Golden Flash Crash

Tyler Durden's picture

Gold just plunged by $20 for no reason whatsoever. So let's take a guess at what happened here: some ETF caused the NYSE to hit LRP thresholds, causing numerous stocks to "break", and the result is an immediate algorithmic margin call satisfied by gold selling? Or not, at his point does anyone really care. Point is obvious: scare all holders into submission. Can the royal "they" just confiscate everything not in paper form (and thus out of Fed control) already and end this charade?

Update: and gold is now back to pre crash levels. Thank you Johnny 5.

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AldoHux_IV's picture

Skynet is fully online (yet to be self-aware, but give it a couple of trading weeks) and is targeting any and all small specs looking to turn marginal paper gains in gold/silver into physical thus keeping the masses under the full dependence of indentured servitude (FRNs).

Once it becomes self-aware look for prices to explode to the upside as it will most certainly target the Centrally Planned Authoritarian Regime (CPAR) as its main threat-- goodbye fiat.

topcallingtroll's picture

It has an innocent name....the billion price project.

And its earlier stealth's price project 10 years earlier.

Connected to hft and information only available to the connected it is unbeatable.

cossack55's picture

Just freakin dyin to hear CPL's take on this.  His Star/stuxnet call was for Wednesday. Trial run?

Dapper Dan's picture

The hits keep coming!


NEW YORK – Sony Corp. said Monday that hackers may have taken personal information from an additional 24.6 million user accounts after a review of the recent PlayStation Network breach found an intrusion at a division that makes multiplayer online games.

Thomas's picture

We are forced to participate in a very nutty game.

Cleanclog's picture

Yep! That's a good exponential chart.

Another would be to show how the debt ceiling rises.  Given that they'll need to raise by $2 Trillion just to get through the 2012 election, AND, even with Ryan's "draconian described" plan they would still need $6 Trillion in additional borrowing room in the next 10 years . . .

Yet somehow, they say that the deficit will be reduced from 10% of GDP to 2.4% in 2015.  How the hell?  Oh, because the US economy is going to grow at a 15% rate?  Really?  Either taxes are going up to 60%, the dollar will be devalued by another 50%, or they are just lying again.  Oh yeah, that.  Guess ya oughta buy gold.

EscapeKey's picture

The debt is one thing - far scarier is what will happen to interest payments on treasury issues, once these ridiculously low bond yields start to rise.

Then the deficit will rise exponentially.

Cleanclog's picture

Absolutely, which also makes this debt ceiling thing crazy.

rocker's picture

Not just the government's deficit.  Who's holding arm mortgages? Ouch.  Credit card debt. Ouch.  

How many people are borrowing thinking this will last forever. Most will be either broke or broken.  But then........

......We are Japan on Steroids. Could that be Bernanke's Secret Plan. Zombie Banks, Zimbabwe Dollars...............

..........But then.....A higher stock market to please Wall Street's Elite.....That's the Secret Sauce...Helicopters.

SilverDreams's picture

They will actuall need to raise the debt ceiling by about $3.4 T to make it to Nov will be interesting to see what a 20%+ raise will do to the markets.

sullymandias's picture

If they just priced the debt ceiling in gold, they wouldn't have this problem any more!

rich_wicks's picture

<img src="" width=800 />

That's the national debt on a log scale.  The red line is if the national debt grew at 9.4% a year for the last 41 years, which (on average) it has.  If the red line holds, we'll be around 33 trillion dollars of debt by 2020.

Government's only function today is to lie.  These budget forecasts are ludicrous, and anybody can see if if they just take a look at historical data.

I doubt we'll reach 33 trillion by 2020, I think we'll hit insolvency.

Smiley's picture

Fat fingers bitchez!

Al89's picture

Hold tight. Going to be one hell of a ride. 

ZeroPower's picture

Hitting the stops until $1520s and if youd take a look at the T&S a nice little 100lot goes through on the GC at $1518.

Peanuts, really.

jelly roll's picture

I can only imagine how pissed the owner of that 100 lot sell stop must be!  Out of his postion and out cool 180k as the crow trades right now.

sabra1's picture


Intel Chief: They Killed “Make Believe Obama”


Kurt Nimmo
May 2, 2011

Former Pakistani intelligence chief Hamid Gul went on the Alex Jones Show today and characterized the unverified assassination of Osama bin Laden as symbolic theater.


Gul said the event was a “make believe drama” designed to be used for Obama’s upcoming re-election campaign.

The supposed hit as described by the government and the corporate media is the “stuff of folk lore, for legend-making and the ballad,” Gull explained.

Hamid Gull went on to cite the late Prime Minister of Pakistan, Benazir Bhutto, who told David Frost in late 2007 that Osama bin Laden was murdered by Ahmed Omar Saeed Sheikh, who is also one of the men convicted of kidnapping and killing journalist Daniel Pearl.

