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Gold And Silver Likely To Go Parabolic Due To ‘Global Shockwaves’ If U.S. Defaults

Tyler Durden's picture





 

From Gold Core

Gold and Silver Likely to Go Parabolic Due to ‘Global Shockwaves’ if U.S. Defaults

Gold is some 0.5% lower against the U.S. dollar and most currencies today but is higher in Australian dollars as the Aussie fell on Australian and global economic growth concerns. Asian equity indices were mixed as are European indices.


 
Bond markets have seen subdued trading but Greek bonds are again under pressure and the Greek 10 year yield has risen to 17.37% in increasingly illiquid trade.

The dawning reality that the U.S. will be downgraded due to its appalling fiscal position led to new record nominal gold and silver prices yesterday.

Denial regarding the possibility of a U.S. default continues with some analysts denying that such an event is “possible”.

Such an event is possible and it grows more likely by the day.

US Federal Reserve Chairman Ben Bernanke warned overnight that a default on America's debt will spark a major crisis and send shockwaves through the global economy.

"The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system," he told a congressional committee.

U.S. CDS - ZCTO CDS EUR SR 5Y Corp

US CDS has broken out to the upside and there is the potential for sharp moves up here as was seen in the aftermath of the Lehman and global financial crisis.

The fundamentals for gold and silver could not be better as the outlook for most paper currencies and government paper (sovereign debt) is not good. The precious metals are again being seen as safe haven assets to protect from government profligacy and currency debasement.

The risks of a “depression” and currency crises in Europe and the U.S. are rising and this is contributing to significant safe haven demand.


The fact that gold and silver have no counter party risk and cannot default and cannot be debased or printed into oblivion makes them crucial diversifications.

Gold, global equities and AAA rated, short dated bonds remain the best way for investors to protect themselves from today’s growing sovereign debt and monetary risk.

Gold, silver, good equities and good bonds will be better than depreciating cash or currencies in the coming years. Real diversification will help protect preserve and grow wealth.

NEWS

Gold pauses after record-setting rally; debt fears aid
http://www.reuters.com/article/2011/07/15/us-markets-precious-idUSTRE7592IU20110715

Gold Poised for Second Weekly Advance After Rallying to Record
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/14/bloomberg1376-LOCTJI0YHQ0X01 0SNO3DLKUC71NCR936FCO4714R.DTL

Gold, silver pull back in electronic trading
http://www.marketwatch.com/story/gold-silver-pull-back-in-electronic-trading-2011-07-15?link=MW_latest_news

US default would be disastrous - Bernanke
http://www.rte.ie/news/2011/0714/usa-business.html

COMMENTARY
US Default Risk Jumps To Highest Since February 2010 On Debt Ceiling Worries
http://www.zerohedge.com/article/us-cds-jumps-highest-february-2010-debt-ceiling-worries

11 Silver Investor Mentality Shifts
http://www.businessinsider.com/11-silver-investor-mentality-shifts-2011-7

Peter Brimelow - Gold: ‘The upside is wide open’
http://www.marketwatch.com/story/gold-the-upside-is-wide-open-2011-07-14?link=mw_story_kiosk

King World News: Capital controls, oppressive regulation likely after
collapse - Zulauf
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/7/14_Felix_Zulauf_-_Collapse_Will_Cause_Governments_to_Change_Rules.html

Charlie Fell: Silver in a Diversified Investment Portfolio - Peter Whelan
http://www.charliefell.com/index.php/articles/2/174

The World of Yesterday - Ignore Reality at Your Peril
http://www.goldstandardinstitute.net/GSI/wp-content/uploads/2010/06/TheGoldStandard7.pdf

Return of the Gold Standard as world order unravels
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html

 


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Fri, 07/15/2011 - 07:39 | Link to Comment doomandbloom
doomandbloom's picture

No defaults anytime soon....of any country....all will be bailed out...

I agree this can only go on until so long...but *shrugs*

Fri, 07/15/2011 - 07:54 | Link to Comment tarsubil
tarsubil's picture

Yeah, so the US is going to default on debts denominated in dollars which it can simply print? Meanwhile Treasury staff blurted out something a month ago assuming that the debt ceiling would rise as if inside the beltway or inside Capitol hill it is already a done deal despite all the theatrics. I'm sorry, my spidey sense detected the assault on PMs and it is dead right now. This is all just a bunch of f**s***.

Fri, 07/15/2011 - 08:28 | Link to Comment centerline
centerline's picture

I have been anticipating an epic beat down in PMs.  Likely will be the last chance to get on board at prices in that range though.

Regardless of the theatrics going on in Washington, the debt ceiling will be raised... one way or the other.  If not by congress, then by Presidential order.

The FED will do QE3 because the economy will falter.  Why?  Because the economy never recovered... GDP was bouyed only by previous QE.  When the FED does QE3 (or OpTwist), it will be by clear direction of the politicians - unable to solve the problems at hand because the problems are not solveable within the context of the current system.  Hence, the irony in all of the theatrics.

Fri, 07/15/2011 - 09:49 | Link to Comment Are you kidding
Are you kidding's picture

Agree...why would anyone junk you?  Maybe no PM beat down...but the rest, I agree completely.

Fri, 07/15/2011 - 11:03 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Gold 1600. TODAY.

Fri, 07/15/2011 - 11:30 | Link to Comment centerline
centerline's picture

Maybe not.  Got to be prepared for that too.  Pure speculation on my part of course - nothing moves perfectly in a straight line.  BUT, history does have some cool parabolic moves that we should be mindful of!  LOL.

Fri, 07/15/2011 - 11:25 | Link to Comment VegasRage
VegasRage's picture

What a place to be though, if they print, it's bad, if they don't print it's bad. No matter how you slice it, gold and silver are good to own because les face it fiat currency is is dire straights. I don't think there is whole lot more ammo out there to beat down metals, hell, they raised margin requirements 5 times in 8 days to prevent silver from going parabolic only a few months ago and yet here we are again climbing back up the same hill at a furious rate. They can't keep gold and silver down. The last time PM's took off was when the Hunt brothers we're at it, only about 10% of the world could buy PM's then, today about 90% can. Bubble what bubble?

Fri, 07/15/2011 - 11:33 | Link to Comment centerline
centerline's picture

The moves in PMs represent the moves towards the fiat exits.  The moves need to be careful because they cant afford a rush for the exits... it spooks the herd.  Likewise, time is needed for those who know what is going on to reposition (find the next greater fool).  Therefore, everything will be done to keep PMs from making big moves.  In fact, a good clobbering might shake out weak speculative hands - and a good bout of deflation might get some folks to cough up physical to make ends meet or cover other positions.  Again - just speculation on my part here.

