no way that you can set such records in increased liquidity and not have explosion inflation regardless of business activity.” IBID



Very True. And the U.S. is already Threshold Hyperinflationary. (See Note 1.)


“There is no way that the Fed can liquidate its holdings of treasuries in an orderly manner without collapsing the Treasury market.” IBID



True. And the U.S. Treasury Market is going to eventually collapse anyway because the Purchasing Power of the currency in which it is denominated, the $US, is being rapidly degraded thanks to The Fed.


“There is no way the Fed can liquidate any toxic paper it took on from banks internationally in the crisis of 2008.”


True, because, inter alia, the Mark to Market Value would be dramatically less than the Mark to Myth at which it is currently valued.


“There is no way the Fed can step away from QE which would mean higher interest rates without collapsing the flat line so called economic recovery.” IBID



True, for all the aforementioned reasons, The Fed and other Central Banks will likely keep Printing until we reach Phase 3, Hyperinflation. And substantiates a quite similar position.


Opening Comments and Executive Summary.  Today’s (February 13th) release of January 2013 retail sales activity showed ongoing stagnation in consumer spending, with both the January 2013 monthly gain of 0.13%, and the nearly-unrevised 0.50% monthly gain in December 2012 statistically insignificant.  

Contrary to the President’s contention last night that the rubble of the crisis had been cleared away, the economic and systemic-solvency crises remain in place.  Particularly relevant to today’s reporting, consumer income and credit conditions continue in shambles, with problems so severe as to prevent an economic recovery. 

“Retail Sales Continued to Stagnant, Reflecting Intensifying Structural Liquidity Issues for the Consumer,” John Williams,, 02/13/2013


The “Solution” for Investors and Traders for Profit and Protection going Forward is to Position Oneself in Inflation Resistant Assets including especially Gold, Silver (yes, Silver) and Agriculture. Regarding Specific Recommendation for Profit and Protection, see Notes, 2, 3, 4 and 5 below.


And Note Especially the comment by Marcus Grubb of The World Gold Council, “Central Banks are now buying more gold than ETF investors which is a very startling result.” Yes, Mr. Grubb, about 450 tons per year. If Central Banks were confident that their Fiat Currencies were such a great Store of Value, why would they be buying Gold?!


Best regards,



February 15, 2013


Note 1: calculates Key Statistics the way they were calculated in the 1980s before Official Data Manipulation began in earnest. Consider


Bogus Official Numbers vs. Real Numbers (per


Annual U.S. Consumer Price Inflation reported January 16, 2013

1.74%              /           9.36%


U.S. Unemployment reported January 4, 2013

7.8%                /           23.0%


U.S. GDP Annual Growth/Decline reported January 30, 2013

1.54%              /           -2.20% (i.e., a Negative 2.20%)


U.S. M3 reported January 24, 2013 (Month of December, Y.O.Y.)

No Official Report       /           4.38%


Note 2: The Equities Market has been Rallying up since Mid-November, as we earlier forecast, with only a few down days at end-December over Fiscal Cliff concerns.


Now we have surmounted the Psychological 14,000 Marker on the Dow, and despite the little pullback this week, the all-time 14,129 High appears dead ahead.


So what is the likely Upside High and when, will it likely occur? And what then?


We evaluate the Competing forces which will determine this Top, and Forecast that Top and the Time it is likely to hit it, and make Forecasts for other Major Sectors in our latest Alert, “Rally Targets; Buy Reco; Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, Equities, & Crude Oil” just posted in ‘Alerts Cache’ at


As well, we make a Buy Recommendation aimed at Profiting from the Intensifying Flood of Liquidity from The Fed, BOJ, ECB, and other Central Banks.


And we warn of two increasingly likely Major Sell-Offs in two Key Sectors likely coming Very Soon.


Note 3: Last month, we issued a “Take 83% Profit” notice on a stock we recommended just 111 days before in a “Fortress” Asset Sector.


Just two days after that we made another Buy Recommendation in that same Sector – a Sector whose Superb Profit Potential will remain Relatively Undiminished by Economic Conditions, whatever they may be.


And we expect to make several more Recommendations in that Fortress Asset Sector in the Next Few Months.


The Economic Forces which were temporarily displaced by the Fiscal Cliff Fight are coming to the Fore again. And those Forces telegraph the next likely Market Moves, which we Forecast in last week’s Alert.


To see our Fortress Asset Sector Buy Recommendation and our Forecasts for U.S. Dollar/Euro, & U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, Equities, & Crude Oil, go to and click on ‘Alerts Cache.’


Note 4: The Market Price of virtually any Asset is arguably always primarily a result of Competing Forces.


But 2013 is unique in that there are especially Strong Forces impelling many markets up. And there are especially Strong Forces impelling markets Down, Catastrophically Down. Regarding Forecasting Force Predominance in 2013, forecasting Timing is critical.


