subject: Why Gold & Silver & The Mining Shares Will Be Impelled Even Higher, And Soon [print this page] "When the Federal Reserve took its first steps down the road of debt monetization with the first quantitative easing program (QE1), we knew there were going to be more. QE2 followed QE1. QE lite -- the Fed promised to keep interest rates low until the end of 2014 -- followed QE2. And QE3 is on the way...
"It's going to happen - as surely as we'll see QE4, QE5, and on and on and on.
"That's the problem with reckless money printing. It's like jumping into a swimming pool. You can't ever 'un-jump.'
"So now it's just a question of timing the announcement for maximum impact..."
"Traders Prepare for More Money Printing", Jeff Clark,
The Growth Stock Wire, 05/15/2012
Old news it is to most readers, that a Cartel (Note 1) of Mega-Bankers and Allies has for years, and is, engaged in Ongoing Price Suppression of Gold and Silver and their Miners' shares.
Increasingly wide acknowledgement of Gold and Silver as the Ultimate Stores and Measures of Value (i.e. Real Money) would further devalue their Paper Treasury Securities and Fiat Currencies, and diminish their immense power. Thus their ongoing Price Suppression intensifies.
Indeed, it is no surprise to us that The Cartel has successfully (thus far) waged a battle against pro-Gold and Silver Sentiment since last September, 2011, and especially since the end of February, 2012. And they have been helped recently by Fears of Economic Deflation arising from of the Eurozone Crises.
Specifically, Greece moves ever nearer to Default and Spain and Italy are too Big to Bail, but both the latter are at increasing Risk of Economic Meltdown, as reflected in their 10yr Treasury Securities Yields moving back up over the Toxic 6% level.
One consequence of The Cartel's Real Assets Price Takedowns is that the Continuous Commodity Index (CCI) recently made a 19 month low. And, significantly, the recent strengthening in the U.S. Dollar and U.S. Treasuries (both of which Deepcaster earlier forecast) has led to large Bullish Options Bets on ten-year Treasuries. The yield level implied from these options Prices is about 1.4% on the U.S. 10-year. No surprise to us. And Equities Markets are recently down on these Deflation and other Fears. But the French and Greek people have spoken. They will have no more Austerity.
However, note well that Soybeans, Wheat, and Corn Prices have already rebounded strongly from their recent Takedowns. (Essential Tangible Assets hold their value notwithstanding Central Bank Money Printing.)
All this (but rebounding grain prices) adds up to the "Nightmare the Monetary Authorities Dread -- DEFLATION" to borrow the Graphically Accurate Language of Trader Dan Norcini.
Europe, via the ECB, must certainly print more Money, lots of it, and soon (QE 4, however it is disguised -- the ECB's LTRO and Fed's ongoing Operation Twist are de factor QE 3). But this European Reality mandates a major Ripple Effect which is not widely recognized.
Have you wondered why, even in light of the Ever-Worsening Eurozone Crises, the Euro does not depreciate even more than it has vis--vis the U.S. Dollar? That is because it is not in the self-interest (the U.S. Fed is a private for-profit entity after all) of the Major Central Banks around the World to allow one currency (e.g. the Euro) to depreciate too rapidly vis--vis the rest.
The Central Bankers implement this NO-Dramatic-Depreciation policy by coordinating the same-sizing (approximately) of their money printing. If the ECB prints more Fiat Currency, as it surely will soon, The Fed and other CB's must follow suit. This monetary Hyper-Inflation leads eventually to Price Hyper-Inflation as it already has in the U.S. (9.9% -- see Note 2) and creates superb Profit Opportunities along the way (see Note 3). Nonetheless, Gold and Silver Prices are still vulnerable to Cartel Takedown attempts.
Even so QE4 is coming. And at the First Whiff that a QE 4 will be implemented, we can expect Gold, Silver, and especially the miners to accelerate their recent launch up. We look forward to more closely Forecasting the launch date of their durable Uptrend as it draws nearer.
Gluskin Shelf Chief Economist, David Rosenberg, wisely observes "there is a very good opportunity in Gold" and "it will eventually hit $3,000." We agree. We shall be watching very closely "Signals" from the CB's, and watching even more closely what they actually do, however well it is disguised.
Best regards,
Deepcaster
May 17, 2012
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 December, 2009, Special Alert containing a summary overview of Intervention entitled "Forecasts and December, 2009 Special Alert: Profiting From The Cartels 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.
Note 2: *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 May 14, 2012
2.30% / 9.94%
U.S. Unemployment reported May 4, 2012
8.2% / 22.3%
U.S. GDP Annual Growth/Decline reported April 27, 2012
1.62% / -2.17%
U.S. M3 reported May 7, 2012 (Month of March, Y.O.Y.)
No Official Report / 3.02% (e)
Note 3: Recent moves (correctly forecast by Deepcaster) in Gold, Silver, the U.S. Dollar, and U.S. Treasuries have been catalyzed by Macro-Events and Cartel Manipulation. Similarly, recent Equities and Commodities Takedowns have been catalyzed by Eurozone Realities (Spain is too Big to Bail and Greece may be on the verge of Debt Repudiation), the China Slowdown, and by what the J.P. Morgan Chase Debacle portends for the Derivatives Disease in the Financial Markets.
The BIS (the Central Bankers' Bank) says that as of June, 2011 there were over $700 Trillion National Value of Derivatives Outstanding -- about $100 Trillion more than just before the 2007-2008 Financial Crisis.
But Jim Sinclair says the Actual Amount is over A Quadrillion(!) Dollars because the BIS changed the definition of "Derivatives".
We agree with Sinclair, and with Buffet that they are "Time Bombs".
The fact that JPM publically admitted its error before unwinding its "$2 billion" (now reportedly $3 billion) plus Loss testifies to the seriousness of the Derivatives Threat. Regulators should implement the Volcker Rule etc. forthwith, so that Taxpayers' Bank Deposits and "Insurance" (via, e.g., the FDIC) will not be again at risk from Mega-Banks taking Mega-Risks.
But the Positive News it that the Opportunities we have described in recent Letters and Alerts are approaching Maximum Attractiveness. And there will likely be a Very Major Catalyst soon to begin to realize this Profit Potential.
See our latest Alert -- "Opportunities Knocking Louder: Forecasts: Key Commodities, incl. Gold, Silver, Grains, Copper, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates" just posted in 'Alerts Cache' at deepcaster.com.
One such Opportunity flows from ongoing and increasing Mega-Bank Money Printing.
But perhaps the Greatest Opportunities will likely result from that Very Major Catalyst referred to above.
