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Surprising Observations From TrimTabs: "Are Central Bankers Loading Up On Gold?"

Tyler Durden's picture




 

When it comes to following the trail of money, capital flows specialist TrimTabs has traditionally focused on the stock market. In the past, TrimTabs' Charles Biderman has discussed how according to any reasonable calculations, there appears to be a key buyer missing among the usual market participant suspects, leading Biderman to conclude that the Fed may be buying stocks directly (or indirectly through Citadel as the case may be). To our surprise, in its most recent release, TrimTabs takes a look at the buyers in the gold market, and ends up with the same question: "Gold prices hit a record high in nominal terms for the second consecutive day.  We are not sure who is driving up prices." The speculative conclusion: "Are central bankers loading up on gold as they crank up the printing presses and keep interest rates ridiculously low?" Of course, at first glance this would be preposterous as it has long been accepted that for the Fed a jump in surge prices is a very adverse development. Well, is it? Traditionally rising gold prices have been merely indicative of abnormally high inflation, which for the Fed was a "bad" thing in the past. Not so much any more, or at least since the advent of the "wealth effect" experiment. Recall that it is now the Fed's "goal" to give the impression of inflation (and reality for those who eat and use energy). This is based on Bernanke's false assumption that inflation is much more easily controllable (15 minutes...) than deflation. So while on the surface this may appear to be a preposterous claim, in reality there is nothing that prohibits a gold price surge in the context of the Fed's third mandate.

Full observations from TrimTabs:

Who Is Driving Gold Prices Higher?  Speculative Traders and Fund Investors Not Very Bullish.  Are Central Bankers Loading Up on Gold as They Print More Money?

Gold prices hit a record high in nominal terms for the second consecutive day.  We are not sure who is driving up prices:

  • Commitments of Traders data indicates that non-commercial futures traders are net long gold futures by 3.7 to 1, which is a low ratio historically.
  • Precious Metals equity mutual funds—which hold mostly mining shares—redeemed 0.4% of assets in the past week.  Meanwhile, Real Estate funds and Natural Resources funds attracted 0.8% of assets and 0.5% of assets, respectively.  In the past month, Precious Metals funds lost 0.5% of assets.
  • Precious metals exchange-traded funds—which hold physical metals—issued only 0.2% of assets in the past week and 0.4% of assets in the past month.

Are central bankers loading up on gold as they crank up the printing presses and keep interest rates ridiculously low?

Whatever the source of the buying, we think investors could do a lot worse than allocate some of their capital to precious metals as fiscal and monetary excess continues around the globe.

Lastly, remember that there has been speculation that various banks are pushing for a mark to market treatment of gold held at central banks. Our own Fed marks its 8,133.5 tons of gold at $42.22/ounce. In other words, if at some point the central bank cartel needs to expand excess reserves even more, thereby creating an even greater "inflationary threat", what better way than to convert held gold from a fixed to a MTM price. For the Fed alone this move would imply a $350 billion "increase" in assets, which would then need a comparable increase in bank reserves (and currency eventually).

In an ironic twist, is gold about to become the "red button" to be pushed in the last ditch case when expectations of rampant inflation need to be created, following the next major deflationary market crash.

 

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Thu, 04/07/2011 - 13:03 | 1145809 LawsofPhysics
LawsofPhysics's picture

"In an ironic twist, is gold about to become the "red button" to be pushed in the last ditch case when expectations of rampant inflation need to be created, following the next major deflationary market crash."

 

Yes, I hope.

Thu, 04/07/2011 - 13:10 | 1145841 Ahmeexnal
Ahmeexnal's picture

And the MSM is finally recommending Joe Sixpack to buy gold AND SILVER!

 

http://www.marketwatch.com/story/going-for-gold-2011-04-06?link=kiosk

 

This is it. It's going parabolic!

Thu, 04/07/2011 - 13:17 | 1145870 camaro68ss
camaro68ss's picture

this is Such BS. I wish i can print paper money and exchange it for gold. F*** the bernake F*** the FED

 

Im the sucker who has to work for his gold and silver

Thu, 04/07/2011 - 13:30 | 1145930 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

agreed 68ss.  i try to convert frn plague promises every time they get near me.  i always fear they may spontaneously combust due to the heat and pressure on them!

i know for a fact pm's are not known to burn!

btw nice avatar! 

Thu, 04/07/2011 - 15:40 | 1146576 quartshort
quartshort's picture

I get your overall point in your post regarding the difference between fiat and metal, but indeed they do "burn". I use a 4000 degree torch to fume gold and silver all day long onto borocilicate for the purpose of creating tobacco related smoking apparati. Just thought I'd throw down a little known fact to our ever growing base of informed and entertaining cohorts.

Thu, 04/07/2011 - 16:24 | 1146762 Confuchius
Confuchius's picture

@quartshort

Evidently you have not yet run into the Au plated W; for which your torch would be 4000 degrees too cold...

Thu, 04/07/2011 - 17:46 | 1147145 quartshort
quartshort's picture

HA! Now that's funny, and pertinent.

Thu, 04/07/2011 - 13:50 | 1145997 Ahmeexnal
Ahmeexnal's picture

Newsflash:  Math Man and Johnny Bravo are the ones buying massive amounts of gold.

Thu, 04/07/2011 - 13:55 | 1146016 DosZap
DosZap's picture

Along with every swingin weiner here.

