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Citi Says QE2 Would Be End-Game For The USD
These are not the hyperbolic ramblings of various fringe blogs who have been claiming this for over a year, these are the non-hyperbolic ruminations of Steven Englander, until recently head FX strategist at Barclays, and recently at Citi:"A second round of QE will likely put sharp downward pressure on the USD, to some degree versus the euro and other G10 currencies, with potential for a broader USD sell-off. Foreign investors are likely to view the renewed direct intervention as indicating that the Fed’s balance sheet expansion and implicit monetization of fiscal expenditures are first line approaches to dealing with disappointing recovery prospects, rather than the exceptional measures they were meant to be initially. This could have severe implications for foreign perceptions of the quality of the US assets that they are accumulating in private and official portfolios, and may lead them to draw the conclusion that USD weakness is less a by-product than a desired outcome of these measures...It is difficult to gauge the set of policies that US policymakers will pursue to reduce the risk that the US
slumps into a significant slowdown. In the current environment of extremely disappointing growth and
apparent lack of response to traditional monetary stimulus, policies that are less than orthodox are likely to
be considered seriously. Most of these unorthodox polices are likely to weigh on the USD." Guess what that means for gold...
h/t Mike
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is it bad for gold? mirite?
End game, bitchez!
Gold has the same buying power.
Pricing against other currencies will mean higher gold if one chooses to make a purchase using the Federal Reserve Debt Note (US dollars).
gold: buy the rumor, sell the news. when the dollar turns down, money will go into EM and commodities. goldbugs will be stuck holding the bag.
you mean the bag full of gold?
+1
Hehe. Yeah the "rumor" has lasted over 10 years. Shhht. Let's keep our little secret quiet.
I would think after several thousand years it qualifies as no longer being a rumor.
this is true; we are buying apartments in EMs and renting them to the locals; more money.gold is great cause it give you that high; but when you try to sell, the guy holding the cash wins in the bargain.
When these days are here, gold and silver will be the only accepted method of payment.
lemonobrien, gold can be traded for localized currency VERY easily in many parts of the world... or traded for goods and services (and usually you get an additional discount when using gold as payment). TRY IT for a few years before you make such comments as you have, then report back.
When buying power craters, gold skyrockets. Apartments are considered the worst kind of illiquid investments when operating costs skyrocket at the same time that renters' buying power decreases. Gold becomes the go to store of wealth in the blink of an eye.
Gold has been very good to me, especially mining shares. Right now, silver is even better. You might not be so cranky if you had a little hoard. What is the sound of two silver bars clinking together? Pure pleasure.
Clinking silver bars together will start to sound like torture once you own two 30kg bars unless you are seriously strong.
I prefer the ramblings of the blogs.
From Harvey Organ:
"The USGovt will devaluate the US$ by 50% overnight in the not too distant future. They need 11 days to do this. If they push it, they can do it in 6 days. So look for a long holiday weekend as an opportunity. The best time to do this is the Christmas / New Year time window. They tried to do it in 2005/2006, but the Chinese put a gun to their heads in Washington and they backed down. You can slice and dice it as you like, but the USDollar is dead and so is the Euro. The systemic change will be a cataclysmic and traumatic event for the West, since all it stands for will go into the toilet in a blink of an eye."
http://harveyorgan.blogspot.com/2010/08/august-242010-commentaryextremel...
Sterling bitchezs......gawd bless her
I saw that quote yesterday on smartmoneytracker.blogspot
Also anonymously attributed. What crap
I have been long AOB because they have operations in China, about $100 million worth of RMB and earn all their money in RMB.
Also, long CEF for gold and silver.
AOB has been a disaster now at .4x book value and P/E 5.
My US shorts, AMZN and TOL and some REITs have defied logic..TOL has been good though.
A devalution? Bring it on!!
We'll get it becaue Ben has made a deal with the devil.. decided to print money.
Harvey is quoting from The Golden JackASS, who also said last year hired hit-men would take the comex down in september.
well he's still got one month to go on that, so you never know our luck..
i heard its getting a bit tense over there
I was thinking about doing that. Get on the floor,walk up behind a trader, poke him with a gun and tell him to bid $2000.
