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M2 Surges By Biggest Weekly Amount Since 2008 As It Hits Fresh All Time Record

Tyler Durden's picture





 

Desperation kitchen sink anyone? The M2, which up until now was merely diagonal, is about to go parabolic. In the week ending 1/17/2011, Seasonally Adjusted M2 surged by $46.6 billion, the biggest weekly increase in the broadest tracked monetary aggregate (ever since the cost-cutting associated with discontinuing the M3) since 2008. One look at the chart below indicates precisely what is fueling the endless market ramp. Furthermore, for those who realize there is a 93% correlation between M2 and gold, we would certainly recommend putting on the M2/Gold convergence trade on.

 


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Thu, 01/27/2011 - 18:44 | Link to Comment mynhair
mynhair's picture

Just got back from the mailbox - no M2 there.  Cit!

Thu, 01/27/2011 - 19:49 | Link to Comment willien1derland
willien1derland's picture

Nice +1 = The Bernank needs to show mynhair da LOVE

Thu, 01/27/2011 - 21:19 | Link to Comment Malcolm Tucker
Malcolm Tucker's picture

So Egypt has shutdown the internet in advance of tomorrow's mega protest and now:

US Senate to reintroduce Internet "Kill Switch" bill...Somebody's taking notes....

http://fedupmontrealer.blogspot.com/2011/01/us-senate-to-reintroduce-internet-kill.html

 

Thu, 01/27/2011 - 21:34 | Link to Comment Bastiat
Bastiat's picture

Totally coincidental -- either that or it's the fault of jews or boomers or both.  Maybe jewish boomers?   ;-)

Thu, 01/27/2011 - 21:44 | Link to Comment Malcolm Tucker
Malcolm Tucker's picture

Now hacker group Anonymous joins the fray and launches "Operation Egypt"

Here's the video of their announcement:

http://fedupmontrealer.blogspot.com/2011/01/anonymous-hacker-group-joins-egypt.html

 

Fri, 01/28/2011 - 01:14 | Link to Comment macholatte
macholatte's picture

Privacy Invasion

photos reveal location when posted on the internet

http://abclocal.go.com/wabc/video?id=7621105

Thu, 01/27/2011 - 22:10 | Link to Comment Caviar Emptor
Caviar Emptor's picture

El Baradei is the shill pawn of US Dept of State posing as a concerned Egyptian. He's there to try and convince moderate groups and spread the gravy around to get a pro-US government elected

Fri, 01/28/2011 - 00:55 | Link to Comment Turd Ferguson
Turd Ferguson's picture

And debka now reports that The Muslim Brotherhood is joining the "rebellion" tomorrow.

http://www.debka.com/article/20598/

This is about to get really interesting, really fast.

Fri, 01/28/2011 - 01:03 | Link to Comment Element
Element's picture

Kill Bill?

Fri, 01/28/2011 - 02:02 | Link to Comment TruthInSunshine
TruthInSunshine's picture

What do we ZHers do if they nuke the iNterWeBZ?

Do we communicate by carrier pigeon, or Native American smoke signals?

Fri, 01/28/2011 - 02:49 | Link to Comment Dave
Dave's picture

Might consider a single sideband radio stashed in the closet. Just in case.

Fri, 01/28/2011 - 03:36 | Link to Comment Eternal Student
Eternal Student's picture

So much business would be shut down, including the supply systems, that getting your internet fix will be the least of your problems.

At the same time, it would give rise to hackers building new communication technologies, or re-using old ones, over whatever communication medium is still available.

Fri, 01/28/2011 - 07:42 | Link to Comment Zero Govt
Zero Govt's picture

  • No web, no money, no comms, no GS emailer selling AAA-rated fraud, no brainer  

Watch Egypt, should redefine the record books for dumb unforeseen consequences for Govt intervention 

Fri, 01/28/2011 - 11:44 | Link to Comment Kobe Beef
Kobe Beef's picture

I had some M3 in a CD, but it evaporated somehow.

Fri, 01/28/2011 - 07:47 | Link to Comment Zero Debt
Zero Debt's picture

It's because they sucked it back in overnight. Just takes 15 min according to the Chairman.

Thu, 01/27/2011 - 18:46 | Link to Comment gwar5
gwar5's picture

Gooold Bitchez....!

It's on like Donkey Kong!

Thu, 01/27/2011 - 18:46 | Link to Comment silvertrain
silvertrain's picture

 Tax refund direct deposits bitches!!

Thu, 01/27/2011 - 19:39 | Link to Comment Math Man
Math Man's picture

Exactly.  Notice the corresponding spike last year at this time.

 

Nothing to do here.

Thu, 01/27/2011 - 20:28 | Link to Comment Mike2756
Mike2756's picture

Yeah, quite a few folks at work are complaining that they got back less than last year. Cc's to be paid down this Q?

Thu, 01/27/2011 - 23:41 | Link to Comment ebworthen
ebworthen's picture

Binary database fiat dollars BITCHEZ!

As valuable as that hot babe you are chatting up who is gay.

(gold)

Thu, 01/27/2011 - 18:49 | Link to Comment mynhair
mynhair's picture

All you that picked up NEM at 55.05, junk away!

Where's that crazy potato?

