Click here to visit : Is It Time to Book Profits in Bank Stocks?

Bank stocks have been one of the strongest sectors in the market over the past year. Bank stocks have rallied sharply after many investors dumped shares on fears that the financial crisis might worsen. Those fears obviously never materialized, and many bank stocks have begun to resume paying dividends and generating profits.

There are two questions I am often asked: 1) is it too late to incorporate bank stocks into one’s investment strategy; and 2) if someone has already owned bank stocks over the past couple of years, is this the time for that investor to start taking profits?

Since the fall of 2011, an index of bank stocks has almost doubled in value. Clearly, an investment strategy that owns a number of bank stocks has seen significant gains in this sector. But no one can rationally expect this type of return to continue forever.

Part of my cautious view on bank stocks, in terms of reducing the sector weighting in an investment strategy, is the fact that there is a limit to upside capital appreciation in every sector. A big question when developing an investment strategy: what is the future outlook for the sector?

Obviously, the low-hanging fruit has already been picked when it comes to bank stocks. Regardless of what was thought about bank stocks in the past, as an investor you are only interested in the potential for growth in earnings and revenues. Large gains have already been realized; now we need to consider how bank stocks fit into an investment strategy over the next decade.

Large concerns for bank stocks shareholders are increased regulation and a reduction in potentially profitable areas of business. The president of the Federal Reserve of Philadelphia, Charles Plosser, stated that there needs to be an increase in effort to ending the problem of “too big to fail” banks. (Source: Spicer, J., “Fed’s Plosser adds voice to too-big-to-fail criticisms,” Reuters, May 9, 2013, accessed May 10, 2013.)

One of the measures that Plosser has endorsed is for higher levels of capital to be held by the bank stocks. There are suggestions of breaking up the bank stocks completely, as well as lower borrowing limits. In a nutshell, if one were a shareholder in bank stocks, the thesis behind this investment strategy might be in doubt, as the landscape looks increasingly hostile toward the sector. Many of these measures will ultimately end up limiting the growth potential and profitability of bank stocks.

Featured below is a chart for the bank stocks index:

Chart courtesy of www.StockCharts.com

This chart of the bank stocks index shows just how strong this sector has performed over the past couple of years. While there are negative implications from the increased regulation for bank stocks, many investors are incorporating a strong dividend yield issued by these companies into their investment strategy.

This ends up being a battle between fundamental and income investors. Income investors will continue to search for yield, which involves many bank stocks, while investors looking at valuations and the potential for future earnings might begin to take profits in bank stocks, as the heavy hand of regulation appears to be headed toward the sector.

It is clear from looking at the above chart that the uptrend is still intact. No one can predict when a top will occur, but what we can do is reallocate resources into more attractive areas. The real question: what is the best way to build a long-term investment strategy? One can determine that by looking at his or her portfolio and individual goals.

While bank stocks are not going away, the uncertainty about the viability of earnings growth and recent outperformance in the share price certainly raises doubts in my mind as to the potential for capital appreciation. At this point, I would certainly look to reduce my exposure to bank stocks ahead of any new rules being implemented in this sector.

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Read More : Junk Bond Demand Soars: Is This the Time to Be Raising Cash?

With the aggressive monetary policy plan implemented by the Federal Reserve in place, it’s not just retirees who are seeking yield and can’t find it; large institutional funds are in the same predicament.

I believe that one of the goals of the Federal Reserve in enacting its current monetary policy plan is to entice investors into assets other than cash. Simply having cash sitting idle cannot help the economy. However, yields are so low that many investors are hunting for income in dangerous places.

Just this past Tuesday, the yield on Barclays U.S. Corporate High Yield index (junk bonds) dropped below five percent. This represents a record low and is the first time in its history of 30 years that the junk bond index has seen rates fall to such low levels. (Source: Burne, K., “Yields on Junk Bonds Reach New Low,” Wall Street Journal, May 8, 2013, accessed May 9, 2013.)