So we evaluate the prospective results of this “competition” and forecast Timing accordingly in our February Letter entitled “2013 Profit Primer; Buy Reco; Forecasts: Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold, Silver, & Crude Oil” recently posted at in ‘Latest Letter and Archives.’


And we offer a Buy Recommendation aimed at a Substantial Profit in just the next two months in our February Letter.


Note 5: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, Negative Real GDP growth, over 9.0% Real U.S. Inflation (per 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 (9.41% per year in the U.S. per


To consider our High-Yield Stocks Portfolio recommendations with Recent Yields of 10.6%, 18.5%, 26%, 15.6%, 8%, 6.7%, 8.6%, 10%, 14.9%, 8.8%, 10.4%, 15.4%, and 10.7% when added to the portfolio; go to and click on ‘High Yield Portfolio.’


OPM Silver Round Promo 2 with Border

  1. While we can agree with your analysis, you beg the question, are the Central Banks operating with unlimited impunity?
    Must watch…must see @ 1:52:34

  2. Take a look at this unusual and insightful article, which ties together 25 events in the next 5 weeks that together indicate some sort of meltdown in March 2013. This includes the all new mayan end of the world (March 21), the last pope, and alot of other important events (some of these events are BS propaganda, depending on your view, but all of them link in to march).

  3. This is not about politics, even though the Main Scream Media will tell us that it is.  What it really is about is… math.  Thanks primarily to a failed education system, Americans are not good at math, so this entire financial episode is creeping up on most Americans on little cat-feet, like the fog.  
    The rest of us, however, and particularly those who were actually educated BEFORE the dumbing down process was implemented, do know what math is and how it is applied.  What part of an unsustainable path is not clear to the politicians who squeal that someone will be hurt if ANY budget cut occurs?  Yes, someone will be hurt.  They will lose the largess that they have grown accustomed to receiving.  Unfortunately, the attempt to continue funding these programs WILL destroy the national finances and then EVERYONE will be hurt… and badly, at that.  
    Because of all this and much more that we all pretty much know to be true, there is not only no painless way to avoid a financial collapse at this point, there is no way to avoid it, period.  Much time that could have been used to repair our nation’s finances has been wasted via can kicking, left vs. right BS, and other stupid political games.  Yes, there WILL be a price to be paid and it will be MUCH higher than most of us can even imagine.  
    My mother is a depression era person who vividly remembers those terrible days of the 1930s.  She was only a child at the time but kids have a way of absorbing everything around them and remembering it for a very long time.  Although mom is 84 years old now, the memories are as clear to her today as they were 75+ years ago.  She has often discussed them with me in considerable detail.  They are not anything any of us wants to see again, yet the table has been set for a scenario that is even worse than this.  The one thing that my mom has emphasized over and over are the values of hard work and of money.  She knows that those who had money or who could earn it via working hard did OK during the depression.  Those who did not suffered horribly.  In her day, money was generally silver coins.  Gold was money too but her family was too poor to have had much of that… maybe the occasional quarter eagle but that was it.  These days, gold and silver are not officially used as money but… they ARE money in essence, and it would behoove anyone who envisions a return to the days of depression to have some of them on-hand.  Given that the coming financial collapse could very well be worse than The Great Depression, it would be wise to have a considerable amount of them stashed.

    • I grew up poor. My family never took a dime of money from the government either. We all learned to hunt, fish, garden, preserve food as survival for a family of 7. I was fishing on my own at 10 and hunting at age 14. At 14 I was also working 2 part time jobs for my own spending money and to help pad the family kitty each month to buy groceries that we didn’t grow. I learned responsibility early and work ethic that is sorely lacking in the younger generation.
      Kids I worked with at the casino would not do anything unless specifically told what and how to do it in itty bitty steps. And even then they would disappear into the break room 4 times an hour. Had to watch them or nothing got done and that put a crimp in my getting things done. Those kids are in for a world of hurt when things go bad because they don’t understand the concept of real work. They expected a paycheck for doing as little as possible for 40 hours.

    • Then we have quite a bit in common, Mary.  We always had a large garden when I was a kid and I was happy to work alongside my parents, mostly my mom, in planting, weeding, watering, and harvesting it.  I loved digging the potatoes!  It was like a treasure hunt, never knowing whether there would be 1-2 potatoes or a dozen of them in the next hill.