Thu, 04/07/2011 - 14:51 | 1146332 DoChenRollingBearing
DoChenRollingBearing's picture

Just bought some more yummy yellow today DosZap my friend.

Fri, 04/08/2011 - 07:32 | 1149188 SWRichmond
SWRichmond's picture

I still buy a little more every now and then just so I can say "See!  I'm helping!"

Thu, 04/07/2011 - 16:14 | 1146718 Jonas Parker
Jonas Parker's picture

Glad I have company...

Thu, 04/07/2011 - 13:56 | 1146027 Triggernometry
Triggernometry's picture

You are not alone

Thu, 04/07/2011 - 14:01 | 1146038 Triggernometry
Triggernometry's picture

You are not alone

Thu, 04/07/2011 - 14:06 | 1146056 Shell Game
Shell Game's picture

Same sentiment and actions here, brother.  Hope to see you on the other side. 

Thu, 04/07/2011 - 13:14 | 1145875 Cdad
Cdad's picture

And the MSM is finally recommending Joe Sixpack to buy gold AND SILVER!

Ummmmm....if it is true, then that would traditionally be the sell signal.  It means that the Street has ounces for sale.

Thu, 04/07/2011 - 13:27 | 1145921 pointer
pointer's picture

that's what I would think - time to sell if mainstream media is recommending it to the masses - but it just doesn't make sense to sell now with all that's going on...

Thu, 04/07/2011 - 13:40 | 1145965 Ahmeexnal
Ahmeexnal's picture

Remember we are no longer in a "normal" market situation. Events that should have made the markets crash are now cause for upward movement.  I would not rely on past "contrarian" positions, but on a clear analysis. And price explosion is exactly when millions of Joe Sixpacks and their moms make a run for the narrow PM window.  When that happens, and you see a orders of magnitude price increase, you could trade your PMs for other assets, never for fiat.

Thu, 04/07/2011 - 13:46 | 1145986 Buckaroo Banzai
Buckaroo Banzai's picture

in the meantime... don't fight the Fed!

Thu, 04/07/2011 - 13:51 | 1146006 I think I need ...
I think I need to buy a gun's picture

Don't say the mainstream media didnt recommend you to buy (at the last possible minute) after you blown 15k on Penguins or Capital season tickets the last 2 years.

Thu, 04/07/2011 - 13:47 | 1145987 Ruffcut
Ruffcut's picture

Maybe when MSM says buy G and S, then joe should buy lead instead.

I think most gbugs are buy and hold, and will only give it up from "My cold dead hand".

I bought alot of sprotts shares, but have a pile of junk silver in personal storage. It was not a trade. I'll probably keep it until I need it, which is hopefully never.

Thu, 04/07/2011 - 14:01 | 1146035 Banjo
Banjo's picture

You have to look at more indicators than a few mentions of MSM recommending gold. I did a little write up on gold about Sep 2010

 

Is gold in a bubble?

 

"Gold is not in a bubble. Currently on a global basis only 0.8% of all global financial assets are in gold, gold share and ETF's. In 1932 it was 20% and at the start of the 1980's it was 26%. If a total of 2% were allocated to gold the additional demand would amount to 85000 tonnes. Or total global mining output of almost 34 years"

 

 

Broad based public participation and the gold bubble.

The fact that gold is only now starting to be recognised as an asset class that mainstream financial professionals might consider holding and is still not broadly popular with the public, "the general public is hardly invested in gold yet"30 gives some indication that there is more upside to the gold story in terms of prices contining to move up. Gold does not have the euphoria of tech stocks of the late 90's, the US realestate market of the mid 2000's or the current Australian realestate market where homes are trading at multiples of ten times average income and producing low yeilds. There is no broad based public participation or euphoria about the current gold market. In my opinion we are at the tail of phase two or entering phase three of a bull market in gold where the public at large will begin to move into this asset class.

 

 

Gold conclusion.

 

Gold will be re-discovered as a stable, valuable, international and immutable asset class. Gold will eventually be an asset that people will be interested in holding over a lifetime. Gold has the ability to protect a portfolio in either an inflationary or deflationary environment, especially where extreme events are probable. Owning physical or allocated gold is important, paper promises or instruments based on leverage of the underlying physical will be liable for "cash settlement" or default if all holders make the call for real metal. The physical market globally is small compared to the global bond, equity and property markets. Prices may need to go much higher to bring additional liquidity to the market and clear the debt backed paper seeking the value of real physical gold.

 

The most benign analysis puts gold at reasonable value at current rates of $1300 more positive estimates put prices easily in the range of $2000-$2500 and up to $6000 or more on aggressive valuations. Ratio analysis indicates additional upside is very probable and current prices are not overbought. Talk of a bubble is easily scotched especially in relation to other asset class bubbles and their historic price and crowd psychology behavior. Gold prices are nowhere near extreme and the public is still overwhelmingly unaware and unconvinced of gold as an investment option.

 

There is enormous volume of paper and debt backed instruments compared to the total physical gold market. The future looks to central banks continued printing of larger volumes of money to support the massive volumes of debt in the system. Gold supply is becoming constrained by lower quality ore deposits and increased costs of extraction.