Fri, 07/15/2011 - 15:28 | Link to Comment VegasRage
VegasRage's picture

A good clobbering, that both silver and gold they have gotten a number of times over the last few years. But then those who hold paper metals are going to get shaken out when the reality of the fact they sell 500 x the paper to the amount of the actual metal. When these paper tools can't deliver and they default, physical metals will push higher.

Fri, 07/15/2011 - 08:22 | Link to Comment Sudden Debt
Sudden Debt's picture

Agreed, and PM's will be kept at current levels untill the paper scam has 0 backing of PM's.

But now the media is advertising gold and silver more, the remaining stocks will be depleted within 2 years.

 

But it's a fact that the balloon will pop.

Today, I've read for example that it would take Greece 24 years to buy up all of their debt if Europe would keep on throwing money at it for 24 years.

Yeah...

and the list is a bit bigger then Greece...

 

Fri, 07/15/2011 - 10:04 | Link to Comment CrazyCooter
CrazyCooter's picture

I am hoping for a big fat raid like they did silver not long ago. I had a lot of personal crap on my plate nipping at the paycheck and I am finally in a position to begin acquiring again. I will buy regardless, but I feel reasonably confident they can't let the bull run so the rules will get repeatedly changed and broken and price action will be pretty nasty! Just waiting it out in the gold blind for a nice rack to wander into my kill zone ...

Regards,

Cooter

Fri, 07/15/2011 - 08:18 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

I may be fll of vodka but you ar a fucking idiot. Its an bout time you mob of fucking wombat brained cunts fucking woke up. for fiucks sake , get a bloody clue. No defaults soon. Where you been you fucking dolt. It's been default since 19fucking13 you dumb cunt. How's eazy this fucking csptcha hey? 62+ ? = 78,for fuck's sake.  It's as easy as that!  plus get a fucking clue you dick head. fuck me. Fuck you. sick of this shit.

Fri, 07/15/2011 - 08:30 | Link to Comment tarsubil
tarsubil's picture

I wonder what would happen if you switched to whiskey.

Fri, 07/15/2011 - 08:37 | Link to Comment caerus
caerus's picture

lol

Fri, 07/15/2011 - 08:44 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Fucking shit drink but I'll hang around to shoot the crap.   Fucking junkers are a mob of skulking pussies. Fuck them and the fly by horse they rode in on. Aren't you truly pissed oof about these brain dead fuckwits that haven't the faintest clue about a full faith and credit descriptors of the piece of debt ridden IOU shit script that they place their full faith and hope in. It's a disgrace to the presumption of innate human logic. had a gut full. pissed as a parrot, I know but that's where it rests with me,  

Fri, 07/15/2011 - 09:01 | Link to Comment MsCreant
MsCreant's picture

Very early to be this drunk unless you are not in the US. One thing I am realizing about my "pissed-off-ta-tude" is that there is a part of me that is angry and hurt that I was even sold the idea of "rules" "fair market" and "capitalism" and that I bought into it. I am a woman scorned because I idealistically believed this shit when it was never true. Now that I know what has been true THROUGH HISTORY (never mind learning that the US has not paid down debt, at all, since 1960) I must ask "Who do I blame for this?" The delusional folks who sold me the fairy tale? They were duped too. The criminals? Well hell, they just naturally do what they do and have done through history. 

It takes as long as it takes to figure it out. We can be sick of it, but it has always been this way. You are (IMHO) grieving. The loss is formidable. I say this to you because I think I am going through something like this as well. I'm looking for somewhere calmer to stand, where I am not reactive, but I am not compromising either. 

Hope you have a good day and the headache isn't too bad.

Fri, 07/15/2011 - 09:10 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Cheers, big ears. Ms C, it took three readings but yes, we are on the same ride. Gut full. How the fuck am I finishing a huge one but still log on to Zh? Fucking rrealy gone tonight.

Fri, 07/15/2011 - 10:17 | Link to Comment gmrpeabody
gmrpeabody's picture

I can see the "realization" for you is fairly recent. Most here went thru this, some still dealing with it. Myself, just getting over the denial after the realization. Too funny. At least people are finally getting pissed. ;-)

Fri, 07/15/2011 - 10:31 | Link to Comment Monday1929
Monday1929's picture

Ben, is that you? Calm down, it will be o.k.

Well, maybe not, but come back to bed, dear.

Fri, 07/15/2011 - 10:38 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

MMmmmm . You've got a nice arse luv. Don't mind if I do.

Fri, 07/15/2011 - 19:50 | Link to Comment smore
smore's picture

Not as nice as mine.  I suggest you schedule a session with Dr. Dissonance when you are feeling better.

Sat, 07/16/2011 - 02:47 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

When your moon hits my eye

Like a big pizza pie

That's smore.

Fri, 07/15/2011 - 11:45 | Link to Comment Boxed Merlot
Boxed Merlot's picture

The loss is formidable...looking for somewhere calmer to stand...not reactive...not compromising either.

 

Putting old wine in new wineskins may well describe the formidable loss you speak of.  As my avatar would suggest, new wine requires new wineskins to prevent loss. 

 

It’s not by chance the term debt is equivalent to the word sin in the original language. I suspect when the world’s economic doctors and professors finally arrive at the end of the road, they’ll find the theologian at the inner sanctum.

There is a 5 step process to debt forgiveness as described by these adherents.

1. Repentance.
2. Remission.
3. Restitution.
4. Reconciliation.
5. Restoration.

It may come as a shock to some, but most theology is economic based and very practical in its application. The “5 Rs” for starting over may sound “religious” but are actually quite ordinary activities and easy to understand. Their opposites are equally easy to identify.

1. Quit borrowing vs. continue to borrow.
2. Divine discharge vs. continued guilt.
3. Thankful vs. envy.
4. Purpose for living vs. marking time before death.
5. Restoration. Speaks for itself.

 

The "divine discharge" is typically the crux of the matter.  "Who is this that has the authority to forgive debt but the divine?"  An equally important question is actually the opposite, who is this that has the power to conjure debt?  Which is more difficult, to indenture a person or to discharge the debt?  The entire concept is based in the ethreal.

imho.

