Deepcaster has, from its founding ten years ago, aimed to provide Investors Truth about the Economy and Markets so far as we could determine it. Not an easy job given the deluge of Bogus Official Numbers and Mainstream Media Spin or outright distortion or Censorship.
Fortunately, there are Alternative Sources of Accurate Information.
Well, an examination of the Real Economic Numbers and Key Market Realities today leads to a Startling Conclusion. Soon in 2017 we expect Investors to experience a Great Shocker—a Great Profit Opportunity for the Cognoscenti, and a Great Threat to the Wealth of the Unknowing.
To consider the Great Shocker and see the Opportunities and Threats it presents we need first to summarize Key Economic and Markets Realities.
—– The International Economy is burdened with all-time-record levels of both Sovereign and Business Debt. Over $150 Trillion according to the IMF.
Thus any significant Increase in Interest Rates will cause increasing Defaults and Bankruptcies—a phenomenon already occurring in the Energy Industry.
But Interest Rates have already begun to Increase—from 1.5%ish for the U.S. 10-Year Treasury just a few months ago to 2.4%ish as we write. And Real Consumer Price Inflation has NOW shot up to 9.4% (Shadowstats Chart Below).
But the U.S. Economy is not and has not been recovering.
— Real GDP “Growth” is a Negative 1.93% (See Shadowstats chart below)
— The Labor Force Participation Rate is down to 63%, lowest since 1977
— And 43 Million Americans are on Food Stamps!
As to Prospects Going Forward, Consider Shadowstats Overview
“…Nonetheless, once the new Administration takes office January 20th, horrendous issues will face the new team. While quick action is likely from the standpoint of economic stimulus, there will be some lag before the economy responds. Those economic woes and other threats to the banking, financial and economic systems were created and exacerbated by decades of operational malfeasance in the policies of, and banking-system oversight and guidance by the Federal Reserve…. The resulting problems include:
A stagnant economy that never recovered meaningfully from its collapse….
Domestic- and global-banking and financial systems that continue on the brink of insolvency….
A federal budget deficit that tops $100 trillion, counting unfunded liabilities…. If those aggregate obligations remain in place, the United States has zero chance of honoring them. The circumstance promises ultimate insolvency for the U.S. Treasury, or the more-likely full debasement of the U.S. dollar, as the government eventually just prints the money it needs to meet its obligations. Pending banking-system and currency turmoil could trigger that massive-dollar debasement crisis in the immediate future….
“…[T]here generally is a lag between such actions and the beginnings of the desired positive economic impact, by nine months to a year or more. …
“With any near-term boost to the U.S. fiscal deficit, even if short-lived,
the global markets likely would return their focus to those sovereign-solvency problems, as was seen in the dollar crisis of August 2011….
“…[D]espite the Federal Reserve’s rate hike of December 14th, its Federal Open
Market Committee (FOMC) likely will be forced into expanded quantitative easing, before mid-year 2017…
“Fed actions remain centered on maintaining banking-system solvency and liquidity … The Fed simply has used economic woes of the recent past as political cover for the quantitative easings used in bailing out the banking system.
“The Fed’s frequent ‘crying wolf’ during 2016, and before, as to imminent rate hikes, and the eventual December action, largely were used to prop the U.S. dollar. A renewed shift in policy towards easing would pummel the U.S. dollar in the global markets, boosting oil prices and domestic inflation, along with increased repatriation of unwanted, foreign-held dollars that the Fed would end up absorbing. In 2008, when the Fed and the U.S. Treasury opted to save the U.S. banking system at any cost, they had to accept willingly that the cost eventually would include a sharp pickup in domestic inflation.
“A Potential Positive. The new Administration will have the opportunity not only to address near-term economic issues, but also the long-range U.S. sovereign-solvency and current banking-system solvency problems. Those latter issues are extremely difficult to handle from both a political and practical standpoint, such as bringing programs like Medicare and Social Security into long-term, self-sustaining solvency, and perhaps even dissolving the Fed and nationalizing the banking system. Irrespective of the desires of the new Administration, Congress will have to legislate almost all of the needed changes. Congress has been either unwilling or unable to address the fiscal crisis meaningfully, in recent decades, let alone ignore lobbying pressures from the banking and other industries.
“If the system is not brought under long-term functional control now, it likely never will be, … long-term solvency issues of the government threaten domestic hyperinflation…. Further, the banking-system problems can accelerate the onset of the hyperinflation issue into the immediate future.…
“The current post-election surges in U.S. stocks and the U.S. dollar are not sustainable. In like manner, the related, recent sharp declines in gold and silver prices are not sustainable. When the dollar and stock prices break, the downside adjustment likely will be rapid, along with a corresponding upside reversal in precious metals, with domestic- and foreign-flight capital seeking safety in physical gold and silver.
