Gold And Silver Surge On QE3 Expectation Rerack

Tyler Durden's picture

Who'd a thunk that BTFD works for commodities even better than it does for stocks. Desks now advising clients that QE3 is likely (whether or not due to this article is irrelevant) and the result is presented below.



Next up: as bond yields jump by 100+ bps next, Bill Gross will be more than happy to load up at a special, new low price.

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Tortfeasor's picture

Silver looks like a tsunami...flat, then the tide goes out, then a double-overhead

whatsinaname's picture

while I think QE3 is a certainity, it aint coming without a tangible market drop. Ben may not be able to justify QE3 while crude is still over 110 (brent). Which means even though long term fundamentals for silvah and goldie are fine the current spike could be a head fake.

SilverRhino's picture

QE3 is a DONE deal.  

Who do you think is going to have to purchase all of the UST's that are about to come onto the market in competition with the Treasury's standard sales as Japan deleverages and starts paying out insurance and rebuilds?

No QE3 = USA implodes. 

ColonelCooper's picture

And QE3 = USA explodes.  Choices.  Choices.

EscapeKey's picture

No doubt some Keynesian macroidiots will attempt to sow doubt about QE4.

How did a school of economics, which is consistently wrong, get to be so powerful in todays economic environment?

pslater's picture

"How did a school of economics, which is consistently wrong, get to be so powerful in todays economic environment?"

Its perpetrated by the 'progressives' whose answer for every failed outcome is always the same: "We just didn't have enough resouces (money) and regulation into it last time.  If we just increase the funding and regulation 'X' times, I KNOW it will work next time."

Until, of course, it doesn't work next time either...

UGrev's picture

Let me refine your statement. The people weren't under enough control where 100% of their production went to service the government. Seriously.. this is what they want. 

newworldorder's picture

When you never say no to power it is easy to be successful. There is a sexual expression for this, but I won't go there.

redpill's picture

Because it allows for easy bribery of enough of the populace to allow the policy to continue.  Government makes all the money they want, they pick the winners & losers, keep the necessary palms oiled, and everyone is happy until the day finally comes when it all falls apart, but that's the beauty of the ugly machine, with funny money and holding the title of Reserve Currency, you can stretch this bitch out a llllooonngggg time.


seek's picture

The immortal wisdom of Glenn Frey: the lure of easy money has a very strong appeal.

StychoKiller's picture

"Rock stars, is there anything they don't know?" -- Homer Simpson  :>D

RafterManFMJ's picture

Essentially it told the politicos what they wanted to hear.

Deficits do not matter.

You can print, and thus fund MASSIVE welfare programs - and thus buy votes and power.

Hard money does not allow huge welfare states.

Mossy's picture

Lysenkoism without the gulags.

Exposer of Internet Shills's picture

it's Satanic, to bring about a purposefull collaspe so that a ONE world government can eventually be formed.  Read about the powerfull influence Aliester Crowley had in the early part of the century (describing this) and then read the Bible.

Dr. Porkchop's picture

The inflation explosion kicks the can down the road a little while rather than an immediate and devastating depression, the kind that has angry mobs outside of politicians homes. The end result will likely be the same either way, but they'll buy time at whatever cost.

Temporalist's picture

They just want to buy enough time to be out of office so they can't be blamed.

Cyrano de Bivouac's picture

They also need time to dig a rat hole in Paraguay or Costa Rica to scurry off to when the time has come.

Papasmurf's picture

They don't go out of office.  That's the root of the problem.

I am more equal than others's picture

QE32 is like sheen on an 8 gram rock; sure, the party was great but the law of unintended consequences kicks in somewhere down the line.  The US and the world has smoked that big rock and are trying to prevent the consequences - Bernaked is trying to pull off bi-winning .... the manic phase is always the funnest.

huntergvl's picture

This time will be different. QE3 will not engender a market rally, it will lead to a harsh correction.

Of course there will be a QE3. No way to handle the treasury rollovers without it. But, it's obvious that the US economy is now officially 'STUCK.'

