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THE FINANCIAL CRISIS SOLUTION WITH PROFIT “KICKER” POTENTIAL FOR PRECIOUS METALS PARTISANS

As gauged by the Fundamentals and the still freezing Credit Markets - - as opposed to spasmodic spikes in the Equities Markets - - The Fed and Bush Administration’s U.S. Taxpayer-funded “Bailout Program” (by now $7.7 trillion* in capital injections, purchases, loans and guarantees!) has failed miserably in reviving the economy and restoring stability in the financial markets, notwithstanding the recent (and temporary) bounce in the Equities Markets (*Bloomberg News, November 24, 2008).

In essence, U.S. taxpayers/consumers/small businesses/disfavored financial institutions (Main Street) are being forced to bail out, and guarantee the profitable continuance of Wall Street (and only Fed-favored firms at that!) to the tune of Trillions of Dollars. But if Main Street wants any of that money back they have to borrow it! Outrageous!

Indeed, The private-for-profit Fed’s Balance Sheet has increased massively in recent months. Their “double-dip” profits look to rise dramatically. They get “interest” on the money they print out of thin air and lend it to us Main Street Taxpayers, etc. Then, their Favored Financial Institutions (who are the beneficiaries of The Bailouts and some of whom are probably shareholders of The Fed) get to charge us on Main Street interest again for lending it back to us.

Moreover, the initial indicators regarding Obama Administration financial and economic policies and appointees are not promising. Certain appointees - - Messrs. Geithner and Summers in particular - - have played a significant role in crafting policies which have failed and impoverished us on Main Street so miserably. Thus, it is up to us, the citizenry, to develop, and push for, a Solution to our Financial Crisis.

Fortunately, there is a Solution. Practicality dictates that we outline only the key necessary conditions for this Solution. Of course these need to be fleshed out to make a complete proposal. While in normal times we would not approve of certain components of the following five-point plan, they are forced upon us by the massive schemes of The private-for-profit Fed and the Bush Administration.

When one is in a deep hole into which one has been pushed, one must temporarily cast aside one’s ground-level ideology and exit as best one can. [The maxim, “when you’re in a hole, quit digging,” is regretfully and temporarily set aside.]

1. Unique Targeted Tax Rebate Stimulus Plan

The Initial and Ongoing Catalyst of the current Financial and Economic Crisis, credit freeze-up and toxic waste creation is the ongoing and increasing numbers of delinquencies and defaults on mortgages and other credit obligations by mortgage holders and other borrowers.

It is clear that The private-for-profit Fed instigated this crisis by its easy credit and massive monetary inflation policies. But as investors, taxpayers and citizens we must cope with the consequences.

There is one fundamental problem which must be solved, or no long-term Solution is possible. The financial system and economic crises will not and can not be solved until the 70% of the US economy (which is represented by the U.S. taxpayer/consumer) is in a healthier financial condition and is thus able to service their debt and pay their taxes while simultaneously resuming normal saving and spending.

Until the Main Street Sector returns to a healthy state, there will continue to be foreclosures, bankruptcies, and delinquencies which will continue to create ever more toxic waste for lenders, with ensuing counterparty failure continuing to ripple through the system. And the counterparty failures will be magnified by continuing defaults of some of those $683 trillion in OTC Derivatives outstanding as of June, 2008. No number of bailouts “at the top” of major banks or other favored institutions will solve this problem. A lasting solution requires assistance at the ground level for the typical obligor (e.g. on a home mortgage).

Thus Deepcaster reiterates that the bailout plan will not work in the long-term (except perhaps insofar as it enriches private financial institutions favored by The Fed and The private-for-profit Fed) and earlier said so, along with others, including Robert McHugh of McHugh’s Daily Briefing. McHugh states the primary cause of the Bailouts failure succinctly and, to his credit, articulates The Core necessary condition for a Solution:

“…The reason is that it fails to address the source of the problem, the consumer’s lack of income due to asset depreciation, job loss, declining investment yields, rising real estate taxes, and a rising cost of living. Buying today’s bad assets fails to prevent tomorrow’s bad assets from showing up as a new batch of consumers fail to make loan payments, giving birth to the next round of fresh toxic assets, sure as death and Obama raising taxes on the “rich.”

