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Gold-To-Dollar Ratio Back To July 2008 Levels, On Surging Au, Collapsing USD
The recent run up in gold, coupled with the decline in the dollar (via the DXY) has raised the GLD/DXY ratio to July 2008 levels, with just under 1.5x points left for Gold to hit multi-year relative highs. With gold seen as not only an inflation hedge, but a systemic collapse safe haven, could the run up in gold have more than just inflationary implications? With the dollar safe haven status out of the window, it does, in fact, only leave gold as the only TEOTWAWKI hedge. At flat dollar levels, look for gold to test the $1050 level relatively soon.
In the meantime, stocks are blissfully unaware of anything except how many robots are chasing after AIG, FNm and FRE.
In actual news, maybe this has something to do with the move in gold. Seems gold repatriation is becoming a dominant topic for virtually every sovereign. Of course, things like this happen every day for no reason... whatsoever.
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"pitiful, just pitiful" Jed Clampet
I'm thinking more like 1200 or 1300 for this particular nreakout. It may take until close to year end, but it'll get there!
My Jul 28 article on why S&P/GOLD Ratio would fail at 1.10. The 1.10 top occured 2 weeks ago. http://bit.ly/VjiXs
AL
I am happy long USD intermediate term. I have faith the public will stop the Fed from printing faster than defaults and bankruptcies destroy debt and derivatives. I think pols who've been supporting the Geithner/Summers bank handout agenda will start getting voted out. I think Politicians will pay attention to that. The public will get vicious if Bernanke's printing causes CPI to inflate, but wages don't keep up.
Hmm, you look vaguely familiar.
He's wearing shorts.
You on the other hand... need to put some clothes on. :)
Look here I pay my taxes and if you pay your taxes you can run around nude.
Especially if you are 7'4 and can run through brick walls.
Where we're going, naked will be the new-norm. Shorts only on Sundays.
I think maybe then the public(s modesty) will be somewhat outraged
I hope you are correct, my optimistic friend!
"I have faith the public will stop the Fed from printing faster than defaults and bankruptcies destroy debt and derivatives."
ROTFL.
Hell ya GG...I'm with you....sad, but oh so true.
While I don't have faith that the people or congress will do anything (you can't fix what you don't understand) I do believe we will hit a point where inflation in gas and the prices of other necessities start to piss people off. Gas prices will be the stick that breaks the camels back, should it get there.
One thing people do know is that the economy is f*cked, so gas should not be $4 / gallon. If Bernanke pushes the dollar so low that gas breaches $3, people will start to make noise. If it gets to $4, then lookout Ben!
They will have to reign it in at some point, I don't see the currency collapse coming on just yet. Give it a few years.....
Remember, remember, the fifth of November.
I am Chumbawamba.
The gunpowder plot, I guess for these times it will be the C4 plot, or maybe the ammonia nitrate plot.
Mr. Kool Aid may be right in the market even if he is wrong on his political judgement (and the jury is still out there).
Just look at what happened last fall. Why couldn't that happen again? Sentiment drives everything, and when trades get as one-sided as this short dollars / buy anything else business, they tend to reverse violently.
ROTFL means?
"Roll on the floor laughing"
I believe in the toothfairy too! Or not?
G. Kaiser
i'm eschewing the K-A today.........
The large unlineing assumption is that this economy won't fail until after the 2010 elections.
90% of the public doesn't even know what the Fed Reserve is let alone understand it ultimately destroys the dollar with the printing press.
This implies that there are 30 million people that know what the Federal Reserve is.
Sounds a bit optimistic to me.
As long as Larry Summers is whispering sweet nothings in the President's ear the government market manipulators and their wall st friends will never give up one of their last lines of defense: short gold. The JPMorgan and Goldman short positions there were never meant to be covered, just added to in case things start to look like they are going out of hand. When they start adding to them, moving us closer to the inevitable unwind of the last line of defense positions and hence the entire financial system, then I'll buy Gold.
BTW my systemic collapse safe havens would be lead, corn, pork belly futures and gasoline.
Mmmm....pork bellies...
I think all those September rumors are moving gold up. Might be a case of self-fulfilling prophecy.
Is that you dad?
When you have control of the printing press, everything and anything can be made into a self-fulfilling prophecy.
Go to your room.