In addition to this record-breaking threshold, this junk bond index yielded six percent only this past January, which shows the massive amount of capital being put to work. The monetary policy by the Federal Reserve is leaving institutions with so much demand for yield that they are piling into any marginal investment, which could end up costing investors.

Even more esoteric, investors are moving into emerging markets such as Cote d’Ivoire, which has seen yields on its eurobonds (bonds denominated in U.S. dollars outside of America) cut in half over the past year. (Source: “Africa’s bond markets: Kings of the wild frontier,” The Economist, March 2, 2013.)

Risks are substantial for investors hunting for yield in this environment engineered by the Federal Reserve, as Cote d’Ivoire was involved in a civil war not too long ago, not to mention it has a history of defaulting on its debt. Yet, international investors are piling money into very risky investments.

A great example of the heavy demand, Zambia was looking to issue $500 million in eurobonds, yet received $12.0 billion in orders. The 10-year bonds were ultimately issued for a total of $750 million at a yield of 5.4% to investors from all over the world.

The additional yield that many are seeking might come at a large cost in a few years. The monetary policy program by the Federal Reserve will not last forever, and when this tide shifts, it will reverberate throughout a variety of markets.

The best time to sell is when you can, not when you have to. While I still advocate stocks over fixed income, a shift by the Federal Reserve in beginning to reduce monetary policy stimulus will hit all markets. At that point, cash is king.

A prudent plan would be to begin reducing some equity holdings, while having stops in place to be able to exit the remaining positions and raise funds during the next sell-off, which I believe will come this fall.

While the Federal Reserve is trying to improve economic conditions through its monetary policy program, there will be costs associated with this action. Namely, individuals and institutions that are making risky investment decisions in the hunt for yield might pay a very large price over the next decade.

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Read more : Are Lower Oil Prices on the Horizon?

The oil sheiks at the Organization of the Petroleum Exporting Countries (OPEC) must be at their wits’ ends these days, with oil prices showing some downward pressure.

While the West Texas Intermediate (WTI) spot is in the mid-$90.00 range, there’s a sense we could see a downward move in oil prices, including gasoline prices at the pumps, on the horizon.

Over the past decades, OPEC’s decisions were largely influential in determining the direction of world oil prices. This was done by regulating the production of oil out of the Middle East.

The sad reality is OPEC has held the United States and other industrialized countries hostage simply by controlling the flow of oil and oil prices.

Texas oil baron T. Boone Pickens has long been a champion for domestically produced oil and for lessening the import of oil from OPEC, which he blames for keeping oil prices high.

The truth is that Pickens is correct.

Think about what happened in October 1973, when an oil crisis surfaced that saw some members of the Organization of Arab Petroleum Exporting Countries (the predecessor to OPEC) announce an oil embargo while also attacking Israel in the Yom Kippur War.

So here we are some 40 years later, and OPEC continues to dictate the global oil prices to a major degree, but the positive side is that it doesn’t have to be that way and it will likely change.

The fact is that the United States is producing more oil domestically than any other time in its history, and this includes the high potential flow of oil from the Canadian tar sands via the Keystone XL pipeline. While there are environmental issues with the pipeline, if they can be rectified, the U.S. could begin to further reduce its need for OPEC oil and instead buy Canadian oil.

Even without the Canadian oil, the domestic oil production, especially via the new fracking techniques (the fracturing of rocks below the earth’s surface to extract oil and natural gas), is resulting in new sources of oil that will surely help to cut OPEC oil prices and perhaps lower domestic oil prices.

The U.S. Energy Information Administration (EIA) just released its “Annual Energy Outlook 2013,” and it’s quite interesting. If you want to read the 233 pages (the report is available for download on the EIA’s web site), you are welcome to, but I will also summarize the findings for you.

The EIA predicts domestic oil production will continue to rise over the next decade due to oil from fracking and the rise in natural gas production.

The influx of natural gas as an alternative for oil and better gasoline consumption for vehicles will also help to cut the dependence on oil.

Domestic oil production has risen from 5.0 million barrels per day in 2008 to 6.5 million barrels daily in 2012, according to the EIA. As such, the country has seen its oil imports fall in each year since 2005. The end result could be lower oil prices on the horizon.