The solution is simple: Rebate the past 5 to 10 years of [household] income taxes, up to $10 trillion worth, requiring half the rebate to pay off the debt. If households don’t have debt, they get to keep all the rebate. This will metamorphose current and future bad assets (loans and loan securities) into good assets. This gets the household back on their feet, heals both household and corporate balance sheets, and jump starts the economy with a boom that could last decades. Sure, the Dollar would take a hit, maybe a 50 percent hit, but debts will be eliminated, a depression will be averted, and everyone gets a fresh start….”

McHugh’s proposal is not only excellent, it is necessary. Since If the basis of 70% of US GDP (the taxpaying, consuming but increasingly impoverished U.S. Middle Class) is increasingly financially unhealthy, no enduring economic or financial system recovery is possible.

Though this is an excellent core proposal it needs elaboration. For example, only individual and small business taxpayers should be eligible, and only those who are out-of-pocket on taxes. That is, this proposal is not intended as a transfer payment to those who receive negative income tax credits. Any checks received from the government over the period would be deducted from the amount of the tax rebate. As well, a temporary suspension of the payroll tax could be enacted as a compliment to a less generous tax rebate.

The plan also needs refinements and conditions. For example, even a massive Tax Rebate would not be sufficient to bring some of the weakest borrowers and the most egregious loans current. These should be allowed to go into default and foreclosure because they will have been the most marginal loans in any event and the lenders deserve to be stuck with the losses on these loans they never should have made.

In sum, the taxpayer-funded bailouts “at the top” will not work to change the dismal Fundamentals, unfreeze credit, etc. Indeed, to help at all they should be coupled with “required loan quotas” for lenders. If you don’t lend, you don’t get bailed out. But that has not happened. Thus, this Solution is proposed.

2. Enact a Fair Trade Policy for Industry and Job Protection Immediately

The United States has foolishly been led (by Democratic & Republican Administrations alike) down the Globalist (as opposed to Internationalist) path which has resulted in the destruction of American industry and American jobs via so-called “free trade” agreements like NAFTA and CAFTA. Unfortunately, this destruction has only just begun.

Appeal to the nineteenth century Ricardo’s Theory of Trade is usually spurious because modern interpreters confuse “Relative” advantage with “Absolute” advantage. Absolute advantage envisions moving capital across national borders in order to benefit from lower wages in second country. Ricardo espoused free trade only to the extent that it maximized relative advantage. He never considered that British capital might be moved to, say, Burma, in order to manufacture goods more cheaply than these same goods could be manufactured in Great Britain.

Today’s “free trade” agreements entail moving capital across national borders and, thus, inevitably impoverishing the domestic manufacturing base. Some decades ago, it was estimated that a $150,000 investment was needed to create one well-paying job in the United States. The middle class suffers when jobs are created offshore rather than in the United States. Capital should be encouraged to stay mostly at home.

Not even Tax Rebates can save the U.S. economy or the World’s Reserve Currency (the U.S. Dollar) without a durable strengthening of the U.S. manufacturing and broader business base.

Neither can the United States, nor for that matter most of the rest of advanced economies of the world, compete with the wage rates paid in Vietnam, for example. In the long run this fact represents doom for the advanced industrial economies unless the U.S. and other advanced economies enact multiple bilateral agreements with tariffs that require an approximate balance of imports and exports with each trading partner. That “fair trade” approach would generate sufficient competition to keep domestic industries on their toes, but create sufficient protection so that domestic industries of all major advanced countries and their employees could prosper and at the same time emerging economies would benefit from a continuation of Fair Trade not “Free” Trade, which is often nothing more than welfare for giant globalist businesses.