One should tweak the Hall 9000s to HFT all those delivery notices also…
Alas the time has come... The real play right now is silver. Gotta have both though...when a putz like tumbling dice starts buying that's when its time to sell
what a great analysis; you can take the other side any time you like.
Yes your correct. When people who fail to initially see the big picture finally do because it punches them in the mouth and then they try to jump in - it is time to get out. Bubbles 101
Gold is not a bubble. Gold is currency.
Let me just put it this way...if/when gold will be priced at over 2500 dollars, I won't be buying gold, I wil be buying (additional)seeds, guns and ammunition. When you see the breakout you expect in gold, you won't be selling it on the COMEX or any other futures market. If you're lucky, you might be able to sell it to me in exchange for a good meal. That will be your reward for catching the "bubble".
Balance with palladium. Silver tends to follow gold. When everyone believes (i.e.,, hop, change) that the ecoomy is recovering, gold and silver soften, but Pd rises.
If I can add to that.
Russian palladium stocks depleted
http://www.miningweekly.com/article/russian-palladium-stocks-depleted-arm-2009-08-31
This follows the recent trend of recent years....
Too much Excess Money sloshing around
GS start with commodities, usually foods, grains, and give them a good juice...inflation scares start.
then they moves to Oil, and really get the talk going for a bit
then goes to basic materials via China fake imports and #, and then lets take a swipe at precious metals, once everyone at GS had his turn at the till, they guarantee that they get their bonuses..... meanwhile the HFT and props circle jerk stocks, (and each other) to ecstasy ........
and then.......
and then all assettes go to HIAHB.
.......POP
View of the Day: Albert Edwards, Société Générale
Published: September 3 2009 03:00 | Last updated: September 3 2009 03:00
Commentators have been perplexed by recent strength in government bond markets, especially set beside continued resilience in equities. They should not be, says Albert Edwards, global strategist at Société Générale.
"Once again, equity participants are missing the big picture. For despite clear signs from the business surveys of some sort of second half recovery, firm evidence is emerging that the global economy is sliding towards a full-blown deflationary episode once this recovery falters.
"We heartily concur with GMO's Jeremy Grantham who remarked recently that after 20 years of more or less permanent overvaluation of US equities, we saw just five months of under-pricing through the March trough. Do bursting global equity valuation bubbles really end like this? Of course they don't."
In contrast, Mr Edwards says: "The bond market is responding to two key events. First, it is clear to us [that] the ongoing march into outright deflation will accelerate during this short-lived economic recovery.
"Second, post-bubble realities will force commercial banks to aggressively step up their buying of government bonds," like they did in the 1990s US credit crunch.
"But what about massive supply of government bonds I hear you ask? Won't that drive yields higher? Well it never did in Japan."
The difference is that Japan was able to export their inflation via the yen carry trade and they also had a growing export market to the US.
It appears a 69bn coupon package was expected.
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Yep. Why do you think the SEC is suddenly serious about regulation? Now it matters, as they try and keep the bubble inflated.
Did you guys forgot TG's comment about the IMF selling their gold in case they need money?So it could be that this rally is in prepration for that sale. However,China did indicate that it is willing to take that gold. So what will be its reaction if that gold was sold in the open market?
The massive amount of bank failures in the thousands took place with the rumor of Roosevelt's intention to confiscate gold. Although he denied that was his policy the night of the elections, he remained silent refusing to discuss the issue until he was sworn in. on March 6, 1933 just 2 days after taking office, Roosevelt called a bank "holiday" closing the banks from which at least another 2,500 never reopened.
All of these events are contrasted by the collapse in national debts in Europe. It was the financial war between European nations attacking each other's bond markets openly shorting them that led to all of Europe defaulting on their debt.
Loss of international (EXCEPT FOR THE US $) trust, USA "springing" revaluation and confiscation on its public, cascading sovereign default--triggered the ultimate crash and eventually military conflict.
This time all the above is occurring on schedule, EXCEPT no one will want to flee into US $, but rather out. The world is also surfeited with US debt via Treasury market.
Where will they flee for safe haven?
Your answer is taking place real time.
Huh. Half that was true and half that was babbling.
Pray tell us, which half was which in your thinking?
"The massive amount of bank failures in the thousands took place with the rumor of Roosevelt's intention to confiscate gold. Although he denied that was his policy the night of the elections, he remained silent refusing to discuss the issue until he was sworn in. on March 6, 1933 just 2 days after taking office, Roosevelt called a bank "holiday" closing the banks from which at least another 2,500 never reopened."