For investors, oil as a commodity is not dead.

The implication for investors is to buy companies that are involved in the fracking process along with oil and gas services oil stocks that deliver solutions to domestic oil production.

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By George Leong, B.Comm. for Profit Confidential

Not everyone is happy with the current bull market, despite the fact that the S&P 500 and the Dow are headed for their fourth straight year of gains and seemingly more records to break.

As the old saying goes, “the trend is your friend,” and so far, this has played out.

Just take a look at the chart below of the S&P 500 and its rally from the March 2009 bottom. Also note the rising flow of money into the system by the Federal Reserve, as indicated by the green upward-trending line. (Read “Thank the Fed for Your New Car, Home, Investments.”) Cheap and ample money combined with extremely low interest rates and yields on bonds has helped to fuel the stock market rally.

Chart courtesy of www.StockCharts.com

The stock market advance could continue, as long as the Fed and other central banks around the world are willing to continue to print money.

Now, let me explain why not everyone is happy.

With the burden of home foreclosures, job losses, declining wages, and continued uncertainties, many Americans do not have the resources to play the stock market. These lower- and middle-income Americans are just trying to pay for the necessities to survive daily, never mind thinking about their 401(k)s and retirement funds.

So you have the people making tons of money from the stock market. These are the consumers buying new cars, homes, traveling, and playing the stock market.

Then you have the people who are still struggling and haven’t yet recovered fully from the Great Recession. It could take a few more years for these people to rally out of their sinkhole, but in the meantime, they are missing out on the gains in the stock market.

By the time those who have not partaken in the current bull market are ready to once again invest in something other than the necessities, the stock market may be turning down, due to the aftermath of higher interest rates—and yes, they are coming down the road.

The r… Read More

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Read More : China’s Economic Reporting: Fact or Fiction?

Are the economic data compiled and reported by the Chinese government agencies correct and reliable? Are we seeing a major scam developing out of the country?

While there has been lingering doubts on the reliability of Chinese data, no one has yet proven the Chinese are fudging the numbers.

But you know that this is a real possibility.

I’m a Chinese bull, but I must admit I’m always concerned when evaluating the financials of Chinese companies; the proven corruption in the past several years has made me think long and hard about what and whom to trust.

I have been burned by Chinese stocks, but so have many of you.

The potential issues with the Chinese economic numbers may also be true. Case in point: in the first quarter, China’s gross domestic product (GDP) growth was 7.7%, according to the National Bureau of Statistics. That percentage was down from 7.9% in the fourth quarter.

We have also been seeing a decline in manufacturing data, including the country’s internally produced Purchasing Managers’ Index and other external manufacturing reports.

The country’s industrial value-added output growth expanded at 9.5% in the first quarter, down from 11.6% in the first quarter in 2012, according to the National Bureau of Statistics. (Source: “China’s Q1 industrial output growth slows to 9.5 pct,” Global Times, April 15, 2013, last accessed May 9, 2013.)

Given all of this, it was quite a surprise to see China’s exports surge 14.7% in April, based on data from the country’s General Administration of Customs. The reading was well ahead of the market estimate calling for growth of 10.3%. The import picture also looks somewhat skeptical, with imports up 16.8% in April, well above the estimate of 13.9%.

There is well-founded nervousness toward the numbers, as they came out of nowhere and the other key economic readings didn’t indicate a strong reading.

So are China’s reported numbers reliable?

To tell you honestly, I’m not sure. And that is because, based on my experience with the somewhat questionable financial reporting practices of some of the Chinese companies previously listed on U.S. exchanges, there is a history of fraudulent reporting being discovered later on.

Once you have been stunned, you tend to question the data, especially if they originate from China.

While there may be some creative accounting on the books, I do actually remain positive on China; however, you need to be extremely careful when buying, and if you are nervous, I would advise you stick with the big Chinese blue chip stocks found on the Xinhua China 25 Index.