Of course, a necessary condition for success of this policy would be to dramatically reduce mass immigration into advanced industrial countries via a temporary moratorium. Mass legal and illegal immigration results in importing poverty and a net increase in costs usually born by local and State taxpayers while certain employers get the benefits of paying low wages to low skilled workers.

Consequently the taxpayers at large (including other employers!) pay far more in taxes to support health care, education, infrastructure and other needs of the low skilled immigrants and their families. (The U.S. population, for example, is increased by about 2 million legal, and 2 million illegal, immigrants and their offspring annually.) The result of a moratorium would be relief of other burdens as well, such as on the retirement system. The average age of immigrants entering the United States is four years greater than that of the average native born.

3. Remove The Fundamental Cause of Our Systemic Crisis - - The U.S. Federal Reserve

The Root of the Problem is both deeper and broader than just Taxpayer-funded Bailouts. The root of The Problem is the structure, functioning, and very existence of that very entity which in large measure created and catalyzed the Financial Systemic Crises to begin with - - the private, for-profit U.S. Federal Reserve.

Just as the crisis began with The Federal Reserve’s loose-money policies and the malinvestment these enabled the key to its solution is relatively simple. Consider first Jim Rogers on the Bear Stearns Bailout:

“If the system is so fragile that the collapse of the fifth-largest investment bank in America could bring the whole thing down, what's going to happen in a few years when the No. 2 or No. 1 banks go bad...What's Bernanke going to do, get in his helicopter and fly around the country repossessing cars and houses? This is insane."

Jim Rogers, June 25, 2008, Moneynews.com

Thus, Jim Rogers helps make a compelling case that those “insane” Fed policies (easy credit and massive monetary inflation) of the past few years have brought the Financial System to the Brink of Meltdown. Were that NOT the case, the Fed would not have seen it necessary to intervene to resolve the Bear Stearns (and Fannie Mae, Freddie Mac, AIG, and….?) crises. Bear Stearns was only the fifth largest investment bank in the United States.

Deepcaster, former Presidential Candidate Ron Paul, and Jim Rogers recommend the same Solution to The Crises catalyzed by the private, for-profit, U.S. Federal Reserve: Abolish it.

Indeed, a few months before he was killed, President Kennedy signed Executive Order 11110 which would have de facto abolished the Federal Reserve by gradually replacing Federal Reserve Notes (today’s Fiat U.S. Dollar) with U.S. Treasury Notes. Executive Order 11110 has never been revoked.

The currency-creation function of the private for-profit Fed should be replaced by the U.S. Treasury operating as a de facto U.S. National Bank as authorized by the U.S. Constitution. The Treasury could then Re-link the U.S. Dollar to Gold and Silver as constitutionally authorized. This could prospectively avoid the massive Fed-catalyzed monetary and credit excesses which are the main cause of our current Financial Crises.

Interest rate manipulation, which The Fed has been conducting (for their shareholders great private profit!) for decades, should not ever be a government function because it undermines the pillars of a free market.

Fed abolition is necessary because Fed policies perennially risk Systemic Collapse while facilitating massive profits for favored Financial Institutions. A number of European Bankers also agree with Deepcaster and Rogers on the matter of Systemic Risk.

“…The clash between the European Central Bank and the US Federal Reserve over Monetary Strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990's, a team of bankers has warned. 'We are seeing striking similarities between the transatlantic tensions that built up in the early 1990's and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe, said a report by Morgan Stanley's European experts..."

