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Gaining From Gargantua

Guest Commentary - DEEPCASTER

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Wealth Preservation Wealth Enhancement

Gaining From Gargantua

“I’d rather write about laughing than crying. For laughter makes men human and courageous.”

La vie de Gargantua et de Pantagruel

Francois Rabelais

There is indeed a Gargantuan Giant growing in the International Economy and Markets. It is growing, and will continue to grow, until it collapses, inevitably.

Those who understand it can prosper and protects, as we explain here. Those who fail to understand, or understand but deny or disregard, do so at their peril.

That Gargantua is the Globalist Mega-Bankers Ongoing QE-to-Infinity (One Trillion Euros injected via the LTRO since December 2011!) and associated Markets Manipulation as e.g. Manifest in the February 29 Takedown of Gold and Silver Prices. Only tiny Viking-Iceland (and prospectively the Chinese) has successfully fought off this Giant by telling the Mega-Bankers to “stuff it” and Iceland’s economy is now recovering. But to date it appears the rest of the developed World lacks the Will.

Jim Sinclair correctly identifies The Power behind the Equities Markets’ recent Rally and the cause of the Gold and Silver Takedown.

“Because of the volatility you experienced in gold today (Feb 29), and the absolute fact that it was an MSM cover operation of today’s covert operation, which was one of the largest injections of QE liquidity into the Euro banking system ever, you must know the facts.

“The power behind the equity markets right now is liquidity and everybody knows it. It’s not improving earnings and it’s clearly not a broad globally improving economy, but rather improving liquidity.”


“If, in fact, what Bernanke attempted to tell the investment world today, that QE may not be necessary because of a modest improvement in the statistics of unemployment, if that was truly to be believed, then the stock market should have been off 800 points while gold was gold was down $100. Because the same thing moving the stock market is what’s moving the metals and that is pure liquidity.”


“Today was a Cover-up by the Fed and Mainstream Media”

Jim Sinclair,, 02/29/2012

But in fact the Equities Markets dropped only modestly while Gold was taken down dramatically, due to Cartel (Note 1) Price Suppression.

But Sinclair identifies the “Safe Haven” with Profit Potential – Gold, in spite of the Takedown.

“Keep in mind the notional value of the total amount of OTC derivatives outstanding reported by the BIS was reduced by 50% about two years ago when the BIS changed their computer basis for valuation by considering all derivatives as going to closure as value to maturity. … The $700 trillion US dollars that is quoted now has not changed since it was manufactured by a change in the method of accounting for notional value

“When does notional value become real value? That is, under what circumstance would a credit default swap require financing to 100% of its insurance undertaking? The answer is in default.

“This is another reason why the can must be kicked down the road, not only at the February or March payments due by Greece, but to infinity. This is why QE is going to infinity. Once you have kicked the first can down the road you cannot stop. Your hope is that business conditions become ebullient and by earnings, the balance sheets that are truly a disaster are rebuilt. This is not the case now nor will it become the case. The can is going to get kicked forward again and again until in 2015 when it simply becomes too big a number to imagine.

“Since there is no strong economic recovery out there and the can must be kicked as there is no other choice, liquidity has but one direction to go and that is higher. Because liquidity can only go higher, gold cannot do anything but go higher

“The only way out is the historic way out. That is the instillation of a new monetary system based on commodity money, gold. … Gold will be the last man standing in terms of asset categories when the piper must be paid, more than likely in June of 2015.”

“When Does Notional Value Become Real Value?”

Jim Sinclair, MineSet, 2/24/2012

The Key Takeaway from Jim Sinclair is that QE is going to Infinity. And the December and February 29, ECB One Trillion Euros LTRO Injections into its Client Banks confirmed that. Consider what an incredible “Hot Money” Liquidity Injection has been pumped into the Eurozone, and thus into the International Economy, and what the effects will likely be. Indeed, we shall all have to suffer the consequences as David Rosenberg points out:

“Even in the best of times, pullbacks occur after a very whippy move, especially those built on liquidity and sentiment as opposed to improved economic fundamentals. Divergences between the financial economy and the real economy can certainly last months, or even quarters (like three quarters in 2000 and again in 2007), but not indefinitely.”