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Read More : Gold Bullion Trading Hitting Record Levels; Chinese Leading the Pack

Recent data has shown that China imported gold bullion from Hong Kong at a record-high level in March. Net imports into China of gold from Hong Kong were 130,038 kg, compared to 60,947 kg of the yellow metal in February, according to Bloomberg. (Source: “China’s Gold Purchases From Hong Kong Expand to Record,” Bloomberg, May 7 2013, last accessed May 8, 2013.)

While these imports happened prior to the sell-off in the price of gold bullion in April, China has clearly been using an investment strategy to continually accumulate the precious metal whenever it can. With the price of gold in April dropping 14% in just two days—the biggest sell-off in 30 years—this led to an increase in demand for jewelry and coins in China.

Essentially, gold transactions have increased as many more participants use the metal for trading purposes as an investment strategy. Exports of gold from China into Hong Kong were 93,481 kg, a huge jump from February’s exports of the yellow metal of 36,159 kg. Profiting from the volatility, trading in gold continues to skyrocket globally.

The volume of gold bullion on the Shanghai exchange hit a record high on April 22 of 43,272 kg. As more traders use gold in their investment strategy, transactions continue to increase substantially. Following the sell-off in gold bullion prices on April 15 and 16, the China Gold Association reported that retail sales tripled in China as individual customers used the sell-off as part of their investment strategy to accumulate the commodity.

What does this mean for gold bullion in the future?

Clearly, we’re seeing increased demand for gold bullion as part of an investment strategy by many participants globally. Especially in India and China, gold is seen as a store of wealth. In countries where the local currency is not stable, gold will always be attractive.

The chart for spot gold is featured below:

Chart courtesy of www.StockCharts.com

The real question is: will there be enough physical demand to overcome the massive level of supply that’s driven prices down?

We all know that many central banks around the world continue an easy monetary policy stance. This should drive commodities such as gold bullion higher, as this has historically led to higher inflation, and having a diversified portfolio as part of one’s investment strategy makes sense.

However, the velocity of money continues to be at historically low levels. This means that the money printed is sitting idle, not being injected into the economy—which is why we’re not seeing high levels of inflation. At some point, the idling is expected to end, and we should see higher levels of inflation. However, no one can predict the future.

These early reports of retail buying appear to offer the theory that there is a floor in the price of gold bullion supported by physical demand. Clearly, there will be significant resistance on the way up for the price of gold. What we don’t know is if this recent bout of gold buying by the Chinese consumer has exhausted most of their cash. This could result in a lack of momentum for the price of gold.

Ultimately, gold bullion will need to move above several key technical levels before more buyers emerge as bullish in their investment strategy for this commodity. It is a positive sign to see physical buyers stepping in and supporting gold after such a massive sell-off, but the market will need much more demand before a new trend is established.

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“After watching the effects of the mediocre payrolls number yesterday (Friday, 5/3/13) which culminated in a push over 1600 in the S&P 500 and a print in the Dow over 15,000, I thought it might be useful to note a few things about this most recent example of a hysteria.

“I am on record here as stating that the entire stock market rally is nothing but a Federal Reserve induced bubble brought about by artificially low interest rates starving investors for yield elsewhere. The Fed, along with the Bank of Japan and the ECB I might add, are determined to corral investors and herd them, unthinking like cattle, into equities; the goal being to create an atmosphere of general euphoria towards the economy boosting consumer confidence in the hopes of inducing them to take on more debt and spend.

“This is akin to building a towering skyscraper on a foundation of PLAY-DO. It may look wonderful and draw gasps of admiration but it has no stability and will not be able to withstand any external shocks.

“I know what the perennial perma bulls are saying - stocks are cheap and corporate profits are good so the path of least resistance is higher. They have been right so far judging by the tape. However, to point to a jobs number that is less than 200K per month, now some FIVE YEARS after the onset of a horrible recession as if it is evidence of a recovery strikes me more as ROSE-COLORED GLASSES analysis rather than solid reasoning.”

