“Whether Americans and Westerners in general like it or not, the Chinese have become and will remain the key drivers to many economic and financial market developments, progress, and averted wreckage. The intrepid lapdog US press, loyal to the syndicate, is a critical element to maintain distractions… for years they have maintained a tight link in monetary policy. Doing so has linked their asset bubble expansion and bust cycle to the deadly one in the United States, and filled their coffers with US$-denominated toxic debt securities. However, China has three advantages over the US… They have $2.65 trillion in savings… a vast industrial base, courtesy of the US, the West, and Japan, which donated the technology… They have an expanding middle class… It is slowly becoming clear that the US granted the Most Favored Nation status to China in return for massive gold & silver swaps to the USGovt. The Wall Street fraud kings illicitly sold the leased bullion into the market, to sustain the American fiat paper congame, and thus a betrayal to the Chinese.
The Beijing leaders are highly motivated to unseat the Anglo bankers from their perched throne, emboldened by vengeance. The betrayal was to the American people also, since waves of jobs went to China from US shores, since the US sold not only its own Fort Knox gold inventory, but Western Europe's also… Those who believe the USGovt has any gold reserves at all should donate their cerebrums to science while still alive… The USGovt in all likelihood is in possession of less than zero gold, owing both Europe and China massive amounts. It is the American ticket to the Third World, paved by lost industry, locked by vast debt…
…a comment is in order regarding President Obama's State of the Union address… the entirety of the sacrifice to reduce the USGovt budget will come from the domestic, non-defense, non-security side… The higher priority war machine will be preserved… Ironically, the security of the nation has been put in peril from unspeakable banker fraud, abandonment of industry, and neglect of infrastructure… The Obama Admin will remain committed to gutting America, undercutting the middle class, and feeding the deterioration of the USEconomy… When reference is made to a Sputnik moment for the United States, try not to laugh… Survival will soon escalate to a higher priority.
The Chinese are well along a full court press to secure Gold bullion and dominate in the next phase of the global chess game that will span the next decade or more. With the expansion in the European Dollar Swap Window by the Chinese, the Euro currency has risen impressively… My guess is the harlot Intl Monetary Fund will facilitate the Gold conversion, from the EU member nation central banks associated with PIGS nations. If inadequate supply of Gold is a problem with PIGS nations, perhaps some gold swap contracts can be enabled with the help of the Bank For Intl Settlements in Switzerland. But those swaps would seal the PIGS nation fates, since they would hand over industrial, commercial, and other collateral, assuring banker elite ownership of whatever keys to the kingdom are left… China has found a way to purchase high volumes of Gold bullion at a discount… So the PIGS debt will be rescued for a while, but with forfeit of their central bank gold, or borrowed gold.
Lately, a chief US export has been price inflation, most evident in food prices, courtesy of the QE2 program by the USFed. In the last decade, the chief export was toxic debt securities. The Chinese have a different approach… They have made 180 trade deals… They do not place military personnel on foreign soil. They do not lace foreign banking systems with toxic debt. They establish multi-faceted contracts that involve the build-out of port facilities, railroad lines, schools, hospitals, and community living… They operate a sophisticated guerrilla economic warfare in sharp contrast to what the US does. The Chinese build partnerships… while the Americans ignite violent conflicts and demand that allies take sides, while extorting bank ruin, living above their means.
The most important factor to bear upon the financial markets globally in the last several months… is the creation of the Dollar Swap Windows by China… Their focus is on the PIGS nation sovereign debt… They will buy PIGS debt at discount. They will win favor… They will cut off geopolitical opposition in extremely subtle manner. They will open up the pathways for greater technology transfer. They will offer a semblance of stability to the currency markets in turmoil. They will spread their global presence, if not dominance. They will work some backdoor deals with motives to secure large volumes of gold bullion at discount…
…My full expectation is that the Chinese will sell far more USTBonds than they purchase PIGS nation sovereign debt. In other words, they are building a dumping ground. Key parts of the equation are that the Europeans have been promised a willing buyer (although with ulterior motive) in the Chinese for PIGS sovereign debt. The Germans are sick & tired, fed up to the gills, in supporting the Southern Europe welfare system…
The financial news reports fail to mention the China card. They fail to mention that China is exchanging USTBonds for Euros in order to purchase EuroBonds with PIGS skin labels. They fail to mention that large Chinese hands are supporting the Euro currency… A grand Chinese wedge has been inserted, not so much between Central Europe and Southern Europe as between Europe and the United States. China will be crucial in casting the Southern nations aside from the European core. They will become wards of China, even for exploit…