Thu, 01/27/2011 - 19:08 | Link to Comment cossack55
cossack55's picture

Will M2 affect my SNAP card?  How about my EUC checks.  Been without work for over 2 years now.  Plenty of jobs around, I just want other peoples money.  It smells like......victory.

Thu, 01/27/2011 - 22:49 | Link to Comment jeff montanye
jeff montanye's picture

plenty?  that seems a stretch.

Thu, 01/27/2011 - 18:51 | Link to Comment imsaul0968
imsaul0968's picture

So we have M2 going parabolic and Gold going the other way. Hmmm the faster something in a bull market goes down, the more it tells me we are close to capitulation and a wicked catch-up rally is a coming. I love me some good ole fashion bearishness. Where did all the gold bulls go?? I think those guys are called the weak holders. Buy buy buy

Thu, 01/27/2011 - 18:54 | Link to Comment mynhair
mynhair's picture

Gold bull present!  Well, at least for the miners.  Capitulation is not allowed - just ask the JP Morgue.

Thu, 01/27/2011 - 23:30 | Link to Comment william the bastard
william the bastard's picture

I'll sit it out. Someone's got to remember the Alamo.

Thu, 01/27/2011 - 19:13 | Link to Comment AUD
AUD's picture

I think those guys are called the weak holders

 

Fools & their money are soon parted? Actually a 'convergence' trade may be a very good bet here. Gold futures spreads are showing some very deja vuish patterns.

 

Fri, 01/28/2011 - 00:41 | Link to Comment stewie
stewie's picture

Care to extrapolate?

Thu, 01/27/2011 - 20:07 | Link to Comment e_goldstein
e_goldstein's picture

Where did all the gold bulls go?? 

to the coin store, of course.

Thu, 01/27/2011 - 22:41 | Link to Comment bigkahuna
bigkahuna's picture

turning some more paper into some real currency -- by the way, did they take the nickel out of the nickel yet?

Fri, 01/28/2011 - 00:16 | Link to Comment rocker
rocker's picture

FYI, Just the facts. A U.S. nickel is only 25% nickel, the other 75% is copper. But your point is very valid. It's melt value is almost .07 each.  Copper pennies are almost worth .03 each. Copper pennies are from 1981 and back. In 1982 they actually made both copper and the copper coated zinc variety we have today. Nickels also had a wartime variety which was made from 1942 to 1945. These had 35% Silver, 9% Manganese, and 56% copper. I'll stop here or it might be TMI.

Fri, 01/28/2011 - 10:26 | Link to Comment TruthInSunshine
TruthInSunshine's picture

1942-1945, wartime variety, 35% silver nickels FTMFW!!!

Thu, 01/27/2011 - 18:53 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

long as M3 doesn't get revealed we got every tin pot dictator in the world with a bank account full of dollars.

You would be amazed by how many sell outs there are.

Thu, 01/27/2011 - 18:53 | Link to Comment flaunt
flaunt's picture

This would worry me if I didn't know for an absolute fact that there is no inflation.  That's what Uncle Ben told me and I'm sticking to his story.

Thu, 01/27/2011 - 18:54 | Link to Comment Misean
Misean's picture

Benny Bernutty can sop that up in  like 15 minutes! He just has to sell the PD bonds he's been buying for a huge premium and all that very tasty Mark To Model MBS he's got stuffed in the vault...Everyones gonna buy that crap when the Feral needs to sell it right?!?! Right??!??!??! Anyone??????

Thu, 01/27/2011 - 22:12 | Link to Comment unununium
unununium's picture

Right and 15 minutes is by Ben's definition an "extended period."

Thu, 01/27/2011 - 18:55 | Link to Comment Rainman
Rainman's picture

That's sure a lot of fiat sloshing around....enough to cover all the bets on the crap table.

Thu, 01/27/2011 - 18:56 | Link to Comment Cheesy Bastard
Thu, 01/27/2011 - 22:31 | Link to Comment StychoKiller
StychoKiller's picture

When ya wanna reach out and touch someone... :>D

Thu, 01/27/2011 - 18:56 | Link to Comment mynhair
mynhair's picture

Everything is bullish.

The pig Market never goes down.

BTFD YFI.

Thu, 01/27/2011 - 18:57 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Well, isn't that the point, print money to expand the money supply?  Let's get Ben a "Mission Accomplished" sign.

Thu, 01/27/2011 - 18:58 | Link to Comment Misean
Misean's picture

Let's get him a "Heckuva job, Benny." T-shirt as well.

Thu, 01/27/2011 - 18:58 | Link to Comment MaxVernon
MaxVernon's picture

I know parabolic is a word, but it surely doesn't need to be splashed around in every damn article, does it?  Really?

Thu, 01/27/2011 - 18:59 | Link to Comment mynhair
mynhair's picture

Ok, how about 'hyberbolic'?

Thu, 01/27/2011 - 19:02 | Link to Comment MaxVernon
MaxVernon's picture

even fucking better!

Thu, 01/27/2011 - 19:06 | Link to Comment MaxVernon
MaxVernon's picture

One week up does not a parabola make.  Now if it does the same next week, and week after that, and the week after that, then you're talking para-fucking-bolic; until that happens it's just para-bollocks.