Ok before going on the gold standard the money trust had already cornered the market on gold in america, Then being placed in both england and germany the european arm (rothchilds in both places) immediately helped set up the conflicts of power in europe to cause ww1. By flushing germany with cash it made it a titan in the region and all the liliputians became increasingly threatened by it. Causing a war in europe allowed the indebtedness to flow into the american arm of the money trust. After WW1 the huge debts that america had racked up were getting paid down too fast. The 2 presidents following it set up good economic policy. Low taxes which didn't allow much money flow into central bank coffers and high tarrifs which caused the debt to get paid down at a higher rate than had ever been seen before. They had to set up a crash to stop the pace of geting out debt and get things back on track with indebting. So they raised the money supply 60 percent causing the roaring 20's and rampant speculation in the stock market. Back then they did things differently. They would actually loan money out to people to invest in the stock market. It was called call money. Today they do it through hedge funds. Hedge funds are supposed to be some slick cool financial superstars but they are really just temporary speculators that spring up around a bubble in money supply and there leveraging makes them completeing manipulatable on when they have to stop playing. Anyway back to the old route they called in the loans on the late 20's versions of slick speculating jack asses which caused them to have to sell everything all at once and crash the market. The side affect to that period was that alot of the cornered gold had slipped into private hands. Rockefeller, JP morgan and I forget his other buddy and few others all went to gold just before the crash. They were already rebuilding Germany and using Adolf as a threat in 1930 and 1931. There was alot of outcry as the ultrawealthy had beeng getting some blame for the crash but for the most part the power they had over the world was just too much for roosevelt. They had purposely put banks with as little 1 percent reserves and caused so many crashes and consolodated power into a central bank an d had so many people afraid to speak out against them. The gold confiscation bill was essentially an untrackable plan. No congressman took credit for authoring it, Roosevelt claimed he never even read it saying it was simply a plan to pool the nations gold to get them out of the recession and it's what the "experts" had said would work. After they had gotten the confiscation only then did they loosen the money supply. They took 30 billion dollars out of the american treasury and rebuilt germany with it while americans were starving so you know this was serious hardcore hardball. 2 days in to a new presidency. Are we really talking about going back on your word or walking into white house full of monsters.
"All of these events are contrasted by the collapse in national debts in Europe. It was the financial war between European nations attacking each other's bond markets openly shorting them that led to all of Europe defaulting on their debt."
Shorting the bond market if that even went on back then was hardly comparable in importance to look we got this madman. He's kinda hardcore doesn't really believe in mercy and we are buying him guns. Lots of guns. I know we took support from these people just in time to make them sort of maybe have to give up WW1 and then took over all thier land and factories but this time we'll go all in.
GOLD at 991 and passing technicals like a sports car.
I think London was just busted NOT having the gold for physical delivery to China/Hong Kong. And all the shorts who have borrowed the gold(CB's lend gold out to short, remember) have to cover their shorts and return the gold(for a change.) Usually, the suppress gold prices, the CB's lend the banks gold or futures to dump on the market. The banks usually COVER their shorts cheap and buy back real gold or futures. There has been some issue about the CB's actually getting the gold back or having ANY at all-hence the cry for a Fort Knox audit. IF HONG KONG/CHINA is playing hard ball and asking for real gold bullion to be delivered and London doesn't have it then we are on the gold rocket ship right now-at least into the 1000's again. Crossing 1000 is a big deal here and we could see 1200 gold(see VW/Porsche short squeeze disaster last year.)
The Chinese must be pissed off as all hell to do this.
The COT data apparently has not shown any difference in the short interest yet, but it's 2 weeks behind.
Hennecke said yesterday on CNBC:
http://www.cnbc.com/id/32638139/
Hennecke stressed that investors should go for physical forms of gold and other precious metals rather than "paper gold investment scheme where there isn't full backing, where the metal might be leased out or used for derivatives. That's crucial because there is 80 times more paper gold in the market than actual physical metal in existence in the planet."
Dude that was awesome - the sweet Aussie even laughed and said yes, the bullshit paper metal fraud was an "interesting situation".
DMCC vault may store region's gold reserves
The new vaults of DMCC will be a home to the gold allocated to the Dubai Gold Securities (DGS) Exchange Traded Funds (ETFs). The vault may also become a natural choice for storage of gold reserves by central banks in the regional market, analysts said.
