EURUSD Breaks $1.3000, BIS Steps In To Prevent Rout

Tyler Durden's picture

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Mr Lennon Hendrix's picture

As posted for ZH:

First, the doelarr "strength" to continue tightening the trading range of Euro/USD.  The move to $1.30 will happen quick, in the next week or two.  DXY to trade roughly at 81.5.  Gold and silver will continue to make nominal highs against the Euro, as well as push back up to the nominal highs for the doelarr.  Then there will be a move down to $1.25 Euro USD with the DXY staying in the 81.5 range.  By late May, the pressure from the doelarr will have peaked, as the State budgets of America will once again be addressed. California, will legalizing pot combine with personal investment by Walled Street in Hollywood save your ship?

4.21.10

http://www.zerohedge.com/article/open-thread-reader-not-making-any-payme...

jdrose1985's picture

what's your reasoning for the takedown in the POG today and do you see such forced liquidations as likely to continue given the circumstances we have at hand?

Just looking for others points of view.

Mr Lennon Hendrix's picture

Gold has not finished decoupling...yet.  It is on one of the last strings of sinew before the rope snaps.  They have this much more time, and they will use every moment to its fullest.  They must push gold down, or the blind might hear the song of the birds instead of the songs of sirens.  For example, these words are not often discussed:

http://www.google.com/#hl=en&source=hp&q=POG+takedown+economics&aq=f&aqi...

So they must push it down, their parlor game is not over.  Once the Euro is all put together again they will go after the doelarr.  The doelarr is the last move on the chessboard.

The liquidation is all mythical, as they are not really "selling" gold.  They are selling their positions.  More importantly, the banks are selling their positions.  They do not have the gold!  The gold that should be vaulted is being used for facials by Barney Frank.  In a few short years, the world will know this, Barney will not be getting gold facials, and the Bushes and Harrimans will have retreated to Abu Dabai.

I will add that I think they are actually trying to keep a lid on inflation at this point, and are welcoming bad news to keep prices down.  This has been my reasoning for a few weeks, so if this keeps going this bad, it could get out of hand.  Then my theory is out the window.  We will see.

MsCreant's picture

Gosh, nothing about this on the BIS website!

Hondo's picture

Merkel is right they need an immediate plan for orderly insolvency because that's where is eventually going to end up.  Probably sooner rather than later.

casino capitalism's picture

Where does the BIS get the money to intervene?  I thought they were just policy makers.

Hansel's picture

I'd like to know, too, where and how they get the money to "defend" the euro.

Hansel's picture

Partly answering the question... The BIS says they collect "placements from customers", but their only customers are central banks, so central banks give them money. They offer financial products to the central banks, fixed income investments. I don't know where they get the money to pay interest if they only get money from "customer placements". Sounds like another layer on top of the Ponzi to me.

casino capitalism's picture

I guess the central banks have strategically installed printing presses everywhere they can.  Maybe the day will come when you can go get some fantasy dollars from a 7-11.

Gordon_Gekko's picture

They probably create "money" using ledger entries like other central banks, you know, the usual fraud.

mikla's picture

Exactly.

The Basics:  Central banks debase their currency.  That's what they do.  That's the purpose of the Fed's printing, and the purpose of the ECB's audit failures since the establishment of the ECB (e.g., all member countries print more than they are allowed, and lie about their numbers, because the incentive to cheat is *too great*).

That's also the purpose of SDRs (Special Drawing Rights) and other currency baskets -- it's merely coordinate debasing among central banks.

That's also the purpose of the BIS -- to settle transactions, skimming from the central banks, and to use that "slosh fund" in support of the system -- which is one of debasing by the central banks.

The net effect is that central banks and the BIS have the capital (they merely print it and circulate it first among themselves), and ultimately that value percolates to the rest of the world (through world governments, and then world markets, including stock and bond markets).

The world financial system is ultimately managed through the BIS, whose board includes members from the world central banks.  That's the only place to reasonably discuss a single world currency, should one replace the dollar as the world reserve currency (e.g., with a basket of fiat currencies of some arbitrary unit).

The fact that we are now talking about BIS involvement means we've gone to the "root" -- this is where the buck stops.  All layers below the BIS have some level of accountability, while the BIS does not.  Thus, this must be a big problem (e.g., it's reasonable to talk about BIS involvement as the "end game").

thewhigs's picture

Mr. Trichet, with respect, did you come from the "School of Bernankenomics"??

Bonesetter Brown's picture

What's the big deal?

It's just a 1.5% move.

In a currency.

In a day.

TylerJ's picture

What does "BIS" stand for again?  Obviously your refering to that scumbag Bernanke.  Just wanted to get my acronyms straight.

Pladizow's picture

Bank of International Settlements.