Thu, 01/27/2011 - 19:11 | Link to Comment Cheesy Bastard
Cheesy Bastard's picture
  1. Money supply growth has gone parabolic. It took us from 1620 until 1974 to create the first $1 trillion of US money stock. Every road, factory, bridge, school, factory, and house built, every unit of economic transaction that ever took place over those first 350 years required the creation of $1 trillion in money stock. But it only took 10 months to create the most recent $1 trillion and I don't recall seeing an entire continent's worth of factories, schools or bridges built during that time.

  2. http://www.marketoracle.co.uk/Article258.html

Thu, 01/27/2011 - 19:17 | Link to Comment faustian bargain
faustian bargain's picture

Even just from 1959 to 2006, it looks approximately parabolic:

http://www.economagic.com/em-cgi/charter.exe/fedstl/m3ns+1959+2011+0+1+1...

Fri, 01/28/2011 - 03:23 | Link to Comment OldPhart
OldPhart's picture

Setting the chart to start at 1995 made my hemorrhoids flare up.

Thu, 01/27/2011 - 19:36 | Link to Comment the rookie cynic
the rookie cynic's picture

Yes. No new infrastructure on which to build a future for our kids. No new nothin'. Just a bunch of empty Mc-Mansions and bankers in Gulfstreams.

Rampant acceleration of M2 and flat to falling BDI (90% off the 2008 high practically) means we got deflation on the one hand and crazy ass money printing on the other. I'm not worried though. The Fed has this all modeled to perfection. They know exactly what's gonna happen. Right? (My guess is they'll use the "no one could have seen this comin' excuse again.)

Maybe that guy from Casenove was right, "I think not owning gold is a form of insanity, it may even show unhealthy masochistic tendencies, which might need medical attention." Better have some food, fuel and water stored too. http://therookiecynic.wordpress.com/

Thu, 01/27/2011 - 20:05 | Link to Comment benb
benb's picture

‘…I don't recall seeing an entire continent's worth of factories, schools or bridges built during that time.”

Look’in in the wrong place. It was added over in China. Minus the skim of course.

Fri, 01/28/2011 - 01:18 | Link to Comment stewie
stewie's picture

Bingo

Fri, 01/28/2011 - 07:29 | Link to Comment The Alarmist
The Alarmist's picture

No, but it does make for one more observation in an asymptotic series, with value being the independent variable and money supply being the dependent variable. The asymptote, if you do not recall, approaches infinity, which is where the money supply when related to true value in the system is going over time.

Thu, 01/27/2011 - 19:43 | Link to Comment mynhair
mynhair's picture

para-bollocks, lmao!

Thu, 01/27/2011 - 19:03 | Link to Comment lunaticfringe
lunaticfringe's picture

I'm in with "diabolic"

Thu, 01/27/2011 - 23:06 | Link to Comment savagegoose
savagegoose's picture

how about y=x*(1.05)

Thu, 01/27/2011 - 19:14 | Link to Comment whatz that smell
whatz that smell's picture

how about "insane". insane is a word but i like it.

diabolic is cool too.

..."the market went diabolic today on news robotTraders mom was seeking new lovers"...

Thu, 01/27/2011 - 21:54 | Link to Comment ThirdCoastSurfer
ThirdCoastSurfer's picture

Any votes for direbolic?

Thu, 01/27/2011 - 22:24 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

Well, next week will be superballic

Thu, 01/27/2011 - 22:46 | Link to Comment BigDuke6
BigDuke6's picture

i was just thinking the same thing....

right up there with my all time annoyfav  'wiemar'

i swear if i hear it one more time......

Thu, 01/27/2011 - 23:47 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Annoyfav? Nice construct.

i'll say it....Whymar. ;-)

Because it is. The parallelogramisms are un-avoidably in one's face, ne?

Momentarily, I'll have a lapse of reason.

ORI

http://aadivaahan.wordpress.com/2011/01/27/wisdom-for-warriors-6/

Thu, 01/27/2011 - 18:59 | Link to Comment walküre
walküre's picture

AMZN down 10%

NFLX up 15%

HFTs swapping partners.

Hey, what is the world coming to? There's not even any level of commitment among the HFT brides anymore.

Robottrader should have to say a thing or two about that.

Thu, 01/27/2011 - 19:03 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

AMZN's tech must have got stolen, netflix? I'm not sure, only chumps or console cretins use that service.

Thu, 01/27/2011 - 19:01 | Link to Comment faustian bargain
faustian bargain's picture

Has Shadowstats updated their data with this yet? I wonder what his M3 chart looks like with this latest M2 included.

Thu, 01/27/2011 - 19:04 | Link to Comment Bill Lumbergh
Bill Lumbergh's picture

Has anyone asked B. S. Bernanke what is the objective of this QE...of course the proverbial "wealth effect" but oil at $150/barrel is not going to grow the economy...I fear he is so invested in this nonsense he will not stop until something blows.

Thu, 01/27/2011 - 19:17 | Link to Comment AUD
AUD's picture

Has any banker ever stopped issuing promissary notes when others are clamoring for them?

Thu, 01/27/2011 - 20:17 | Link to Comment Tyler Durden
Tyler Durden's picture

The most recent version of quarterly the Shadow Liabilities, which is far more "aggregating" than M3, showed that per the Z1 there was an upward inflection point for Q3 data for the first time since Lehman. Safe to assume it is continuing.