While the gold allocated to DGS is kept at HSBC's vaults in London, the gold reserves held by GCC's central banks are held by various other vaults in London, market sources said. Gold vaults have existed in London for more than 150 years.
http://business24-7.ae/articles/2009/5/pages/12052009/05132009_4d115a2aa5da4d69b8e7350a8875bd9d.aspx
London gold is being transferred to newly constructed regional storage facilities, first Dubai now Hong Kong. If history serves guide perhaps this is just part of the process of financial centers migrating to where the money is, domiciles of capital and savings.
TEOTWAWKI hedges: You forgot Ag, Pb & MMs
great, now you made me hungry for M&M's. You might be on to something with that one, but I don't get what lead has to do with hedging.
Projectiles Futures?
Latest Marc Faber from last week, 9 min video.
Expects world governments, especially of the US kind to continue desperate attempts with more and more (and more) stimulus in coming 12 months. Then the pain comes after
http://www.fundmymutualfund.com/2009/09/marc-faber-august-2009.html
Naturally, US$ is a debt based currency, however, physical gold is debt free money. Significantly different. Similarly,
the dow gold ratio is dropping.
TD, are you goldbug?
Actually, IMHO, he's a truth-bug.
"With the dollar safe haven status out of the window..."
Really? Not if you are getting into Dollars right now. Gold will pop higher and probably retest 1030 but it's downhill from there.
Everyone is bearish on the Dollar right now which is exactly why I expect it to paint a bottom very soon.
Well...that is one hell of a strategy considering there is a plethora of info to suggest otherwise.
Well, well, well...looks like we have none other than Mole the PM permabear over here. Here is how your PM analysis sounded like all year (and probably since the bull run started in 2000 for all we know) - "Gold (Silver) will pop higher and probably retest (insert recent high) but it's downhill from there." Come to think of it, doesn't sound all that different from Bobby Prechter - the guy who has been either short stocks or in cash since BEFORE the 1987 crash...oooops! BTW, how are them Silver puts workin out for ya?
That's not a very nice comment.
Thanks for your opinion.
Mole's a good trader and always contributes something. You sound like a jerk.
Well, that depends on what your definition of "good" is.
998, suddenly AU is making its move. Say hello to my little friend, margin call.
Shorts must cover, this is a big ramp. There's going to be a lot of busted out shorties.
Currency repudiation, especially in the dollar (used to be the gold standard ha ha), makes au the defacto reserve currency.
The best part is that once shorts get pulled down, and spanking commences, shorts may stay off for a while leaving a rise likely.
Whatever comes out of these gates, we've got a better chance of survival if we work together. Do you understand? If we stay together we survive...
Works well in times of cholera and prison escapes too, yes?
Five thousand of my men are out there in the freezing mud. Three thousand of them are bloodied and cleaved. Two thousand will never leave this place. I will not believe they fought and died for nothing.
Of the following, what has NOT had a bull market run in the last ten years:
Gold, silver, Hampton's real estate, tech stocks, the SSE, US home prices, S&P500, copper, tin, uranium, bonds, corn, crude oil, sugar, 1960's Muscle Cars, first growth bordeaux wines, rice, Cohiba cigars, the Euro, Moscow office space, cocoa, Hong Kong homes on the Peak, firearms, Willem de Kooning paintings, Tiger Woods, the dollar.
Does every dog still have its day?
The Coinage Act of 1792 FIXED the Silver/Gold at 15:1...I've heard that is the same ratio the metals are found in the earth......Natural law if you ask me.....
Do the math w/ 1k gold....Hi-O Silver!!
Johnny Dangereaux...from the CBOT Floor
GUNS are the best TEOTWAWKI hedge.
Go to your local Walmart and load up on 'em.
I read that here all the time. I am mystified as to exactly how having a gun at the ready will hedge anything of importance.
When real shooting starts -- whoever is doing it -- the game is simply over. There is nothing present in the current game that will emerge in the next game intact once real shooting starts.
Oh wait, the people with the most guns will dominate the landscape. There's a thought. But I think the Mafia, the Mexican drug cartels and the shattered remains of the US military will have that landscape sewn up here in lovely N America. Any of you bit-players who remain will have to choose sides then, and one of the costs of your infeudation will be you get to hand over all your gold holdings to your new master.