Disclosure: Long RZIM, Ligonier, MLJ Trust

Fri, 07/15/2011 - 10:16 | Link to Comment tarsubil
tarsubil's picture

I don't think it is that bad. We'll just get another painful lesson in what good money is. Sometimes you need to fall down to learn how to stand, *vomits*. Life is like a box of choco... Just kidding. Hopefully, on the otherside of this giant turd, people will know how to respond to politicians and bankers who push the idea of fiat. Wealth might take a hit, it might go backwards, but the death of fiat will ultimately be a good thing. I'm just a hell billy that loves whiskey myself. PFF, brah.

Fri, 07/15/2011 - 12:57 | Link to Comment downrodeo
downrodeo's picture

Fuck them and the fly by horse they rode in on.

 

Do not fly by horse. It does not work. (I've never tried but I've studied physics, a horse has very limited ability to create the necessary lift force to get you off the ground. A Pegasus however, that is a different story...good luck finding one though.)

Take heart my friend; we're against it with you!

Fri, 07/15/2011 - 09:34 | Link to Comment LongBalls
LongBalls's picture

hahahahaah!

Fri, 07/15/2011 - 09:49 | Link to Comment CrazyCooter
CrazyCooter's picture

Oh, Corb Lund time!

Time to switch to whiskey!

And the most military history references in a single song I have ever heard (and it will get your blood going!)

Horse Soldier! Horse Soldier! <--- listen for 10 seconds

Regards,

Cooter

P.S. I must confess when I post on ZH after drinking I tend to get a bit off the wall myself ...

 

Fri, 07/15/2011 - 10:05 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

I can't believe you took the time. Thanks mate. Sorry to the poor unsuspecting sod above. My shout if we meet. But fuck it, I'm pissed (in a cross-cultural sense) for the first time in a long time.

Fri, 07/15/2011 - 11:23 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Don't get mad, get even.

Hmmm...anyone drunk listening to that "Horse Soldier" would most likely understand drunk-warped lyrics as "I'm a whore..." instead of "I'm a horse..."

cheaper booze to calm/dumb down the sheeple is in the works.

Sat, 07/16/2011 - 01:10 | Link to Comment GoinFawr
GoinFawr's picture

It's ok Ahm, Corb Lund is Canuckian. The drunker that lot stay, the better for the rest of us.

To be quite honest, I didn't find it to be half bad. Sounds like he's seen Killam, mb played a gig or two in Leduc, and Camrose; why, I've got money on my flank that says CL lanced clear through Boyle while gnawing on a giant sausage made in Mundare, with the Smalls.

Fri, 07/15/2011 - 10:28 | Link to Comment tarsubil
tarsubil's picture

Those are some quality links. Thanks.

Fri, 07/15/2011 - 11:47 | Link to Comment MsCreant
MsCreant's picture

These were great, sent them to my hubby.

Fri, 07/15/2011 - 08:34 | Link to Comment centerline
centerline's picture

LOL... you are correct of course.  It has been a slow, ongoing default.  Over 100 times now since the debt ceiling was first increased (1917 I think?).  Anyhow, I think what the poster was saying is that no country will be allowed to default until the system has gone parabolic.  In theory, someone will be the "first" to go - but the house of cards will come down in such rapid succession that it wont matter anyhow.  Rather than dealing with an orderly default, we are locked into building more and more "financial potential energy" in the system to virtually guarantee an economic atomic blast.  Have your goggles near by at all times of course.

Fri, 07/15/2011 - 08:50 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

The goggles do nothing. 

Fri, 07/15/2011 - 10:24 | Link to Comment tarsubil
tarsubil's picture

You're alright.

Fri, 07/15/2011 - 11:28 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Radioactive Man roolz!

Fri, 07/15/2011 - 11:36 | Link to Comment centerline
centerline's picture

The keep the little bits of fiat paper out of your eyes as the shockwave passes over.  Plus, they probably would annoy other people... simply an added bonus for asshole points.

Fri, 07/15/2011 - 09:32 | Link to Comment mick_richfield
mick_richfield's picture

For me the timeline is more like this:

1913: reconquest of US by Crypto British Empire & Money Power

1933: US semi-default internal -- loss of gold backing, but silver remains.

1964: US full default internal -- loss of silver backing.

1971: US full default external -- loss of gold backing internationally.

1973: beginning of US Imperium -- dollar backed by mideast oil, backed by US military.

2011: Collapse - US Fifth Fleet defeated in Arabian Sea.

Oh wait -- crap.  I wasn't supposed to say that last line yet.  Just kidding. :-)

Now, where's that vodka ?

Fri, 07/15/2011 - 10:21 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

You say potato.

I say your shout.

Down to miserable Barcarrdi. oops. must be the pirate in me.

Fri, 07/15/2011 - 10:26 | Link to Comment tarsubil
tarsubil's picture

I'd like to print this out and frame it in my office.

Fri, 07/15/2011 - 11:31 | Link to Comment trav7777
trav7777's picture

who the hell is going to defeat the Fifth Fleet?

Fri, 07/15/2011 - 11:37 | Link to Comment centerline
centerline's picture

JP Morgan and Goldman Sachs.

Fri, 07/15/2011 - 11:53 | Link to Comment A Nanny Moose
A Nanny Moose's picture

OBL. Is selling aircraft carriers to raise funds considered defeat?

Fri, 07/15/2011 - 13:10 | Link to Comment akak
akak's picture

who the hell is going to defeat the Fifth Fleet?

Financially unsustainable imperial overreach.

Sat, 07/16/2011 - 02:54 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Holy Bloody Mary, I tied one on last night! First time in two years and look what it does for you. My humblest apologies to you DoomandBloom. Man, you got a drunken mouthful from me for some unknown reason.

Kids, don't drink and let your mouth drive. It brings out the blue ribbon dick head in you. Sorry all. (Must have been that last orange whip).

Fri, 07/15/2011 - 07:42 | Link to Comment doesmybuttlookf...
doesmybuttlookfatinthis's picture

I understand that dollars will now be printed on a roll instead of a sheet. This will allow us to conviently count and tear of as many dollars as needed. And it will serve two purposes, spending and wiping. What will they think of next?

Fri, 07/15/2011 - 08:08 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Perhaps they'll be printed on soft, absorbent, two-ply paper.

 

Fri, 07/15/2011 - 08:23 | Link to Comment agent default
agent default's picture

True, even as toilet paper the dollar leaves a lot to be desired.