“Fed Induced Stock Market Mania”

Dan Norcini, TraderDanNorcini.com, 5/4/2013

Perceptive, Independent Market commentators like Trader Dan Norcini generally agree that The Fed’s (and Bank of Japan and European and other Central Banks) Easy Paper Money Policies are Creating An Asset Bubble in the Equities Market that is not justified by Economic Fundamentals.

And they generally agree that it can not last.

We agree.

That raises the Key Question of which Assets to Invest in Now, and “When the Bubble Will Burst,” questions which we address here.

As to timing of the Asset Bubbles Bursting, John Hussman has it generally pegged.

“The year-over-year growth rates of real GDP and real final sales have declined to just 1.8% and 1.87% respectively, which is the first time in this economic cycle that both have simultaneously declined from above 2% to below 1.9% – an occurrence that has been a hallmark of every post-war recession, with remarkably few false signals for such a simple measure. The Fed's ability to kick-the-can in increments of a few months at a time may allow this time to be different, but investors should recognize that they are relying on that proposition.”

“When Rich Valuations Meet Poor Economic Data”

John Hussman, HussmanFunds.com, 4/29/2013

Yes, given the following, Fed (and other Central Bank) Actions only support the Markets “in increments of a few months.”

Indeed, it is likely only a matter of Months before Two Key Asset Bubbles Burst with Calamitous results. (See Deepcaster’s latest Letter and Alerts.)

But Burst they Must because all that Fiat Central Bank Money is already creating Threshold Hyperinflation, if one disregards the Bogus Official Numbers and looks instead at the Real Ones. (e.g., U.S. CPI at 9.12% per shadhowstats.com – See Note 1).

But there is another reason too. Most of the “Wealth” Creation since the Crash of 2008-2009 has in fact been a Wealth Transfer from taxpaying, mostly Middle Class, Savers and Retirees (who now get virtually nothing for their Savings Accounts) to the Mega-Bankers and Speculators. (of David Stockman Bill Bonner, Matt Taibbi, et al.)

And with Middle Class Consumers over 60% of developed Nations’ economies, their continuing Impoverishment (in terms of diminishing Fiat Currency Purchasing Power) is not good for Corporate Earnings, or Capitalism in general.

Consider the following re Hyperinflation in today’s Argentina, a Harbinger for the USA, Eurozone and Elsewhere.

“The typical American is not buying a Porsche. Relatively, he's getting poorer. But his brain has gone soft, shrunken by TV news, elections and deadhead commentaries. 

“He believes Hillary Clinton when she says, "The government is all of us." He thinks the Fed really is bringing a "recovery." And he imagines that an economy can get richer when it prints more money and gives it to other people.

“The Argentines know they can't trust their money... or their government. In comparison, Americans are saps. They don't know whom to trust.

“But we'll make a prediction: Americans will be a lot less sappy... and a lot less wealthy... when they finally realize what the feds are doing to them.”

“The Greatest Wealth transfer in History”

Bill Bonner, BonnerPrivateWealth.com, 5/3/2013

Writing from Argentina

Today, Argentinians are suffering from up to 50% annual inflation due mainly to Fiat Money Printing. A Harbinger indeed.

The logical and anticipated response should be, and we recommend, go for the Gold (and Silver) because these Precious Metals are Real Money and thus protection against Paper Fiat Money Printing/Devaluation.

But the Very Best of the Very Few excellent CNBC reporters identified the problem of Going for the Gold.

Paper Gold in the form of Gold Fund Securities increasingly no longer reflects the Value or Price of Real Physical.

“Rick Santelli said, "I do not even look at Gold as gold anymore since they securitized it. If things went badly in the world that I used to observe (as a gold bug), the gold would end up in the hands of the gold bugs. If things go badly now, they are going to end up with checks from Exchange Traded Funds! Sorry, it is not the same. The reign of paper gold as the Ayn Rand endgame, to me, that is over. Game, Set, Match!" A big wow!! By securitizing gold, Santelli means the conversion to a paper contract, either a gold futures contract or a gold certificate (bank promise) or a GLD stock fund share from the infamous ETFund.”