I'm trying to imagine an alternative scene of pasty day traders blasting their way into a new day of free-market capitalism where they can trade PM all day for steak, women and aged single-malt... and failing.
cougar
Save that last bullet. You'll need it. These zombie villagers are of the savage torturous, supermasochistic sort.
haha
Don't forget the H1N1 flu. Most of the gun toten Republicans are NOT going to get vaccinated out of fear, so disease, not gangs will be taking them out of the picture.
I am registered Independent and there is absolutely know way I am taking any vaccine. They are untested and unsafe. The government has no right saying what I should put in my body.
You remember how Baxter 'accidently' contaminated flu vaccine with bird flu last winter right?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTo3LbhcA75I
I will rely no good nutrition, supplements, oligodynamic silver, arbidol, etc. Vaccines are a modern-day psuedoscience.
You can take the vaccine, but do not think it will protect you from illness-- because it will not. Even seasonal flu vaccine is barely more effective than placebo, and actually increases the rates of hospitalization in children and asthmatics. So do yourself a favor and do some research before you let yourself be injected with materials which you know nothing about.
Informed consent is the cornerstone of morality in medicine.
I am registered Independent and there is absolutely know way I am taking any vaccine. They are untested and unsafe. The government has no right saying what I should put in my body. The government has waived safety testing (many current trials are simply for dosing) , and HHS have given vaccine manufacturs blanket immunity from lawsuits due to a 'public health emergency'. Caregivers and vaccination sites have also been given immunity. So if it makes you sick you will have no legal recourse.
You remember how Baxter 'accidently' contaminated flu vaccine with bird flu last winter right?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTo3LbhcA75I
Myself, I will rely on good nutrition, supplements, oligodynamic silver, arbidol, etc. Vaccines are a modern-day psuedoscience.
You can take the vaccine, but do not think it will protect you from illness -- because it will not. Even seasonal flu vaccine is barely more effective than placebo (6% reduced incidence of illness), and taking a seasonal flu shot actually increases the rates of hospitalization in children and asthmatics. So do yourself a favor and do some research before you let yourself be injected with materials with which you are unfamiliar.
Remember , informed consent is the cornerstone of morality in medicine.
Keep thinking about it. You might need to hedge your ass at some point, and it won't be from Mexicans, Mafioso or pasty day traders. Think garden variety criminals who just may get emboldened. Should FRNs struggle to buy food, you think drugs are going to get cheaper? You should read a little about Argentina before you pop off, you know, just in case this Japan II thing runs off the rails. Not saying it will happen here, but home "security" is a definite hedge down there.
Too generalized. Y'all been watching too much Hollywierd. Think outside the box, and imagine more possibilities than the Al Capone guns blazing in the streets scenarios.
Of course when you got the guns, you can steal other people's stuff.
Too late, the guys with the briefcases already got it.
The reason the Latin Drug cartels are so powerful are due to the Drug War and the large US consumption base. When the system collapses the drug war will end and drug laws will be loosely enforced, effectively crippling the need for "drug protection" and drug cartels.
TEOTWAWKI means?
"It's TEOTWAWKI... I feel fine" - REM
The End Of The World As We Know It. This can only be spoken aloud with the rumble of tympani drums in hallways that echo ominously.
The risk-on risk-off trade has been busted by
Gold. This is amazing. Equities do not rebound,
commodities do not rally, but gold celebrates
a kind of usain bolt run, on huge volumes, this
is really amazing, this can only be China.
It does not make sense -- either this is more speculative dynamics or gold smells war
It's pretty much everybody who sees the fiat money system for the fraud it is.
Wall Street Pro must be rolling around on the floor of garage in all of the lead and heavy metals dust while giggling hysterically today with his little silver bars...
I'm waiting for the after the party video...
That's about as apt an apocalyptic scene as any I've been privy to.
Thank you for sharing. I think.
cougar
It market is waiting for confirmation on next safe heaven before collapsing. Is the game over for Dollar.
Yup..the dollar is falling as usual
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I guess Asia is getting a little insecure and wants to hold the physical Gold to make sure it actually exist!
Perhaps they will wake up and want their physical cash backed by treasury securities. Sorry that one doesn't exist either!