Deflationists Take Note: Bernanke Succeeds In Offsetting Shadow Banking Collapse

Thu, 01/27/2011 - 20:31 | Link to Comment Rainman
Rainman's picture

Thanx for the remind. Benny and the Banks looked around the card table and quickly identified the sucker. The US Tapayer. That was easy.

Thu, 01/27/2011 - 23:01 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

The hard part is to get the sucker to leave the table peacefully and go home to his wife to explain why they can't afford groceries for a couple of weeks.

Fri, 01/28/2011 - 00:27 | Link to Comment rocker
rocker's picture

Excellent Tyler, how else will they pay off their debt. With cheaper dollars for sure. Not with real money, like Gold or Silver. 

Footnote: Somebody should tell Robert Prechter that he is so 1929 by selling the deflation argument.

Surely we will have hyperinflation first. 

Thu, 01/27/2011 - 19:03 | Link to Comment mynhair
mynhair's picture

Extending that M2 line means we putz around this level for another 4 days, then start the march to 1360.  It's all pukable.

Thu, 01/27/2011 - 19:05 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Did anyone notice that Social Security came out today and said that it will be running a deficit from here on out?  It wasn't supposed to go permanently cash flow negative till late this decade.  "Solvent" till 2037, but that looks iffy.  Late 2020's at best.

Thu, 01/27/2011 - 19:07 | Link to Comment mynhair
mynhair's picture

Noticed, yes.  Care, no.

I want to see jail terms!

Thu, 01/27/2011 - 20:51 | Link to Comment Hedgetard55
Hedgetard55's picture

"Solvent" only if the deficit is made up by Treasury.

 

Greenscam said they could guarantee your SS payment, but not it's purchasing power.

Thu, 01/27/2011 - 22:52 | Link to Comment Prof Gulliver
Prof Gulliver's picture

Solvent Greenspan is people!

Fri, 01/28/2011 - 03:27 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

+1

 

better be solvent than soylent

Fri, 01/28/2011 - 01:13 | Link to Comment FreedomGuy
FreedomGuy's picture

It's because the original projections forecast never ending growth and prosperity, the same thing all government "solvency" projections are based upon. What irritates me is how the conservatives and Republicans are missing these data and the opportunity to use them for real reform. For my whole life I have heard of the cost overruns and impending insolvency. In the 80's we did a massive hike of the SS withholding. It just kicked the can down the road. Now we are playing with stupid ass ideas like raising the retirement age and taking the cap of the taxable pay. All still stupid ideas from economically stupid elected representatives. Frankly, it all has to crash and people have to realize that all this "cash", stimulus and overspending is on their personal credit card the same as identity theft, where someone runs up your credit without your knowledge or permission. 

It needs to and will crash soon, I think. 

Thu, 01/27/2011 - 19:08 | Link to Comment lunaticfringe
lunaticfringe's picture

Geezus, had to run downstairs and snap the TV off. Some baldheaded dink talking about stocks. Does anyone listen to "Craner" anymore. Where is my Nielson thingy with some leveraged M2 attached...

Thu, 01/27/2011 - 19:31 | Link to Comment Ludwig Van
Ludwig Van's picture

 

"Does anyone listen to "Craner" anymore?"

Yeah, the people at the Citigroup Yahoo message board.

 

Thu, 01/27/2011 - 19:15 | Link to Comment jdrose1985
jdrose1985's picture

Is there a corresponding drop in the velocity?

Thu, 01/27/2011 - 21:57 | Link to Comment ssp2s
ssp2s's picture

You can count on it.

Thu, 01/27/2011 - 19:16 | Link to Comment whatz that smell
whatz that smell's picture

do robots suffer the herpes if they co-mingle?

Thu, 01/27/2011 - 19:17 | Link to Comment TooBearish
TooBearish's picture

Wouldn't short M2 against Gold, State Street just put M2 on the hard to borrow list.

Thu, 01/27/2011 - 19:30 | Link to Comment max2205
max2205's picture

So it's working!?! Ben's got that working for him.

Thu, 01/27/2011 - 19:31 | Link to Comment haskelslocal
haskelslocal's picture

Be suspect of charting that closes down time frames to within a small range to add effect.

Thu, 01/27/2011 - 19:48 | Link to Comment Misean
Misean's picture

So I can have more money now?

Thu, 01/27/2011 - 19:54 | Link to Comment willien1derland
willien1derland's picture

Dr. Rand Paul...Dr. Rand Paul, please review the chart & pick up the white courtesy phone stat.....(Perhaps the Bernank fell asleep on his keyboard & invoked the Hyper-Print process - Where is WB7 when you need a picture?!)

Thu, 01/27/2011 - 19:58 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Silver will rise through the Asian and European night, annd trade at $27.20 going into the first NY minute.  Then it will go up, up to $27.60 and finish there.  There are some major waves ahead in the financial market, and do not think davos can part the seas forever.  A wall of worry will hit Spain and Portugal in the form of a Euro crisis, but Muni Madness will soon take the dollar to the ground.  The best of thieves knows to go for the gold.  WHo the burgaler is depends on the mask worn, maybe more.  Either way it goes when the coming months go round, the silver moon and golden sun will still be.