The BBC had excised Bhutto’s comment but was forced to reinsert the footage in its version after the unedited version appeared on YouTube.

She was assassinated on December 27, 2007, after a political rally in Rawalpindi, Pakistan.



Bringin It's picture

Does anyone besides me remember the Jessica Lynch "Rescue"?


Full disclosure - Jessica Lynch seems pretty admirable to me.  The media circus/melodrama the US preception authorities tried to enshrine her in is another story.

Mongo's picture

Remember... it's not gold that crashes... it's YOU

molecool's picture

Since I have been previously junked my response to Tyler here:

Point taken and fully agree - I have posted on this very subject on numberous occasions. Examples abound regarding the dollar/pm relationship, the gold/silver ratio as of late, etc. - so no argument there.

Nevertheless - IMNSHO precious metals longs are going to have to endure a correction - the boat is too one sided at this point. There comes the point when the last buyer has bought. Not that I see a glorious future for the U.S. Dollar - mind you. I just don't want to be long PMs right now and here when the g/s ratio is at historic lows and silver has been pointing up vertically.

FWIW - the sheer fact that I was junked for daring to point out a technical reality is rather disappointing. This alone supports my view that emotions are reigning high and that PM longs will get burned.

Tyler Durden's picture

Actually there was a database issue and all comments were lost (we had to repost the article). And yes, since metals trade in a paper world, there will absolutely be a correction, even as central banks continue to turbo print. For all those who believe, correctly, that fiat is doomed, any intermediate variations should be more than irrelevant. OTOH any "traders" should have booked profits last week when our friends at FMX advised to do so.

mynhair's picture

Hmmm, Bloomturd was down at the same time.......

Hephasteus's picture

Unfortunately the USD squeel line has been reverse engineered.

molecool's picture

Thanks Tyler - appreciate the response. I'm not here to slam gold/silver - in particular not long term. I may be guilty of pointing out the obvious. But I hope it's clear to everyone that the possibility of volatile moves increases when sentiment reaches extreme levels like this (irrespective of what happened just now). IF PMs drop like a rock I would be among the first to take profits quickly.

Everyone else - not sure why I got junked so quickly. Again - when a 'position' has so much emotion attached to it it's usually time to get out. Food for thought.

fxrxexexdxoxmx's picture

I junked you simply because you seem concerned about getting junked.

Stop mentioning the junking and your comments may actually be read before the junk.

Bicycle Repairman's picture

You are too thin-skinned.  This is fight club.  I junked you, too.

"There comes the point when the last buyer has bought"

When the last buyer shows up, we'll let you know.

RockyRacoon's picture

That should be the guy who flips off the lights on his way out of Washington DC.

All this talk about corrections and stuff is humorous.   Fiat money is not to be made from PMs.  Savings/wealth are to be retained from holding PMs.   Anyone seeing it any other way will, of course, subject to the vagaries of the so-called market.   The reason I hold PMs is so I sleep well at night.   Worrying about a 10% or even 20% correction is not in the cards.   My concern is burglars and thieves and corrupt governments with guns.

One must decide -- and soon -- whether one is making more fiat dollars by trading PMs; or, is the object the preservation of buying power and carrying the wealth over the hollowness of a depression.   If one has to use his PMs to survive during very hard times then he has planned badly.


rocker's picture

That's why we, (in the know), own PMs. It is about keeping some real money. Some real cash is not bad either. Bank Holiday's can be hell for sure.

Zero Hedge Rules. What a Class Act for this organization, Tyler is not here to hurt anybody. One can learn much from ZH.

Tyler's comment is on the money, "For all those who believe, correctly, that fiat is doomed, any intermediate variations should be more than irrelevant."   Way to go Tyler.   Hold physical and sleep well all.

falak pema's picture

"For all those who believe, correctly, that fiat is doomed,..."

This statement is at the core of the battle going on. The Oligarchs do NOT want this to be mainstream USA and world view. As it implies mega-paradgim change and painful, scary and unpredictable world wide asset deflation. Even the Oligarchs don't know what this means in the ensuing real economy tug and pull (as today in the similar monetary tug and pull occurring), and don't want to go to this place too fast. Banks only know how to do ONE thing when 'shit hits the fan' in the real world : spread out the pain over many years and hope future economic growth will pay back accumulated bad debt. As we all know, with three of the main economic zones now hit by stagflation (USA/EU/JAP), the only one to take the world out of this quagmire is China/Brics by a New Marshall plan deal based on their economic growth and accumulated monetary credit base, forever increasing every month.

That is not part of the current Oligarchy's game plan,they aren't 'done' yet, and ready to throw in the towel (if they'll ever be)....So the official line stays..."we kick the can and say our fiats are the ONLY way"...

