“…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
Bill Bonner
correctly identifies The Threat that is coming from The Mega-Bank Cartel (Note
1) — an “attempt to cut off our finances and line of retreat” — that is, The
Cartel’s Attempt to discourage and, in
certain circumstances, prevent the use of Cash. Take Note that Mega-Bank
Moves in this direction are already
occurring.
But The
Threat is much Broader than that, and includes dethroning the US$ as the
World’s Reserve Currency and replacing it with a New Reserve Currency, IMF
SDRs, a “Currency” which could not be owned by Citizens, but would be
Controlled by The Mega-Bank Cartel’s IMF.
Worse, this
would result in a dramatic drop in the Purchasing Power of Citizens’ (like you
and me) Fiat Currencies, in effect, a Confiscation of Citizens’ Wealth.
But before we
address that IMF SDR Threat, Consider how the “Cash Abolition Threat” — an
“attack” as Bonner correctly puts it — is likely to play out.
“…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.
“Last week, the
influential Financial Times newspaper ran an article calling for the abolition
of cash. … And it claimed that cash causes ‘a lot of distortion in the economic
system’.
“Can you believe
it?...
“It also repeated the
familiar claims that cash also is what finances terrorism, tax evasion, and the
black market. Making cash illegal, it says, would ‘make life easier for a
government set on squeezing the informal economy out of existence.’
“You see where this
is going, don’t you, dear reader?
“If the feds are able
to ban cash, they will have you completely under their control. You will invest
when they want you to invest. You will buy when and what they want you to buy.
“You will be forced
to keep your money in a bank — a bank controlled, of course, by the feds.
“You will say that
you have ‘cash in the bank,’ but it won’t be true. All you will have is a
credit against the bank….
“If this new attack
succeeds, by law, it will have no access at all to cash. And neither will you…
“You will be completely
surrounded. If the feds want to force you to spend… or invest… your money, they
will simply impose a ‘negative interest rate.’…
Ibid.
Unfortunately,
there is precedent for these sorts of Actions. Worse, Certain Mega-Banks have
already taken steps to discourage the use of Cash.
“In 2001 in
Argentina, the closed the banks. …
“In 2013 in Cyprus,
they whacked large accounts with a 50% tax…
“And in the U.S.,
JPMorgan Chase recently sent a letter to its large depositors telling them
that, as of May 1, it would start charging what it called a ‘balance sheet
utilization fee’ …
“The feds will
announce a ‘bank holiday.’ They may ban transfers to gold sellers or foreign
currency…
“…It will be almost
impossible to protect yourself.”
Ibid.
This accelerating
push to discourage/forbid the use of cash is one consequence of The Fed and
other Central Banks multi-faceted “Competition” to diminish the Purchasing
Power of their Fiat Currencies (i.e., QE, Easy Credit, etc.) and to support
their Banks. Medium-term this will cause a dramatic loss of Purchasing Power of
the $US, and, long-term, loss of value of U.S. Treasuries.
But it is
important to consider how this will likely play out and how to surmount the
Negative Effects beginning now.
Short-term,
Re. U.S. Treasuries, various increasing risks to the Equities Markets and the
Economy have made and will make Investors turn to that ostensible “Safe Haven” of
Treasuries with more Equities weakness coming in the weeks ahead.
And, as the
Equities Crash is now launching we are seeing a Rush back into the Ostensible
Safety of U.S. Treasuries and will likely see the 10Year Yield dropping to or
below 2% again for a while, as we forecast.
In sum, short to medium term, we are still
Bullish on U.S. Treasuries. Long-term we expect them to crash. The Signal that that Crash is impending will
come when their yields start to spike.
We intend
then to issue a Buy Recommendation aimed at Profiting.
Longer term, regarding the future of
the U.S. Dollar, Jim
Rickards well describes Triffin’s Dilemma, and how it ensures that the $US is
doomed as World’s Reserve Currency. (Rickards is author of “Currency Wars” and
“The End of Money.”)
But, Rickards
claims that IMF SDRs are the “Brilliant” Solution.
But Rickards
is wrong in claiming that IMF SDRs
are a Solution because he also admits that “The only losers are the citizens of
IMF Member Countries — people like you and me — who will suffer local currency
inflation” … and further admits “I’m preparing with Gold and Hard Assets.” (That
last is excellent advice.)
“If the dollar was
the lead reserve currency, then the entire world needed dollars to finance
world trade. In order to supply these dollars, the U.S. had to run trade
deficits….