Rick Santelli, CNBC, courtesy of

“Hat Trick Letter Issue #109”

Jim Willie, GoldenJackass.com, 4/21/2013

In fact, after the mid-April Cartel  (Note 2) Gold Takedown the Premiums for real Physical (when you could find it) shot up over those for Paper Gold Securities. We agree that we can now expect to see a Permanent and Widening Divergence between Prices for Physical and Prices for Paper.

Jim Willie summarizes well the Real (as opposed to the Mainstream Media version) Realities of the Gold Market.

“$$$ THE PRICE DIVERGENCE IS WIDENING IN A BIG WAY BETWEEN PAPER GOLD AND METAL GOLD, AS THE JACKASS FORECASTED. THE DIVERGENCE IS A DEFINITIVE END GAME SIGNAL. THE POINT HAS BEEN APPROACHED WHERE THE GOLD PRICE IS MUCH HIGHER, AND COULD HAVE NO PRICE ATTACHED. ON FRIDAY APRIL 12TH, AROUND $20 BILLION IN PAPER GOLD WAS SOLD SHORT SUDDENLY IN TWO VERY POWERFUL WAVES WHERE NO METAL CHANGED HANDS. A MAJOR LONDON GOLD DEFAULT ALMOST OCCURRED, WHICH MOTIVATED THE ATTACK. $$$ 

“The gold paper architects and craftsmen have control of the publicized Gold market. They do not have control of the physical Gold market, and are actually cutting their throats in accelerated fashion. The Eastern players are grabbing at the opportunity to secure gold bars at any price, wherever it is available. The global cupboards are turning bare. Tiberius reports that Russia & China have been very heavy buyers after the price dip through their central banks. See the Red Lion Trader article (CLICK HERE). The victims are those naive and reckless investors who insist on remaining in the leveraged paper gold arena (ignored MF-Global warning), and the unfortunate few who depend upon small gold sales to fund household expenses and specific projects. The scale of the selloff was incredible, only to accelerate on Monday April 15th for a climax event timed exactly with the income tax deadline in the United States. No coincidences occur in this great game of global fascist chess.”

“Hat Trick Letter Issue #109”

Jim Willie, GoldenJackass.com, 4/21/2013

Yes, The Great Divergence between the price of Physical Gold and Silver and Paper (i.e., the Price Manipulated Market) Gold and Silver will only increase. In light of these ongoing paper price “Games” and in light of the fact they must eventually end, we make Recommendations designed to Profit and Protect (see Notes 3, 4 and 5).

But the Realities underneath the Official and Quasi-official “Games” of Price Distortion and Data Distortion are two of those Realities:  “No Economic Recovery” and “No Improvement in Unemployment” in the foreseeable future.

“Labor Market Conditions Still Reflect a Troubled Economy and No Economic Recovery.  The outlook for current economic conditions has not changed at all.  While happy headline news from the April jobs and unemployment report may have some on Wall Street hyperventilating, stories based on the Bureau of Labor Statistics (BLS) press release—that the economy is strong or not faltering—are little more than hype.  Both employment and unemployment are coincident indicators of broad economic activity and the signals are not good for near-term business conditions.  There has been no recovery, and there can be no sustainable economic recovery, without a recovery first in consumer income and liquidity. 

“Unemployment.  The pattern of declining headline unemployment rates since the end of 2011 has not been due to new jobs from a surging economy.  Instead, these declining numbers tell the unhappy tale of discouraged workers—unable to find work—being moved out of the BLS headline counting.  The ShadowStats alternate unemployment rate regained its series-high 23.0%, based on detail from the same April unemployment report that excited the markets today (May 3rd).”

“April Employment and Unemployment, M3 and Monetary Base, No. 521”

John Williams, ShadowStats.com, 5/3/2013

A specific Area in which Reality will eventually overcome Manipulation is in the Gold Market, as the legendary Investor, Jim Sinclair, notes.