Thu, 01/27/2011 - 20:16 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Better get More Critical Thinking on this thread. He says the USG is good for all its debt obligations. That said, I have no idea why gold and silver have averaged 18% and 24% YOY for ten years running.

And where's Abiggs, Spalding and GloomBoomDoom to smack me down on my bad gold calls? Pile on, I can take it. $1000 to $700 was far worse than this li'l hiccup. 

 

Thu, 01/27/2011 - 23:52 | Link to Comment william the bastard
william the bastard's picture

$1000 to $700 was far worse than this . Really? my houe is worn thin onthe desflat. can livei n a gold cave. how you hopus doin?

Fri, 01/28/2011 - 01:10 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Care to speak english for those of us who don't do gibberish?

Fri, 01/28/2011 - 03:09 | Link to Comment Dave
Dave's picture

Cheap tequila again.

Fri, 01/28/2011 - 07:33 | Link to Comment The Alarmist
The Alarmist's picture

The US is good for its debt, but that does not mean it will be repaid in dollars that are worth as much tomorrow as they are today. Do you still have no idea why other traditional "hard" currencies like gold and silver might be "appreciating" in relative terms over a period of significant debasement of the USD?

Fri, 01/28/2011 - 12:47 | Link to Comment Nine Pies
Nine Pies's picture

11:50 a.m.   You're pretty damn close.  Ag at 27.54 right now on a sharp rise this morning. 

Thu, 01/27/2011 - 20:20 | Link to Comment Yen Cross
Yen Cross's picture

 Sort of off topic. Check out he XLF 5day chart. That trade looks heavy to me. Wanted to pick up some C. I think I'll do it on risk off Friday.

Thu, 01/27/2011 - 20:23 | Link to Comment wtlf555
wtlf555's picture

I'm not sure where you get the 93%. I just ran the monthly figures from 1980 and the correlation is .67 or 44% of the change in gold is explained by the change in M2. Money velocity correlates higher. Either way the correlation implies a breather for gold. Despite the scary one year red line M2 has only gone from 8,500 billion to 8,850 billion a one year increase of a whopping 4%!

 

I know you're pumping hyper-inflation or stagflation but it aint happening until money supplies start increasing faster than 4% and until money velocity stops declining. For that you need demand, complete abandonment of the dollar, or huge GDP increases.

I don't see them happening. How can you have abnormal inceases in M2 without increasing demand or GDP? None of the hyperinflationists can explain this. If M2 increases its because Joe the plumber is getting on the pd's QE action and initiating money demand to be spent on commodities or stocks. if the M2 growth is based on this and not true demand/growth then its just going to some bubble that's gonna pop.

In Oct of 1979 when Volcker announced rate increases gold was below $400. You could have waited for his announcement and for a few more months and still caught the ride that doubled gold.

Do we have a Volcker out there? NO!!!!!! I wish we did - but remember Volcker's rate increases cleansed the system by flushing hundreds of S&ls down the tubes at a cost of a couple billion dollars. It needed tio be done - but who's gonna flush three times as many banks along with the pd's and a book loss of trillions? President Paul? I don't it's gonna happen.

 

 

 

Thu, 01/27/2011 - 20:49 | Link to Comment lsbumblebee
lsbumblebee's picture

My understanding of hyperinflation is a loss of confidence in the monetary system. Of course, inflation depends on the increase of money supply, but hyperinflation is a different story. The public can't spend their cash fast enough to avoid further losses. 

Thu, 01/27/2011 - 21:03 | Link to Comment Crawdaddy
Crawdaddy's picture

I  like your take on this. Your comment re: Volcker caught my attention because somehow raising interest rates "wrung out" inflation is taken for granted as accurate. Please check out an alternative view on Big Paulie's handling of the Fed during the early 80's:

http://www.polyconomics.com/ssu/ssu-050318.htm

In June 1982, Mexico advised its U.S. banks that it could not pay its dollar debts because the oil price had declined when it was supposed to have risen -- and Mexico depended on oil sales for hard currency. This would have meant bankruptcies of some of our major banks and a likely Depression rivaling the 1930s. Volcker went to Treasury Secretary Donald Regan and told him he would have to buy Mexican bonds with fresh dollar liquidity, so that Mexico could pay the U.S. banks. He also told Regan he could no longer aim at the monetarist targets. I not only assured Volcker (and Polyconomics clients) that easing would cause the bond market to strengthen, not weaken as the monetarists predicted. I also bought government bonds and made enough money in a few short weeks to build a wing on my home in Convent Station, N.J., which I named “The Volcker Wing.” The recession ended and the Reagan boom began.

This is interesting as well:

Volcker's October Deflation
Jude Wanniski
November 2, 1983

http://www.polyconomics.com/essays/esy-831102.htm

 

 

Thu, 01/27/2011 - 20:28 | Link to Comment frippy
frippy's picture

Can't wait to hear Mish tell us that this is deflationary.

Thu, 01/27/2011 - 20:32 | Link to Comment Alcoholic Nativ...
Alcoholic Native American's picture

All I know is I got like a year of savings, and a shit load of people who are doin worse than me. Good luck bitches.