My best guess is that the Chinese have temporarily halted their usage of the COMEX avenue for gold acquisition. They have permitted the corrupted COMEX to push down the gold price, using its fraudulent paper mechanisms. They have given free rein for the Wall Street maestros to lower the gold price for any IMF deal to secure European gold bullion in exchange for EuroBonds. Most gold & silver contracts are settled in cash anyway these days, since the COMEX does not have much precious metal in its possession. Imagine the day coming before too many months when gold & silver can be traded in contracts at the COMEX with no gold or silver metal exchanging hands. That day is coming, along with ruin of the GLD and SLV defaults… As for the Gold & Silver price, they will rise when the Chinese decide to resume buying. Right now, their attention is diverted to EU gold bought at deep discount, and in volume. As usual, they are thinking at least 20 years ahead…
Germany is grateful that a new benefactor has come to Southern Europe… The Germans are exhausted from $300 billion in annual welfare support of a deadbeat set of children in Portugal, Italy, Greece, and Spain. Over the last ten years, the drain of German wealth has been $3 trillion in total…
In return for the outsized Chinese relief of PIGS debt, the Germans have offered key exports in technology… The German Economy is not a war economy, as they possess world class technology for domestic purposes. In the early part of the last 2000 decade, the technology transfer was significant from Japan to China. It enabled a great leap for Chinese industry… the Chinese leapfrogged the US easily… My view is that the Eastern Alliance… are working on the New Nordic Euro currency, complete with a gold component, in order to establish a replacement for global banking and commerce. It could become a new global reserve currency…
…at the most recent G-20 Meeting of finance ministers. The USGovt attempted to find wider support for hostility against China. They all fell of deaf ears. The American delegation was embarrassed, isolated, and stunned. With the Chinese acting as chief debt benefactor in Europe, with the Chinese forging Asian, Arab, South American alliances, nobody joined the adolescent US chatter to confront and combat China… Witness the battle for global control and leadership… As the Islamics fade in perceived threat, enter the Chinese who "stole" the US jobs and "sit on" vast hoard of money from "ill-gotten trade surpluses" in great ongoing accumulation. The ugly truth is that 60% to 65% of Chinese trade surplus from 2004 to 2008 was derived from US and Western corporations having expanded on Chinese soil with factories, fully endorsed by USGovt and Western Govts…
The hypocrisy is thick. However, the incessant annoying shallow charges of currency manipulation ring hollow when the US Federal Reserve announced the Quantitative Easing #2… Expect a QE3 later this year, to rescue states and muni bonds, but only after government pension obligations are abandoned and smashed. In the process, the United States has become isolated. Numerous trade deals exclude the USGovt and USEconomy…
THE CHINESE WISH TO CONVERT DISCOUNTED EUROBONDS TO SECURE HUGE VOLUMES OF EUROPEAN GOLD… The acquisition will NOT be front page news, will NOT be discussed by European leaders, and will NOT be publicly debated… They have very likely secured deals whereby the IMF harlot will facilitate huge gold bullion sales to China with the EuroBond securities… The common denominator in the great majority of Chinese deals forged worldwide in the last decade is the secured supply line of hard assets, like commodities…
The extreme wild card in the entire equation is eventually colonization by the Chinese elite. If they aid in government debt purchase, then hold title to property, while providing supply lines to a wide range of consumer products (someday cars too), what would prevent them from sending 100 thousand people per year to occupy abandoned homes and empty apartment buildings held under proper title? Nothing!”
“China Plays Europe Card”
Jim Willie CB, GoldenJackass.com, 1/26/11
“This morning news came down the wires that the rating agency S&P had downgraded Japan's sovereign debt from 'AA' to 'AA-'. This is no small development. The reality is that Japan's finances are in even worse shape than those of the US when its overall indebtedness is compared as a percentage of GDP. Japan is approaching a debt to GDP ratio of nearly 200%!..
What this means is that the rating agencies… are looking at the huge deficits being run by many nations in the West (and Japan). In other words - TOO MUCH DEBT!
That led to selling in the long end of the US yield curve this morning as bond traders are starting to be more than a bit fearful that the same thing is going to happen to the US's 'AAA' rating… They are watching massive amounts of QE2 and another ballooning of the federal budget deficit and are selling even as the Fed attempts to jam the market higher with its purchases. AT this point, the only thing holding the long end of the curve is the Fed. How long can that last especially without affecting the Dollar?
More and more we see the integrity of sovereign debt being brought into doubt which leads to the question among many investors; "what is a safe haven that is actually safe?"”
“S&P Downgrades Japan's Sovereign Debt”
Jim Sinclair, JSMineset, 1/27/11
The ongoing Takedown of Gold and Silver, The Food Riots in Various Countries around the World; the recent Blue Chips Equities Markets flirtation with Dow 12,000, and the recent Pullback in Crude Oil Prices are all signaling one thing for Investors and Traders: Great Opportunity!
But capitalizing on these developing Opportunities Requires having a Solid Overview of Market and Interventional Forces, Excellent Timing, and the Willingness to go Short in Some Sectors while going Long in Others.
First, Consider Gold and Silver:
The Detractors who claim Gold and Silver have topped point to an ostensibly recovering Economy, generally strong corporate earnings, and increasing Yields on Treasury Securities, as reasons Investors should get out, or not get in, Gold and Silver. And besides, they say, Gold recently hit a record nominal high (and Silver at Record 21st Century High) and there is, they claim, likely not much “up” left.