I actually had this conversation last night with family. Just hypothesizing that one way we could go is waking up one morning to find the banks closed and the system shut down. A week or two of chaos as everything is revalued... new currency issued... etc. Would be seriously ugly. But, I personally haven't ruled this out. The big question is when the power is turned back on, will the system reboot? Or will it be end game?
I'm sure that they'll issue a new currency. But what will be used for international trade?
(S)oros' (D)emon (R)eserve.
Bancor.
Brings to mind all the Red Dollar stuff too.
The public has a sore ass when it comes to the word "banc." Our overlords will have to do better. Frank and Mark got money named after them. What about Gidget? It will show Sandra Dee carrying a surf board.
Gidgets...it has a ring to it.
Betty Bucks? Veronica credits? These "Lords" may like the Isis reference you know, they dig them girls, $$.
my vote goes to Eris, goddess of strife & discord. . .
there's a "girl" that can represent the truths.
http://en.wikipedia.org/wiki/Eris_%28mythology%29
I second that emotion.
SDR's, of course. (beaten to the punch).
I want you to hit me as hard as you can. ;)
Nice double entandre.
My thoughts exactly. What about BS shouting, "Turn the machines back on!" on a dimly lit trading floor, with his only company being a homeless couple nearby doing the horizontal limbo under a desk?
A week or two? really? plan on a whole lot longer than that.
Latency (still), bitches!!!!!!!!!!!
Utter nonsense. Anyone who thinks the US govt will commit suicide in such a fashion, has lost the plot. As long as the rest of the world holds US debt, they will not be allowed to devalue. Organ says it himself re the Chinese in 2005/2006. Why should this be different now ?
Organ didn't say it. He's quoting Jim Willie who's quoting an anonymous source.
That's Achylle's heel. The Chinese are slowly and stealthily getting rid of US debt and buying South American stakes in mining and energy. They cannot afford to get rid of US debt overnight, so they are doing it slowly to minimize losses. They know in the end they will lose some, but there is a lot more to gain by dumping the dollar as reserve currency and replacing it with something else.
Also, Sarkozy has been lately calling again for another Bretton Woods agreement. Guess what that means... It means Europeans can't wait to pay Americans for the friendly fire on the Euro this year.
Yup. The trickle can fast become a stampede as holders of paper become increasingly concerned about loss of value and missing the chance to unload. At the root of it all is the fact that FRNs are really IOUs. If the debt isn't fully honored, that's a form of default that creditors have little tolerance for.
no one wants to be first or last in this game.
Yep, and the governor of the People's Bank of China has been talking up SDRs since early last year:
http://www.pbc.gov.cn/english/detail.asp?col=6500&id=178
Also not the 'hyperbolic ramblings of various fringe blogs'... (Mind you, I'd take hyperbolic ramblings over anything from the Too Big to Fail-ers anyday.)
Sinking the dollar and protectionism, good for US jobs? Well will be good headlines for US politicians anyway.
http://www.bloomberg.com/news/2010-08-26/obama-seeks-to-tighten-u-s-trad...
OK, so he brings arguments for USD devaluation and then he concludes that the USD is dead and so is the Euro. That makes sense. Why is it that Americans whenever there is talk about a collapse of the dollar, the euro must fall too...? Is it a psychological thing? It seems to me the same reflex was used when the Euro was being attacked by hedge funds earlier this year. "Why should the dollar go down and the euro be among the reserve currencies being considered by China, India, Russia et al? Let's nudge them a little off the pedestal, show the CHinese who's in charge around here."
. . .possibly because the same global bankers are "behind" both "currencies"?
And when they do this they will institute a 90% tax on your gold holdings....not the sales, but the holdings.
Redistribution......bitchez!!!!!!!!!
Isn't that the game plan? Destroy the US dollar once and for all?????
Yesterday JPMC says the US will default on it's debts and today Citi says QE II is the end of the dollar. But we know QE II has begun.
Doesn't this all seem to be a bit scripted?