Your affirmation is NOT current paradigm; it is even heresy ...So I'm not surprised that we'll see these flash storms all through the interim period of next five years while the Oligarchy fights tooth and nail...fasten seat belts! 

Hearst's picture

"the boat is too one sided at this point"


Ha ok.  So Silver bullion representing what 0.1% of global assets and Gold maybe 1% is to one sided?  Come on...who are you fooling?

molecool's picture

I am not trying to fool anyone. I am merely pointing out a technical pattern - I am not a fundamental trader. Again, why is everyone so emotional about this? I am merely attempting to engage in constructive dialog - maybe I am in the wrong place for that.

traderjoe's picture

1. You seem to be a bit sensitive. That usually earns a junk.
2. You accused TD of censorship. That usually earns a junk.
3. I would guess most PM holders are long-term holders here. Getting in and out might cost 10-20% with bid-ask, taxes (if you care), etc. It's tough to try to market time physical.
4. There's been lots of corrections along the way.
5. If you own physical as a hedge, why would you want to get rid of the hedge for a few days, weeks? What happens if you can't get back in?

Kina's picture

You're lucky, I dream about getting junked.


Getting junked means you have been read and understood, even if they didn't like it.

RockyRacoon's picture

Seems to be on the way to the wet variety...

DollarMenu's picture

"Getting junked means you have been read and understood..."

I would not be too sure of that.

For some, the mere appearance of their avatar elicits an immediate 'junk' regardless of the comment,

which probably goes unread.

Harbourcity's picture

When someone is overly concerned that his girlfriend is going to fool around it usually means he's insecure or untrustworthy.


You are overly concerned about people being emotional.  Maybe you are the one who is emotional.  Did you have an opportunity to buy PM's and failed to do so?  Are you now upset at yourself for failing to get on PM's?  Now you are looking for a reason for them to fail and to recover some sense of pride?


Don't make the same mistake twice.  Come on it, the water is fine.

Kickaha's picture


All technical traders get trashed here, so don't feel you are being singled out somehow.

The PM holders think it is nuts to view silver as just another commodity.  It is a substitute for fiat currency.  As such, it's value is supposed to exhibit exponential growth as the world abandons the dollar as a medium of exchange.  What you see as a parabolic rise indicative of a pending market top and crash, they see as reaffirmation of the end of fiat, and they fully expect even a steeper slope to that price rise as the dollar crashes and the world turns to precious metals as the only true medium of exchange.

So, when you defend yourself by pointing out that the technicals indicate it is time to sell, you might as well be saying that your car is blue, so it is time to sell silver, and you are therefore treated like an idiot.

I am not so absolute in how I see the current market for silver.  It is undoubtedly composed of both technical speculators and "buy and hold" theorists who have foreseen the impending demise of all fiat currencies and who find any discussion of technical indicators to be an insulting waste of time.  The techies like yourself will trade as your charts dictate, and the technical subset of the market participants will cause volatility in both directions, superimposed over an overall ascending price trend.  Hence, the conclusion here to BTFD!!, because the dollar is being printed into oblivion.

Hence the further advice to hold the PM, and not some paper derivative, since when the SHTF, your paper will be worthless.  That is a second reason that technical traders are treated like imbeciles, since you deal in derivative paper.

If you want to defend yourself, challenge the underlying assumptions of the theorists about hyperinflation and the world turning to gold and silver as the new currency.  If you continue to insist that your technical indicators should be useful as predictors of future price moves in the silver market, you will, at best, be ignored.

As for the emotionalism, perhaps it is warranted given the idea that we are staring into TEOTWAWKI, and nobody in charge seems to give a shit right now, except to score the most luxurious lifeboats for themselves.


akak's picture

Excellent post Kickaha!  Well said in every particular.

What does it all mean's picture

I guess, beyond storage, they said the same thing about crude back in 2008...

But it is a very good summary of where we stand at the moment... only time will tell who is right.

akak's picture

Actually, I don't recall ever hearing anyone make the same store-of-value claims, or even vaguely analogous claims, for oil as they have and do for the precious metals.  Petroleum and precious metals could NOT be more dissimilar, not the least reason being that oil, unlike the metals, only has value by its very consumption and destruction.  Oil is also neither possible, in any practical sense, for the average person to store, nor is it compact in bulk relative to value, nor stable.  In all measures, petroleum could not be LESS of a practical store of value.

Bastiat's picture

Well said.  The other important driver for silver is that it is somewhere between a rigged paper market to a true market determined by physical price discovery.  No one knows just where in that transition it is--but it is clearly not resolved.  Technical analysis and sentiment based contrarian momentum analysis will not be consistently reliable that kind of transition.

Is the end somewhere south of 10 GSR as Sprott predicts?  Or 16 GSR?  In the latter case we are slighty more than halfway there -- and that is ignoring the USDX and pricing only in terms of gold.