 

There is no free lunch and gold could suffer retracements of > 30% in any given year and for any pull back in gold to be sustained, investors would have to re-evaluate economic and business conditions as having genuinely turned the corner (e.g. Is the US still borrowing 1.2 trillion per year and adding that to GDP?) before balancing exposure to gold and allocating capital to the productive economy.

 

In the context of ongoing government debt financing projected many years into the future, sluggish economic performance and desire by governments to run large deficits, any pullbacks in the price of gold should be viewed as a buying opportunity.

 

Physical or allocated gold should be added to every investor portfolio as a long term event hedge and to benefit from the ongoing debasement of paper currencies. For a HIGH RISK high return play investment in gold miners especially juniors should be considered along side appropriate exit and risk mitiation strategy.

 

 

 

Thu, 04/07/2011 - 14:03 | 1146049 long juan silver
long juan silver's picture

Great cut and paste. Do you have a canoe also?

Fri, 04/08/2011 - 14:52 | 1150867 Banjo
Banjo's picture

747

Thu, 04/07/2011 - 13:27 | 1145915 FIAT_FixItAgainTony
FIAT_FixItAgainTony's picture

the article looked pretty good, then i was disappointed at the end - buy paper!

oh well, at least they tried.  glad i got in at $13.  $8. would have been better, but hey, it's better to have awakened later than never!

now peeps first getting in at $39.50 won't have as much of a so-called gain, but they'll at least have a gain over not having bought and loosing all.

please remember this important fact - price in fiat means nothing.  you are going for a store of value.  value is something backed-by-nothing fiat will never have.

voltaire was correct.

Thu, 04/07/2011 - 14:01 | 1146047 Stuck on Zero
Stuck on Zero's picture

The Marketwatch article is by the Aden sisters.  They've been advising PM purchases for twenty years.

Thu, 04/07/2011 - 16:05 | 1146686 RockyRacoon
RockyRacoon's picture

Sort of.   They do advocate selling when over-bought -- buy the dips as it were.

Thu, 04/07/2011 - 19:08 | 1147479 rosiescenario
rosiescenario's picture

...I think it is more like 30+ years they have advised on buying (and selling from time to time).

Thu, 04/07/2011 - 13:22 | 1145905 bonddude
bonddude's picture

Sorry, lost faith in TT when CB gave up on asking just WHO was buying all those s&p s.

F him.

Thu, 04/07/2011 - 13:50 | 1146001 RunningMan
RunningMan's picture

I should warn all PM speculators that I made my first ever physical PM purchase today, which virtually guarantees a decline in spot price since I've always gotten in at the top.

I would add that I'm a pretty conservative investor and have always been an aggressive saver, and the fact that I've done this reveals the depth of my belief that the US monetary system is in dire straits, and we will witness a currency crisis in the next 18 months if not sooner. Those on this site that have been saying this all along will ask what took so long... pattern thinking is a dangerous thing, but real nonetheless.

Thu, 04/07/2011 - 14:15 | 1146111 billhilly
billhilly's picture

Runningman, WELL DONE !!!!  Congratulations and welcome to the club.

Do not worry much...put it away and rest well.  If the price declines, buy more...if it goes up, buy more. Win-win. 

My strategy has been to purchase X amount for every $50 move up in Au and 2X for every $50 move down.  So far, so good.  With Ag, I just buy when I can find the bars I like (RCM). 

Now, sit back and enjoy the feeling of your first-time!  It's almost as good as...well, you know!

 

Thu, 04/07/2011 - 14:19 | 1146123 SWRichmond
SWRichmond's picture

I have also always been an aggressive saver but have been much more sensitive to watching my savings and perceiving their theft-by-inflation.

What took so long?

Thu, 04/07/2011 - 15:59 | 1146655 RunningMan
RunningMan's picture

I would chalk this up to old patterns of thinking and behavior being very hard to break. There is this initial disbelief along the lines of 'is this not an admission that things are really so bad?'.  I had the whole armaggedon kit together, just not the financial 'kit' (i.e. PMs). Now I will. 

 

Fri, 04/08/2011 - 07:32 | 1149196 SWRichmond
SWRichmond's picture

I've been neglecting PT, but no longer.  Same reasoning.  Wisconsin pushed me into reality there. 

Thu, 04/07/2011 - 14:26 | 1146164 oddjob
oddjob's picture

I bought another monster box today at 40.28 CDN per oz.

....and four 5 '9' maples.

 

I just dumped 26K of paper,feels good.

 

Think # of ounces,not price.

Thu, 04/07/2011 - 14:59 | 1146381 DoChenRollingBearing
DoChenRollingBearing's picture

@ Running

I too always seem to buy on the spikes.  But, that's OK as I have been buying PMs for decades, more lately though, so my cost basis is not as ridiculously low as I would have liked.

I buy as I get money coming in and hardly let the price influence me.  I have bought so many times when "the price seemed so high" that I have just gotten used to it...

Thu, 04/07/2011 - 16:04 | 1146681 RunningMan
RunningMan's picture

Thanks DoChen. I told my family that I did this, and they sent me all sorts of links about bubbles and such. I told them I wasn't speculating or investing, but protecting myself from the currency debasement and eventual collapse. We all joke about the Fed and Bernanke, but I seriously think they have no idea just how much people are concerned that they are bringing an end to the US through a currency crisis. We see that they have no choice but to continue trashing the dollar since raising rates is an impossibility.g

Thu, 04/07/2011 - 16:09 | 1146705 RockyRacoon
RockyRacoon's picture

Hang in there.  My buying over $10 was very painful, but not so much any more.  Gold over $400 made me question my own sanity.   Not so much any more.