Thu, 01/27/2011 - 20:34 | Link to Comment buzlightening
buzlightening's picture

hehehehehe! Acceleration of paper fiat systemic breakdown! Promissory notes, bonds, world wide monopoly currency redemptions, contracts, and jokers behind every counter party risk, destined for massive default under a daisy chain implosion!!  The intrinsic value of  paper money gets a no vote soon as all credability of a corrupt fraudster bankster disease gets axed and thrown into the garabage dump of failed human experiment!  Turd herding the masses through fear & greed no more!!  Another purging! Another historical cycle ending in human disaster because parasites consumed the host!  Happens everytime the rat basturd banksters crown themselves masters of the universe and forget we all have value or none of us matter!!  Left with nothin but an obilterated scorched earth with some few faithful souls left to rebuild freedom all over again; by the people for the people!! 

Thu, 01/27/2011 - 21:31 | Link to Comment Bastiat
Bastiat's picture

You're an optimist but still . . thanks!

Fri, 01/28/2011 - 03:47 | Link to Comment Oh regional Indian
Oh regional Indian's picture

If you want your mind stretched even more, get a load of this...

http://redactednews.blogspot.com/2011/01/americas-dirty-secret-how-psycho-sexual.html

I like Gordon Duff. The man is no Duffer.

ORI

 

 

Fri, 01/28/2011 - 10:51 | Link to Comment Bastiat
Bastiat's picture

Thanks for the link ORI.  I've been aware of the Air Force cult weirdness for many years.  Ever notice how much that "church" pictured in the article looks like a row of ICBMs? I've heard stories from women who lived in Colorado Springs and dated cadets.

Check these out:

http://goo.gl/Tp7b

http://goo.gl/jHhOp

or just google "air force academy religion"

Back in the early 80s they named an ICBM carrying nuclear submarine "Corpus Christi."  Think about that one!  Due to protest from non-fanatical clergy, it was renamed City of Corpus Christi. 

http://en.wikipedia.org/wiki/USS_City_of_Corpus_Christi_%28SSN-705%29

Thu, 01/27/2011 - 20:43 | Link to Comment Yen Cross
Yen Cross's picture

 I'm not even remotely interested in XAU. I would not be surprised it it takes a ahandle around 1275. The 200 daily sma and a daily decending trend  line converge in that area.

Thu, 01/27/2011 - 20:47 | Link to Comment bullet357
bullet357's picture

Nothing new here....same ol same ol Pump & Dump......Two  words to live by in 2011 ...Food & Ammo.

Thu, 01/27/2011 - 20:53 | Link to Comment buzzsaw99
buzzsaw99's picture

Torah! Torah! Torah!

 

Bitchez

Thu, 01/27/2011 - 21:02 | Link to Comment trav7777
trav7777's picture

gold blowtorched again tho

Thu, 01/27/2011 - 21:09 | Link to Comment Eric The Red
Eric The Red's picture

time to stop reporting M2

Thu, 01/27/2011 - 21:19 | Link to Comment RobotTrader
RobotTrader's picture

Gold down again AH, margin calls flooding in.

Thu, 01/27/2011 - 21:21 | Link to Comment buzzsaw99
buzzsaw99's picture

Everyone who even suggested gold might go down someday has been flamed on here. If the selloff has legs I want to see some butt kissing apologies.

Thu, 01/27/2011 - 21:36 | Link to Comment Yen Cross
Yen Cross's picture

Buy the deep dips. India has weddings in June.

Thu, 01/27/2011 - 22:22 | Link to Comment Bay of Pigs
Bay of Pigs's picture

That's bullshit. Every hardened Goldbug knows the game going on here. It's called buy and hold your physical. Trade the futures, options, ETF's, stocks at your own peril. 

So BTFD? Absolutely, accumulate all you can. This Golden Bull has plenty of legs despite this HUGE drop of 7% the last 30 days (sarc). Still up over 20% YOY.

I will not apologize to the anti gold crowd at all. No reason to. 

Thu, 01/27/2011 - 22:24 | Link to Comment buzzsaw99
buzzsaw99's picture

strawman much?

Thu, 01/27/2011 - 22:35 | Link to Comment tmosley
tmosley's picture

You use that word, but I'm not convinced you know what it means.  There was no strawman in that post.  He didn't even debate any of your points, or anything related to your points.  He just said he won't apologize.  In that, he has plenty of company.

Thu, 01/27/2011 - 22:44 | Link to Comment buzzsaw99
buzzsaw99's picture

No reason to insult me asshole. If he did nothing in need of apology why is he even replying since he has nothing to say?

Gold goes up, that's the way it should be.

Gold goes down then that's manipulation.

There have been many, many obnoxious gold bugs on this site with their heads up their asses. The Hunt brothers had it all figured out back when until they got their asses reamed by manipulation that lasted 30 years. LMAO!! Buy and hold bitchez! It only goes up!!

Thu, 01/27/2011 - 23:32 | Link to Comment tmosley
tmosley's picture

Who insulted anyone?  You just claimed the guy above was knocking down a strawman when he clearly wasn't.

I wonder if that says anything about the general level of intelligence of the anti-gold crowd?