“Given likely heavy U.S. dollar selling or debasement, inflationary pressures should mount rapidly, with the inflation surge beginning with upside spikes to oil and gasoline prices, which, in turn, would tend to fuel a self–feeding cycle. In what would evolve rapidly into a major inflation problem—the early stages of hyperinflation—physical gold (primary) and silver remain the best hedges, stores of wealth that preserve the purchasing power of the invested assets, as well as being highly liquid and portable. They work as solid hedges, only if held through the currency/inflation crisis….” [Emphasis added]
“Economic and Financial Review and Preview,” Commentary No. 858,
And the greatest Challenge is the $20 Trillion U.S. Debt which is actually $100 Trillion when unfunded downstream liabilities are included. And even without the Trump spending proposals, this National Debt is increasing at $1 Trillion per year!
Yet, indeed, the best-case scenario is that “there will be some lag before the Economy responds…” to the Stimulus provided by President Trump’s policies (and assuming they are enacted).
As former OMB Director David Stockman puts it:
“Trump and his so-called GOP Majorities are caught in a giant inherited Debt Trap, and will therefore be foiled time and time again as they attempt to implement the big Tax Cuts and infrastructure stimulus programs that the Casino (Wall Street-ed.) has already so foolishly “priced-in.” [Emphasis added]
David Stockman, Contra Corner, 01/11/2017
Thus, in the interim, i.e., in the first half of 2017, there will be real, substantial Challenges which are not solvable in the short-term, challenges which will be reflected in Mega-Moves in the Markets short-term—the Great Shocker of 2017.
Result: Dramatically increased Volatility in the Markets in the short-term, i.e., the First Few Months of 2017. And Deepcaster has and is making Recommendations to take Advantage of the Profit Opportunities and to Protect Wealth. (See Notes Below)
How could it have come to this that the USA and other Major Economies have stalled or are contracting?
Well, The Fed and other Major Central Banks are the Primary Culprits, with fiscally irresponsible Politicians a close second, consider that The Fed’s (and other colluding Central Banks) low interest rate and Quantitative Easing policies have destroyed honest price discovery and caused massive overleveraging and financial Asset (e.g., Equities and Real Estate) Inflation, i.e., Monster Bubbles.
But it is possible that Creative Policies can prevent the Great Shocker, but we think not. Given the Realities it would seem that Trumpian business-friendly policies, deregulation and lower Tax Rates, likely can not, in the short to mid-term prevent a Cataclysm in the Markets. A Great Shocker indeed.
Specifically, consider further that Ultra-low interest Rates have created Residential and Commercial Real Estate Bubbles. Consider how loud a Bang will occur when/as Interest Rates are Normalized!
— The USA’s 20 Trillion Debt Ceiling will be hit in Mid-March with dramatically negative consequences for the Markets whether it is raised or not
— And consider the Corporate Earnings Bubble. The Russell 2000 is now trading at 230 times reported Earnings!!
— No way can Trump’s Massive Infrastructure Plan, Aid to Veterans, and increased Border and General Law Enforcement be financed without the required spending (borrowing and/or Money Printing) launching us into Hyperinflation.
Borrow to spend is no longer possible without Big Penalties.
And another factor is One Political Reality—the Establishment aka TheGlobalist Deep State is not happy about the election of Donald Trump. As aNationalist and Internationalist, he is not one of them and is not controlled by them. They have every reason to keep him from succeeding so they can regain power. Thus, it is likely they will use the impending Markets Collapses and Chaos as a pretext to regain Global Domination.
Consider that the Globalist Mainstream Media continue to spin out the false Narrative that the Economy is recovering, a Narrative demonstrably false as Shadowstats and others have shown.
And the reason they continue to spew out this nonsense is succinctly captured by Mr. Smith.
“The false recovery Narrative will indeed die in 2017 and it will be because the Globalists WANT it to die when The Nationalists are at the helm. This is perhaps the biggest con game in recent history with conservatives as the fall guy and the rest of the public as the gullible mark. One can only hope that we can educate enough people on this scenario to make a difference before it is too late.”
“The False Economic Recovery Narrative Will Die in 2017,”
Brandon Smith, Alt-Market.com, January 2017
And to make matters worse, closely aligned with the Globalist Deep State are the Cultural Marxists which dominate much of the Political/Economic Discourse through their Domination of the Mainstream Media. The Cultural Marxists push Globalism, Statism, Political Correctness, Multi-Culturalism (all the better to play one group off against another) and Mass Immigration for Cheap Labor and to advance Multi-culturalism.