Fri, 07/15/2011 - 08:32 | Link to Comment mickeyman
mickeyman's picture

Unfortunately you will be forced to use $1000 bills for this function. You won't be able to use anything smaller because coins are too difficult to use for this purpose.

Fri, 07/15/2011 - 09:54 | Link to Comment Long-John-Silver
Long-John-Silver's picture

I keep wondering when $500 and $1,000 bills will be printed for general circulation. $100 bills go fast when you stop for gas, milk, and bread on the way home from work (if you still  have a job).

Fri, 07/15/2011 - 10:07 | Link to Comment CrazyCooter
CrazyCooter's picture

I wholly empathize with this statement; I pay cash alomst exclusively for everything. Gas is my primary exception (I just prefer to fill up - pre pay on a fill up is a pain in the ass).

However, most folks spend on credit/debit cards, so I don't think they notice as much.

Regards,

Cooter

Fri, 07/15/2011 - 10:20 | Link to Comment DosZap
DosZap's picture

Never, as it's too easy on the Drug Runners.

And for you to take all your wealth out in a small package.

Fri, 07/15/2011 - 10:20 | Link to Comment DosZap
DosZap's picture

Never, as it's too easy on the Drug Runners.

And for you to take all your wealth out in a small package.

Fri, 07/15/2011 - 11:55 | Link to Comment XenoFrog
XenoFrog's picture

They won't have to because they'll just lie about how much inflation there is, like they're doing now. Sure bread will cost $50, but it's transitory and due to "evil speculators".

Fri, 07/15/2011 - 07:45 | Link to Comment slaughterer
slaughterer's picture

The other side of this trade is also possible: PMs could plummet if the US does not default.   In the shadow of Stearns/Lehman, I do not think the US will want to trigger a "financial Armageddon."  

Fri, 07/15/2011 - 07:49 | Link to Comment letsgetreadytorumble
letsgetreadytorumble's picture

How would that be possible with supply and demand in silver?

Fri, 07/15/2011 - 08:05 | Link to Comment Popo
Popo's picture

You must have missed 2005

Fri, 07/15/2011 - 08:13 | Link to Comment Dr. No
Dr. No's picture

With everyone loosing their ass on defaulted bond, they will have no money to buy silver

Fri, 07/15/2011 - 09:58 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Silver is barter for Beans and Bullets. Just look at what happened in Argentina, Zimbabwe, and the Wiemar Republic. History is your guide, read it and learn what works.

Fri, 07/15/2011 - 10:12 | Link to Comment CrazyCooter
CrazyCooter's picture

Weren't gold futures rules modified recently (I don't trade so the finer implications were lost on me)? Coupled with debt ceiling brinkmanship?

Look, congress will increase it. The fact they are argueing over it says a great deal in my mind; the banksters want the epic theatre. The fact is that both parties spend like drunk sailors (my appologies to sailors - ya'll stop spending when you are out of cash).

This is an epic "paper price suppression" set up if there ever was one.

Thoughts?

Regards,

Cooter

Disclosure: Accumulating as fast as I can.

Fri, 07/15/2011 - 07:51 | Link to Comment Captain Planet
Captain Planet's picture

-1

P.S. Not my junk

Fri, 07/15/2011 - 08:22 | Link to Comment tmosley
tmosley's picture

So you're saying that the US having ever more and more debt is bearish for PMs?

You shouldn't drink so early in the morning.

Fri, 07/15/2011 - 09:18 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Party pooper.

Fri, 07/15/2011 - 09:27 | Link to Comment caerus
caerus's picture

I would like to buy you a pint or ten my friend

Fri, 07/15/2011 - 10:12 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

You're on. I reckon 10 will do it, shout for shout.

Fri, 07/15/2011 - 10:25 | Link to Comment whaletail
whaletail's picture

What TM said. Short term down if a debt deal is reached? Si, probably right, as those that parked in the PM's for perceived short-term relief will bounce back into YHOO or the like, but more debt just strengthens the fundamental reasons for PM's. (I likely just described the sun as yellow)

Fri, 07/15/2011 - 07:42 | Link to Comment Twindrives
Twindrives's picture

The U.S. Ttreasury is about as good as Obama's word.  

Fri, 07/15/2011 - 07:42 | Link to Comment unky
unky's picture

and if they not default and raise the debt ceiling it will first go parabolic downward in the short term ;- )

Fri, 07/15/2011 - 08:00 | Link to Comment NidStyles
NidStyles's picture

I've heard it being called a, "buyer's paradise".

Fri, 07/15/2011 - 10:00 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Like it did that for QE and QE2. What makes QE3 different?

Fri, 07/15/2011 - 07:43 | Link to Comment HoofHearted
HoofHearted's picture

PMs, bitchez. Then you don't have to worry about the bitches on the other side of the trade.

Fri, 07/15/2011 - 07:45 | Link to Comment Lmo Mutton
Lmo Mutton's picture

Silver bastages!!

Fri, 07/15/2011 - 07:46 | Link to Comment letsgetreadytorumble
letsgetreadytorumble's picture

SILVER BIOCTHEEEZZZZZZZZZZZZZ

Fri, 07/15/2011 - 07:48 | Link to Comment slaughterer
slaughterer's picture

Every time ZH posts these "Gold Core" reports, PMs sink. 

Fri, 07/15/2011 - 07:50 | Link to Comment unky
unky's picture

i agree, its a little overdue for a correction. then time to load up again, now everyone is in panic mode, dont buy PMs now

Fri, 07/15/2011 - 08:02 | Link to Comment tarsubil
tarsubil's picture

Yeap, should have bought the last big dip for the physical at 33.50 and what 1480? My friend had money but wanted to wait until 30. I told him use 1/3 or 1/2 to buy at 33.50 just in case. He didn't listen. Still might crash to 30 but I wouldn't count on it.

Fri, 07/15/2011 - 08:20 | Link to Comment dcb
dcb's picture

my friend, it doesn't matter. I am short that that goes up. or you short euoros or any other thing. sliver is great, so was cotton which lost 1/2 it's price.  just so we are clear. if the market drops enough holdings in almost everything are liquidated to meet margin calls. gold dropped during the financial crisis. under the right circumstances there may be no "safe" trades.  maybe swiss frank? I don't know.