Catastrophic' Event Feared as Fed fights ECB on Rates
Ambrose Evans-Pritchard, The Telegraph, London, Monday, June 16, 2008

Indeed, the Primary Cause of the aforementioned Crises is U.S. Fed policies of recent years. Specifically, among the many crisis-creating Fed policies have been, and are:

--Expanding the money supply (M3) at a Hyperinflationary Rate, now about 11% per annum, and coupling that with “easy credit,” and

-- Manipulating interest rates so that true free market rates are not reflected, thus,--Both create skyrocketing Real Consumer Price Inflation, now nearly 12% annually, and

--Both thus catalyzing record-high Real U.S. Unemployment, now about 16% annually. (all according to the quite credible calculations of shadowstats.com)

The Systemic Manifestation of The Fed-Led Cartel’s Outrageously Bad Policies is the creation of the various Bubbles: the Credit Bubble, the Mortgage Market Bubble, the Darkly Liquid OTC Derivatives Bubble, are among the major ones. These are all in the process of Bursting, with quite deleterious consequences.

The bottom line is that the U.S. Fed-led Financial System is systemically toxic and is indeed becoming a threat to democratic governance and free markets. It is essential to understand why this is so in order to understand how to achieve financial “salvation” and profit. Thus, consider - -

“But if you wish to remain slaves of bankers and pay the cost of your own slavery, let them create money.”

Joshua Stamp, Director, Bank of England, 1928

Even the most causal student of Economic History knows that the United States’ Federal Reserve system, or “The Fed” as it is called, is not a U.S. government owned or controlled entity.

Various international private banks, several of which are headquartered in Europe, own the “United States” Fed. Moreover, this “United States” Fed leads a Cartel of Central Banks* and their Agents, Allies, and Factota, who collectively intervene in a wide variety of markets, as Deepcaster (see Deepcaster’s July, 2008 Letter entitled “Market Intervention, Data Manipulation Still Accelerating…” in the Letters Cache at www.deepcaster.com) and others have demonstrated. All this is obviously quite financially incestuous.

These International Bankers, acting through their “U.S.” Fed, make money by creating money out of “thin air” as eloquently described by the Dean of the Newsletter Writers, Richard Russell:

“I still can’t get over the whole Federal Reserve racket.

Consider the following - - let’s take a situation where the U.S. government needs money. The U.S. doesn’t just issue United States Notes, which, of course it could. These notes would be dollars backed by the full faith and credit of the United States. No, the U.S. doesn’t issue dollars straight out of the U.S. Treasury.

This is what the U.S. does - - it issues Treasury Bonds. The U.S. then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money “out of thin air” (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the U.S. The Fed holds the U.S. bonds, and the unbelievable irony is that the U.S. then pays interest on the very bonds that the U.S. itself issued. (With great profit to the private owners of The Fed - - Ed. Note) The mind boggles.

The damnable result is that the Fed effectively controls the U.S. money supply. The Fed is …not even a branch of the U.S. government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the U.S. forever in debt - - or I should say in increasing debt along with ever rising interest payments.

How did the Fed get away with this outrage? A tiny secretive group of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn’t realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).”

Richard Russell, “Richards Remarks,” dowtheoryletters.com, March 27 2007

After President Wilson signed the Federal Reserve Act into law in 1913, he reportedly said, “I am a most unhappy man, I have unwittingly ruined my country…a great industrial nation is now controlled by its system of credit…the growth of the nation, therefore, and all of our activities are in the hands of a few men…” Deepcaster thus recommends a compelling expose of The Fed entitled “The Creature From Jekyll Island” by G. Edward Griffin.

Insightful economic forecaster Ian Gordon notes several negative consequences of the nearly 100-year reign of The Fed, consequences with which we cope today.

“Since its inception in 1913, the Federal Reserve Board has been responsible for almost 95% devaluation of the U.S. Dollar. All this has been achieved through its ability to continually inflate the money supply.

And, between 1985 and 2005, the Federal Reserve Board has increased the money supply by five times. This extraordinary money creation is merely the catalyst for debt creation. In a fiat money system, money is debt…there is absolutely no way this money can ever be repaid except by continued inflation. But, now that the credit bubble is blown up, inflation is no longer an option; bankruptcy looms.”

“The Federal Reserve…What Has It Done For You Lately?”