Thu, 01/27/2011 - 23:41 | Link to Comment william the bastard
william the bastard's picture

Why's my home price is tanked frend? I ez prayin for flation in my fattest asset

Fri, 01/28/2011 - 02:47 | Link to Comment faustian bargain
faustian bargain's picture

Dude they can only blow up so many bubbles at the same time.

Fri, 01/28/2011 - 02:58 | Link to Comment Bay of Pigs
Bay of Pigs's picture

I said nothing about manipulation at all. You stupid assholes don't know what a bull market looks like? Sad.

Thu, 01/27/2011 - 22:33 | Link to Comment tmosley
tmosley's picture

Why?  None of the gold trolls ever apologizes when the latest X% correction isn't the end of the bull run.  Not once have I been apologized to.  NOT ONCE.  Been right for three years, across at least three boards with plenty of gold trolls.  The trolls either just vanish or they keep to the same stupid crap telling everyone the bull run is over on every dollar dip.  Every time it goes down a dollar, they were "right", and every time it isn't dipping it's a "bubble".

Yeah, those guys can ALL go fuck themselves.

Thu, 01/27/2011 - 22:41 | Link to Comment buzzsaw99
buzzsaw99's picture

I have never insulted a gold bug in my life. If it goes up good. If it doesn't then tough shit. Oh, that's right, it can't ever go down not never. HAHAHAHAHAHAAHA!

Thu, 01/27/2011 - 22:59 | Link to Comment Attitude_Check
Attitude_Check's picture

Come on, you KNOW that real bull markets only go up - so obviously the gold bears are right, the bull market is over.  Just kiss'em say nice things about them.

 

AND BUY MORE CHEAP GOLD.

Thu, 01/27/2011 - 23:47 | Link to Comment william the bastard
william the bastard's picture

cheeper by the minut

Fri, 01/28/2011 - 03:02 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Hey Bill Bastard,

Anyone ever teach you how to schpell? 

Fri, 01/28/2011 - 08:36 | Link to Comment anvILL
anvILL's picture

After some while of RobotTrader observation, my bet is that Robo is a gold bull on the long term.
That does not mean that he can be bearish on gold today.
I became more certain on this after I started following Gary K as advised by Robo.

The interesting thing is that Robo highly respects Gary K who says Gold to 4000 in the longterm but bearish today but makes fun of Jim Sinclair. (whom I highly respect)
I think robo is trying to just tell you that you can be bearish while being bullish and that is probably the right thing to do to make some profit.

*Disclosure
This was posted after drinking serious volume of alcohol by a someone not native in English.

Thu, 01/27/2011 - 21:51 | Link to Comment Biosci
Biosci's picture

Four percent?  I'm stocking my bunker because of a four percent rise in M2 in the last 12 months?

Thu, 01/27/2011 - 22:16 | Link to Comment twinshot
twinshot's picture

Getting a sip of inflation in the coffee shops in Singapore now. Literally Front page news on the Straits times as Starbucks and friends hike prices 4-5.5%. Thanks Bernanke!

Thu, 01/27/2011 - 23:44 | Link to Comment william the bastard
william the bastard's picture

Califony valley R/E cheap. yu cant live in coffey

Thu, 01/27/2011 - 22:42 | Link to Comment Cdad
Cdad's picture

You know, you take into account J. Dimon's words today, from the pristine mountains of Davos, and you add to that the whole Blythe silver manipulation story/case, and you put a pinch of L. Blankfein's call to go long[er] the Euro [a currency almost certain to fail], and you swish that all around with Blight of America bank toxins and Fred/Fan conservatorship...bake for 30 seconds at 5,000 degrees F...in a Wells Fargo oven...

...and I think the right convergence trade to put on is short banks, long gold [in your favorite form].  I think that is the trade for 2011.  Having said that, it might be difficult, what with every freakin' banker for thousands of miles shooting at gold with Bernanke bananas...but...

We all know what the criminal syndicate known as Wall Street has done regarding the 2008 financial crisis, and we all know what the criminal syndicate known as Wall Street is doing with the market right now here in our Banana Republic Tree, a licentious Federal Reserve Chairman at the helm.  And we all should know by now that we cannot heal from this crisis because...because...

CAPITAL WILL NOT FORM IN BANKS AS CORRUPT AS THESE! 

Thu, 01/27/2011 - 22:45 | Link to Comment Pegasus Muse
Pegasus Muse's picture

Adding to the corruption theme here is Ed Steer's comments today.  He quotes Ted Butler.

-------

Needless to say, I was very encouraged by the big turnaround in silver and gold prices yesterday...as we are now very close to a bottom...if we're not there already. The precious metals shares [especially the junior silver producers] were proof that there was a feeding frenzy of bottom fishing going on...and that's always a positive sign.

To quote another couple of sentences from Ted's note to clients yesterday..."In short, this was a classic Comex jam-job by the commercials to the downside. Don't be fooled by the now-bearish rhetoric about silver's prospects. News and opinion follows price. Those bearish on silver now, will be singing a bullish tune once prices start to rally. That's just the way the world works."

"The sell-off wasn't invited, or welcomed, by silver or gold investors...or by me. Nor was it a simple case of the free market at work. Far from it. This week's COT report will show just what the most recent COTs have shown, namely, that a very small group of Comex commercials have been able to buy what many leveraged speculative long traders were forced to sell. Without belaboring the point, it is not possible for such a small group of commercial traders to bamboozle so many other traders so methodically and consistently without collusion."