Fri, 07/15/2011 - 08:37 | Link to Comment tarsubil
tarsubil's picture

My friend and I are just small timers. We buy physical PMs for the security against disaster. Not in it to "make money". I make money easy enough by paying debts down early to avoid interest. Coins are so I don't crap my pants reading the daily news. Even if the price crashes, the loss in "money" is worth the piece of mind I got from holding the coins. We time the market to simply get the biggest bang for our bernank buck.

Fri, 07/15/2011 - 09:12 | Link to Comment j0nx
j0nx's picture

This is the right mindset looking forward imo. Silver is used for trade if the shit hits the fan. I'm not in it to make money either with PM as you have to buy too much of it to play that game for any lasting effect and good luck securing it onsite or trusting a bank to hold it for you or the govt. not to seize it when they get desperate enough. I'm looking at a breakdown of society effect for PM and nothing more here on my end. I know it might sound a little bit doomerish but a fat lot of good 250 ounces of silver will do you when your neighbors are roaming the streets looking for food and water. 45M people on foodstamps, record amounts of section 8 dwellers and exorbitant amounts of 3rd worlders that immigrated to the US in the past 20 years does not bode well for societal calm when the entitlements dry up. And they will.

Fri, 07/15/2011 - 10:20 | Link to Comment Thisson
Thisson's picture

An alternative view: no need for Doom and Gloom!  Look outside your window.  The day after fiat defaults, all of the buildings and infrastructure will still be there.  What we will get is a giant re-org, putting people back to productive uses instead of having an economy of wealth transfers and people exchanging medical back-rubs, juggling, and other "services".

Gold is for when the system needs to be recapitalized.  Guess what?  If you hold even 10 ounces and the system recapitalizes via gold, you could have the buying power equivalent to what $1,000,000 buys now.  AND you will have much less competition for the things you want to buy, as everyone else who was dependent on paper wealth has to start again from scratch.

Fri, 07/15/2011 - 13:03 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Every time someone mentions 'correction', it makes my skin crawl. The new and improved 'correction' is nothing but a technical prognostication that indicates a Rembrandt painted psychological indicator attempting to deleteriously modify your decision making ability in a 100% manipulated market. 

Fri, 07/15/2011 - 08:47 | Link to Comment Henry Chinaski
Henry Chinaski's picture

Catch 22. If PM prices crash, you won't be able to buy any.  There will be scant few sellers of physical when the crunch comes. 

Fri, 07/15/2011 - 10:21 | Link to Comment CrazyCooter
CrazyCooter's picture

PM prices will not "crash", they will just get hammered down 10% or 20% (could we be so lucky) to scare the uncertain accumulators out of the physical market. Things are scary now and many folks are making their first gold/silver purcases (they are watching and believing this deb ceiling crap). Those folks have to bleed (in the eyes of the bankers).

Going into the fall, a low starting point is needed to engage in the traditional game of keeping the lid on. Again, I don't do any of this shit professionally, but if they "keep the lid on" and that means "goes up 5% a month" then eventually everyon gets in the pool. So set ups are periodically required to really hammer the price down to scare folks out of the pool.

You know, like this:

http://www.youtube.com/watch?v=1PmMFaVzbzc

Regards,

Cooter

Fri, 07/15/2011 - 10:24 | Link to Comment DosZap
DosZap's picture

dcb,

This time will be different on the PM front, a LOT has changed globally, and locally since then.

The Buy & Hold crew will not let go of what they have accumulated.

Fri, 07/15/2011 - 13:51 | Link to Comment j0nx
j0nx's picture

Agreed. I am not letting go of any of my silver unless it goes up 25x or more in price and even then only if the volatility in the system is purged and the crooks on wall street and consitution ave. arrested. Needless to say, I don't see that happening any time soon. I'll continue to buy my ammo and my piddly 10 silver eagles per month at my local coin shop until I see these things happen. I am not in this to make money, at least not for a LONG time.

Fri, 07/15/2011 - 23:27 | Link to Comment GoinFawr
GoinFawr's picture

.

Fri, 07/15/2011 - 08:24 | Link to Comment tmosley
tmosley's picture

What, every morning?  At the COMEX open?

Gee, I wonder why that is?

Yeah, it's got to be because of Zero Hedge.  Nothing at all to do with corrupt US markets.

Fri, 07/15/2011 - 07:48 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Gold and silver go up no matter the outcome right?

Fri, 07/15/2011 - 07:48 | Link to Comment Tense INDIAN
Tense INDIAN's picture

wont such a PANIC make the DOLLAR SAFE HEAVEN play come into force ...and send all ASSET classes plunging???

Fri, 07/15/2011 - 07:54 | Link to Comment letsgetreadytorumble
letsgetreadytorumble's picture

The Syrian'a are burning dollars as we speak in protest to the safe haven dealeeeooo........ using Chinese Bic lighters I might add!!!

Fri, 07/15/2011 - 08:58 | Link to Comment snowball777
snowball777's picture

I don't suppose trading them for gold or CHF occurred to them....pathetic savages.

Fri, 07/15/2011 - 08:26 | Link to Comment tmosley
tmosley's picture

Only for retards.  What kind of moron thinks that the currency of a defaulting nation is a "safe haven"?

Fri, 07/15/2011 - 10:20 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Only one who is endeared to the bullshit full faith and credit siren song.

"We thought you was a frog!".

There has got to be a youtube link to that but you can all get fucked and find it yoursel.ves

Fri, 07/15/2011 - 10:15 | Link to Comment owensdrillin
owensdrillin's picture

I agree completely. Buying US treasuries is no different than buying an interest in your neighbour's house which is underwater, while at the same time he is overspending on his credit cards, getting new loans for boats, trucks, furniture, etc.

It just does not add up for me. It is hard to believe that the whole world is going along with this bullshit.

Fri, 07/15/2011 - 12:27 | Link to Comment Temporalist
Temporalist's picture

It is very easy to believe once you realize that the U.S. taught people how to default by going off the gold standard, then how to deficit spend, then how to print endlessly.  Now every country is complicit in the same upsidedown global financial ponzi and they liked getting high on their own supply so now they can't stop.

Fri, 07/15/2011 - 10:28 | Link to Comment DosZap
DosZap's picture

The world is watching the ONCE strongest nation on earth self destruct, and you think they will run into the dollar......

Hopefully the rest of humanity has seen the writing on our wall.

Running into the dollars as a safe haven is as safe as walking thru the  Gobi without water and clothes.

Fri, 07/15/2011 - 07:52 | Link to Comment Big Bob
Big Bob's picture

As every day passes the chance of a systematic shock that can't be controlled increases.. It doesn't really matter where it starts and if the debt ceiling is raised then it will only be worse later in the year. Time to stock up on PM in a Zurich vault.