Thu, 04/07/2011 - 17:00 | 1146922 bushboy
bushboy's picture

Runningman imagine as more people start doing what you just did for the reasons you did will be the start of the rush to PM's. This will eventually lead to a "The bubble" and is when I will bail out and buy a house or something.

Since I bought PM's I have felt a lot more at ease and not worried all the time like when I had shares. Even the ups and downs of prices in PM's doesn't phase me as I see nothing changing to stop the devaluation of all fiats. I also live in Oz and am  waiting and watching as our property market starts to drop in value. 

I am a late starter in ownership around 24 for Ag and 1300 in Au.

Good to have you onboard

bushboy

Thu, 04/07/2011 - 14:06 | 1146054 covert
covert's picture

better buy all you can before it gets outlawed.

http://covert2.wordpress.com

 

Thu, 04/07/2011 - 22:31 | 1148104 PaperWillBurn
PaperWillBurn's picture

http://fofoa.blogspot.com/2011/04/reference-point-gold-update-2.html

 

"With gold near its all-time high, it's time for another Eurosystem MTM party. And just maybe, there is a timely message here for Congress and the U.S. Treasury."

 

"And today, three months later, that amount of untapped U.S. hard asset equity is $370 billion! The reason U.S. gold went up and European gold went down is simply because the dollar went down and the euro went up. That's the point of Reference Point Gold! It's what Robert Zoellick, head of the World Bank, was talking about. It's really no big deal! But today it may be a big deal to Congress."

Fri, 04/08/2011 - 00:13 | 1148521 mr66
mr66's picture

The central banks are following correct procedure and buying the precious metals.  They are not stupid.  They know that in the end, budgets everywhere will never become balanced so the need will be overwealming to kick the can down the road and have more QE.  It is the only way for survival.  The consequences otherwise will be too ugly.  We need more QE just to keep the wheels greased

Thu, 04/07/2011 - 13:03 | 1145811 Clueless Economist
Clueless Economist's picture

Bernanke probably craps in a gold toilet

Thu, 04/07/2011 - 13:13 | 1145866 oddjob
oddjob's picture

...and we all know what he wipes his ass with.

Thu, 04/07/2011 - 13:24 | 1145913 Eternal Student
Eternal Student's picture

At the current rate that the debt is increasing, has anyone calculated how much money is spent every time Bernake takes a crap?

Thu, 04/07/2011 - 13:55 | 1146012 Temporalist
Temporalist's picture

Calculating that would depend on one main factor:

Does one actually crap when solely feeding on the blood of unborn children?

 

Thu, 04/07/2011 - 16:07 | 1146641 Eternal Student
Eternal Student's picture

Not sure why you got junked, Temporalist. But anyway, curiousity got the better of me, so I looked it up. One site is claiming that the debt is increasing by $4.09 Billion per day. That works out to $2.8 Million per minute. If it takes Bernake 5 minutes on the can, then that works out to be:

$14 Million per crap.

With gold at about $1400 per ounce, that's 10,000 gold coins per crap.

Turd Ferguson has nothing on Bernake.

Thu, 04/07/2011 - 13:06 | 1145815 bigdumbnugly
bigdumbnugly's picture

scoundrels one and all

Thu, 04/07/2011 - 13:05 | 1145817 Trifecta Man
Trifecta Man's picture

Bankers don't want to left owning only their fake paper.  Real wealth is in precious metals.

Thu, 04/07/2011 - 13:18 | 1145883 Bay of Pigs
Bay of Pigs's picture

Not many in gold even after an eleven year run. Amazing some call it a bubble.

http://www.caseyresearch.com/sites/default/files/Gold%20Percentage_1.gif

Thu, 04/07/2011 - 13:55 | 1146020 Ruffcut
Ruffcut's picture

Real wealth is in owning everything and ruling everyone. If you can't buy it, you hire soldiers and you steal it.

True democracy and sovereignty, are things of the past. No rule of law, just law from rulers.

Thu, 04/07/2011 - 14:24 | 1146163 Mossy
Mossy's picture

"Gold for the merchant, silver for the maid, copper for the craftsman skilled at his trade, Good Laughed the King as he sat in his hall, but iron- cold iron shall rule them all."

Thu, 04/07/2011 - 16:12 | 1146708 RockyRacoon
RockyRacoon's picture

Got that too.  No problem.   Nothing wrong with owning all.

Thu, 04/07/2011 - 13:24 | 1145900 Josh Randall
Josh Randall's picture

+1, exactly - the game of musical chairs is winding down, and all these Banksters want a chair with their fat @ss in it when The Ben Bernank picks the needle up off the record

Fri, 04/08/2011 - 00:16 | 1148534 mr66
mr66's picture

Amen to that TriMan..the bankers see the writing on the wall.  The can must be kicked down the road and QE must continue in order to us to survive.  Then, like Trump says, go into Lybia and Irqa and take the oil

Thu, 04/07/2011 - 13:07 | 1145818 gordengeko
gordengeko's picture

Yeah deliberatley inflate the fiat while accumulating the rest of the gold.  Not like they didn't alreay own almost all of it already thanks to FDR!  Tricky Dickhead then allowed americans to buy back their gold (FDR stole) from the foreign european banker fucks back in what was that '73 after they jacked up the price?  Then after they profit from the bubble they create in commodities, start the media push for dollar standard, then hit the reset button.  Fuck that, these vampires hate silver for a reason.  Buy silver, fuck the gold standard and fuck fiat!

