"The Financial Times reports that the European Central Bank has secretly distributed E100 billion to Greek banks and billions more in secret to other European banks and, in doing so, has gained great "sway over eurozone politicians" -- you know, the people actually elected to run their countries.
"Infinite secret money is infinite secret power, and it's great that the FT is interested in this aspect of central bank secrecy. Is it too much to hope that the FT someday will show similar interest in the secrecy imposed by central banks on their interventions in the gold market, interventions detailed by GATA here?"
"European Central Bank secretly distributes infinite money"
Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc, 5/22/12
No surprise that The Cartel (Note 1) of Central Bankers continues to pump more Q.E. into the Financial System to preserve the Mega-Banks' Power and Profits. Once The Cartel Bankers begin QE (i.e., Fiat Money Printing) they can't stop. The problem is, Infinite Q.E. -- The Biggest One -- is ultimately a Recipe for Disaster for Citizens and Investor-Citizens alike since it eventually creates Dangerous Price Inflation.
"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, 5/15/12
QE can not be stopped any time soon, but it can be Profitably Corralled as we explain.
But first a bit more context is needed. Consider that a Covert (albeit de facto) QE3 has already been implemented in the last 6 months via The Fed's Operation Twist and the ECB's LTRO program.
Moreover, consider that the potentially Toxic (because highly leveraged) Derivatives Positions at the Mega-Banks are of the same Order of Magnitude that they were before the 2007-2009 Financial Crisis.
Specifically, consider the Multi-Trillion Dollar Derivatives Positions at the Four largest Banks (Sept 30, 2011) and compare it with their Total Assets.
NOTIONAL AMOUNT OF DERIVATIVE CONTRACTS
TOP 25 COMMERCIAL BANKS AND TRUST COMPANIES IN DERIVATIVES
SEPTEMBER 30, 2011, $ MILLIONS
RANK | BANK NAME | STATE | TOTAL ASSETS | TOTAL DERIVATIVES
1 | JPMORGAN CHASE BANK NA | OH | $1,826,387 | $75,351,583
2 | CITIBANK NATIONAL ASSN | SD | 1,300,674 | 55,607,201
3 | BANK OF AMERICA NA | NC | 1,466,417 | 55,123,036
4 | GOLDMAN SACHS BANK USA | NY | 104,514 | 46,453,719
Compare the approximate $4.7 Trillion combined Assets of these four largest Banks with their approximate $232 Trillion Notional Derivatives Exposure (as of September 30, 2011).
Stress Test Anyone?
Consider in addition, for example, the Best Estimates of the Capital Injection needed to "save" the Spanish Banks -- around One Trillion Euros.
No wonder yields on 10 year Spanish Government Notes are approaching the Hyper-Toxic 7%.
A major problem in that each additional Injection of QE creates less and less Markets Boosting effect. Just as a Drug Addict needs more and more, with increasingly less effect.
Jeff Clark is correct, additional QE Tranches are coming "surely we'll see QE4, QE5 and on and on and on".
But unlimited QE (i.e., unlimited Monetary Inflation) inevitably brings Price Inflation, which we are already seeing round the World. In the U.S., for example, 9.94%, annualized per shadowstats.com, already Threshold Hyperinflationary. Food Prices, e.g., are off their highs, but they have not really dropped that much, have they?!
So Neither Monetary nor Intensifying Price Inflation can be stopped, any time soon (though ultimately, the QE-Paper-Edifice is likely to collapse).
But the effects of Hyperinflation can be profitably corralled.
The following excerpt from Sharps Pixley gives us a clue as to how.
"Central banks gold purchase data in April cheered the gold market on Thursday, however. Mexico, Kazakhstan and Ukraine added about 204,000 ounces in April. The Philippines added a whopping 1.033 million ounces in March with gold now at 13.6% of its total reserves. UBS highlighted the Philippines' gold purchase is significant as this is the second largest monthly Central Bank's purchase after Mexico's purchase of 2.5 million ounces in March 2011.World Gold Council (WGC) reported that central bank purchases were 80.8 tonnes in Q1 2012 or around 7% of global gold demand. What is more interesting is that WGC is now confident that central banks will continue to buy gold and has added official sector purchases as a new element of gold demand while eliminating official sector sales as a negative supply factor."
