FSU Editorial: "Profiting From the Mother of All Interventions" by Deepcaster 09/29/2006

Profiting From the Mother of All Interventions
by Deepcaster
deepcaster.com
September 29, 2006

Deepcaster has found that employing all three major market analytical techniques - - fundamental, technical, and interventional - - is essential to successfully forecasting market moves.

In particular, employing interventional analytical techniques when we are in the throes of obvious major markets interventions, such as we are today, is essential.

Indeed, Deepcaster’s view is that we are now witnessing interventions massive in their degree and scope - - that is, we are witnessing The Mother of all Interventions.

So how does one begin to enhance profit opportunities from these ongoing interventions?

Deepcaster suggests that the following “considerations” are crucial in developing a “mind-set” for potentially profiting from the interventions:

Consider the evidence that there is massive and ongoing intervention in key markets by what we choose to call the “Fed-led Cartel” - - a cooperative “cartel” apparently composed of the United States Federal Reserve, the Bank for International Settlements (“BIS”) and key primary dealers.

Perhaps the greatest impediment to profiting from employing interventional analysis is a refusal to admit that intervention exists and that it is pervasive throughout most key markets on most days.

In fact, substantial evidence for interventions (and, indeed, for all the “considerations” below) can be gleaned entirely from public sources. The evidence from these public sources is persuasive and increasing.

For those who doubt that significant intervention exists, we suggest you study Deepcaster’s summary of the interventional landscape in our June, 2006 Letter entitled “Juiced Numbers II - - The Interventional Takedown - - How the Government Gets the Statistics It “Wants,” Markets Get Manipulated, and Citizens Get Deluded, And Worse.”

Consider the evidence that intervention takes place in most, if not all, major markets, and that the interventions are interrelated. For example, we have learned that the 10-year U.S. Treasury Note and the price of gold bullion are not likely to both stay on a sustained uptrend at the same time. Likewise, the takedown of crude oil prices is likely to foreshadow or accompany a takedown in gold prices.

Consider the evidence that INTERVENTION TRUMPS FUNDAMENTALS AND TECHNICALS MUCH OF THE TIME. One of the most successful traders with whom Deepcaster is familiar, stated in recent weeks, with incredulity, that crude oil was “oversold and just kept getting more oversold.” And another trader with an excellent record indicated crude oil was oversold and “due for a bounce.”

Unsurprisingly to Deepcaster, there was no significant bounce and crude just kept getting more “oversold.” For those who have followed Deepcaster’s work, this would also be unsurprising, since Deepcaster has more than once pointed out that The Cartel controls a $3.2 TRILLION derivatives position (see BIS Table #22-A: “Amounts of Outstanding Equity–Linked And Commodity Derivatives” found at http://www.bis.org/statistics/derstats.htm) which apparently has been used in the past few months to drive down natural gas prices and in the past few weeks to drive down crude oil prices.

Consider the evidence that The Cartel PLAYS FAVORITES among the markets. For reasons explained at length in our June, 2006 Letter “Juiced Numbers II - - The Interventional Takedown - - How the Government Gets the Statistics It Wants, Markets Get Manipulated, and Citizens Get Deluded, And Worse.” The Cartel has a vested interest in generating strong demand for its Treasury Securities, for equities in the securities markets, and for its fiat currencies. Similarly, it has a vested interest in discouraging investors from investing in Hard Assets (such a gold and silver) and from investing in strategic commodities (such as crude oil), as stores or measures of value. It is obviously a policy goal of The Cartel to keep investors “in paper.”

Consider that The Cartel may well have less difficulty manipulating markets than they do finding a publicly acceptable pretext for the manipulations which they do want to implement. Ask yourself, for example, if you can remember a day when all the news was bad, yet you were perplexed by the market indices rising and/or by gold falling. We surmise that such days are days in which no pretext was found for market moves which The Cartel regarded as needing to be made, and which were therefore implemented in any event.

There is evidence that The Cartel may be involved in “creating impressions of pretexts” (for its market interventions) in the news media as part of its “Communications Policy.” We encourage readers to view the film “Wag the Dog” in order to fully appreciate “news manufacturing” capabilities.

Unsurprisingly, it is not unreasonable to infer a “political” motivation for certain of The Cartel’s actions. It is not therefore surprising that crude oil and oil distillates are falling before the November election, and that the equities markets appear to be quite buoyant.

Ask yourself: Is it too much to infer that, if The Cartel appears to be generally happy with the policies of incumbent politicians, the “markets” seem to cooperate?

Conclusion

Deepcaster employed the aforementioned general principles when it made its correct forecast last spring that the prices of crude oil, gold, and silver would be taken down, as well as when it developed its “Fall Forecasts” two weeks ago.

If investors employ the aforementioned considerations, it is Deepcaster’s view that they will have taken a giant step forward to enhancing profit opportunities and to avoiding losses.

With best wishes for profitable investing,

Deepcaster

CONTACT INFORMATION
DeepCaster LLC
USA
Email | Website

DEEPCASTER FORTRESS ASSETS LETTER
Wealth Preservation, Wealth Enhancement, & Financial and Geopolitical Intelligence
Gravitas, Pietas, Virtus

The opinions of FSU contributors do not necessarily reflect those of Financial Sense.