“The not-anticipated result of the take down on paper gold was to wake a sleeping elephant of physical demand from other every corner of the globe. The opinion of the operators is that if the gold banks can keep pressure up on paper gold the huge demand for physical will fizzle. The world outside of North America has recent memories of monetary situations exactly the same as now. They know that paper is in its final stage and gold is in a major ascendancy. Physical demand will remain strong thereby overcoming paper gold and forcing paper gold exchanges to change their methods of delivery, clearly restricting paper to a secondary role and making its use to manipulate gold redundant.”

“Where We Are, Why Gold Was Bombed, And Why TA Is A Waste Of Time”

Jim Sinclair, JSMineSet.com, 5/6/2013

And also, in addition to the Precious Metals Market,there is the Great Risk in the Greatest Manipulated Market Sector of all (see our recent Letter and Alerts) as recently identified by Goldman Sachs CEO, Lloyd Blankfein. See our recent Alert regarding the Nature and timing of the “bursting of This Greatest Asset Bubble.

“I worry now – I look out of the corner of my eye to the '94 period... you'd think in hindsight (it) should have been expected... (it) really was stunning.”

Lloyd Blankfein, CEO Goldman Sachs, 5/1/2013

And, regarding The Ultimate Outcome, Paul Singer identifies one of the Major (and, unfortunately, likely) consequences of the Central Banks’ Money Printing.

“Printing money by the trillions of dollars has had the predictable effect of raising the prices of stocks and bonds and thus reducing the cost of servicing government debt. [...] But it is like an addictive drug, and we have a hard time imagining the slowing or stopping of QE without large adverse impacts on the prices of stocks and bonds and the performance of the economy. If the economy does not shift into sustainable high-growth mode as a result of QE, then the exit from QE is somewhere on the continuum between problematic and impossible.

“At some stage, central banks inevitably realize, regardless of whether they admit the catastrophic nature of their own failings, that the cessation of money-printing will cause an instant depression. Even though at that point the cessation of money-printing may be the only action capable of saving society, that becomes a secondary consideration compared to the desire to avoid immediate pain and blame.”

“The Fed, Lost in the Wilderness”

Paul Singer, CEO Elliott Management Corporation, 5/3/2013

The foregoing demonstrates why it is extremely important to, and why we do, stay attuned to the Macro Environment, and to Timing. The Macro Policies and Developments we have identified here will continue to Trump other Investment Considerations.

Best regards, 

Deepcaster
May 10, 2013 

Note 1: *Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider

Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)

Annual U.S. Consumer Price Inflation reported April 16, 2013
1.47%     /     9.12% U.S. Unemployment reported May 3, 2013
7.6%     /     23%
U.S. GDP Annual Growth/Decline reported April 26, 2013
1.67%        /     -1.98%
U.S. M3 Growth reported  May 3, 2013 (Month of April, Y.O.Y.)
No Official Report     /    4.34% (e) (i.e, total M3 Now at $15.111 Trillion!)

Note 2: 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 3: Central Bank and Major Government Actions lately increasingly have the Odor of Desperation about them.

-        Japan and the European Central Bank and the U.S. Central Bank and other Central Banks are creating Fiat Money at all-time record levels. And Australia, India, South Korea and Vietnam just joined the Fiat Currency weakening War.

-        India has tripled the tax on and imposed restrictions on Gold Imports. 

-        Cyprus’s Gold and Bank “Deposits” have been confiscated.

-        U.S. job and Inflation numbers are becoming increasingly unbelievable.

-        And evidence of Central bank and Government Intervention in a wide variety of Markets continues to increase. But Central Banks’ Gold buying is increasing also. It appears they do not trust the Market (e.g., Equities) Rallies they are facilitating.

-        Witness the mid-April Precious Metals Paper Price Takedown, which resulted in a rush for Physical world-wide and doubling of Premiums for Physical.

And the main reason for these Actions by the Powers of the Developed World is that the Market performance of Key Sectors has become farther and farther divorced from Economic Fundamentals, and the US$ is becoming increasingly Vulnerable. And, ultimately, Fundamentals will prevail.

All of this has led to the increasing likelihood of a Massacre in one Huge Sector, according to one very highly placed Financial System Insider. And Deepcaster agrees with him, and has been saying the same thing for weeks.