David Rosenberg, Gluskin Sheff

Since it is unlikely that the rest of the Sovereign Nations of the developed world will exhibit a Viking-like Icelandic resolve by telling the Mega-Banks to stuff it, (See Deepcaster’s article titled “A Macro-View for Profit and Protection (02/23/12)” and “Saving Investments, Sovereignty, & Freedom from The Cartel ‘End-Game’ (1/13/11)” in Articles by Deepcaster Cache at & ) Investors need to prepare accordingly, given the Inevitable Result of the QE to Infinity Policy.

QE to Infinity is unlimited Money “Printing” and associated Credit Provision. Make No Mistake; this Monetary Inflation will eventually lead to increasing Price Inflation (and already is in Food and Energy) and then Hyperstagflation, then a likely Monetary Collapse.

Indeed, Real Inflation Numbers (as opposed to Bogus Official Ones) show we are at the Threshold of Hyperinflation already – 10.57% in the U.S. e.g., per (See Note 2).

As Sinclair rightly points out, the Monetary Antidote for Profit and Protection is Gold. The Chinese know this and have implemented a National Policy to dramatically increase Gold Reserves.



“Today, the global price of gold is largely controlled by just five "bullion banks" in London. These banks establish the price twice a day by offering to buy or sell gold at a fixed price.

“Manipulating the price of gold … is possible by influencing those five bullion banks…

“…to control the market for gold, the Chinese must not only accumulate massive gold reserves, it must establish the world's leading exchange – and regulate it honestly.

“In September 2009, China became the only country in the world to promote gold ownership to its citizens. The government started a major campaign to encourage all citizens to buy gold. Locals can now buy gold bars, which come in four sizes, at ANY Chinese bank in the country. …

“The Chinese government has also set up thousands of gold "stores" around the country...

“Why would the Chinese government set off a frenzy for gold?

“But all of these facts are just hints about what's to come. The real story won't be unveiled until June. That's when China will open something called the Pan Asia Gold Exchange (PAGE). This is a direct competitor to the London Metals Exchange and the COMEX in New York….

“But both of these markets back gold contracts with only 10% of the actual metal. The new China PAGE market is expected to have a much larger gold backing and could change the way gold is traded.

“For several years, we've been warning about the loss of world reserve currency status for the U.S. dollar. We have worried about our currency because we understood the propensity of governments to steal from their citizens through inflation.

“With roughly half of our national debt held by foreigners, we have long believed efforts to print away our obligations will prove catastrophic for America's leading international position – and most especially for the role of our dollar as the world's leading reserve currency.

“But until recently, we were unsure of the exact mechanism by which the dollar would be replaced. Now, we see how it will unfold...

“The Chinese will slowly hedge their exposure to the dollar by becoming the world's leading gold investors. By taking over the world's gold markets and building a huge stockpile of gold, they will be able to back their currency with the world's traditional form of money.

“Once they are ready to make the yuan freely convertible, they will have created tremendous demand for their bonds and bills by making their currency the world's most reliable... and the only one backed with gold.

“The impact on the dollar could be catastrophic...”

How China Plans to Change the Way Gold is Traded”

Porter Stansberry, Daily Wealth, 2/25/2012

As Porter Stansberry rightly suggests, the pro-Gold Chinese Policy could well lead to the Yuan displacing the $US as the World’s Reserve Currency.

Important to note though, that this displacement will not be an event, but rather a Process. And in that Process shrewd Investors have the Opportunity to Gain from the Gargantua of QE-to-Infinity, and Mega-Bankers Gold and Silver Price Suppression, because, in light of the foregoing, the ability of Cartel Mega-Bankers to sustainably suppress P.M. Prices is inexorably diminishing.

In other words, Cartel* (Note 1) Mega-Bankers will continue to engage in Gold and Silver Price Suppression Operations such as the February 29 one but with decreasing success. The Investors Antidote is to buy and take Delivery of the preferred form (see Deepcaster’s Portfolio Recommendations at of Physical Gold and Silver near the bottom of such Cartel Takedowns and Take Personal Delivery. Physical Gold and Silver Prices are much harder to manipulate than Miners Shares Prices as reflected in the fact that the Premiums for Physical have risen dramatically in recent years. Also, Quality Miners shares should be purchased on weakness.