The world powers are getting tired of being shafted by US sponsored bezzle, games over.
buy Gold heavy
http://globaleconomicanalysis.blogspot.com/2009/09/too-big-to-survive.html
GS and JPM (two of many), retails are of the Federal Reserve aide by unlimited PPT financing can short physical gold contracts of course. But when it comes time for actual physical delivery and there is none in COMEX... that is when the game is over and gold goes skyward. Now that China has woken up to gold in a very big way, there is a new consumer that is three times that of the USA and the Chinese are much more aware of gold to boot.
This is a valid point. It is true that the COMEX gold reserves cannot match the futures contracts out there. There have been contracts created out of thin air just to let some big players go short.
However, while Hong Kong may demand London to deliver the physical gold, they are most likely not going to do that for COMEX. The reason is that China does not hold as much UK debt as it does US debt. They can afford to let the pound fall but they have yet to reduce their dollar exposure enough for their comfort IMO.
80X
http://www.cnbc.com/id/32638139/
Hennecke stressed that investors should go for physical forms of gold and other precious metals rather than "paper gold investment scheme where there isn't full backing, where the metal might be leased out or used for derivatives. That's crucial because there is 80 times more paper gold in the market than actual physical metal in existence in the planet."
BTW, the pound falling helps China, because it boosts the dxy, and as you pointed out China holds few pounds (maybe this is the motivation).
Agreed. Any commodity play at this point absolutely has to be physical.
http://thefundamentalview.blogspot.com/2009/09/china-and-buzz-of-pending...
And I'll take my gold too please!
Is someone leaving the high stakes table at the casino?
Thanks -- very useful article.
Jim Sinclair is also hammering on about the Chinese threat to default on commodity derivatives.
I'm seeing a possible double bottom for the dollar. This is what's going to make or break everyones thesis. Does the dollar tank, or does the dollar rise due to risk aversion?
Btw...if the dollar does tank, does that mean that Oil would sky rocket? I don't see oil acting in the same way...which I think it should (since it actually has utitlity)
Maybe someone needs a stronger dollar and must coerce it through a gold run? The market activities of these 20 months raises the suspicious paranoid. Always is the fear that anything that appears to be an organic free market movement is again just some backroom players in a deep nesting of gameplay, ready to thieve in a fast move what took drip n drabs of time to build up.
Circa 1980: Across America shysters open temporary stores in the shopping malls urging citizens to rush down and sell their gold and silver.
2008-2009: Companies send citizens envelopes to deposit their gold in and send off in mail for cash. Sell your gold ads are played during the Super Bowl.
We all know how this is going to end...
Turns out that Jim Willie - for all the mocking he received from that arrogant prick wannabe-politician Denninger - was right about a substantial breakout in Gold somewhere around the end of August. Gold rocketing past $1000 should shut guys like Denninger up for good.
Who is Denninger? I guess he does not like gold.
That would be Karl Denninger, well known for a no holds barred approach to market commentary -- linky http://market-ticker.denninger.net
He's an all around stand-up guy who's been a vocal opponent of the banksters for years.
Why do so many gold bugs get nasty whenever someone says gold might fall against the dollar for a while? Prechter is often singled out, but these guys forget that he has always been a gold bug -- he calls gold "real money or "honest money" and presents the dow:gold chart often.
Most of these nasty guys are just newbies who think because the paper dollar was created by and for banksters and will ultimately go the way of the Weimar deutchemark, it is crazy to say that it could EVER appreciate against gold.
If they were better traders they would keep their minds open and try to understand what the minority is saying, especially since it is so small. Gold bugs are a big crowd these days, and that is always dangerous.
Agreed. Denninger is a class act, perhaps an irritating and arrogant one but he's a great source of information on corruption and consistently right time and again.
So he doesn't like gold. I disagree with him but so what?
This isn't CNBC -- there's space for alternative views and disagreements here without lashing out.
Did you see his afternoon missive?
http://financialsense.com/fsu/editorials/willie/2009/0903.html
He hits Denniger with an upper cut as well. FTW.
KD responds by penning an embarrassing screed calling Willie a Truther, for using the word "treated" when mentioning JP Morgan's beneficial loss of hard copy documentation in WTC3. That he gets in such high dudgeon over his own strawman argument only shows how thin his skin is IMO.
I like both Jim Willie and Denninger. They look at the world in dramatically different ways but they are both very capable at what they do.
Jim has been pretty spot on lately. I just wonder is this rally for real, or is someone washing out the spec longs?
PM, right now pretty much everybody is suspicious of this rally. The consensus view seems to be that this is another bull trap, which makes me think this is the real deal. The bull likes to shake off the maximum number of riders.