Here's a better script: All business and personal depositors PULL ALL DEPOSITS OUT OF Citi, JP Morgan Chase, Bank of America and Wells Fargo.
There is a script that will reveal who really runs this country. DO IT TODAY
+mucho
+n
The OP forgot to add.
And scrub yourself with steel wool for at least 6 hours after pulling out.
Have to pull the funds out slowly. If you move too fast, you will be charged with market manipulation or inciting a bank run. Scapegoats are always gratefully accepted.
Yep !! bush wanted the amero !!!!!!!!!!!!! and kenny Mehlman all nlght ??? lol
and let's all guess what it means for JPM....holder of a galactic-sized short position in gold, as well as one in silver.........
ah, they thought they were kings and ruled the world, until the peasants arrived with the pitchforks....
Since we're basically already in QE2...
We're on the highway to hell, yes?
http://www.youtube.com/watch?v=fsDpznl8eIs
QE2 be underway right now. Arrrrr! Where else does we get T-bills rollover, matey? Arrrr! We be takin' this wrecked vessel into the shoals at full speed. A crafty bit of plunder awaits the wary!
Arrr!!! (looks at shoulder): "If you do that against ye beastie, it'll be blood soup for dinner!"
Today is drink like a pirate day (actually, every day is lately)
September 19th is talk like a pirate day
http://www.talklikeapirate.com/
"Any man usin' the pluperfect dies where 'e stands . . .":
http://www.youtube.com/watch?v=XKv5ulewTO4
The trap has been set. Easy in - hard out. You'd think those foreign investors would have learned from the CDO debacle. They slowly file into line to purchase Treasuries (and other high quality long term US debt instruments). But the exists become blocked and a major airpocket ensues. This time it's the double whammy for them - currency risk and duration risk = Owch!
primary dealers selling 1040 calls, 2nd day in a row now
edit: some are buying 940 puts
wonder why would they do that ?!
Looks like a little end of day sell off in anticipation of a not so happy revised GDP #
Ben has an "AIN'T SKEERED" sticker on his helicopter
and some "chopper balls" hanging from the rear rotor?
.........give u an A+++ for that.......
...sorry, you mistook Tiger's Jet Ranger for Obama's....
Obama's Marine Chopper 1 sticker says " Drive it like you stole it"
Yep, there's another that says "black power" !!!!11
My other rides are all paid for by taxpayers.
Palins says she is a p.i.g !!!!!!!!!!!
He also has a sticker that reads "If you can read this bumper sticker, you are not seeing all the money I am dropping".
Bush`s says my boy ken mehlman is gay !!!!!!!!!!!
I hope to god I can start buying silver before they hyperinflate.
better hurry it was playing with the $19 mark today.
We are looking at $20.92 kick starting the revolution. Yes, do not wait for it.
Ugh, I hate using doelarr terms!!!
Once Again:
GOLD BITCHEZ
Here's just a taste of happens when the middle class of a nation revolts.
http://www.youtube.com/watch?v=rH6_i8zuffs
Argentina is not a 3rd world country. Advance the movie to about 3:40 and take a good #uckin look at what our future may entail. Imagine what downtown Manhattan or LA would be like.
I am worried.
Thanks for the link. I have that fear in the back of my mind that this is a possible outcome. Reminds me that having added food, water, ammo, etc. is not crazy.
I say we should just give it a shot.
Prolonging the inevitable is nothing more then a cock teaser.
FRIDAY IS BENNY B. DAY!
I hope he gives a good speech :)
B-b-b-but the dollar going down will be good for exports! Bring on QE 2-200 imo.
What are exports? Is that also something Pré-2007?
If I want to hear something about history, I'll flip on the History channel...
QE1 was the end game. But sadly the bankers realized that through perma recession they can keep control of the printing press and all the power. Japan was a clinic on that. Japan is the best case scenerio for the Fed and it is what they are shooting for. Anything more or less ends their power hold.
exactly. psychopaths will never give up their power. They're just going to "manage" the decline into poverty. As long as it happens slow enough, the sheeple won't really notice/won't lose hope.....
it's already been happening for decades anyways...
yup.
succinct. +1
PS, the bush stimulus $300/600 payments were the end game (everyone paid down debt)... QE 1.0 was just confirmation. In so far as overt stimulus efforts go...
