This page has been archived and commenting is disabled.
Paging Dr. Rogers: Patient Federal Reserve Confetti Is Asystolic
A few days ago Jim Rogers prudently warned that silver had entered parabolic mode and the the only case which would not lead to a collapse in silver prices (once silver hit $100 that is) is if the Federal Reserve note, or the liability to all those uber-valuable Fed assets known as Treasury Bonds (and of course Agencies, thank you QE1) became "confetti." Well, confetti is what we have. As of tonight, the dollar has just taken out the 2009 lows, and only the extreme carry trade which sustained the overall market into the biggest market crash ever, back in 2008 is now a lower point in the DXY index. In other words only a complete market wipe out, or an exogenous external event such as war, now that the market does not even blink at such black swans as civil wars, bankrupt European countries, nuclear catastrophes, and record earthquakes, can lead to some restoration in the purchasing power of the US currency. Incidentally, as the long term DXYchart below shows, the current dollar cash is by now means the most pronounced one. A far bigger one occurred in the mid 80s, when the dollar was cut in half from over 160 to 80, in a move that, as everyone who was alive back then and not merely some derivative of gaseous gallium metal and arsenic trichloride, recalls culminated with Black Friday. Oh yeah, gold just hit another record high.
And here is a thought experiment for everyone: if the Fed's chief liability - the Federal Reserve note - is plummeting in value, what does that mean for its chief asset - obligations issued by the United States of America...
»
- 14134 reads
- Printer-friendly version
- Send to friend
- advertisements -
If the Fed raises rates to drop PMs we now occupy the 3rd level of hell.
But you couldn't be more wrong. A silly minimal rate rise won't do. The FED would have to admit there is inflation first, then that it was getting past that sweet 2% spot that BB says he wants and can target. Then Bernank would have to admit he was wrong about QE and was reversing policy. Next he would have to raise 500 bps immediately to slow the chain reaction that he has already started. Then he would have to swap out all federal state and local politicians which disciples of Ron Paul. Recall all the troops from overseas, and finally put a bullet his own head.
At that point, the rise in real assets -- including PMS -- might be arrested.
Get out of the Matrix.
Do the math. What if they raise rates just 1% on $14,000,000,000,000?
1% means game over. But remember that FED is not audited and does not need to M-T-M.
But if they don't go to a real rate -- 5% or so -- yhen it's game over for the dollar.
Maybe we are already in the 3rd level of hell.
>> raise rates a tad.
More like 10%. When I see a Volcker show up at the Fed, then come talk about this bullshit.
Oh yeah, I forgot. 10% treasuries would DESTROY the US government.
Ben and Tim are two menstruating whores in a rubber raft and the silver and gold sharks have picked up their blood trail.
Barry had his chance to take Volker's advice
judging by the EUR/USD 5 min chart set-up...the $DXY looks primed to drop below 74 in a matter of minutes...1 hour at the most.
so, someone explain why there wont be contrarians swooping in to buy the dollar? everyone proclaimed the euro dead last summer when it 1.19-1.00, and there came the contrarians. why not this time?
If the Pacific Ocean suddenly dries up, you can't refill it from the Atlantic and the Mediterranean.
here's real silver getting delivered, today, and for the month:
DJ Comex Silver Delivery Intentions Breakdown - Apr 20
eb, you and yosemite sam, the penguin, talk among yerselves with the tooth fairy, ok?
Pants --totally filled.
2008 USD meltup, then meltdown. there is a major risk event, could be China. Asia has been cramming bizarre bids all session so far
But what about the 38 billion dollar spending cut? That should help. It's all about the trend.
Yeah and I suppose the dollar is just going to plunge to infinite nothingness and Pimco's Gross is totally ignorant of this... NOT. Expect a strong rally in the dollar as the economy begins to get new life breathed into it in the form of rising employment, profits and oil purchases (that's right the strength of the dollar is highly correlated to oil demand for all you know-nothings). I expect we are either at or approaching a low for the dollar, but it won't last very long. The end of QE2 will be timed nicely with the dollar's rise to seal the fate of the PM bugs out there, who will have to kiss their accumulated, but unredeemable wealth, goodbye.
Obama, Ben and Timma do not want a strong dollar. They need the dollar to fall to "double exports in 5 years". Keep fighting the FED's debasement of the currency.
LOL
LOL double exports in 5 years. Like anyone is going to remember that statement in 5 years. LOL.
DXY bottoms at ~$72 ish in June-July timeframe...then monster rally and subsequent nasty correction in all commodities, even PMs