BTFD has a new risk dynamic. You might be able to trade it for a bit longer, but the risk of getting hammered to the downside has increased and will rise linearly as we approach 6/30.

DoChenRollingBearing's picture

I just checked (12:20) and their handy gold/dollar calculator.

ALmost all this spike is due to the dollar taking a dump.

EscapeKey's picture

I don't actually get this - why is this bullish for the Yen?

DoChenRollingBearing's picture

Escape, the line I have read about the Yen going up is that when there is a BIG DISASTER in Japan, they repatriate their Yen to rebuild.

I do not know how reliable that info is.  ZH-er Orly writes often about FX, ask him/her!


Gold, by the way, is some $3 or $4 off its little tip of the spike there.  This might not be a big move, but remember I do not TRADE gold, I just buy and hold it.

EscapeKey's picture

I get'cha. So they sell US Dollars and denominated assets in exchange for Yen. That would explain both the strength of the Yen as well as the Dollar weakness.

Thanks, DCRB.

dearth vader's picture

Piles of yen will be needed to pay for damages and insurance. Japanese institutional investors will dump $$ and €€ for yen.

pauldia's picture

Who bought PIMCOS treasuries? Look for a new Homestead Act to bring back one trillion at very favorable terms. Also, your retirement funds are a little low on treasuries for your own good. Many buyers available.

dearth vader's picture

"Who bought PIMCOS treasuries?"

Must have been the bigger fool, but which one, indeed?

EscapeKey's picture

I would say there's no bigger fool but Bernanke, but I don't think he's deliberately obtuse. The plan is obviously to shift ALL assets to the elite, and so far he's carrying out his job to perfection.

rustybenelli's picture

I think the bernank needs political cover before he unleashes qe3.  Let the markets drop and then state due to the fragile nature of the recovery "forty acres and a mule for everyone".

Smu the Wonderhorse's picture

I think QE3 may be too politically difficult with prices already soaring.  What about another QE lite, i.e., not letting the Fed balance sheet shrink?

Yield2Greatness's picture

Ben Bernake, is god and answers to no one.  Probably farts in bed and giggles when his wife inches away.

Gen X Gen Y Hybrid's picture

As I said last week.....Friday effect.

Let's see that COT report.


Big Corked Boots's picture

I suppose if you are going to hold silver you better like roller coasters.

fuu's picture

Uh ok. If you are holding silver and were not expecting this then you should sell me your weak hand.

Shameful's picture

Hold on?  It's easy.  Just have to look up and see if the reason you bought silver/gold changed.  Is Zimbabwe Ben still manning the bridge?  Yep.  Does the US still have face melting deficits?  Yep.  Does the US have a plan to deal with the massive entitlements it's promised?  Nope.  Does the US have a foreign policy that does not involve free money or murder?  Nope.

Now if your trading, well then good luck to you, that's a whole different animal.

Tortfeasor's picture

That's the second "face melting" reference of my day.  Thanks!

Temporalist's picture

You forgot expanding empire and military industrial complex and police state.

byukid's picture

"Silver to 10$ by next Thursday"

- Methman

Broomer's picture

I don't intend to play games with the market, I'm just hoarding PSLV.

If a fall like the one in 2008 happens again I'm buying like a madman.

Temporis's picture

by Math Man on Sun, 03/06/2011 - 20:23 #1024792

"It only costs five bucks to dig it out of the ground!"

Long-John-Silver's picture

He could also say "A gallon of diesel fuel will bring up an ounce of Silver".

Al Gorerhythm's picture

Willy the Retard, "You'll be puking PMs by Monday afternoon" He really doesn't have much to say or offer, does he.