To consider how this Warning is justified and what Opportunities for Profit and Protection it provides, read our recent Alert, “Insider Warns Key Sector Mega-Crash Impending; Reco. Prep.; Forecasts: U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, Gold & Silver, Crude Oil, & Equities,” just posted in Alerts Cache at Deepcaster.com.

Note 4: (The Fed is) “creating massive fraud…in the short term it’s great for assets…at some point there’s a levitational problem.”

            Nouriel Roubini,CNN Money, April 29, 2013

Like it or not, several Crises are impending in the next few months. And it is highly likely certain of these are unavoidable.

Fortunately, it is possible to prepare to avoid significant Damage from most of these and indeed to Profit sustainably.

Unfortunately, if one fails to prepare for certain of these very soon, it will be too late, even impossible, to prepare later.

To consider Deepcaster’s suggestions for profiting from impending crises, see our recent Article, “Profiting from Coming Crises,” just posted in the ‘Articles by Deepcaster’ cache at deepcaster.com.

Note 5: A superficial review of the Market Performance of Major Sectors can present a confusing perspective. There are Major Bullish and Major Bearish Fundamental and Technical Indicators in several of the Major Sectors we follow.

But a review of deeper and longer term Technical and Fundamental Indicators reveals High Probability forecasts which can allow Profitable Investments above the noise.

Indeed two sectors provide Great Profit Potential in the mid-to-long term. We identify those High Probability Forecasts and Sectors in our recent Alert, “Profit Opportunity; Forecasts: Gold, Silver, Equities, U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates, & Crude Oil” posted in ‘Alerts Cache’ at deepcaster.com.

And in one of these a very substantial Profit Opportunity has dramatically appeared just recently. To consider this Profit Opportunity and High Probability Forecasts for Waves 2, 3 and 4, read this Alert.

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"Quantitative easing" is a government monetary policy launched to ease off the market in intense situations. It had increasing the money supply as the primary goals. The government buys the securities in order to increase the capital in the market and increase in the buying capacity of people. It increases the money supply by flooding the financial institutions, which in turn leads to easier lending. However, it has a negative factor too. It leads to increase in the prices of the goods, and services, as the supply does not increase though the monetary condition gets better. At certain situations, it can cause inflation like situation. Quantitative easing was nicknamed as "QE" and "QE2" was the term given to it when the process was repeated by the Central Banks in U.S. in the year 2010. Similarly, the third round of the process was termed as "QE3" and the first one preceding "QE2" as "QE1." The QE3 was announced on September 13 2012 and is expected to run until 2015.

For more details you can visit http://goarticles.com/article/Quantitative-Easing-Bank-Profit-Drop-Culprit/7598955/

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The U.S. Housing Market

Despite a continuing weak U.S. economy, some have been pointing to an increase in new home construction as a sign that the economy is rebounding. While the U.S. economy remains fragile, housing—which was ravaged by the 2007-2009 recession—has become one of the few bright spots.

In August 2012, new home builds were up a modest 2.3%. September housing starts were up 15%—the highest levels since 2008.⁹

During previous recessions, residential construction was a major factor in recovery. Not so this time. Why? The homebuilding industry was collateral damage in past recessions. This time around, it was a major cause of the Great Recession. Over-building, brought on by overzealous banks, easy credit and a mountain of debt, has left the U.S. economy in an extremely fragile state.  Read More

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Read More : http://www.investmentcontrarians.com/gold-investments/is-it-time-to-look-away-from-gold/1995/

Lately, I’ve been reading about all of this buying of gold bullion by central banks around the world.

Some would say the move is bullish for the precious metal, but I’m not convinced. I was encouraged by the recent bounce after the price fell below $1,400 an ounce, but it has since stalled, based on my technical analysis.

To tell you honestly, I’m not sure in which direction the yellow metal will move. The recent rally was more technically driven than based on fundamentals.There are many factors involved that could encourage the precious metal’s future direction.

What Others  Are Reading : European Debt Crisis Explained

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