Thu, 04/07/2011 - 13:30 | 1145901 gordengeko
gordengeko's picture

(That's media push for the gold standard.)  I have the cynical viewpoint that there is a major financial interest "backing" behind the "sell your gold for cash scheme."  I was skeptical of this 4 years ago when you started seeing this everywhere before and during the first meltdown in 2008.  Get the sheep to basically give the rest of their gold away for pennies.  Don't kid yourself on this whole gold standard as being the savior.  They own it just like they own the printing machines on the fiat.

Thu, 04/07/2011 - 14:00 | 1146041 DosZap
DosZap's picture

gord,

a bit paranoid on the shyster trade me thinks.

Those scum sucking outlets are rip off artists.

You take a ring in, to sell the gold, they keep the stone!.

They are just taking advantage of Dumb and Dumber.

Pay 40% below spot, and are making a killing..........

They are crooks, and just like the Fed.

Thu, 04/07/2011 - 14:02 | 1146045 Cleanclog
Cleanclog's picture

2 full page Ads of "Buying Gold * Silver * Platinum - coins, jewelry, flatware, tea sets, broken jewlery, pens, watches, bars etc . . . every day in the Front page Morning Report section of our daily regional paper (circ. over 2 million). 2 pages of a 6 page section that includes breaking news and headline news.

Thu, 04/07/2011 - 14:11 | 1146075 DoctoRx
DoctoRx's picture

Contrarianly their buying is bullish for the price.  They are buying from a public that is selling either out of financial need or from top-picking.  Wait till the smart and not-so-smart money is selling with lines of overheated buyers forming to get in on the hot stuff a la 1999 tech stocks and 2006 real estate.

Thu, 04/07/2011 - 14:18 | 1146126 gordengeko
gordengeko's picture

I think the giant reset button will have been pushed by then.  Whether it's a financial reset or giant reset of the natural kind. 

Yeah once you get a view of how this scam of a system really works it tends to turn you cynical of almost everything.

Thu, 04/07/2011 - 13:06 | 1145825 Cognitive Dissonance
Cognitive Dissonance's picture

It appears that Bernanke has finally decided he can eat the barbarous relic. Who would've thunk?

Thu, 04/07/2011 - 16:15 | 1146730 RockyRacoon
RockyRacoon's picture

I have my doubts about the premise of the article.

"...is gold about to become the "red button" to be pushed..."

Doing  so would guarantee the death of the dollar (not that that is not a goal) and subsequently the hegemony of the U. S. (again, perhaps a feature as opposed to a bug).  Something just smells fishy about a plan this reliant on what these ivory tower economists disguised as policy gurus could dream up.   Too complicated and based on assumptions that they do not normally make.   Just my thoughts.

Thu, 04/07/2011 - 13:08 | 1145828 ArsoN
ArsoN's picture

Got 2 hours of down time?  Pretty much explains it all... http://vimeo.com/18160394

Thu, 04/07/2011 - 13:21 | 1145897 BKGuy
BKGuy's picture

Exactly. Rickards has been all over this. This is the USA's plan B. They can always announce a gold backing due to their massive reserves. China, et al. have no such option and that is why they are frantically capturing all domestic PM production and buying in secret and in the open world markets.

Thu, 04/07/2011 - 13:52 | 1145994 Urban Redneck
Urban Redneck's picture

Was it the slam-dunk WMD crowd that that told the US that China had no such option?

China is the world's largest gold producer. 

China's state owned institutions have been acquiring controlling stakes in both exploratory and producing gold ventures.

China's state owned institutions have been arranging off-take agreements with producing gold mines. 

Being a centrally-planned economy 100% of the above gold flow can be directed to the PBOC.

Also, the state-run PR has been hyping/commanding massive retail investment in PMs, making China the on-again/off-again largest retail consumer.  Being a centrally-planned economy- a 1934 FDR-style gold reload in China will have a much bigger bang for the buck than a similar maneuver in the US where everyone from the Bernank to the CNBC ho's derides the barbarous relic.

Plan B is China schools the US in Mercantilism 101.

The only US response, if you disliked "Drill Baby Drill" you will hate "Strip Mine Baby Strip Mine"

Thu, 04/07/2011 - 16:23 | 1146750 SHRAGS
SHRAGS's picture

So we should not be surprised if total gold under the control of the Chinese government exceeds perhaps 25,000 tonnes. This is considerably more than the holding of 8,134 tonnes claimed by the Fed on behalf of the US government.  If this is true, then China’s economic policy and precious metal dealings begin to make sense. And it makes even more sense given the Fed and other Western banks are claiming to still own gold long since sold, to the point where close observers of bullion markets see a potential supply crisis developing.

 

Alasdair Macleod: Chinese Puzzles

 

Thu, 04/07/2011 - 13:07 | 1145830 tradewithdave
tradewithdave's picture

Hmmm?  I've been waiting for the paradigm shift that would sustain ZeroHedge... is this it?  Act II.