      My first job for pay was mowing and trimming lawns.  That was where money and effort were connected in my mind.  Later,  I worked in the bean and berry fields as well as in the cherry, Hazelnut, and Walnut groves.  Once, I even got to pick gooseberries.  Great pay but those suckers have needle-like thorns about an inch long, so considerable care was needed!  My final field job was moving irrigation pipes in the bean and berry fields 14-15 hours per day for $1.10 an hour. Got one raise to $1.25 an hour… WOO HOO! Man-killing work that was and I was just a 16 year old kid.  Handling a 40 foot long 3″ diameter aluminum pipe in 100+ degree weather was not my idea of a good time.  Neither were the leg cramps, muscle aches, and 5 hours of sleep a night.  Next day, same thing!  This was the job that convinced me that I did not want to be doing things like this for the next 50 years! Later, I worked through college in a food cannery.  Got union wages of $1.75 up to $2.45 an hour there.  My folks paid for all that I could not but I always tried to earn at least half.  Also worked in various restaurants, even meeting my sweetie there.
      This year will be our 19th year in our current house.  It’s an upscale neighborhood on a ridge with a view.  Not once in those 19 years has any kid come by asking to mow our lawn for pay.  Not one!  I am disappointed at that as I was looking forward to awakening some kids to the idea that money is worth working to get.  Guess that they are too busy playing video games and leeching off their folks to bother with it.  Yeah, I grew up poor and worked hard but I pity these kids more than they will ever know.  🙁

  4. Phase 1, Phase 2 etc…what on earth….who is to say that there won’t be a phase 89 and phase 90…is there a limit to these phases?
    If there is a currency war, then it will mean nothing. All current currencies are related to one another. The US Dollar is the basis for most of the currencies that don’t freely float and the only party wishing to devalue directly with the dollar and not through policy are the Chinese.
    The only real issue is for the Americans and the debt that they owe China. The rest is just bogus crap. So what if the Japanese devalue their currency, they own more local Fiat currency than American Dollars, they will loose the war as they will always have a problem with exporting to America crap that Americans can no longer afford. There are only so many 42 inch TV’s you can sell, The IPod does everything that Sony used to do well. Only thing left are cars, which are made out of metals that the Japanese need to import before they can export cars. If they devalue the Yen then the metals that they buy will cost them more, which in turn means they will have to absorb the cost into the cars, in turn mean they will pass the cost onto the Export Market, in turn the Market will go “How much!!!!” and will buy some other crap car made in the East instead, or maybe an even crapper American Car.
    So, lets get down to the meat of all this. The American Dollar. The Chinese are an export driven economy. America are their biggest customer. It is not in their interest to burn the cash cow that is America, if they do so their economy will blow up, no matter how much they try to impose their will in Africa and gain cheap commodities, they still need America to drag their country into the 20th Century (no not a typo…they are that far behind, even though they play with technology from the 21st…damn now I feel like Buck Rodgers in the 25th Century.)
    So…what will actually cause Precious metals to rise? …I would say local inflation based in your local currency. If your in America, I don’t know, they will cook the books and make the dollar look great to the locals. Me living in Good ol Blighty, well I have the fortune of living on a little island, with little minded people working for the Bank of England that are now thinking that inflation might not be such a bad thing for the economy. Go right ahead with your plans Ol Lady of thread needle street, I got my stack ready and able to be converted into the local currency at any time, I beg you 20% inflation, I will convert to local currency as and when required and reap the reward of a low cost of living. 🙂

  5. I notice how Iceland barely gets mentioned in the MSM now… probably as it has provided the world with a clear example of how to deal with speculative debt. Whenever I bring up the subject to people, they howl that Iceland was irresponsible by not paying its debts as though its debt burden was static. I then explain that while Iceland remained plugged into the debt system, the losses from speculation would have continued to be passed to the people.
    But cancelling the debt totally is what is needed… followed by an increase in interest rates to encourage people to save and so create some new capital to stoke the recovery. A rejuvenated economy will bring with it a new generation of savers only prepared to spend within their means.

  6. “…followed by an increase in interest rates to encourage people to save and so create some new capital to stoke the recovery. A rejuvenated economy will bring with it a new generation of savers only prepared to spend within their means.
    I view this as a matter of absolutely critical importance.  Saving is THE foundation upon which a thriving economy is built.  Without earning more than we spend and allocating the difference first to saving and then to investing, we cannot and will not have a thriving economy or the jobs that go with it.  
    Bernanke’s ZIRP is a death-blow to savers.  Few people are saving today because they recognize that inflation isn’t just coming, it’s here… NOW.  Because of this, a lot of people are putting what they used to save into extra food and other things that they know will rise in price.  Some are even buying a few silver coins.  But they are not feeding their bank accounts.  There is very little reason to do so, other than for an emergency of some kind and they are just as likely to keep some extra cash under their mattress as they are in a bank.  
    Unless this very low interest rate environment is ended, I fear that there will be no way to pull out of the current death spiral that the US economy is in.  Punishing savers to satisfy speculators and others who mis-allocate cheap capital is NOT a path that leads to prosperity.  Perhaps if Bernanke had spent more time doing hard work in his formative years and less time supposedly studying The Great Depression as a young man (but apparently not learning much from it), he would know this.  Because he does not, it is up to those of us who do to protect our families from the terrible result he is most likely to achieve.  Stack on, friends!

Leave a Reply