In fact, the Economy is not recovering, as we and increasing numbers of others have pointed out in recent articles. Fundamentally, there is simply too much Debt, and too much unemployment!
In the Final Analysis, sustained positive Corporate earnings depend on a Recovering Economy which largely depends on the Middle Class Consumer Health in the U.S.A. (which is 70% of U.S. GDP) and Eurozone and elsewhere and continued rapid Chinese growth,.
And, yes, U.S. and Eurozone Treasury Securities have displayed weakness, and thus higher Yields lately, but as John Williams has pointed out this is due mainly to Fed and other Central Bank Q.E. - caused Monetary Inflation and not on increased Economic Activity. But given the ongoing Devaluation of the U.S. Dollar and the realistically unpayable Debts of U.S. and many Eurozone nations, savvy Investors are not likely to jump en masse out of the Precious Metals into Devaluing Paper anytime soon. And the Chinese do not wish to continue their current levels of inflation–inducing growth and are taking steps to moderate it a bit.
Of course, it is becoming ever more widely known that Periodic Gold and Silver Takedowns, including The Ongoing One are due to ongoing Fed led Cartel* Suppression of the Gold and Silver Prices.
*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 Cartel’s 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.
Indeed, Gold and Silver have been appreciating vis a vis major Fiat Currencies for a decade now, because, for one reason, Central Banks are printing excessively much Fiat Currency, and facilitating far too much Debt, to increase their own Profits and Power.
And as to the argument that Gold, say, has had its run-up and is overbought, consider the following chart:
Gold and Gold Mining Shares in % of Global Assets
(Sources: Silberjunge.de, Erste Group Research)
Consider that while the average % of Global Assets in Gold and Gold Shares from 1921 through 1981 is 26%, in 2009 a mere 0.8% (i.e. less than 1%!) of Global Assets were in Gold and Gold Shares!
Consider also the November 9, 2010 historic high Gold Price ($1421/oz) and the recent 21st Century High Nominal High Silver Price ($30.67) in light of Real Inflation being Factored in per John Williams’.
“The earlier all-time (Gold) high of $850.00…of January 21, 1980 would be $2,395 per troy ounce, based on December 2010 CPI-U-adjusted dollars, $7,943 per troy ounce based on SGS-Alternate-CPI-adjusted dollars…
…for silver in January 1980 of $49.45 per troy ounce…1980 silver price peak would be $139 per troy ounce and would be $462 per troy ounce in terms of…SGS-Alternate-CPI-adjusted dollars…
(and regarding Retail Sales, an important indication of Economic Activity)
…annual contraction in December 2010 deepened to 4.3%, from 4.0% in November.”
“Commentary Number 345: December Inflation, Retail Sales, Production”
John Williams, Shadowstats.com, 1/14/11
Indeed, it is crucial when considering the Price Prospects for Precious Metals to consider the Real Numbers as opposed to the Bogus Official Ones.
Shadowstats.com calculates the Real Numbers for the U.S. the way they were calculated in the 1980’s and 1990’s, before systematic Official Data Distortion and Interventions began in earnest.
Bogus Official Numbers vs.Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported January 14, 2011
1.50% / 8.91% (annualized December, 2010 Rate)
U.S. Unemployment reported January 7, 2011
9.4% / 22.4%
U.S. GDP Annual Growth/Decline reported December 22, 2010
3.25% / -1.44%
U.S. M3 reported January 15, 2011 (Month of December, Y.O.Y.)
No Official Report / -2.76%
Note that Real U.S. Price Inflation is already raging at 8.91% in the U.S.A. a Hyperinflationary Threshold level.
Thus, in light of the aforementioned, and ongoing Q.E., and highly likely Q.E. 3 and Q.E. 4 and…? the long term Price Prospects for Gold and Silver are very Bright.
Short term, given the ongoing Takedown, ideally one buys as close to an Interim Bottom, as possible. Deepcaster intends to recommend several Gold and Silver Prospectors and Miners in 2011, as Interim Bottoms are Near.
In sum, Gold, Silver, and Agricultural Products and businesses provide the Main Refuge and Profit Potential for Investors Worldwide.
Speaking of Agricultural Products, given that the Massive Fiat Currency Printing by The Major Central Banks is generating major Food Price Inflation and will continue to do so. Deepcaster recommends Investors prepare to go Green.
Foodstuffs in high and inelastic demand and the companies which focus on them, will continue to do well, regardless of economic conditions.
Thus, Deepcaster also has already identified and intends to recommend Key Agricultural Enterprises with Great Potential, with the first being Recommended in an Alert very soon.
On a related issue, Potable Water Crises are Proliferating around the World. Deepcaster has also identified several companies with excellent Potential whose Mission it is to respond to increasing Potable Water Needs.
As to Other Sectors not mentioned here as we indicated in our recent letter, one can expect Serious Takedowns in certain of these Sectors and very soon in one Sector. That is why it is essential to be willing and able to go Short as appropriate.
In sum, recent and Prospective Market Action Signals Present and Prospective Great Opportunities in Gold, Silver and Green.
