Marc Faber says we are in a euphoric state in the US Stock Market driven by a few vert exoensive stocks like Netflix and Tesla. Marc lays out his global view in this interview

Mega-Risks Loom in the Next very few months and most will be realized. But for Investors properly positioned, they Provide Very Substantial Profit and Wealth Protection Opportunities. First let’s examine the Risks, then the Profit Opportunities.

MEGA-RISKS

China

Perhaps the Main One will be the slowdown in growth in China, the world’s second largest economy. This Slowdown will be Caused mainly by China’s serious drive to restrain unsustainable credit growth.

Indeed, credit outstanding (including to “Wealth Management” entities outside the formal banking system) is a Real Threat to China’s Economy and was recently estimated to be 260% of GDP. Indeed, China’s Credit has been rising twice as fast as China’s GDP. But China’s restraints on Credit Growth will lead to the slowing of China’s economy.

Consequences of China’s Slowing:

¾    Dramatically reduced demand for many commodities Worldwide

¾    Chinese GDP growth plunging by up to 50% by 2020

¾    Diminished liquidity in China and thus Worldwide

¾    A fall in Chinese Equities, the beginning of which is already evident in the Shanghai Exchange

¾    Greatly diminished Credit Availability 

¾    And because China is the 2^nd largest Economy, these Negatives will adversely affect other Economies and Markets

USA

Almost surely this coming Fall’s Budget Deal will require an increase in the Debt Ceiling. There will be several consequences of which the most important are:

¾    Weakening of the $US

¾    A great deal of Conflict and Consequent Uncertainly

¾    Strong leg up for Real Money, i.e., Gold and Silver (but only in certain Forms see Deepcaster’s recent Letter and Alerts), and Spike UP and then the beginning of the Great, probably multi-year, Bear Market for Key Sector Equities

¾    The beginning of a deeper and widely acknowledged U.S. Recession

¾    Consider the Real Numbers courtesy of shadowstats.com compared with the Bogus Official Ones (Note 1)

Internationally

¾    An intensification of the Currency Wars among Central Banks, with one eventual Result being the $US loss of World Reserve Currency Status and either the Gold-backed Chinese Yuan or the IMF SDRs ascending to that Status.

Result: an even worse recession in the USA and China, and spreading Worldwide.

Political-especially in the USA, Eurozone and Mideast

Political Factors will continue to have an inordinate influence on the Markets going forward. Indeed, if the Deep State Neo-Con Globalist’s and Cultural Marxist’s Attempts (see Carrying Capacity Network’s February 2010 article re Cultural Marxism)  to destroy the Trump Administration continue to gain momentum, The Great Crash we forecast to begin in September/October could start sooner than even we have forecast it to begin (see our most recent Alert for likely Triggers). 

But it could also be delayed, but not avoided by a successful Repeal and Replace Healthcare Bill and/or Corporate Tax Cut which might still cause a significant Market Bounce lasting for days or a few weeks, ifother Political Events do not continue to dominate.

Indeed, Equities Markets around the world have topped, or, in the case of the USA, are Topping, and the USA is almost done Topping!

Overview: the Markets have shot up since the U.S. Election (Dow has hit a record 21,000+) on the hope/sentiment that President Trump’s Optimistic speeches and Policies will usher in a New Era of a Booming Economy and Markets. 

Unfortunately, as much as we would like to believe in that vision, the Economic and Geopolitical Realities/Headwinds which Trump inheritedare simply too great for that hope to be entirely fulfilled, at least in the short-term. 

Consider:

The $20 Trillion-plus U.S. Debt and $100 Trillion+ downstream Unfunded Liabilities are one problem which has not been dealt with! Indeed, those debts are unpayable absent currency devaluation. And China’s unpayable Debt to GDP is 260%! So China can not be the Savior of the International Economy. How are substantial Tax Cuts Possible without substantially raising the Debt Ceiling?

And we reiterate that, in addition, Due to the private for-profit U.S. Federal Reserve Bank’s low interest rate Policies, Many Companies and Countries are highly overleveraged (and Many Retirees devastated due to hyper-low rates on CDs etc). EXCESS DEBT IS THE GREAT TRAP and likely The Primary Cause (among several) of the expected Crash. (See our Buy Recommendation aimed at profiting from this.)

Moreover, until recently, the Markets have been pricing in Massive Trump Tax cuts. We expect there will be cuts, but not as substantial or as soon as the Markets expect, want, or are pricing in. And other Trump Initiatives are meeting strong resistance. And the RyanCare debacle has been disastrous. Therefore, Earnings Improvement (though Good for Q! 2017) Expectations will eventually be dashed. Result: More Impetus to the downside. See our most recent Alert for Timing.