"Central Bankers Bought More Gold while European Leaders Kept Talking"
Austin Kiddle, Sharps Pixley, 5/25/12
If there is any group that should know the effect of, and remedies for, infinite Fiat Money Creation, it is the Central Bankers.
And what are they doing? They are buying Gold.
And notice that in the recent Equities Market Downdraft, Gold is acting as a Safe Haven Asset, stubbornly refusing to move lower than the $1550s to $1560s range. Buying Timing is Key.
Notice also that recently the Mining Shares have performed better than Equities-in-General. The aforementioned are why Deepcaster has added Mining Shares Recommendations and other Monetary Inflation Surmounting Recos, including High Yield Recommendations (See Notes 2 and 3) aimed at achieving a Total Return (Gain + Yield) in excess of Real Inflation, to his Portfolios.
Thus, Guidelines for building a "Corrall" with both Wealth Protection and Profit Potential are
1) Buy Physical Gold and Silver at the right time.
2) Buy Quality Mining Shares whose Fundamentals and Key Technicals are quite Bullish now.
3) Do not be satisfied with Achieving anything less than a Total annualized Return in excess of the Real Inflation level of 10% otherwise, you will Surely lose Purchasing Power.
4) Aim to shift investments into Sectors which are resistant to and Profit from Monetary, and thus Price, Inflation.
"Q.E. to Infinity" as Jim Sinclair puts it, is here, now. And Deepcaster will be forecasting the timing of the next QE Tranche, implemented "for maximum impact" as Jeff Clark correctly notes.
Best regards,
Deepcaster
May 31, 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 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.
Note 2: One Impending Mega-Event will effect Rapid Trend Changes in Several Key Sectors.
Major Intensifying Challenges -- the U.S. Economic Malaise and Unemployment, intensifying Eurozone Debt Saturation as well as Chinese and Indian Economic Slowdowns -- all are bringing The Impending Mega-Event ever Closer.
Consider the Dramatic Impact of the Impending Mega-Event through the lens of our latest Forecasts.
Read our recent Alert "Mega-Event Preparation; Buy Reco; Forecasts: Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates" in 'Alerts Cache' at www.deepcaster.com.
This Mega-Event will likely be Inflation-generating. To surmount Real Inflation (e.g. U.S. now at 9.9% per shadowstats.com) consider our High Yield Portfolio.
To consider our High-Yield Stocks Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%, 26%, 6.7%, 8%, 10.6%, 14.9%, 10% and 15.6% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'.
This Mega-Event should also magnify the Subsector launch referred to in Note 3 below.
Note 3: You may be hearing it here first but one Massive U.S.-Centric Sector Bubble is beginning to Burst. And one Subsector with Massive Profit Potential is launching. Regarding that Subsector launch consider:
No sooner had the "Word" from the G8 Summit been heard than the Equities Markets launched into a Bullish Outside Reversal Day.
That "Word" was that "Growth" (announced the G8) must take precedence over Austerity. Translation: More Money Printing is on its way.
The Equities Markets loved it.
Yet None of the Eurozone or U.K.'s or U.S.A.'s Debt Saturation or Unemployment or Fiscal Excesses have been solved. And China's Growth continues to slow. However, that G8 "Word" was followed in a few hours by "leaks" that preparations were being made for a Greek Exit from the Euro. The Equities Markets tanked.
Taken together, these Market Actions triggered a Buy Alert in a Key Subsector. This Buy Reco has several hundred percent Profit Potential. See our latest Alert. And we emphasize that all the foregoing Developments have begun to Burst a huge U.S.-Centric Sector Bubble!
For the Details of all the foregoing, see our recent Alert -- "Forecasts: 1 Subsector to Soar, Massive U.S. Centric Bubble to Burst; and for Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates" just posted in 'Alerts Cache' at deepcaster.com.And we also recommend considering our High Yield Portfolio aimed at generating a Total Return (Gain plus Yield) in excess of Real Inflation (e.g., 9.94% in the U.S.).