From their publication; check this out:
I still sense a refusal to fully accept reality here....or truthfulness...
the word "unconventional" is scary. right up there with "exploratory" and "experimental."
long dental floss
and zircon incrusted tweezers
Sears ponchos, bitches!
...and oil of cloves, then ask yourself..."is it safe"
Feels more like an enchilada wrapped with pickle sauce shoved up the tax payers arse until they can't it stand anymore.
At what point do the underwater sovereigns start unloading their gold?
Presuming they haven't already, when uncertainty in the world is gone. It's kind of like having pictures of a congressman killing someone and agreeing to give him the pictures for money while at the same time expecting to live to spend it.
When they need to eat.
But the problem is once enough of them start doing that, gold will start crashing in price. If they purchased their gold a month ago, they will loose their asses. If they purchased 10 or 15 years ago, it wont be as bad. Either way, still better than paper currency.
However, I think they know this, and are concocting a plan to confiscate or tax. The USA already hid a law in obamacare to tax sale of gold coins. Prepare for more...
Ok, who the heck junked me?
ouch..
Countries should not and will not surrender their gold to foreign banks. They will use it to back their new currency.
But most of their gold is already sitting in our country, for safety.
But the Federal Reserve Bank of New York holds the prize as the world's biggest known stockpile of gold, some 550,000 glistening bars of the stuff buried deep into the bedrock of lower Manhattan. That's $203.3 billion worth of gold in a single place. Just 2 to 5 per cent of it is owned by the US government, though. The rest is owned by foreign countries.
They also have santa clause and the tooth fairy and 30 million pounds of unicorn meat under there.
LMFAO!!
+++hilarity!
unicorn meat, that's funny!
You mean Tungsten?
Here's "rock/paper/scissors" for the 21st century:
gold beats paper
lead beats gold
tungsten beats lead
depleted uranium beats tungsten
enriched uranium beats depleted uranium
lithium deuteride beats enriched uranium
if you're still playing at this point, your name is either WOPR or Skynet.
Won't cut it. Gold beats everything. Wait. Moses begs to differ.
....do I have to say it yet again...AMMO...the new currency...the useful currency...it will get you whatever you need....provided you have the foresight to own a gun in its caliber...
Given the general status of the population, that should not be assumed.
...until a bigger caliber gets aimed your way....
The spike in gold is nothing compared to the spike in treasuries. Given that the treasury market is orders of magnitude larger than the gold market, I'm thinking the smart money is preparing for deflation. Gold is just a diversion to give the hyper-inflation crowd something to hold on to.
Go look up a chart of Gold priced in Japanese yen during their deflationary lost decade(s).
Please sit down before you look at the chart because you may get dizzy.
The only thing that changed was the yen.... gold just sat there being gold.
So if I buy Gold now with my dollars and Gold goes up in price your telling me that's not real price appreciation?
I'd guess the next thing you'd tell me is Shakespears plays were either written by Shakespeare or a man calling himself Shakespeare.
Exactly! What's the diff? The plays exist as they are.
Lost decade chart:
http://www.marketoracle.co.uk/images/2008/Gold-in-Yen-13-10-08.jpg
The treasury market is indeed far larger than the gold market. Thats why (physical) gold is so valuable; it is a monetary asset with no counterparty risk. When the UST market crashes, and it will, all the money in the treasury market will flow into gold, as people will be sensitized to counterparty risk and gold's lack thereof.
Why is everyone telling me to get out of debt? Shouldn't I want as much fixed debt as possible to pay back in next month's worthless dollars? Or is the thinking that they will revalue my mortgage in SDRs?
Other than the timing being hard to judge, banks will find a way to make you pay, plus a penalty for trying to beat them at their own game.
I've been waiting for over 30 years for the dollar to crash. Not going to hold my breath. Something always seems to come along to save the USD.
True. But no ponzi scheme continues forever, not even a government sponsored one.