Ian Gordon, December 29, 2007 (www.axisoflogic.com)

When the United States has, in recent years, been threatened with recession or depression (e.g. 1987 and 2001), the Greenspan-led Fed responded to each threat by ever more massive fiat money (debt) creation. The problem is that each time the fiat money supply is inflated by an ever-greater amount, more money must be printed (and borrowed from The Fed, with consequent increased profits for The Fed) in order to stave off recession or depression. One recent calculation has indicated that approximately $6 must now be created (i.e. printed) in order to drive each additional $1 of GDP.

Thus if the Fed must be dissolved (and Rep. Ron Paul has wisely introduced a Bill which would do just that) then we can…

4. Establish the U.S. Treasury as the de facto U.S. National Bank and Link the U.S. Dollar to Gold & Silver

Establishing the U.S. Treasury as a de facto U.S. National Bank and linking the U.S. Dollar to Gold and Silver could mitigate the nearly inevitable Fed-catalyzed Disaster. This would end profligate printing of fiat currency merely delays financial disaster, but does not avoid it.

Such a disaster could be avoided by implementing the following: linking currency (particularly the U.S. Dollar) to the Monetary Metals – Gold & Silver – but The Cartel strenuously resists that. It would dilute their power and profits.

Independently calculated Monetary inflation reflected in (the now hidden by The Fed) M3 is now rising at about 11% annualized per year (www.shadowstats.com) - - about a 7-year doubling time. Of course, this reckless Fed-generated Monetary Inflation is gradually translating into Price Inflation, though that price inflationary effect has 1) been temporarily delayed by importing cheap goods and cheap labor into the United States via the de facto Open Borders policy and 2) has been disguised by data manipulation (see section of Deepcaster’s July, 2008 Letter regarding shadowstats Alternative Government Statistics Calculations at “Latest Letter” at www.deepcaster.com).

Of course, among the negative consequences resulting from rampant monetary inflation and easy credit has been serious wage depression and job quality degradation of American workers, as well as the destruction of much of the United States’ domestic manufacturing capacity.

A major problem with The Fed’s profligate fiat money creation is that as the money supply continues to increase, prices begin to increase at an increasing rate. That rate is beginning to be reflected even in the jiggered U.S. government’s early September data releases showing CPI is over 6%. In fact, Real Consumer Price Inflation is now about 12% annualized (www.shadowstats.com). As consumers lose confidence in the buying power in the Dollar, they advance their purchases before anticipated price rises take effect. The increased velocity of money, according to some analysts, was the triggering factor in the hyperinflation of the Weimar Republic.

Deepcaster and Richard Russell are of the same mind regarding the consequences of the Fed-created monetary inflation.

Regarding the continued inflation of the money supply:

a) The U.S. Dollar will eventually (pushed by Fed policies) self-destruct (though we are at the beginning of a short-term U.S. Dollar “bounce” as Deepcaster has earlier forecast) and

b) “…The system must eventually destroy itself. It is not a matter of whether, it is simply a matter of when and how…” Richards Remarks, March 27, 2007

So if “the system must eventually destroy itself” and The Cartel likely knows this, what has been, and is likely in the future to be, their response?

5. End Cartel Market Interventions and Stop The Cartel “End Game”

First, in order to stave off the day or month or year of Reckoning (which, we reiterate, is coming mainly as a consequence of their dramatic monetary inflation, market and interest rate intervention, and “easy money” policies), the Fed-led Central Bankers Cartel* has created, and for the past several years has operated, an extraordinary “financial machine” built on increasing trillions of dollars (over $683 trillion as of June, 2008) of OTC Derivatives (and recently the TARP and other funding facilities recently authorized) which allow it to manipulate major markets ranging from Precious Metals to Crude Oil and Energy, to Equities and Strategic Commodities.

*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Key Central Bankers and favored financial institutions to read Deepcaster’s July, 2008 Letter containing a summary overview of Intervention entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org 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.”