"Infinite secret money is infinite secret power, and it's great that the FT is interested in this aspect of central bank secrecy. Is it too much to hope that the FT someday will show similar interest in the secrecy imposed by central banks on their interventions in the gold market, interventions detailed by GATA here?"
"European Central Bank secretly distributes infinite money"
Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc, 5/22/12
No surprise that The Cartel (Note 1) of Central Bankers continues to pump more Q.E. into the Financial System to preserve the Mega-Banks' Power and Profits. Once The Cartel Bankers begin QE (i.e., Fiat Money Printing) they can't stop. The problem is, Infinite Q.E. -- The Biggest One -- is ultimately a Recipe for Disaster for Citizens and Investor-Citizens alike since it eventually creates Dangerous Price Inflation.
"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, 5/15/12
QE can not be stopped any time soon, but it can be Profitably Corralled as we explain.
But first a bit more context is needed. Consider that a Covert (albeit de facto) QE3 has already been implemented in the last 6 months via The Fed's Operation Twist and the ECB's LTRO program.
Moreover, consider that the potentially Toxic (because highly leveraged) Derivatives Positions at the Mega-Banks are of the same Order of Magnitude that they were before the 2007-2009 Financial Crisis.
Specifically, consider the Multi-Trillion Dollar Derivatives Positions at the Four largest Banks (Sept 30, 2011) and compare it with their Total Assets.
NOTIONAL AMOUNT OF DERIVATIVE CONTRACTS
TOP 25 COMMERCIAL BANKS AND TRUST COMPANIES IN DERIVATIVES
SEPTEMBER 30, 2011, $ MILLIONS
RANK | BANK NAME | STATE | TOTAL ASSETS | TOTAL DERIVATIVES
1 | JPMORGAN CHASE BANK NA | OH | $1,826,387 | $75,351,583
2 | CITIBANK NATIONAL ASSN | SD | 1,300,674 | 55,607,201
3 | BANK OF AMERICA NA | NC | 1,466,417 | 55,123,036
4 | GOLDMAN SACHS BANK USA | NY | 104,514 | 46,453,719
Compare the approximate $4.7 Trillion combined Assets of these four largest Banks with their approximate $232 Trillion Notional Derivatives Exposure (as of September 30, 2011).
Stress Test Anyone?
Consider in addition, for example, the Best Estimates of the Capital Injection needed to "save" the Spanish Banks -- around One Trillion Euros.
No wonder yields on 10 year Spanish Government Notes are approaching the Hyper-Toxic 7%.
A major problem in that each additional Injection of QE creates less and less Markets Boosting effect. Just as a Drug Addict needs more and more, with increasingly less effect.
Jeff Clark is correct, additional QE Tranches are coming "surely we'll see QE4, QE5 and on and on and on".
But unlimited QE (i.e., unlimited Monetary Inflation) inevitably brings Price Inflation, which we are already seeing round the World. In the U.S., for example, 9.94%, annualized per shadowstats.com, already Threshold Hyperinflationary. Food Prices, e.g., are off their highs, but they have not really dropped that much, have they?!
So Neither Monetary nor Intensifying Price Inflation can be stopped, any time soon (though ultimately, the QE-Paper-Edifice is likely to collapse).
But the effects of Hyperinflation can be profitably corralled.
The following excerpt from Sharps Pixley gives us a clue as to how.
"Central banks gold purchase data in April cheered the gold market on Thursday, however. Mexico, Kazakhstan and Ukraine added about 204,000 ounces in April. The Philippines added a whopping 1.033 million ounces in March with gold now at 13.6% of its total reserves. UBS highlighted the Philippines' gold purchase is significant as this is the second largest monthly Central Bank's purchase after Mexico's purchase of 2.5 million ounces in March 2011.World Gold Council (WGC) reported that central bank purchases were 80.8 tonnes in Q1 2012 or around 7% of global gold demand. What is more interesting is that WGC is now confident that central banks will continue to buy gold and has added official sector purchases as a new element of gold demand while eliminating official sector sales as a negative supply factor."