Both silver and gold are under a bit of pressure at the moment [4:29 a.m. Eastern time]...but that's largely due to a 40 basis point pop in the world's reserve currency that began around 7:30 a.m. in London...so I wouldn't read a whole lot into this price action. Gold volume [net of roll-overs] is microscopic at under 6,000 contracts. That's the smallest net gold volume I've ever seen at this time of day. On the other hand, silver's net volume is 8,000 contracts...and this is the first time ever that I've seen silver volume exceed gold volume at any time of day anyplace in the world. It's amazing to look at.

That's all I have for today. New York trading begins pretty soon...and it could prove to be another interesting day.

I'm still 'all in'.

Thu, 01/27/2011 - 22:30 | Link to Comment RobotTrader
RobotTrader's picture

My local dealer is fully stocked with silver inventory...

Despite the screeching hysteria of Eric King and his buddies...

Thu, 01/27/2011 - 22:36 | Link to Comment tmosley
tmosley's picture

Glad to see you still can't tell the difference between the United States and Europe or the United Kingdom.

Are you really that stupid?

Thu, 01/27/2011 - 22:53 | Link to Comment Hephasteus
Hephasteus's picture

LOL. I wanta get me some generic silver bars.

And some comex approximately 1000 oz bars.

They need to add some I'm Just Guessing gold coins.

Thu, 01/27/2011 - 23:21 | Link to Comment Hephasteus
Hephasteus's picture

http://www.golddealer.com/

Here's robo's california site.

 

Thu, 01/27/2011 - 23:32 | Link to Comment william the bastard
william the bastard's picture

I'l sit this one out too. Someone's got to remember the Alamo.

Thu, 01/27/2011 - 23:35 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

They're not bad. They hold your check for 3 weeks and only take phone orders during business hours though but your shipping is free. They refuse to sell gold maples any more which sucks. I bought their last eight 4 years ago for $20 over spot. They said the design promoted scratches however they stopped selling the platinum maple too for a long time. They said the market wasn't deep enough. I think they just hate Canadians. 

Thu, 01/27/2011 - 23:40 | Link to Comment Hephasteus
Hephasteus's picture

Well well robo's site checks out. No major problems.

However the glenn beck stuff with goldline and gainsville is getting some heat.

http://www.ripoffreport.com/investment-brokers/goldline-internation/gold...

But it makes me wonder why his buddy with the ass pic is trying to pin it on sprott.

Thu, 01/27/2011 - 23:26 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Junk silver is getting bid up huge. Pre 1964 U.S. silver coin prices still very high in junk form and BU. This tells me the coin market remains on fire here in the gold old USA. Foreign dictators want gold for their safe passage. American citizens just want silver to survive. BTW Gainesvillecoin came through with that sweet Aztec for me. You should check them out Hephasteus.

Thu, 01/27/2011 - 22:43 | Link to Comment Cdad
Cdad's picture

Robo,

Outstanding! 

Thanks.

Cdad

Thu, 01/27/2011 - 22:58 | Link to Comment lsbumblebee
lsbumblebee's picture

Tell me about it. I can't get rid of it. I've been eating silver sandwiches for lunch, and making silver stew for dinner. I'm sick of it. I got silver jammed down my toilet. My garbage men are wearing trusses. I tried selling it to Sprott but their warehouses are packed with silver. I tried to bribe them but all I had was more silver. 

Damn those are good prices. Maybe I'll buy more.

Thu, 01/27/2011 - 23:04 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

I shop there sometimes too Robot. When the USA was on the silver standard we would mint 50 to 75 million of oz of silver coin per year. It was our only money. We had fewer people than we do now. In modern times America averages less than 20 million oz and has and has a much larger population who is largely dependent on government cheese and a false economy. Go to Inglewood and get those coins Robot while you can still buy them for a song. You will need them for your old age. 

Thu, 01/27/2011 - 23:18 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Damn fine lookin' post there Robo!  Whistlin' Dixie!

Thu, 01/27/2011 - 23:35 | Link to Comment william the bastard
william the bastard's picture

Whistlin' past the graveyard more like it. Hehe

Thu, 01/27/2011 - 23:50 | Link to Comment twinshot
twinshot's picture

Not seeing an inventory list there in your pretty picture but I will take your word for it. However I can tell you my dealer is out of:

All silver bars and rounds, all silver eagles and all silver maple leafs. They've a paltry amount of Koala and Kookaburra 1 kilo coins and a few 1 oz coins.

There is a 4 week wait for more supplies.

So your dealer is lucky because I am having to scrape the bottom of the barrel here to BTFD. My dealer is missing out on their margin as I will not buy on pre-order.

Thu, 01/27/2011 - 22:31 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Bold price increases beginning in NYC: Same Towncar ride as 2 months ago up 50%. Restaurant prices on the rise. Personal care products also. 

Thu, 01/27/2011 - 22:33 | Link to Comment Johnk
Johnk's picture

re: "Can't wait to hear Mish tell us that this is deflationary."

Too funny, frippy!

Mish has chosen theory over reality for some time now.  Kind of like Bernanke, but different.

 

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