When the ancient Chinese triad gang system is a more honourable counterparty, Wall Street must not sleep at night. The Chinese gang (which incidentally just 40 years ago burned down their house, had mass pogroms and incarceration, capricious justice, little industry, and made potmetal in backyard iron foundries while reading Mao's little red and hurrahing the cultural revolution)now is the world's GREAT industrial leader, the holder of the most concentrated capital, with greater sudden wealth creation than ever was. They are selectively reneging on contracts and bringing assets within the gates.
Americaski is slowly losing financial allies and spent away its capital via debt binges on pleasure consumption. Its institutions and financial instruments are in tatters as the world wakes to view the Green wizard in his ragged jammies. Maybe in half a generation, we will have our own cultural revolution and the Chinese will view us with pity and rue the lack of our rule of law.
Oh! They already do.
Tellingly, gold dealers are selling any 1/2 Au gold coin for premiums of 10-12% but are only buying at spot, no premium.
That's never good for price sustainability.
Bingo!
The DX-Y was basically unchanged or UP today. And gold went to the moon. So the weak dollar is not exactly the issue. It may be a deflationary run to cash or currency(gold is money.)
there is something really off:
1) London was busted for phyical delivery and their fractional reserve can't handle the run on the bullion
2) Banks are ready to implode again
3) Bank Holiday
4) China waging WW3 on the US and dollar devaluation by ordering up gold like crazy-and IMF funds.
5) COMEX and LONDONboth are bust and can't return the gold physically
Oh Ben and Timmy-you are in a PICKLE now. Where's the usual slam on gold futures to suppress gold? Can't do that because the Chinese hold treasuries, dollars,IMF and GOLD? Fed is hosed here
Exciting times. I've been waiting for this scenario for years; someone with the required ammo to break the uber-shorts and call bullshit on the entire paper PM scam.
But no way am I ready to call this yet, far, far too early. Plus, I don't actually believe that China is going to try to pull Hunt Bros 2.0
As I said in another post, if they do then they'll be getting a 'friendly' visit from the BIS & IMF kindly instructing them to play nice. Not sure if the other BRICs will back China up if it decides to say "f*** you".
My suspicion is that this is just a temporary surge caused by the inconvenience of having to move physical metal in a fraudulent paper game. Once metals settle into their new homes and the paper croupiers learn the new dialect we'll head back to the way things were.
Perfectly happy to be wrong and see some sweet justice, but not counting chickens yet.
http://ftalphaville.ft.com/blog/2009/09/03/69811/climbing-a-wall-of-worr...
http://ftalphaville.ft.com/blog/2009/09/03/69821/the-sdr-effect-on-the-d...
http://ftalphaville.ft.com/blog/2009/09/03/69831/looking-at-precious-met...
So you think Russia and China are going head to head against the Crimex, and the ETFs with their bankster custodians? This could get interesting. Someone's going to get burned.
Scenario 1: COMEX gets Physical Delivery Run and goes Force Majore. All hell breaks lose and all commodities race to the moon because you know people are doing to same thing in other sectors. Going broke in gold is a bit different than the zinc market when it was busted for force majore. Juerg Keiner has been bitching for years about this
Scenario 2: As stated above the shuffling occurs and gold's parabolic rise gets smoked by the USD strength in a delevering event
Scenario3: Somehow Ben and Tim kowtow enough to get China to stabilize gold with the uunderstanding that the USD will not be trashed by dumping to manipulate the stock market. Also, agreement to halt excessive bond floats and quantitative easing.
The US deserves all this. They are using the dollar's senior currency status to a onetime only advantage. Shortsighted and stupid.
Yes, something is going on here, but while I am no doubt wrong, I have a different take on it.
Here we have people having orgasms because gold has made a 4% move. RT should post a chart of gold vs. AIG, FNM, FRE, C, LEH-on-the-pinks, etc. to let us better understand what the term ROCKETING means. Apparently it is highly relative. When gold doubles in a month, much less has an 800% move, it might be time to get excited.
I have three SD boxes, all offshore, that I filled with Maples and US $50 coins and assorted bars back in the late 1990's. I'm selling them now, as this explosion of enthusiasm for the kind of move BAC makes in a typical day from 0930 to 0940 smells like a top.
Yes, I know, I'll miss the meteoric rise to $50,000 an ounce. So be it.