Dave Harrison

www.tradewithdave.com

Thu, 04/07/2011 - 13:07 | 1145831 umop episdn
umop episdn's picture

"convert held gold from a fixed to a MTM price. For the Fed alone this move would imply a $350 billion "increase" in assets"

IF the gold is really there, then the 'extra assets' could be loaned to the gubbermint to keep things going for an entire two or three months! If the gold is dumped into the fractional reserve bankster system, it won't help much as folks are getting tired of fiat paper endlessly printed.

Thu, 04/07/2011 - 14:10 | 1146080 Temporalist
Temporalist's picture

Exactly while gold will have to reset to higher than current market prices, like around $10,000/ozt

Thu, 04/07/2011 - 16:19 | 1146736 RockyRacoon
RockyRacoon's picture

That would be true for the actual metal, but not so for a paper market that is X times larger than the metal available.   Get it?  If they can convince the lumpen proletariat that there is a zillion more ounces out there (as evidenced by the paper gold market) then the "value" just ain't there.   Base your numbers on all the "gold" available, not just physical.

Thu, 04/07/2011 - 16:42 | 1146852 Temporalist
Temporalist's picture

RR it could be way more I just used $10k as an example; something people can grasp.

I have owned a 100 Trillion Zimbabwean note.

Thu, 04/07/2011 - 17:09 | 1146973 bushboy
bushboy's picture

I think we will find there will be 2 different gold prices. Actual physical gold will be the higher, the paper type gold will be shown up for what it is..paper.

This is why people are advised to take physical ownership for when the PM prices are "reset".

Thu, 04/07/2011 - 13:09 | 1145832 billwilson
billwilson's picture

Print money....Buy gold with it. Sounds like about the only workable plan for the US right now.

Thu, 04/07/2011 - 13:07 | 1145833 Robot Traders Mom
Robot Traders Mom's picture

Who follow Bix Weir on here? Would this jive with his ideas of the end game?

Thu, 04/07/2011 - 13:30 | 1145923 Josh Randall
Josh Randall's picture

I like his stuff, I want to believe it in the worst way. There definitely seems to be the endgame in site for Elites and laymen alike for a Basket of PM's backed currency. The only question seems to be whether this will be a JPMorgue owned one world currency, or if it will be a return to true soverignty for the US and other countries are free to back their own currencies with what they like too. One world currency can kiss my @ss, while a Gold and/or Silver backed Green Back would be a joyous occaision

Thu, 04/07/2011 - 23:01 | 1148200 essence
essence's picture

If an IMF backed SDR world currency that was Gold/PM backed came into play ... how many out there think it would come with a fair playing field?

Need I remind everyone who is behind the IMF.

Perhaps Fiat is headed for oblivion .... the U.S. federal gov has beefed up its police state apparatus such that I wouldn't be surprised that when the times comes  a PM holder that didn't take the offer to exchange their PM for 'offical'  SDR .. would find  there would be consequences.

That's what happens we when allow a cabal of banks to take control of the government.

 

 

 

Thu, 04/07/2011 - 23:02 | 1148209 essence
essence's picture

If an IMF backed SDR world currency that was Gold/PM backed came into play ... how many out there think it would come with a fair playing field?

Need I remind everyone who is behind the IMF.

Perhaps Fiat is headed for oblivion .... the U.S. federal gov has beefed up its police state apparatus such that I wouldn't be surprised that when the times comes  a PM holder that didn't take the offer to exchange their PM for 'offical'  SDR .. would find  there would be consequences.

That's what happens we when allow a cabal of banks to take control of the government.

 

 

 

Thu, 04/07/2011 - 13:15 | 1145868 Ray Elliott
Ray Elliott's picture

billwilson nailed it, "Print money....Buy gold with it."  I would believe that except it probably is legal....and I can't imagine the Fedsters doing anything legal.

Thu, 04/07/2011 - 13:16 | 1145874 Abner Doon
Abner Doon's picture

If Germany’s central bank
suspended the right to redeem gold backed Reichsmarks during World War I,
and 170 Reichsmarks bought an ounce of gold in January 1919,
why did an ounce of gold cost 87,000,000,000,000 Reichsmarks
in November 1923?

 

 "When national debts have once been accumulated to a certain degree
[there has never been] a single instance
 of their having been fairly and completely paid

The liberation of the public revenue...
has always been brought about by bankruptcy
 though frequently by a pretended payment [through inflation]"

Adam Smith
Moral philosopher and Father of Modern Economics

Thu, 04/07/2011 - 13:42 | 1145963 topcallingtroll
topcallingtroll's picture

The central banks are planning a light moderate inflation rather than debt repudiation.

Occasionally they need a deflationary scare to cool things off a bit. This will go on for the next ten years at least.

If you are a real contrarian and sell risk at inflationary peaks and buy risk during the occasional engineered cooling off period you should.do well. Now is perhaps a peak and i am going to consider going to cash soon.

As soon as everyone is scared of deflation again, then it will be time to buy risk assets. Rinse wash repeat, as debt is slowly eroded by inflation to a.sustainable.level.

Thu, 04/07/2011 - 14:30 | 1146180 Temporalist
Temporalist's picture

Just to point out the deflationary/inflationary fears are often "debated" (fought over) on ZH and the blogosphere presently, and there is hardly agreement on the topic.  Most recently look at Gonzalo Lira's and Rick Ackerman's tête-à-tête.