But now, finally, the pressures of the Real Economy (e.g. increases in food and energy costs) coupled with this relentless and irresponsible money (debt) creation by The Fed have begun to seriously stress the entire financial system, as the credit freeze-up beginning in August, 2007 and subsequent events show. As we pointed out in our July, 2008 Letter, the credit freeze-up, subprime crisis, toxic derivatives and other threats have not gone away. These threats are growing with increasing frequency and periodically erupting.

Indeed perhaps the most salient item of evidence that The Central Bankers Market Intervention Regime is becoming less and less effective is that The Cartel requires, and thus creates, an ever-increasing number of derivatives to “manage” all the various markets in which The Cartel intervenes. Indeed, those amounts of derivatives are increasing exponentially. (See Deepcaster’s July, 2008 Letter “Market Intervention Accelerating” in the Letters Cache at www.deepcaster.com). As of June, 2008 there were over $683 trillion of Dark OTC Derivatives available, inter alia, for Market Intervention.

So what are the Central Bankers to do as their Market Intervention Regime becomes less and less effective? What are they doing?

They surely must want to avoid allowing the financial system to collapse around them (in a manner in which its failure would be linked to them) lest they be subject to the wrath of the populace of the major nations. They must thus develop a solution - - an “End Game” as it were - - for what Deepcaster and Richard Russell view as the inevitable collapse.

Deepcaster has described The Cartel’s apparent End Game is in his June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations” posted at www.deepcaster.com in the “Archives” at “Latest Letter” and in his August 13, 2006 Alert “Massive Financial-Geopolitical Scheme Not Reported by Big Media.”

A most compelling rational conclusion from the foregoing is that The Cartel expects (and may even be pushing) the Dollar to go further and further decline, over the medium term, and to continue their other policies, until there is a “No-Salvation, No-Return Systemic Crisis.” (Very short-term, Deepcaster earlier forecast the U.S. Dollar to “bounce” into the 4th quarter of 2008 - - a forecast that is being fulfilled - - but that does not affect the fact that the primary trend for the U.S. Dollar is down.)

It is clear from a variety of substantial evidence that the relentless monetary inflation, non-market (rigged) interest rates, toxic derivatives, dark liquidity, et al has put the financial system in such serious jeopardy that it will be difficult or impossible to remedy.

That the U.S. economy is headed in the direction of Serious Stagflation (a Kondratieff Winter) is pretty clear from the shadowstats.com statistics. We reiterate, according to shadowstats latest calculations, Real Unemployment is near 16%, Real Consumer Price Inflation is running at about 12% a year and, as we commented above. The Money Supply Growth (M3) is increasing at nearly 11% a year, or a doubling time of about 7 years, and Real GDP Growth is at a negative 3% as of the end of the 3^rd quarter of 2008.

It would appear that The Cartel-charted-course toward a stagflationary recession/depression is on course.

To be sure, this Fed policy of explosively increasing the money supply (“money from helicopters” to use a phrase associated with Chairman Bernanke) and The Cartel’s massive and increasing use of derivatives to intervene in a wide variety of markets (see www.bis.org - - then follow the path: statistics>derivatives>Tables 19 through 22) is fraught with danger. Deepcaster, Warren Buffett and Jim Sinclair have pointed out the dangers of derivatives. Indeed, Buffett calls them “toxic” and Sinclair has aptly described the financial system as “sitting on a $20 trillion trembling mountain of derivatives…think Weimar Republic.” Unfortunately Deepcaster, Jim Sinclair and Warren Buffett are being proven correct.

In sum, with The Cartel’s increasing use of derivatives comes an increasing risk of a financial meltdown. We had such harbingers of one in August, 2007 with the credit market freeze-up and in March, 2008 (Bear Stearns) and in September, 2008 (Fannie Mae and Freddie Mac) but The Cartel was able to rescue its major International Bank and Wall Street clients from these.

And so far The Cartel has staved off a systemic meltdown. But, alas, it may well not always be so.

Thus we expect that a (probably nearly inevitable eventually) “No-Salvation, No-Return Systemic Crisis” will likely, as Deepcaster pointed out in his June, 2007 Letter, at some point provide The Cartel a catalyst to force realization of its “End Game.” Only the timing and details are dark.