Thus, The Fed will eventually have to print “Money from Helicopters” and that will be very inflationary.

Great Volatility is coming! 

Bank Failures and likely consequent Asset Confiscation

If the Coming Crash is as severe as we have forecast, Banks will Fail. If the U.S. or other Entity fails to bail them out, then Assets in a bank in excess of $25,000 are subject to confiscation.

Specifically, under the “Adequacy of Loss-Absorbing Capacity” Mandate, approved by the G20, the failed bank can take Depositors’ money and convert it in to Equity in that (failed!) Bank!

Also, CDs, Money Markets, Annuities, IRAs and Savings Accounts are apparently at risk, as well!

Note that, Banks are already Failing in Greece, Puerto Rico, Argentina and Venezuela and are threatened in various Eurozone Countries. This will likely cause an increasing Ripple Effect since Credit Markets are interrelated.

The Bitcoin (and related Blockchain) Delusion/s

That Investors treat Bitcoin as anything other than a Rank Speculation amazes us.

Surely it is not a reliable Store of Value, nor a convenient Medium of Exchange—two Characteristics of Real Money.

Consider:

1) One major Electro-Magnetic Pulse (e.g., from Satellites which North Korea already has circling the Globe) could take the Internet down for weeks or Months. And Bitcoin’s Fate?

2) And the Monetary and Law Enforcement authorities are surely Monitoring it to get a lead on crooks. Indeed, allowing Bitcoin to continue even though it is arguably illegal Money, is very convenient for law enforcement. The claim that it cannot be traced or hacked is nonsense.

3) And any government can make Bitcoin Transactions illegal at any time.  It is after all a Competitor to their Fiat Currencies. Therefore, we fully expect the Coming Crash would be a Trigger for a Bitcoin Meltdown.

Mega-Bankers Ongoing Move to Eliminate Cash

Very serious and a Great threat to our Freedom as well as our Assets. See our Article “Profit and Protection from Threats to Our Freedoms” for more analysis and detail.

Profit and Protect

Deepcaster has Recently recommended several positions which should do well, or very well, in the event of Key Sector Crashes and/or Deeper Recession, for both Profit and Wealth Protection. See our Recent Alerts.

Gold and Silver

But there is one Asset class we expect to do very well—Real Money, i.e., Gold and Silver provided they are owned in a Non-Fraudulent, Not-merely-or-allegedly-Representative Forms. To see what Form/s we recommend for both Profit and Protection see our recent Letters and Alerts.

And there is one additional Impediment to owning and profiting from Gold and Silver. 

A Fed-led Cartel of Mega-Banks has for years conspired and continues to conspire to Suppress their Prices. Of course they do this to push investors into their Fiat Currencies and Treasury Securities to enhance The Cartel’s Power, Wealth, and Control.

This Cartel is and can be beaten but the forms of an Investor’s of Gold and Silver Holding is here crucial as is Timing of Purchases. (See Deepcaster’s Letters and Alerts.) 

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 February, 2017 Letter entitled “Profit, Protection, Despite Cartel Intervention” in the ‘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, and manipulation in other Markets. 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 Deepcaster’s 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.

Best regards,

Deepcaster 
June 9, 2017

Note 1: Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)

Annual U.S. Consumer Price Inflation reported May 12, 2017
2.20%     /    9.95%

U.S. Unemployment reported June 2, 2017
4.29%     /     22.0%

U.S. GDP Annual Growth/Decline reported May 26, 2017
2.04%        /     -1.86%

U.S. M3 reported June 4, 2017 (Month of April, Y.O.Y.)
No Official Report / 3.514%(e) (i.e., total M3 Now at $17.988 Trillion!)

 [See also our other recent Letters, Alerts and Buy Recommendations at Deepcaster LLC for further Analysis and Forecasts.]

DEEPCASTER LLC

www.deepcaster.com

DEEPCASTER FORTRESS ASSETS, HIGH POTENTIAL

SPECULATOR & HIGH YIELD PORTFOLIOS

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Investment and Geopolitical Intelligence

Marc Faber points out the financial system, the Federal Reserve and other Central Banks in the world are being run by academics, most of who haven’t worked outside of academia for their entire lives, that interest rates have never been lower in 5000 years and that this unprecedented monetary experiment will one day react negatively.

….related by Michael Campbell: Voters Love Hearing It’s Going To Be Free

Donald Trump’s political agenda – and his very presidency – are in jeopardy…

…at least if you believe the chatter on cable television.