“So the U.S. ran
trade deficits, the world got dollars and global trade flourished. But if you
run deficits long enough, you go broke. That was Triffin’s dilemma. Any system
based on dollars would eventually cause the dollar to collapse because there
would either be too many dollars or not enough gold at fixed prices to keep the
game going. This paradox between dollar deficits and dollar confidence was
unsustainable….
“This new Age of King
Dollar lasted from 1980–2010.
“Still, it was all
based on confidence in the dollar. Triffin’s dilemma never went away; it was
just in the background waiting to re-emerge while the world binged on new
dollar creation and forgot about gold. The U.S. ran persistent large trade
deficits during this entire 30-year period as Triffin predicted. The world
gorged on dollar reserves with China leading the way in the 1990s and early
2000s.
“The new game ended
in 2010 with the start of a currency war in the aftermath of the Panic of 2008.
Trading partners are again jockeying for position as they did in the early
1970s. A new systemic collapse is waiting in the wings….
“The major trading
and finance powers are cannibalizing each other with weak currencies….
“Is there an
alternative to gold? There is one other way out. That’s our old friend, the
SDR. The brilliance of the SDR solution is that it solves Triffin’s dilemma.
“Recall the paradox
is that the reserve currency issuer has to run trade deficits, but if you run
deficits long enough, you go broke. But SDRs are issued by the IMF. The IMF is
not a country and does not have a trade deficit. In theory, the IMF can print
SDRs forever and never go broke. The SDRs just go round and round among the IMF
members in a closed circuit.
“Individuals won’t
have SDRs. Only countries will have them in their reserves. These countries
have no desire to break the new SDR system, because they’re all in it together.
The U.S. is no longer the boss. Instead, you have the “Five Families”
consisting of China, Japan, the U.S., Europe and Russia operating through the
IMF.
“The only losers are
the citizens of the IMF member countries — people like you and I — who will
suffer local currency inflation. I’m preparing with gold and hard assets, but
most people will be caught unaware, like the Greeks who lined up at empty ATMs
last month….”
“Triffin’s Dilemma and the Future of SDRs,”
Strategic Intelligence,
Jim Rickards, 07/09/2015
Yes, Price
Hyperinflation is coming, and the way to prepare is yes, with Gold, Silver and
selected Hard Assets.
But, acquiring
these Hard Assets has to be done with Great Care in Asset-Form-Selection, and
with Excellent timing. This is because a Fed-led Mega-Bank Cartel has for years
been engaged in Price Suppression of these Precious Metals. (See Gold
Anti-Trust Action at gata.org and Note 1 below). But let’s consider a recent
example of how this Price Suppression plays out.
The Gold and
Silver Launch UP which we earlier forecast has begun. Gold has moved from
$1090ish to $1160ish per ounce recently, despite
Cartel Price Suppression efforts. But on September 2nd’s Equity
Rally, The Cartel has been able to continue to suppress paper/digital prices again (back down to $1120ish as we write), but
at a Tremendous Cost — a record High 124 “ounces” of long paper Gold contracts on the Comex were recently reported for every
ounce of physical actually in inventory.
“Earlier this week, a
Comex gold inventory report showed that availability of the precious metal was
down to its lowest levels ever for eligible gold to be used to back futures
contracts in the paper metals market. And as every indicator points towards a
vast shortage of both physical gold and silver worldwide, on Aug. 5 bullion
bank J.P. Morgan attempted to quell the run on metals not by delivering actual
gold to the Comex, but by performing an accounting trick and manipulating data
to change registered gold into eligible gold on inventory ledgers. …
‘since
after the adjustment, Comex registered gold had dropped to a never before seen
low of just over 10 tons, resulting in record high gold coverage ratio of 124
ounces in outstanding gold open interest for every ounce of physical. …
‘this
was not achieved with an infusion of actual new gold into the Comex, but thanks
to JPM reclassifying 276,000 ounces of gold from the Eligible into the
Registered category, even as actual eligible gold continues quietly
hemorrhaging out of the Comex.’ — ZeroHedge
“In reality, the
Comex is no longer used as a true futures market for delivery of physical
precious metals as it has not made an actual delivery in over two and a half
years. And instead the Comex presides over a paper and derivatives market, …
“For years there has
been much speculation on just how much the Comex is used to manipulate the
price of gold and silver by allowing the Fed through bullion banks like J.P.
Morgan to manipulate prices through the futures market.”
http://www.examiner.com/article/gold-market-so-tight-that-banks-are-manipulating-data-to-show-more-inventory
For The
Cartel, Silver also is especially increasingly a “Problem” because of the
intensifying Physical supply Shortage, as manifest by the 30%+ premium for recently-minted
Bullion Coins.