The bank of banks in Basel Switzerland.

Mentaliusanything's picture

You are referring to Basel Faulty Bank 

Coming Sibel - where is that Spanish git hiding ;)))))

casino capitalism's picture

I think he means Bank for International Settlements.  If so, I don't know where they get the money to intervene in such a huge market.  I thought they only did policy setting.

Cleanclog's picture

BIS also mentioned as possibly providing bridge loan to Greece in the event that all the EU member states that need to pledge their EU portions of the bailout to  Greece can't do so by May 19th.  Many have process that will likely take longer to ratify.  Still - I am unaware of BIS making such loans in past, even if bridge and short-term.

J.Caesar's picture

gold and silver down a chunk.  the conspiracy is posponed for another week or so (sort of in time with the south will rise again)

Rogerwilco's picture

Kerchunk -- the elevator is on its way down, with all commodities onboard. Margin calls are not condusive to orderly selling.

Internet Tough Guy's picture

No margin call on gold, it's down less than 1%. Probably because it's not a commodity.

Cheeky Bastard's picture

No margin call on gold, it's down less than 1%. Probably because it's not a commodity.

 

Say what ?

It is very much commoditized and utilized in industrial production but it is perceived mostly as store of wealth and not a commodity. Read more here: http://geology.com/minerals/gold/uses-of-gold.shtml

Internet Tough Guy's picture

And I can put diamonds in my teeth. Just because you can misuse something doesn't change what it is. Gold is in the process of demonitizing/decommodifying. De-everything except what it will be.

Cheeky Bastard's picture

ITG; wrong wrong and wrong. As long as there is  demand for medical services, medical devices, electronic, conductors,  as long as people use glass, as long as there is a desire to indulge in luxury goods, as long as there are airplanes flying trough the air, as long gold will never, and i can not put enough emphasis on NEVER, enter a cycle of demonetization/decommodification. NEVER. And when everything crashes, and all demand vanishes gold will still be used as exchange mechanism, but it will not be as relevant as the good old fashion barter system will. You should really read something about gold and not just recycle your preconceived beliefs and dogmas when it comes to that metal. 

Internet Tough Guy's picture

Thanks for the (incorrect) lecture. Barter isn't the future, there will always be a transactional currency. Always. But if you need any tips for your summer reading list, just let me know.

Cheeky Bastard's picture

No,thank you.

I dont really like Warren Buffett, Napoleon Hill, Jack Welch type of books. 

Unscarred's picture

No, thank YOU Cheeky, for speaking out against the prevailing dogma and adding badly needed perspective to a conversational topic that has gone too far in the wrong direction.

Alienated Serf's picture

i like shiny metal.  i bought a nice 5oz silver bar to celebrate a big down day for the market.  if i keep this strategy up, i expect to have a few kg soon.

kaiten's picture

Shares of eurozone exporters will skyrocket if euro goes down to parity with dollar.

carbonmutant's picture

 I'll believe it when I see the price of Reggiano Parmigiano dropping at Whole Foods.

Manbarepig's picture

It'd be nice to have the Locatelli Romano not cost me more than everything else in the dish combined...

dnarby's picture

Heh...

That's *imported*.

...Think about it.

GFORCE's picture

The rally will be back by week end and run to August.

Gordon_Gekko's picture

Yeah, DOW 36000 - Here. We. Come.

Mr Lennon Hendrix's picture

After Europe goes all in on their currentsea?  You speak in nominal terms then.  Good luck trading!

Gordon_Gekko's picture

Are you sure it's the BIS, not the ECB? It has to be pretty serious for the Mother Central Bank a.k.a. the BIS to intervene.

Internet Tough Guy's picture

If BIS is playing, the end is nigh. Per FOFOA, they have the nuclear option to rescue the euro.

MsCreant's picture

Wasn't that to let the price of gold loose and then pay off debt with Greek gold? {salivating}

Gordon_Gekko's picture

Why did you change your pic MsCreant? I kinda liked the one before.

seventree's picture

I don't want to speak for our Ms, but it may reflect general state of mind.

Possible subtitle: "Sow the wind, reap the whirlwind."

MsCreant's picture

Gordon,

I liked it too and I may bring it back. I do feel like we have turned a corner and this is what is in store...

Here is what I would have as an avatar if I could, but it just does not come across, small, very well:

http://wallpapers.net/view/fantasy_girl___big_gun-1280x800.html

I like her philosophy of life there...

Meanwhile, all of us are running from something we can't outrun, and from a distance, it is kind of funny. No where to run to, ba-beh, no where to hide...

Gordon_Gekko's picture

That's one hot chic (as I'm sure you are)!

Well, I can feel that "something" coming too...we're pinned down on the highway as the steamroller approaches.