The clue to the character of the “End Game” is the Strategic and Prosperity Partnership Agreement signed by Presidents Bush, Fox of Mexico and Martin of Canada in Waco, Texas in March, 2006. This Agreement was signed without the approval of Congress, or the knowledge of most of the American people.

It is clear from the End Game Plan reflected in this Agreement why the Bush Administration has been so resistant to defending U.S. borders.

It is also clear that a key component of the End Game Plan is the dissolution of the United States Dollar and other currencies into a new currency, the “Amero.” Indeed, two bits of anecdotal evidence that this plan is being taken seriously are:

a) That the “Swiss Portfolio” Investment Advisory Company is already touting the “Amero Alternative” on its website; and

b) The London investment firm Jeffries International Ltd.’s Vice President, Steven Pervis, said that the coming “Amero” will have “a big impact on everybody’s life.”

One clear inference is that if The Cartel is pushing the Amero as the eventual, and their favored, alternative to the U.S. Dollar, The Cartel certainly intends to continue its interventional efforts at suppressing the prices of Gold and Silver in order to prevent their attaining more widely-recognized legitimacy as real money.

The foregoing are only a couple of the components of this massive and dramatic End Game Plan, the particulars of which can be found in Deepcaster’s June, 2007 Letter “Profiting From the Push to Denationalize Currencies and Deconstruct Nations” and August, 2006 Alert ”Massive Financial Geopolitical Scheme Not Reported by Big Media” at www.deepcaster.com.

In the event of the success (from The Cartel’s perspective) of the implementation of the End Game Plan, doubtless The Fed would transmogrify itself into The (still private and very profitable) Central Bank responsible for issuing the Amero.

Of course, the key question for the long-term is whether The Cartel will be able to pull it off. Certainly they have been instrumental in creating a financial climate which has crisis potential.

The immediate question is whether their massive Cartel Interventional Machinery will continue to be potent enough to do as they did most recently immediately after the nationalization of Fannie Mae and Freddie Mac - - implement major takedowns of the Gold and Silver prices.

As their recent exponentially increasing derivatives creation shows, The Cartel is having a harder and harder time maintaining their potency.

So it appears that if The Fed is not able to lead its Cartel to success in implementing its “End Game,” the No-Salvation, No-Return Systemic Crisis which its policies will likely create, will clearly and publicly be its responsibility.

In that event, is it not highly likely that The Fed would be unable to continue as a privately owned for-profit entity?

Rather, and as an alternative to The Cartel’s planned End Game, the U.S. Treasury could become the de facto United States National Bank issuing United States Notes (as did President J.F. Kennedy briefly before he was killed) solidly backed by the monetary metals, Gold and Silver.

Fortunately there is a Resolution in the last Session of the U.S. Congress which reflects opposition to this Threatening Cartel End Game Plan: H.Res.40 (Goode, R-Va) and we expect it to be reintroduced.

Deepcaster has developed a Strategy for both profiting from the attempted implementation of the ‘End Game’ plan, and ultimately defeating The Cartel in its attempt to do so. That Strategy is laid out in full in its Alert of 12/23/07, "A Strategy for Profiting from Cartel Intervention" available in the Alerts Cache at www.deepcaster.com.

The essence of The Strategy, as applied to the Gold and Silver markets, is to consider not only the Fundamentals and Technicals but also The Interventionals in making investment decisions. Such a Strategy can allow one to profit on the way down, in Takedowns of Gold and Silver for example, as well as on the way up.