More than ever there's a crisis of confidence. This is why we see the endless cheerleading by CNBC because they know whats next, and they will continue to be disingenuous and talking their book until they feel reasonably safe.
Confidence is eroding the markets, as we are witnessing. The equity outflows are huge and continue unabated. We are watching a trainwreck in slow motion.
Since the government feels the irresistible urge to prop the financial markets up, this will eventually lead to more bailouts via more QE and monetization.
That will then be the reversal of the deflationary episode and hasten the flight from currencies and then treasuries as confidence to repay will be lost.
Finally, the only thing left will be PMs, and stacks of green paper we will use to keep warm.
Gold = Good
Do you think it's a coincidence that the words "gold" and "good" only differ in one letter? I think not!
got god/gold? good!
Don't goad me Godot or I'll geld you
Good and gold arise from different Proto-Indo-European roots (ged and gel). Characters below may not display properly, see original source:
http://en.wiktionary.org/wiki/Appendix:List_of_Proto-Indo-European_roots
g?ed?- to join, to unite Lith. guodas, Ltv. gods, Eng. g?d/good, Gm. guot/gut, Goth. g?þs; g?ds, ON g?ðr, Skr. ???? (gadhya), OCS god?, Russ. ??? (god), Polish gody, Toch. k?tk/k?tk
*??el- to shine Lat. helvus; fel, Lith. gelta; žalias; želta, Ltv. dzeltens; za?š; zelts, Russ. ??????; ???????; ?????? (žëltyj; zelënyj; zoloto), Gm. gelo/gelb; gold/Gold, Phryg. zelkia, Eng. geolu/yellow; gold/gold, Alb. dhelpër/dhelpën, Welsh gelw, Ir. gel/gealach, Polish ?ó?ty; zielony; z?oto, Gk. χλωρ?ς (khl?ros), ON gulr; gull, Pers. /zard; daraniya/, Av. zaray; zaranya, Goth. gulþ, Skr. ??? (hári); ?????? (hira?ya), Old Prussian gelatynan; saligan; sealtmeno, OCS ????? (zlato); ?????? (zelen?)Change 'debt' into 'gold' one letter at a time!
debt
dent
sent
sold
gold
It can be done!
I boned it above, but now we have a sentence that makes sense (I think): Too much debt put a dent in our economy after we sent all the jobs oversees. The fed bent the bond curve to its breaking point. I wasn't fond of the choices, so I folded my investment hand and bought gold.
That's quality!
PS I'm not normally a fan of theology, but found this interesting:
debt
–noun
Theology. an offense requiring reparation; a sin; a trespass
One would think that the gold bashers would tire of picking splinters out of their prechters, but I guess they have grown to enjoy it!
lol
In fact QE2 (Light) is allready Here!!!
The Fed this week reinstated its program of purchasing Treasuries in a bid to lower long-term interest rates and support the economic recovery, which has shown signs of weakening.
In 2009, the Fed bought $300 billion Treasuries over a six-month period. Earlier Thursday, the Fed bought $3.61 billion in Treasuries after it purchased $2.55 billion two days ago.
From: Fed balance sheet shrinks on less mortgage debt, 19 August 2010, New York (Reuters) http://www.reuters.com/article/idUSTRE67I5B520100819?type=GCA-Economy2010
Citi! I am surprised at you. Biting the hand that feeds you. Biting the hand that saved you. Biting the hand that made last years bonus possible. Don't you remember? Too Big To Remember?
the dollar will be saved
gold standard bitchez
"When these days are here, gold and silver will be the only accepted method of payment."
Not at the IRS, or any other government entity.
Dollars are becoming more scarce than gold or silver, for the time being.
I don't care about the USD. I don't care about Gold. Just don't take away my Jack Daniels.
Citi is great. In march 09, I think they were calling for their clients to buy protection on financial companies. I shorted all the C puts my options account would allow. After few months was selling C straddles very aggressively. great trade.
I think they were wrong on just about every macro call.
What it would mean for gold? Who cares, what would it mean for cattle or poultry is far more interesting (and profitable) question to ponder about. Gold is just too thin of a market that trades on just technicals.
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