Yes, for weeks now, the big media outlets have been stirring up talk of impeachment. One narrative after another – Russia, Comey, Kushner, etc. – yet no conclusive evidence of any “high crimes and misdemeanors.”

Still, Democrats in Congress smell blood in the water… and they have readied articles of impeachment for introduction as soon as an opportunity presents.

But investors don’t seem particularly concerned about the implications of political turmoil intensifying in Washington.

The stock market keeps edging higher with minimal volatility.

The only hint of politically driven jitters all year came on May 17th. The Dow Jones Industrials slid by nearly 400 points as reports surfaced that former FBI Director James Comey was asked by President Trump to stop his investigation of former national security adviser Michael Flynn.

A few days later, the Dow rallied back up to its previous highs. The traditional safe-haven of gold is up modestly on the year but has yet to see any major sort of panic buying. Perhaps investors don’t believe the Trump presidency is at risk – or perhaps they don’t think it matters much if Trump gets pushed out of office.

Markets Appear Unconcerned by the Theatrics in Washington

What would a Nixonian crisis in Washington mean for Wall Street and, more importantly, main street? Probably not a whole lot in terms of major trends in the economy and in asset prices.

Consider the recent history of presidents who have gotten themselves into trouble. Neither the resignation of Richard Nixon nor the impeachment (and subsequent acquittal) of Bill Clinton caused the stock market to crash. Precious metals markets didn’t move much around these momentous political events, either.

President Nixon resigned on August 8, 1974 with gold trading at $152/oz. Gold began the year at $117 and finished at $195/oz. Nixon’s resignation occurred within a major year-long rally and doesn’t seem to have altered its trajectory.

Far more significant than Nixon handing over the keys of the White House to Gerald Ford was Nixon’s fateful decision on August 15, 1971 to close the gold window.

Previously, U.S. dollars had been redeemable in gold by foreign countries. But the Nixon administration feared a run-on U.S. gold reserves.

Henceforth, the U.S. dollar would be a fiat currency with no formal link to gold. As a consequence, inflation fears began to build – slowly at first, but then manically by 1980 with gold prices spiking to $850/oz.

The Watergate scandal that made Nixon infamous didn’t really have anything to do with what unfolded in markets the ensuing years.

The real Nixon legacy is what happened to the dollar after he ended its redeemability in gold. The consequences of the dollar’s lost status as a hard currency are still playing out.

Contrary to popular misconceptions, Nixon wasn’t actually impeached. But Bill Clinton was. The House of Representatives initiated articles of impeachment against President Clinton on December 19, 1998. On February 12, 1999, the U.S. Senate voted to acquit Clinton and leave him in office.

Around that period, gold prices were in a long bottoming out process after having been in a bear market since the $850/oz peak of January 1980. From the time Clinton was impeached to his acquittal, gold essentially did nothing but meander around $290/oz. Interestingly, silver popped from $4.95 to $5.65/oz, and the S&P 500 also made slight gains.

The bottom line is that political turmoil doesn’t necessarily translate into market turmoil or even a detectable market reaction. But major policy changes (or failures) can have significant short-term and sometimes long-term effects on markets.

Trump entered the White House with a bold reform agenda on a scale that hasn’t been tried since Ronald Reagan had been sworn in 36 years prior. Corporate America wasn’t fully aboard the Trump train, but it certainly wants to see the regulatory and tax relief that could generate higher rates of economic growth. Investors seem to be pricing in at least some partial successes for the administration’s policy goals.

Trump Stymied by Swamp Politicians Blocking His Agenda

So far, the White House hasn’t gotten much help from Congressional Republicans. President Trump’s penchant for generating controversy has distracted from his policy aims and eroded his legislative leverage. GOP Senators John McCain, Lindsey Graham, and John Cornyn each declared Trump’s recent budget proposal, which calls for cuts in some domestic agencies and programs, “dead on arrival.”

Career lawmakers never take well to requests for spending cuts. As Ronald Reagan once observed, “No government ever voluntarily reduces itself in size.

Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”

Only a president who is truly an outsider and willing to fight the D.C. establishment at every turn can have any hope of fundamentally changing it. Donald Trump vowed to “drain the swamp” but is so far having little success.

If he were to resign or be forced from power by Congress, then Vice President Mike Pence – a former member of Congress – would become the Commander in Chief.

We doubt Trump has anything to worry about – at least in terms of any real possibility of being forced from office. But either way, the White House will remain Republican for at least a few more years.

During the last period of Republican rule under George W. Bush, precious metals vastly outperformed stocks. There is a good chance that metals will resume leadership when the trumped-up hype and hope for U.S. stocks finally dissipates.

By Stefan Gleason, Originally Published on Money Metals Exchange