To fully understand who the Cultural Marxists are, and how to Combat them see the February 2010 and December 2016, postings at carryingcapacity.org.
In sum, We expect an increasing number of Roadblocks will be thrown in Trump’s way with multiple Crises the Consequence—a Great Shocker indeed. Deepcaster thus offers Opportunities to profit and protect Wealth,in light of the foregoing Realities, in its recent Letters and Alerts.
In conclusion, we agree with Shadowstats.
“…Given Issues of Fed Independence and Ingrained, Systemic Intransigence, Early Resolutions of the Fed and Solvency Problems are not Likely.
“Accordingly, Massive U.S. Dollar Selling, Debasement and Hyperinflation remain the Primary risks to Domestic Economic and Political Stability;…
“SPECIAL COMMENTARY, YEAR-END, YEAR-AHEAD Economic and Financial Review and Preview,” Shadowstats.com, 01/08/2017
“…The greatest crisis at hand remains risk of systemic collapse. In order to prevent a massive sell-off in the U.S. dollar and the onset of nascent hyperinflation, the new Administration has to resolve two massive and increasingly intractable problems. First is the long-range, sovereign-solvency issue of the United States. Second is the impotence of the Federal Reserve, which still is fighting the battle it lost in 2008: to restore normal solvency and functioning to the domestic banking system. Prospects for successes there remain bleak, given institutional intransigence that could take until after the 2018 congressional election to resolve, combined with the established political independence of the Fed. The system, however, likely does not have much more than six months in which to be brought under perceived control, let alone a couple of years. Yet, there always is potential for positive surprise with a creative, new Administration.”
The clock is ticking and Great Volatility is coming.
January 13, 2017
Note 1: Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported December 15, 2016
1.69% / 9.40%
U.S. Unemployment reported January 6, 2017
4.72% / 22.7%
U.S. GDP Annual Growth/Decline reported December 22, 2016
1.65% / -1.93%
U.S. M3 reported January 11, 2017 (Month of November, Y.O.Y.)
No Official Report / 3.93% (i.e., total M3 Now at $17.704 Trillion!)
Note 2: Economic and Markets Developments in 2016 and those likely to come in 2017, create a high probability of Mega-Moves in Key Sectors, soon. These Mega-Moves will create Great Opportunities for Profit or Great Risk of loss for the Unprepared.
Deepcaster identifies these High Probability Mega-Moves and Opportunities for Profit in his latest Alert, “2017 Mega-Moves Coming; Forecasts: Gold & Silver; Equities; US$/€, U.S. T-Notes, T-Bonds, & Interest Rates; Crude Oil & Copper,” posted in Alerts Cache on Deepcaster.com.
Note 3: Rarely do we see an Opportunity like the one which has recently arisen—a potential 100% or 200% or possibly even a 300% or 400% Profit in just a few weeks.
And this opportunity can be seized by buying a stock trading at a little over $10 per share.
Consider our forecast and Buy Recommendation in this week’s Alert “Major Opportunity BUY RECO & Forecast,” just posted in ‘Alerts Cache’ on Deepcaster.com.
Note 4: 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*
• 55% Profit on Precious Metals Streaming Company on January 12, 2017 after just 16 days (i.e., about 1255% Annualized)
• 110% Profit on Gold Shares ETF on November 9, 2016 after just 7 months) (i.e., about 190% Annualized)
• 60% Profit on Precious Metals Mining Company on October 20, 2016 after just 33 months) (i.e., about 22% Annualized)
• 130% Profit on Precious Metals Mining Company on July 8, 2016 after just 29 months) (i.e., about 50% Annualized)
• 75% Profit on Gold & Silver Royalty Streaming Company on June 28, 2016 after just 36 months (i.e., about 25% Annualized)
• 33% Profit on Precious Metals Mining Company on June 13, 2016 after just 28 months) (i.e., about 14% Annualized)
• 65% Profit on Gold & Silver Royalty Streaming Company on May 2, 2016 after just 35 months (i.e., about 22% Annualized)
• 50% Profit on Long Bond position on February 19, 2016 after just 2 days (i.e., about 8810% Annualized)
• 90% Profit on Short Small Cap Equities ETF on January 20, 2016 (i.e., about 30% Annualized)
• 75% Profit on Short Small Cap Equities ETF on January 15, 2016 (i.e., about 25% Annualized)
Deepcaster’s Profits Taken in the second half of 2015 included such successes as 80% in 6 days, 110% in 3 days, 265% in 57 days, as well as 65% in 2 days.
*Past Profitable Performance is no assurance of future Profitable Performance.