"Central Bankers Bought More Gold while European Leaders Kept Talking"
Austin Kiddle, Sharps Pixley, 5/25/12
If there is any group that should know the effect of, and remedies for, infinite Fiat Money Creation, it is the Central Bankers.
And what are they doing? They are buying Gold.
And notice that in the recent Equities Market Downdraft, Gold is acting as a Safe Haven Asset, stubbornly refusing to move lower than the $1550s to $1560s range. Buying Timing is Key.
Notice also that recently the Mining Shares have performed better than Equities-in-General. The aforementioned are why Deepcaster has added Mining Shares Recommendations and other Monetary Inflation Surmounting Recos, including High Yield Recommendations (See Notes 2 and 3) aimed at achieving a Total Return (Gain + Yield) in excess of Real Inflation, to his Portfolios.
Thus, Guidelines for building a "Corrall" with both Wealth Protection and Profit Potential are
1) Buy Physical Gold and Silver at the right time.
2) Buy Quality Mining Shares whose Fundamentals and Key Technicals are quite Bullish now.
3) Do not be satisfied with Achieving anything less than a Total annualized Return in excess of the Real Inflation level of 10% otherwise, you will Surely lose Purchasing Power.
4) Aim to shift investments into Sectors which are resistant to and Profit from Monetary, and thus Price, Inflation.
"Q.E. to Infinity" as Jim Sinclair puts it, is here, now. And Deepcaster will be forecasting the timing of the next QE Tranche, implemented "for maximum impact" as Jeff Clark correctly notes.
Best regards,
Deepcaster
May 31, 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 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.
Note 2: One Impending Mega-Event will effect Rapid Trend Changes in Several Key Sectors.
Major Intensifying Challenges -- the U.S. Economic Malaise and Unemployment, intensifying Eurozone Debt Saturation as well as Chinese and Indian Economic Slowdowns -- all are bringing The Impending Mega-Event ever Closer.
Consider the Dramatic Impact of the Impending Mega-Event through the lens of our latest Forecasts.
Read our recent Alert "Mega-Event Preparation; Buy Reco; Forecasts: Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates" in 'Alerts Cache' at www.deepcaster.com.
This Mega-Event will likely be Inflation-generating. To surmount Real Inflation (e.g. U.S. now at 9.9% per shadowstats.com) consider our High Yield Portfolio.
To consider our High-Yield Stocks Portfolio with Recent Yields of 18.5%, 8.6%, 10.6%, 26%, 6.7%, 8%, 10.6%, 14.9%, 10% and 15.6% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'.
This Mega-Event should also magnify the Subsector launch referred to in Note 3 below.
Note 3: You may be hearing it here first but one Massive U.S.-Centric Sector Bubble is beginning to Burst. And one Subsector with Massive Profit Potential is launching. Regarding that Subsector launch consider:
No sooner had the "Word" from the G8 Summit been heard than the Equities Markets launched into a Bullish Outside Reversal Day.
That "Word" was that "Growth" (announced the G8) must take precedence over Austerity. Translation: More Money Printing is on its way.
The Equities Markets loved it.
Yet None of the Eurozone or U.K.'s or U.S.A.'s Debt Saturation or Unemployment or Fiscal Excesses have been solved. And China's Growth continues to slow. However, that G8 "Word" was followed in a few hours by "leaks" that preparations were being made for a Greek Exit from the Euro. The Equities Markets tanked.
Taken together, these Market Actions triggered a Buy Alert in a Key Subsector. This Buy Reco has several hundred percent Profit Potential. See our latest Alert. And we emphasize that all the foregoing Developments have begun to Burst a huge U.S.-Centric Sector Bubble!
For the Details of all the foregoing, see our recent Alert -- "Forecasts: 1 Subsector to Soar, Massive U.S. Centric Bubble to Burst; and for Gold, Silver, Crude Oil; Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates" just posted in 'Alerts Cache' at deepcaster.com.And we also recommend considering our High Yield Portfolio aimed at generating a Total Return (Gain plus Yield) in excess of Real Inflation (e.g., 9.94% in the U.S.).