The Strategy is simple, Invest in The Monetary Metals Gold and Silver Now on Dips; but also in other Inflation Sensitive Assets such as Crude Oil and Key Agricultural Products at the Right Time. (Deepcaster makes specific recommendations in his latest Letters and Alerts at As well, Invest in Securities whose Prospective Total Return (Gain plus Yield) exceeds Real Inflation (10.57% in the U.S. e.g.). See Note 3. This is because The Economy is not Recovering, as David Rosenberg and Astute Trader Dan Norcini point out.

Specifically, Trader Dan Norcini provides an excellent explanation of why and how the treasury Market is signaling that the Ostensible Economic Recovery is not For Real.

“…What we are seeing is the effects of liquidity splashing all over the entire US economy. It is that factor that is sending hot money into not only the equity markets but also the commodity markets and is pushing up the cost of tangibles once again. Rest assured that once these hedge fund money flows begin intensifying even further into the commodity sector (wholesale prices), we are going to all see this passed through on the retail side of the equation.

“This is perhaps the reason that the bond market is not going in the opposite direction of the stock market. If the economic recovery were in fact actually as strong as the price action in the S&P 500 is signifying, the bond market would have already dropped below the bottom of its trading range and would have begun a strong downtrend portending a rising interest rate environment. It is not doing that.

“This tells us that the bond market does not buy into all the hoopla surrounding the rising price of equities and is not anticipating anything remotely resembling a period of strong economic growth ahead of us in the immediate future. While one would think that rising commodity prices would be viewed as evidence that inflationary pressures are slowly building from the Fed's near-ZERO interest rate policy, bonds seem to have made up their mind that these rising prices, particularly energy prices, are going to act as a DRAG on the economy moving forward.

“Until we see a breakout to the downside in the bond market, all the talk of an improving economy is just that - TALK. When I see long term interest rates beginning to rise steadily, then I will believe it. Until then, it is just the inevitable result of issuing enormous amounts of liquidity in an environment conducive to nothing more than WILD-EYED hedge fund speculation.”

Dan Norcini, “All Boats Rising?”, 2/28/12

Thus, an event like Mideast War and consequent long-lasting Energy Price Spike or a publically acknowledged Greek Default (possibly as early as late March, 2012, we project) or other negative Eurozone event would impel the U.S. 10yr yield well below 2% again, as a “Safe Haven” move to U.S. Paper returns, again.

Indeed, lack of confidence that the Eurozone can successfully solve its problems has helped the 10yr maintain Safe Haven status with its yield still barely over 2%.

Longer term, the U.S. Treasury securities market is becoming an ever-larger Mother of all unacknowledged Bubbles, in part because Eurozone problems have helped mask The Greater Solvency Problem of the U.S.

And as all that Fed and ECB generated Hot Money and Credit works its way into the Economy, much Higher Price Inflation and much higher Interest Rates are on the way mid-to-long term.

That is, Hyperstagflation (HSGI) is on its way.

But it is just not yet (except for Food and Energy Prices) apparent to most.

Now is the time to purchase Assets which will protect Wealth and appreciate in a Hyperinflation. This is how to Gain from Gargantua.

Best regards,


March 1, 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 Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at, 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 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: * 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

Annual U.S. Consumer Price Inflation reported January 19, 2012
2.96%     /     10.57% (annualized December, 2011 Rate)

U.S. Unemployment reported February 3, 2012
8.3%     /     22.5%

U.S. GDP Annual Growth/Decline reported January 27, 2012
1.56%        /     -2.70%

U.S. M3 reported February 13, 2012 (Month of December, Y.O.Y.)
No Official Report     /     3.87%

And Official Source Disinformation continues, consider Shadowstats comments on the January 6, 2012 release of U.S. Employment data:

“The reported seasonally-adjusted 200,000 jobs surge in December 2011 payrolls included a false, seasonally-adjusted gain of roughly 42,000 in the “Couriers and Messengers” category.  That gain was an artifact of the seasonal-adjustment process and will remove itself in the January 2012 numbers.

“The problem is that this 42,000 gain is part of a seasonal pattern that fully reverses itself each January…”

“December Payroll Seasonal-Adjustment Problem”, John Williams, 1/6/12

Note 3: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, negative Real GDP growth, nearly 11% Real U.S. Inflation (per and prospective Sovereign and other Defaults.

One Sector full of Opportunities is the High-Yield Sector. Several of our High yield stocks have moved up when the Equities Market was tanking.

That Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (10.57% per year per

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 and click on ‘High Yield Portfolio’.

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