Fri, 07/15/2011 - 07:55 | Link to Comment slaughterer
slaughterer's picture

"If the US defaults..."--that is a big "if."   

Fri, 07/15/2011 - 08:59 | Link to Comment Bob
Bob's picture

And "if" it did, WTF would be in a position to pay off on those US CDS?!

Fri, 07/15/2011 - 07:59 | Link to Comment Roger Knights
Roger Knights's picture

+1

Fri, 07/15/2011 - 07:53 | Link to Comment StychoKiller
StychoKiller's picture

"The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system," he told a congressional committee.

 

Reminds me of what the constable in "Young Frankenstein" said:  "A riot is an ugly tink, and I tink it's high time we had one!"

Bring on the shock waves -- if the system is really that fragile, then break it to smithereens!

Fri, 07/15/2011 - 08:08 | Link to Comment gofigure
gofigure's picture

The key word there is "viewed", not that it "is"...

Fri, 07/15/2011 - 07:56 | Link to Comment Iriestx
Iriestx's picture

There won't be any default.  This is all just political theater.  There won't be any spending cuts and there won't be any new taxes.  Stocks will go to the moon and PMs will get crushed when they finish this farse.

 

Fri, 07/15/2011 - 10:27 | Link to Comment CrazyCooter
CrazyCooter's picture

That is my read! And I am betting on it by waiting in the wings with cash for PMs.

Regards,

Cooter

Fri, 07/15/2011 - 11:55 | Link to Comment trav7777
trav7777's picture

not clear here how piling on more unpayable debt crushes PMs.  The debt will need to be monetized.

Fri, 07/15/2011 - 12:37 | Link to Comment Reptil
Reptil's picture

correct.

Fri, 07/15/2011 - 07:58 | Link to Comment cat2
cat2's picture

Ironically, not raising the limit will probably make US Treasuries valuable, as the US will not default regardless of the limit.  It's just federal workers/non-entitlement stuff will get either layoffs or wage cuts.  Long overdue, IMHO.

Fri, 07/15/2011 - 08:02 | Link to Comment Robbie4
Robbie4's picture

'Denial regarding the possibility of a U.S. default continues with some analysts denying that such an event is “possible”.' Offcourse it is 'possible', but only if your politicians choose to default. Insolvency of the USA is not possible without the totally unnecessary debt ceiling. People at zerohedge really have to start studying their own monetary system and where it differs from Greece etc. Then they would also understand that Treasuries are just a monetary instrument and that there is no such thing as monetising debt in the USA by QE. The Fed is not 'printing money', the government is (this btw doesn't mean I am a supporter of the Fed or their policies) This lack of understanding of European and mostly American politicians and other policy makers can have such severe consequences for so many people that I find it a big shame.

Fri, 07/15/2011 - 08:02 | Link to Comment adeptus
adeptus's picture

Talk about a troll headline. Slow newsday perhaps Tyler? If 'they' can't even allow tiny Greece to default after 2 years, like the US is going to default 2 months into irrelevant debt ceiling political attention seeking faux debates.

Fri, 07/15/2011 - 08:08 | Link to Comment Sandy15
Sandy15's picture

Unless that's the goal of Soros and his minions.  Soros said himself the the USA is his biggest obstacle to a One World Gov.

Fri, 07/15/2011 - 08:06 | Link to Comment Sandy15
Sandy15's picture

Gov. Takes in roughly 200 billion a month. Here are some expenses:
#1. 29 billion for interest on the debt. Hmm? I think we can pay that one. So default is out of the question. Lied about that one.
#2. 49 billion Social Security checks. Okaaay? Obama lied about that one.
#3. 50 billion Medicare and Medicaid. Hmmm? We can pay that
#4. 2.9 billion ACTIVE military. Still pay for the Libya war( costs will reach 1 billion by Sept.)
#5. 2.9 billion vets affairs. No problem there. Hmmm? Maybe Obama has a broken calculator. Maybe his numbers runner Timmy "tax-cheat" Geitner is using the same math he used to figure out his taxes. Orrrr, maybe Obama is just FLAT OUT LYING!!! But here's the kicker the Social Security checks come out of the S.S. trust fund. It's separately fund by FICA deductions out of tax payer paychecks. If there is a shortfall , as it was last yr., the rest is made up from the General fund. These are the FACTS!

Fri, 07/15/2011 - 08:19 | Link to Comment I only kill chi...
I only kill chickens and wheat's picture

http://blogs.forbes.com/merrillmatthews/2011/07/13/what-happened-to-the-...

Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036.  So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?

The answer is that the federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted.  And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling.

Thus, the answer to my initial question is that the president is telling the truth now in the sense that he is conceding there’s no money in the trust fund to pay benefits; but he and other Social Security status-quo defenders have been deceiving the public for decades.

Fri, 07/15/2011 - 08:50 | Link to Comment Bob
Bob's picture

The primary deceit is that SS is insolvent.  This could only be the case if the gov formally defaulted on the Special Issue Treasuries held by the Trust Fund.  The real question is why are millions of people strutting around making absurdly "knowledgeable" claims about the situation--as if a special US "debt forgiveness" program limited to SS assets/claims is a fait accompli.

That's clearly a dream passionately embraced by a whole lot of people, but it's nothing but a dream. 

Fri, 07/15/2011 - 10:42 | Link to Comment DosZap
DosZap's picture

Thus, the answer to my initial question is that the president is telling the truth now in the sense that he is conceding there’s no money in the trust fund to pay benefits; but he and other Social Security status-quo defenders have been deceiving the public for decades.

 

Then they are thieves and must be tried for felony theft,and hung,tarred and feathered, bank accounts frozen and all assets seized, testicles removed.(a little angry here, sorry)

Because the taxes paid in for the next round of checks that may not go out, were double the amount needed.

WHERE did the surplus go?.................tell us you  thieving bstds?.

We do not want to hear threats, we want to know what happened to the surplus, you stole it.........period.

Removal from office and impeachments are long overdue.

Congress/Senate/SCOTUS ,must be forced out of their positions.........time for a Con Con.This no way for removal from the office/position crap is for the birds.

Only the STATES can stop the insanity......................why haven't they done it?.