The deflationary "scare" is still very present as people argue that plunging housing values are going to continue and salaries, etc.  The inflationary "scare" is still very present as all other non-core prices escalate. 

I agree with Reggie and have said for a couple of years we're experiencing stagflation or simultaneous deflation/inflation/stagnancy in different assets.

Oh and the stock markets...their value is priceless literally as they are valued in paper and are being pumped by paper between paper pushers on low volume bereft of retail investors while pumping the leverage ever higher and cashing out their own equities to avoid certain collapse; all the while knowing that they are engaged in a casino rigged by oligarchical plutocrats that want to create a "wealth effect" in order to anesthetize and tranquilize the entitlement, retirement and pension participants from the pain that is actually ensuing in regular people's lives.

Thu, 04/07/2011 - 14:31 | 1146193 Cleanclog
Cleanclog's picture

Excellent!

Thu, 04/07/2011 - 16:22 | 1146747 RockyRacoon
RockyRacoon's picture

They certainly are.   Oh, you mean the comment.  That, too.

The stock market has NOT gone up since the GFC (global financial crisis).  It has been FLAT because the dollar has tanked.   The nonimal value in dollars is higher, but the absolute values are relatively flat. Thus buttressing the thesis of the comment.

Thu, 04/07/2011 - 13:47 | 1145975 blindfaith
blindfaith's picture

1923...it was more than that, it was the people lost faith in the currenty.  They believed IT HAD NO VALUE.

Brazil went through the same thing until they declared a new currency to replace the old.  The people were sold it as 'good faith' money and it worked.

I would not be surprised if this country came out with a new currency to replace the old one, and maybe that IS the end plan. Someday...

Owning PM's is a granted right...just like owning a gun, freedom of speech, and blabla bla...until it is taken away, by force/law, and then what the hell are all of you with lots of PM going to do?  War on grass, war on this, war on that, war on PM ownership.  "National Security" has meanings that many are not seeing....yet.  Is it coming, damn right it is.  Just remember who makes the laws and who and how they are enforced.  People do not own their governments anymore, "corporate" faceless interests do.

Thu, 04/07/2011 - 14:34 | 1146231 Mossy
Mossy's picture

"People do not own their governments anymore, 'corporate' faceless interests do."

Keep in mind that "non-profit _corporations_" are also corporations, as are Unions. And some of them are certainly political powers.

Want to say "Yeah, the NRA"? The NRA just wishes it had the political pull of AARP. ("AARP is a membership organization leading positive social change..." from the web site.)

Thu, 04/07/2011 - 15:10 | 1146442 SilverRhino
SilverRhino's picture

The War on Silver ...

The day that happens all my silver gets cast into 12 gauge sheet metal and I start making the most valuable suit of plate armor on the planet.

 

Thu, 04/07/2011 - 13:17 | 1145876 Trifecta Man
Trifecta Man's picture

Short covering?

Thu, 04/07/2011 - 13:18 | 1145882 Abner Doon
Abner Doon's picture

LOL

Thu, 04/07/2011 - 15:44 | 1146595 Roger Knights
Roger Knights's picture

Short covering makes the most sense. Supposedly some big banks have dangerously large short positions--and they may be starting to realize it.

The other possibility is that China (or some other Asian central bank) has been buying physical by redeeming shares of GLD to avoid leaving footprints in the futures market.

Thu, 04/07/2011 - 13:16 | 1145881 Muir
Muir's picture

"In an ironic twist, is gold about to become the "red button" to be pushed in the last ditch case when expectations of rampant inflation need to be created, following the next major deflationary market crash."

-

How many ways can this statement be wrong?

-

Seriously, dude, lay off the stuff for a while.

Thu, 04/07/2011 - 14:17 | 1146114 Shell Game
Shell Game's picture

And how might you word it?  This student would like to know..

Thu, 04/07/2011 - 14:35 | 1146236 Muir
Muir's picture

"In an ironic twist, is gold about to become the "red button" to be pushed in the last ditch case when expectations of rampant inflation need to be created, following the next major deflationary market crash."

1. "expectations of rampant inflation need to be created"

The FED does a good job of this via the threat of QE(X)s and does not need gold in any way shape or form in order to create expectations of a devalued currency.

2."following the next major deflationary market crash."

What follows a major deflationary market crash, a.k.a a Depression (1930s style) is, well, more Depression with a capital "C."

Gold would plummet in dollar terms (in abolute purchasing power of a "basket of goods" it would not)

3. "is gold about to become the "red button" to be pushed in the last ditch case" is complete gibberish. See 1 and 2 above.

-


Thu, 04/07/2011 - 13:19 | 1145887 PaperWillBurn
PaperWillBurn's picture

$55,000 an ounce would do wonders for balance sheets

Thu, 04/07/2011 - 13:24 | 1145902 Cleanclog
Cleanclog's picture

Q.  If Fed holds 8,133.5 tonnes of gold, is that owned by member banks or is that US Treasury asset?  If Fed and not US Treasury, what are the US government holdings of gold.  

And despite Geithner's contention that the US should not sell gold to help offset debt ceiling need to climb to pay for commitments . . . how much gold does the US government have as liquid assets - and what is the objective of holding them?

Thu, 04/07/2011 - 13:31 | 1145928 Long-John-Silver
Long-John-Silver's picture

The last Gold audit was 1949.

Bill Clinton used the last Gold bar for plating Tungsten bars.