Mossy's picture

If silver drops to $10, I'm cleaning out my bank account, borrowing to the limit, and buying all I can get my hands on. The reasons silver has gone up have not vanished.

gorillaonyourback's picture

Why did bill gross sell all his treasuries (assuming he did, my argument is as follows)?  I’ll tell you why, the global elite want us in a deflation spiral.  Why you ask?  Cuz they can't accept a currency collapse due to hyper inflation that would be the death of fiat currency, PERIOD, on a global scale.  If they continue printing; commodities keep going up, up, and up, then you reach a point where gold and silver become the default currency simply by the continued devaluation of the dollar to worthlessness.  Also food prices would rise, throwing all countries into revolution(people can't be hungry very long without getting grumpy) just look at Egypt, the middle east and north Africa, revolutions going on everywhere.

So you ask why deflation? It is now the only way to protect the fiat money system, they tried inflating with tarp and QE2 and as you see what happened, food prices soared, precious metals soared, stocks soared BUT something happened.   No wage inflation and no borrowing, AINT THAT A BITCH,  you need borrowing to keep the ponzi scheme going. 1million dollars turns into 10 million dollars in the fractional reserve system but you NEED PEOPLE TO BORROW to make 1mill into 10 mill. (Ya know, I thought trickledown economics was a bunch of hooey, now I know it is!)  

I am also convinced that TARP and QE2 was intended to give those selected few enough fiat currency to be ready to buy assets when the deflationary spiral plays out. Similar play book as in the 1930’s , just more zero’s.

So here we are today, bill gross gave the biggest clue for deflation, if he has the feds ear or vice versa and he is holding no treasuries(remember assumption) THERE WILL BE NO QE3.  That means no more free money by helicopter ben,  INTEREST RATES WILL SKY ROCKET, housing property values will decline,  stocks will surely decline, and oh yeah so will all commodities(yes gold and silver).  Cash will be very scarce, and i suppose what bill gross will turn into is one big property mogul cuz he has all that cash ready to buy property at 40-50% discount or better.

Wonder why insider selling is at an all time high?  cuz they are coming back in a year or two, to buy all their stocks back at a huge discount. BIGGEST FUCKIN PUMP AND DUMP EVER! 

Have you wondered why states are going after the public unions? cuz in a deflationary spiral the government loses.  Less tax receipts but still have to pay same wages as yesterday to the government workers.  oh yeah don’t expect your muni bonds to be doing very well either.  What do you want to bet, that the link of cola works both ways for social security benefits and if they don't now, they soon will be?

I wonder if in a few months Puppet Prez Obama comes out and says “We broke and we aint payin”.  OMG a default?  Yep, quacks and hacks a default.  How you gonna git blood out of a turnip?  Pretty sure that saying came from some dude hijacking some dudes turnip truck cuz he had sex with his sister/wife and he couldn’t find him so he took his turnip truck

If you think this sounds farfetched cuz the rich elites and the government loose in a deflationary spiral too, remember this, the rich elites will make a killing when asset prices drop and they r the only ones who will have cash.

What does one do in this scary world where there is a Muslim terrorist around every corner (FUCKIN FAUX NEWS)? Follow me here! Get back to basics cuz if you don’t you will get back to basics the hard way.  BE SELF SUSTAINABLE.  BE READY FOR REVOLUTION  don’t be afraid we need it.

Riddle me this, why did International Monetary Fund (IMF) grant loans to Haiti on the condition that it agreed to structural adjustment programs? I’ll tell you why it’s about food. The structural adjustment basically collapsed Haiti’s agricultural economy by shipping in food that was cheaper than what it cost them to grow themselves.  Poor Haiti had no idea that the food they were buying so cheap was subsidized by foreign governments for the sole purpose of collapsing their agricultural economy to turn them into a cheap island labor camp for the global elites, one big island maquiladora. 


What happened to the farmer in america?  Bought out by Monsanto, Cargill and other megalopolies

So my advice is 2u is if you have assets get into cash, I can’t believe I just wrote that:(, and be a farmer.  If you don’t have cash, get too some farm land and learn to be a farmer. Tiz gonna git wicked ugly.


Debtless's picture

is the 5000 year bull in gold over? thx for the heads up.