Fri, 07/15/2011 - 14:54 | Link to Comment oldman
oldman's picture

As I recall the congress has said 'no' to funding SS many times. There was a rumor that some part of the medical would actually be funded when I left the US in '93; this was a ploy by the pols to try and convince the public to privatize SS, I believe under bush2. I have no idea whether or not this came to pass, but do remember that public opinion was agin it.

The government has pledged special bonds to cover the principle of its obligation to SS, meanwhile funding war and the police state------never mind, too political for ZH. There is no reason to believe that there are not sufficient funds to pay benefits for the next twenty years or so.

Obama truly fucked up, imo, by using this as a threat when he has nothing to do with the checks going out. I have a difficult time even imagining how unethical these pols are in their constant destablization of out society. I jusy don't get it, nor comprehend how anyone can honestly consider this a democracy enough to go to the polls or even discuss the 'merits' of the fodder that is fed to us as candidates.

The machine is broken. The collapse has been underway for a few years now---we need to begin considering where we are instead of where we will be; I believe this quote locates our our place and time---says it all:

"The Treasury security is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shockwaves through the entire global financial system,"

It is right in front of us----it ain't going to happen---we are in it now!

All our anger and frustration, I understand, but we are just spitting at each other with empty threats and machomania at ZH----we are worms because because our testes are in our throats.

I don't know what to do, so I am a 'do-nothin dude'; I am still waiting for a suggestion on this blog that will enable me to have some faith in the people of this country.

I came back to see if it was time for change. Apparently the pain is not yet severe enough--------any comments?

Fri, 07/15/2011 - 20:14 | Link to Comment smore
smore's picture

OK, I'll give you a comment: you don't realize it, but you are unreasonably optimistic.

"a ploy by the pols to try and convince the public to privatize SS, I believe under bush2. I have no idea whether or not this came to pass"

SS?  Forget it.  Think mass starvation and lots of shooting.

"Obama truly fucked up"

No, he didn't.  He is doing exactly what he is paid to do.  You didn't think he sincerely cared about you, did you?

"The collapse has been underway for a few years now"

Nope.  It hasn't even begun.

"I am still waiting for a suggestion on this blog that will enable me to have some faith in the people of this country."

I think you are in the wrong support group.  This is the one for people who understand that we are all SCREWED.

Now; eat, drink, and be merry, for tomorrow...

Sat, 07/16/2011 - 00:29 | Link to Comment GoinFawr
Sat, 07/16/2011 - 21:27 | Link to Comment oldman
oldman's picture

Thanks, smore

Finally, I have permission to join the crowd              om

Fri, 07/15/2011 - 08:33 | Link to Comment Bob
Bob's picture

The SS Trust Fund is flush with over $2T in "Special Issue" Treasury Securities. 

http://www.ssa.gov/oact/progdata/specialissues.html

If there were a cash shortfall, it would have to raise the money by redeeming some securities.  This, of course, would require the Treasury to cough up some of the money owed via money from the general fund . . . which would put SS payments in competition with those other expenses you cite.

Fri, 07/15/2011 - 15:11 | Link to Comment oldman
oldman's picture

Bob,

I don't believe your comment is entirely correct.

I remember that a general obligation is senior to any new expenses of the government; that these items are equal and do not compete for funds but must be paid before any other expenses.

It was, also, my understanding that the administration can call upon the congress to raise  taxes if the payment of these general obligations is in jeopardy. This is not a political choice or 'option'; it is a legal obligation. Nothing to do with politics or morality---an iron-clad OBLIGATION.

 

I haven't given this stuff any thought for all the years I have been out of the US, so I wouldn't bet a penny that things haven't changed--- please help this oldman out if you know different------thanks

Fri, 07/15/2011 - 08:06 | Link to Comment TooBearish
TooBearish's picture

Sprott - all I gotta say is this fukker is taking more supply outta mkt than Hunts could dream of - with OPM - smart dood

Fri, 07/15/2011 - 10:34 | Link to Comment whaletail
whaletail's picture

+5.60% Sprott is a fully-realized genius

Fri, 07/15/2011 - 08:07 | Link to Comment Master Chef
Master Chef's picture

Gold will probably get within a whisker of 1600 and then get whacked down again, partly with profit taking.
Silver will get another dive by shooting soon, and this comedy will continue.
But sooner or later it will all take off, and when it does it will be sudden. Until then, enjoy the show.

Fri, 07/15/2011 - 08:17 | Link to Comment slaughterer
slaughterer's picture

Is everybody ready for the flying-monkey attack on silver today?  Lots of money to be made when attacking silver from above $38/oz.   Just slip another rumor of a $1.5 trillion package being agreed upon like yesterday, and short 10,000 contract blocks.

Fri, 07/15/2011 - 08:42 | Link to Comment unky
unky's picture

i hope we will see a $6 drop in silver (like in may) when they agree on debt ceiling and debt reduction by $2 trillion. that would be just great buying opportunity;- )

Fri, 07/15/2011 - 23:29 | Link to Comment GoinFawr
GoinFawr's picture

'Debt reduction'? When are these glorious surplus years supposed to happen?

"Hocus Pocus..."

Sorry but 2 Trillion in cumulative spending cuts 'eased in' over 20 or whatever years at the empty gesture rate of 100 billion off the top of every 1.6 trillion annual deficit won't result in any 'debt reduction'. Especially when the debt limit gets raised to accommodate a yearly 1.75 trillion more in the red.

Fri, 07/15/2011 - 08:08 | Link to Comment rsnoble
rsnoble's picture

Who knows what these monkey butts are talking about/planning.  I seriously doubt we'll be the first ones to know if there really is a default.  They need time to get their alternate living quarters secured when all the old people not getting their check are up in arms.  A good negotian would include massive paycuts and rule changes for all politicians. HA ha.  Well that pot of coffee is kicking in now, in both directions.

Fri, 07/15/2011 - 11:40 | Link to Comment GoinFawr
GoinFawr's picture

Heh, time for the morning `Constitutional`.

Fri, 07/15/2011 - 08:10 | Link to Comment White.Star.Line
White.Star.Line's picture

The US defaulted on its citizens when it caved to the bankers in 08.

The name of the country should be changed from the United States of America to INTERNATIONAL BANKERS INC., US DIVISION.

The country is toast.
The only thing left to be done is destroy the currency and take all that is left from its destitute, bewildered citizens.

Fri, 07/15/2011 - 08:14 | Link to Comment the not so migh...
the not so mighty maximiza's picture

sad but true

Fri, 07/15/2011 - 08:11 | Link to Comment rsnoble
rsnoble's picture

You never know, maybe we'll just send the entire millitary to the middle east and stick the flag in it and tell china to fuck off.  Shit happens, rather or not you can argue against it.