Thus, The
Cartel has temporarily successfully capped Silver’s rise from the $14s to just
over $15 and now back to the low $14s as well as Gold’s rise from $1160ish and
now back to the $1120s. But the Cartel is finding it increasingly difficult to
do so and will ultimately lose that Battle.
Thus, the
Great Precious Metals Launch up has Begun. BUT
(CAVEAT!) The Launch UP will not be smooth as
The Cartel will periodically succeed with Takedowns as it did somewhat the last week Of August..
The Cartel’s
intensifying problem is that there is an increasing demand for Physical Gold and Silver, led by China,
India and Russia. And the 124 to 1 “Coverage Ratio” (paper/digital “Gold”
versus Physical Gold actually in Inventory at The Comex) reflects.
For years, we
have cited here the overwhelming evidence for ongoing and generally successful
Central Bank Cartel Suppression of Gold and Silver Prices. (See gata.org for
documentation.)
But that worm
is turning. Across the Board, Currency Devaluation by Major Nations plus the
impending crashing of Alternative Asset Values (e.g., Equities) plus, above
all, the increasing shortage of Physical Gold and Silver, especially Silver, available for Delivery.
And consider
that Silver has historically had the nearly Equal Stature as Gold as “Real
Money”.
And consider
that Silver, unlike Gold, has heavy industrial demand (about 50% of its Actual
Production) and that it is essential
to Modern life in Computers, Smartphones, Medicine, Dentistry and many other
Industrial Applications.
In sum, about
half of Silver Production gets used up
each year in industrial processes.
So we see
that a run up on Gold is also beginning. Of course, The Cartel will do all it can
to continue to suppress these Precious Metals prices. But they will likely not
succeed much longer.
Indeed,
Silver may accelerate up first because of the increasingly critical physical
supply shortage. And when Silver launches, so will Gold, since Gold is The
Ultimate Safe Haven from ongoing and
intensifying Central Bank Competitive Currency Devaluation.
There are a
number of Triggers any one of which could cause Gold and Silver to launch. For
example
- The
U.S., Chinese and Eurozone Economic Fundamentals — all lousy (see Shadowstats note) with disinflating
or deflating economies, and unpayable Debt in many Major Nations
-
Technicals
— Two Hindenburg Omens on the clock.
-
Multi-year
Jaws of Death Pattern Topping
-
S&P
just within 1 point of all time high a few weeks ago, but 10% of NYSE stocks generated new 52 Week lows, at the same time
— very Bearish
- Industrials
forming a completing “Rounding Top” — Classically Bearish
- A
break below the Bottom Boundary of a declining bearish Wedge
- A
Death Cross in the Dow
- Chinese
Shares keep dropping
-
Equity
Volumes Crash on Up Days — Very Bearish
- Walmart’s
Negative Guidance reflects the Reality that consumers are hurting
-
And
several More.
Deepcaster
has forecast The Year-End 2015-2018 Price Targets for Gold and Silver.
And Deepcaster
successfully forecast the 2008 and 2015 Equities Takedowns. Our most recent
Forecasts generated 40%, 65% and 110% Profit after just 4, 2 and 3 days,
respectively in August alone. (See Note 2)
In sum, More
Mega-Moves are coming and soon!!
Best
regards,
Deepcaster
Original Posting Date:
September 4, 2015
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 July, 2014 Letter entitled "Profit, Protection, Despite
Cartel Intervention" in the ‘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, 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.
Note 2: Our attention
to Key Timing Signals and Interventionals and accurate statistics has
facilitated Recommendations which have performed well lately. Consider our
profits taken in recent months in our Speculative and Fortress Assets
Portfolios*
- 45% Profit on Long Treasury Bond Position on October 1, 2015 after just 22 days (i.e., about 775% Annualized)
-
265% Profit on Short NASDAQ Position on September 29, 2015 after just 57 days (i.e., about 1690% Annualized)
-
110% Profit on Short Russell 2000 Positon on August 21, 2015 after just 3 days (i.e., about 13500% Annualized)
-
65% Profit on Short Russell 2000 Position on August 20, 2015 after just 2 days (i.e., about 12000% Annualized)
-
40% Profit on Short Retail Sector ETF Position on August 7, 2015 after just 4 days (i.e., about 3630% Annualized)
-
80% Profit on Short Retail Sector ETF Position on July 27, 2015 after just 6 days (i.e., about 4850% Annualized)
