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the real cpi

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    THE KEYS TO PROFIT IN CHALLENGING MARKETS


    1) Get the Real Data. As many Investors suspect, Crucial, Official Government and Agency Economic and Financial Data are of questionable validity.

    Consider, for example, Official Figures for Consumer Price Inflation (CPI) generated by the U.S. Bureau of Labor Statistics (BLS). The most recent data from the BLS indicates that the CPI is growing at an annual rate of just over 5%.

    But even the average citizen knows this 5% figure cannot be right. After all, all of us buy energy and food and we must, therefore, have an intuitive sense that a 5% rate considerably underestimates real inflation.

    Fortunately, shadowstats.com calculates CPI the old-fashioned way - - the way it was calculated prior to 1990, before it was gimmicked. Using pre-1990 methodology reveals inflation to be a more believable, and much higher, figure. Specifically, CPI is running just about 13% annually according to shadowstats.com. Now that figure is more credible to those of us who have to buy food and energy daily. So the reality is that we have dramatically increasing price inflation.

    It is easy to see why we have inflation because, once The Fed stopped reporting the creation of M3 (the broadest measure of money in circulation), in March, 2006, M3 skyrocketed from 8% to over 18%. As we write, M3 is about 13% annualized, approaching a five year doubling time rate, again according to shadowstats.com. Considering this Ongoing Massive Monetary Inflation goes a long way to explaining increasing Real Price Inflation. Of course, with the Bailout Bill and other bailouts one can expect M3 to go even higher.

    Consider also Gross Domestic Product (GDP) - - The Official Figures recently released claim that real U.S. GDP was at a positive 2% annualized. However, if one considers what is really happening in the economy, the more reasonable calculation of GDP by shadowstats.com indicates that GDP annual growth is contracting by nearly 3% in 2008, is much more credible.

    Worse yet, while official figures put U.S. Unemployment at 6%, shadowstats.com shows it to be 15%, and rising!

    2) Take Account of Cartel Intervention. Many of these same investors who suspect Official Figures also suspect that the private-for-profit U.S. Federal Reserve and/or Central Banks manipulate Major Markets. But they might not be aware that Market Intervention and Data Manipulation are likely far more pervasive than generally believed.

    As well, such investors may not have thought systematically about how one copes with and profits from such Intervention and Data Manipulation. Thus Deepcaster will briefly address those subjects.

    There is convincing evidence that a Market Intervention and Data Manipulation Regime is operated by a Fed-led Cartel* of key Central Bankers and their Allies, including Favored Financial Institutions.

    *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.”

    And, to make matters worse, the Traditional Safe Haven from inflation, deflation, and risk, Gold, has, during the periods of extreme financial market turmoil (e.g. 2008, for example) been taken down in price from its highs of over $1000/oz down to around the mid-$700 level. Deepcaster and others, including the Gold AntiTrust Action Committee, have offered considerable evidence that the Cartel* of Central Bankers and Favored Financial Institutions are the culprits behind these dramatic and devastating Takedowns. See Deepcaster’s Alert of 12/25/07 “A Strategy for Profiting from Cartel Intervention in Gold, Silver, Crude Oil and Other Tangible Assets Markets” in the Alerts Cache at www.deepcaster.com.

    But there is a Profitable Refuge from Market Intervention and Data Manipulation. That Profitable Refuge lies in the Strategy described in the aforementioned Alert, certain characteristics of which we outline here:

 
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