Fri, 07/15/2011 - 10:58 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

I think we have already done that except the flag sticking part?

 

Tuco

Fri, 07/15/2011 - 08:15 | Link to Comment dcb
dcb's picture

This is a perfect reason bernanke should not be in the position he is in. he said subprime would be contained, he said recently the dollar had hit its low for the year (when it hadn't). there is a greatest hits of him on you tube with all of his mistakes. Based on his histry there is no reason for anyone to pay attention to this man. I wish I had been the guy in congress , I'd show the video, and some other stuff, and ask the folks there if there was any reason anyone should pay attention to anything the man says.

Fri, 07/15/2011 - 08:16 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

what if we had a default and no one named it..we are in default have been since Bush and Paulsons tarp..in 08.the three monkey mambo.

see no evil..you know the rest

Fri, 07/15/2011 - 08:18 | Link to Comment MiningJunkie
MiningJunkie's picture

There is NOTHING wrong with the United States of America - my seven years living in your country left me with so many lifelong friends (all MidWesterners) and memories...

Just GRAB your fucking country back from the assholes that created the Fed and have been fucking you since 1913.

And buy gold and silver to cover your asses...

Fri, 07/15/2011 - 08:57 | Link to Comment caerus
caerus's picture

+1776

Fri, 07/15/2011 - 11:07 | Link to Comment DosZap
DosZap's picture

Mining J,

Thank you, there is nothing wrong with America,(American people on the whole, are great people) except the Gv't.

I do not not who junked you, but their a steaming pile,must be liberals.

Fri, 07/15/2011 - 20:31 | Link to Comment smore
smore's picture

Well, that's nice and all, but seven years and you didn't notice anything wrong?  It wasn't sometime back in the 50's, was it? You might consider offering your friends a place to stay when the SHTF.  Just an idea.

Fri, 07/15/2011 - 08:26 | Link to Comment ziggy59
ziggy59's picture

how can treauries be the safest security if it dollar backed?

Fri, 07/15/2011 - 08:58 | Link to Comment SeverinSlade
SeverinSlade's picture

Yes gold and silver would go parabolic IF the US were to default...But what happens if the debt ceiling deal is passed?

As I've said before, I'm predicting a significant dip before QE3 comes.  After that though, it's on like donkey kong.

Fri, 07/15/2011 - 11:10 | Link to Comment DosZap
DosZap's picture

When it's passed, nothing happens to PM's, the reason they are up, is because of the fact they ARE going to raise it.And there will be a QE 3.

Inflation will be rearing it's ugly head soon,no way out. 

Fri, 07/15/2011 - 09:10 | Link to Comment thunderchief
thunderchief's picture

Still too many people sidelined waiting for lower prices.  I think you got your low in May at less than 33 silver.  Bernake will not do QE3 because he knows it has been an utter failure, and why he is bluffing about the Economy improving. 

Right now there are more reasons than ever for QE and his last press meeting is testamount to declaring it a failure.  The debt cieling will also go through in a few weeks as even the Republicans know the consequences of not doing that.  Neither will have much impact on gold and silver at this point.

Fri, 07/15/2011 - 10:34 | Link to Comment Thisson
Thisson's picture

Wrong.  He absolutely will do QE3, although he may call it something else e.g. "operation twist 2"

There is only one way out for the politicians, and it's a rolling currency devaluation.

 

Fri, 07/15/2011 - 09:29 | Link to Comment saulysw
saulysw's picture

So. Is this a binary decision?

 

They raise the debt ceiling - TRUE

And I think they will, and Obama may do it directly and try to make himself out to be a hero. But the important thing, I think, is that it shows that America is happy to paper over any debt and debase it's currency. This indicates a chronic loss of monetary control, and will push them further off the global reserve currency status stage. The although there may be glitches at first, after a time the value of the dollar will fall, and gold will rise.

 

They raise the debt ceiling - FALSE

Unlikely, but I guess possible. Never underestimate the incompetence of politicians. What would happen? Downgrades, markets go crazy, FX goes crazy, Gold and Silver goes apeshit - ie multiples of current value. The world economic stage would be changed, forever, and it would have real consequences for all of our lives in one way or another. Wars would follow, most likely.

 

The enemy of gold is actually restraint. The solution can be explained by a 5 year old. They have to spend THE SAME OR LESS than they take in, and at least stabilize the debt. They could even, you know, paying it down.... Nah! It would choke the economy dead in days, along with gold. This "logical" solution is not even remotely on the table, and that is why gold keeps on powering on.

Fri, 07/15/2011 - 09:52 | Link to Comment thunderchief
thunderchief's picture

Agree, but it never seizes to amaze me how easy the metals are taken down with the whole market, and how quick even the biggest chearleaders panic and sell.  Even this run up this week can go south as the Hedgies throw money in and then scatter like a  bunch of vulters on the highway.  The only achilles heal to that is physcical, which you have not seen selling even at peaks.  That is why I say there will be no effect on silver and gold in any political paper charade.  People are not selliing based on another "it's fixed for now again". 

Fri, 07/15/2011 - 11:12 | Link to Comment DosZap
DosZap's picture

saul,

YES it will be raised, they have NO CHOICE...........

Fri, 07/15/2011 - 09:40 | Link to Comment snowball777
snowball777's picture

Sure, because no one ever liquidates steeply appreciated assets when a financial crisis hits.

Logic fail.

Fri, 07/15/2011 - 12:38 | Link to Comment GoinFawr
GoinFawr's picture

That depends. Define 'Safe Haven' in 2008-speak; now define it for 2011.

Notice any difference?

Fri, 07/15/2011 - 09:43 | Link to Comment samsara
samsara's picture

Take a read on Martin Armstrong's new piece...

Gold: The Final Frontier?

http://www.martinarmstrong.org/files/Outlook%20for%20Gold%2007-13-2011.pdf

 

Fri, 07/15/2011 - 20:39 | Link to Comment smore
smore's picture

Yes, please read it. Especially the "gold is the only real money" crowd. It is really nice to see a sane, balanced view on this. 

Quote: "WHAT IS MONEY?
Perhaps the single greatest misconception is the definition of MONEY being some fixed concept."

Thank you, Martin Armstrong!

 

 

Do NOT follow this link or you will be banned from the site!