The Equities Market Sell-Off and Economic Data continue to support Deepcaster’s often-expressed View that the International and the USA’s Economy is slowing with Key downstream consequences being that there will be many more Debt Defaults and Earnings Misses, with predictable Negative Consequences for Equities and other Markets and Economies.
Key Profit Opportunities and Risks will thus be magnified going forward into 2016.
“…Wall Street Shills will be in the news explaining how markets become unreasonably fearful from time to time. They will tell investors that it is time to hunt for bargains.
“In the meantime, watch your rear: There’s a serious counterattack coming.
“It will be an attack on our supply lines. The cronies and the feds will attempt to cut off our finances and our line of retreat, trapping us between the anvil of the market’s deflation and the hammer of the Fed’s inflation.
There will be no escape, no way out.
-Bill Bonner, Bill Bonner’s Diary, 09/02/2015
“By suppressing Rates, The Fed has borrowed Growth and Returns from the Future.”
Mohammed el Erian, 5/21/15 (Former PIMCO CEO)
“‘Now we’ve had the weakest recovery in post-war history and what has happened?
The Fed has simply reflated the bubble to an even more gigantic proportion.’
Unpayable Debts in the U.S.A., Eurozone, China & Japan virtually guarantee Mega-Moves in Key Sectors are coming.
“Financial assets now represent over 82% of the net worth of both households and US non-financial corporations (data: Federal Reserve Z.1 Flow of Funds). Except for periods where total net worth had itself retreated (for example, 2008-2010), the concentration of private net worth on financial assets, rather than real assets or productive capital, has reached the highest extreme in history in recent years. In our view, this is just temporarily overvalued paper masquerading as something durable.
The previous extreme (again, outside of periods where net worth itself had retreated) was, not surprisingly immediately prior to The Tech Wreck.
Yes, indeed “Temporarily Overvalued Paper” accurately describes many “Markets.” And that which is Overvalued does not stay overvalued! Thus Mega-Moves are Impending and those who are prepared will Profit, and those unprepared will Suffer.
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.
But this War is a Zero Sum Game. So how does it end?
All of the below are Bearish Indicators reflected in the Technicals.
Specifically, for example, the Jaws of Death and seven Hindenburg Omen observations since January 2015 indicate a Bearish Outlook for Equities going forward.
Indeed, Deepcaster’s evaluation of the Fundamentals, Technical and Interventionals led us to forecast the 2008 Market Crash with profitable results.
In sum, we have increasing Economic Deflation which has been created in large part generated by years of Fed-led Central Bank Monetary Inflation:
Not since The Great Depression have there been such Formidable Challenges to those who wish to Profit and Protect their Wealth.
If it were not clear before 2008, the Fall, 2008 Markets Crash, Credit Freeze, and Financial Institutions Collapse and subsequent unprecedented Central Bank Interventions, and ongoing Economic Difficulties all make it clear, that we have entered into a New High Risk Era in the Economy and Markets.
And the “Mixed” (at best) Fundamentals, and Key Technicals (e.g., repeated recent Hindenberg Omens) confirm that.
“When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.” –Bill Gross, Founder & former CEO, PIMCO
We focus here on Key Profit Opportunities, Threats and possible Catastrophes for 2015, few, if any, of which you are likely to hear about from the Main Stream Media (MSM), before they occur because the MSM are beholden to the Powers-that-Be.
Investors are getting mixed Messages about whether we are facing an Inflationary or Deflationary Future.
Answering that question correctly is important both to profitability and protecting wealth.
Major Bankers and some Government Officials Claim they are worried about Deflation.
But rising costs for Health Care, Food and, until recently, Energy, indicate we face an inflationary, and perhaps even a hyperinflationary, future.
Which is it? Inflation or Deflation?
Major Geopolitical, Economic and Financial Events will occur beginning this November.
And certain of these will generate Mega-Moves in Key Sectors.
And Legendary Investor Julian Robertson has correctly identified one of them — The Great Bubble Event which will end in “a very bad way”.
Indeed, the Jaws of Death and Hindenberg Omen Technical Signals are forecasting these Events and their impact on the Markets.
These events will cause some Key Markets to spike much Higher and others Much Lower. In this Article, Deepcaster identifies Key likely events and forecasts likely consequences for Markets and the Economy.
It is important to Tune Out the Mainstream Media Hype and Spin (or Gloom and Doom, as the Case may be) and look at the Real Fundamentals.
So consider here an overview of the prospects for Four Essential Resources: Potable Water, Gold, Silver and Crude Oil.
There is a Delusion, somewhat widely accepted, that if an Essential Resource is in Short Supply, the Supply Problem can be solved if one applies enough Appropriate Technology and Capital to it.
Realistically, though, for certain Essential Resources, supply shortages, (i.e., Demand “Longages” ) can be Managed, to a point. Yes. Solved, No.
This Reality provides both an Opportunity and a Threat — a Profit Opportunity for those who are aware of it, and a Threat for those who are not.
European Central Bank Head, Mario Draghi recently signaled Eurozone QE is Dead Ahead.
And the World has yet to deal with the Consequences of past and ongoing Fed, Japanese, and Chinese Monetary Policies. The coming Consequences of Central Bank QE and other Policies are reflected in the following Major Investors’ Actions and Analysts recommendations.
“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, June 2014
Deepcaster, like Jim Sinclair, believe it likely that Gold will launch into a New Record-Setting Bull Phase this Summer. See “30 Reasons the Bear Phase in Gold Ends This Summer”.
Deepcaster’s word to the wise: Get Physical.
There are Four Fortress Assets Investors should hold in Today’s environment of increasing Geopolitical Economic, Financial and Market Risk.
Owning some of all four is very important. Indeed, and all have Unparalleled Profit and Wealth Protection Potential in today’s increasingly risky environment.
Fortress Assets are those which offer considerable Profit Potential and some considerable degree of protection from Inflation, Hyperinflation or Deflation.
Bogus Official Numbers and Fed QE (et al) policies have artificially inflated Equities Prices – they are a “Mirage” as Carl Icahn says.
And they have greatly distorted other Markets’ Prices as well. Indeed, if one looks at the Real Numbers, one realizes the Economy is not recovering and is in fact weakening. And on that basis one can reasonably conclude the S&P is 65% overvalued.
But the foregoing Realities mean that Nasty Market Surprises (and thus Opportunities) Await Investors, and sooner rather than later.
The Currency War, Stage 2, is already Manifest in another Way. Consider that the Economic/Financial Crises of the early 1930s were characterized by Bank Runs. We are already seeing such runs this year in Crimea, Ukraine and Rural China.
Defaults in China have left Depositors understandably nervous. Deepcaster’s Forecast: there will be more Bank Runs and they will spread, eventually to the Eurozone and U.S.A. Physical Gold and Silver and Tangible Assets such as Energy and Agricultural Products will be the Investors’ Salvation.
Intensifying Currency Wars provide Opportunities and Threats for those who Track their Dynamic Effects on Key Markets.