To summarize certain key aspects, the strategy for protection and profit from the bursting of Fed-catalyzed bubbles and the Fed attempted implementation of its’ ‘End Game’:

1. Understand the various Bubbles and the implications of their bursting. This allows one to

2. Pick which Sectors are inflating and those which are deflating, which allows one to

3. Ride the inflating ones up and use short positions of various kinds to ride the deflating sectors down and

4. Recognize that one must regularly consider the Interventionals as well as the Fundamentals and Technicals in order to adequately forecast Market Moves; and

5. Recognize that Gold and Silver are authentic Safe Havens against both inflation and deflation but that their price at any given time is subject to massive distortion by the Fed-led Cartel of Central Bankers through its Interventions and, therefore

6. It is important to implement a Strategy that allows one to build one’s Core Position in Gold and Silver near the bottom of Cartel generated takedowns, but also to profit as Gold and Silver rise, and when they are Taken Down as well.

A major premise of The Strategy is that one can, and should, certainly remain a Hard Assets Partisan while at the same time insulating oneself from future Takedowns. Adopting such a strategy can help to avoid unpleasantness, or even possible financial ruin, in the future, as well as to make profit along the way.

In sum, Investors must recognize that The Cartel is still potent, as difficult as that may be psychologically for Deepcaster and other Hard Assets Partisans to acknowledge. The Cartel is still the Biggest Player in many markets and, if the timing and market context are propitious, the Biggest Player makes Market Price. In addition, The Cartel has the advantage of de facto controlling the structure and regulation of various marketplaces and that is a tremendous advantage; just as the Hunt Brothers years ago discovered much to their dismay and misfortune, when they tried to corner the Silver Market.

However, there will be a time when The Cartel price capping is ineffective and Gold & Silver make record moves upward. The benefit of this Strategy is that one will likely be long in one’s speculative positions when this happens.

Conclusion: Political Action Can Create Profit Opportunities for Precious Metal Partisans Hard Assets Partisans have the opportunity to become involved in Political Action to diminish the power of the Central Banker Cartel and return to “Hard Money.” It is truly outrageous that the average unsuspecting citizen, and prospective retiree, can and does put his hard won assets in Tangible Assets Investments only to have those assets effectively de-valued by Cartel Takedowns. This is extremely injurious to many average citizens in many countries who are saving for the rainy day or retirement and have their retirement and/or reserves effectively taken from them. In order to help prevent this and similar outrages, we recommend taking four steps:

- - Become involved in the movement to abolish the U.S. Federal Reserve (a private for-profit Cartel of International Banks) as Deepcaster, former Presidential candidate Rep. Ron Paul, and legendary investor Jim Rogers, among many others, all have advocated.

- - Join the non-profit Gold AntiTrust Action Committee which works to eliminate the manipulation of the Gold and Silver markets (www.gata.org). GATA is a non-profit organization which makes a great contribution by gathering evidence regarding the suppression of prices of Gold, Silver and other commodities.

- - Work to defeat The Cartel “End Game.” Deepcaster has laid out the evidence regarding the Ominous Cartel End Game. Clearly The Cartel is sacrificing the U.S. Dollar and price-capping Gold and Silver, inter alia, to prop up favored international financial institutions and to maintain its power. But this sacrifice cannot continue forever.

- - Buy and Take Possession of Physical Gold and Silver near the bottom of Cartel-generated Takedowns.

Since the cornerstone of The Cartel’s Power lies in maintaining the legitimacy of their Fiat Currencies and Treasury Securities, the last thing they want is to have Gold, Silver and Tangible Assets held by investors to increasingly be seen as the Ultimate Stores and Measures of Value. Thus they will continue Takedown Attempts.

Therefore by obtaining, and adding to, one’s own Core Position near the bottom of Cartel-induced Takedowns, one not only can help bolster one’s Core Assets for the future, but also can help defeat The Cartel’s nefarious “End Game” initiative.

Pressing for all the foregoing will collectively serve to increase pressure to throw off the shackles of Cartel Intervention and control. That is the necessary first step to returning to economic and financial health and to preserving democracy and freedom of expression. And that pressure will help Impel Gold and Silver prices upward, despite The Cartel, thus enriching Precious Metals Partisans.

Deepcaster
November 26, 2008

DEEPCASTER LLC
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