Thu, 04/07/2011 - 14:06 | 1146057 Ruffcut
Ruffcut's picture

I thought it was 59. Old ike and his conspiracy of the military industrial complex.

Bill clintock used the last bar to milk his prostate with.

Thu, 04/07/2011 - 14:11 | 1145981 Dr. Impossible
Dr. Impossible's picture

i wish to add to cleandlogs questions...

how is payment/compensation for "protection/insurance/storage" for said assets(FT Knox) being rendered? ( or...Monitarily, what is supporting the safety of the contents?)

am i to guess???

http://www.youtube.com/watch?v=VaeBGjb72jc

Thu, 04/07/2011 - 14:38 | 1146242 Boonie
Boonie's picture

@Cleanclog

A. The Fed does not "hold" or "own" any gold. The Fed Reserve Bank of NY does "hold" gold of other nations in its vault in Manhattan and some of its own gold. The 8,133.5 tonnes of gold that is listed by the World Gold Council as (allegedly) "owned" by the United States is owned by the U.S. Department of the Treasury. Notwithstanding the audit or lack thereof regarding the Fort Knox gold, that is US Treasury gold in Fort Knox, not the Fed's, and there's also US Treasury gold(allegedly) held in the vaults at the West Point Mint and Denver Mint.

If you look on the Fed balance sheet, you will see no asset of gold. You will see an asset characterized as the "gold certificate account." As I understand, that gold certificate account asset was booked after gold was confiscated by FDR in the 1930s. The gold certificate account is then allocated out to each of the Fed Reserve Banks and their allocable share appears on their balance sheets as an asset. Most significantly, the "gold certificate account" is a claim on the US Treasury gold, but only in the "legal standard value" amount of $42.2222/fine troy ounce of gold.

While the Fed may or may not be buying gold (I rather doubt it), it does not "own" or "hold" any of the 8,133.5 tonnes of U.S. gold that is allegedly in existence.

As I've posted before, I think this makes for some interesting developments should gold ever be revalued as against $US.

Thu, 04/07/2011 - 14:46 | 1146312 Cleanclog
Cleanclog's picture

@ Bonnie.  Thank you very much for that education.

Thu, 04/07/2011 - 13:28 | 1145922 topcallingtroll
topcallingtroll's picture

Deflation is indeed very difficult to stop. Look at what the japanese have done.

Bennie knows he has to do twice as much pump priming in half the time. He also knows the difference between speculative influences on prices versus true inflation. Speculative price rises are unsustainable on their own without final demand.being there.

Bennie could wreck the risk on trade and kill inflation any time he wants.

Sustained deflation and credit contraction is a psychological issue. As such it is difficult for the fed to change it. Sustained inflation requires sustained accommodative policy and thus is easy for a central bank to stop as long as it is willing to endure mass unemployment.

Ingrained deflationary habits are virtually impervious to change. The hreat depression generation hates debt, they are total packrats, and repair everything until it turns into dust. They even darn their socks and underwear. We cant have that psychology become ingrained again.

Thu, 04/07/2011 - 13:30 | 1145924 Life of Illusion
Life of Illusion's picture

 

Remember when CB's announced they would sell their gold down. All BS.

Who’s the acquisition agent, NY Fed?

Thu, 04/07/2011 - 13:31 | 1145933 EireWhiteTrash
EireWhiteTrash's picture

This is going on right now.. Link below.

House Financial Services Subcommittee on Domestic Monetary Policy and Technology held a hearing entitled, "Bullion Coin Programs of the United States Mint: Can They Be Improved?

http://financialserv.edgeboss.net/wmedia/financialserv/hearing040711.wvx

Thu, 04/07/2011 - 13:31 | 1145934 DarkMath
DarkMath's picture

"Our own Fed marks its 8,133.5 tons"

Ah, Tyler, that Gold was leased out loooooooonng ago.

Thu, 04/07/2011 - 13:35 | 1145943 doomandbloom
doomandbloom's picture

of course they are.....new elite same as old elite..

 

the problem is not gold or paper...the problem is money...

 

as long as we continue to believe in a world of scarcity( there is enough for our needs, not our greed)....hoarding of some commonly agreed item( wheat, gold, paper)  will happen( often by force) , leading to elitism...

Thu, 04/07/2011 - 13:42 | 1145952 Temporalist
Temporalist's picture

Mike Maloney has a nice video of this exact topic today:

Gold & Silver Game Changer - Central Bank Buying - Mike Maloney

http://www.youtube.com/watch?v=Ykv5Uae2aiw&feature=feedlik

 

Mike takes a look at the CPM Gold Yearbook and examines the CB buying that is reported and forecasted (Jefferey Christian makes this report and has been very wrong recently).

 

Eric Sprott on CNBS April 5, 2011:

http://www.youtube.com/watch?v=owMsb2akt78&feature=feedf

 

Also Newmont mining's CEO was on CNBS so look for his interview if interested.

Thu, 04/07/2011 - 13:38 | 1145955 gwar5
gwar5's picture

I've always figured there are some Central Banks are loading up on Gold. It would be funny if it was Greece, Portugal and Ireland's CBs using bailout money on the side to fund gold purchases.

Realistically: China can't get enough, and GLD had a record 5.4% outflow last month as gold went up. Physical vs paper decoupling seems to be underway. Is this the result of redemptions out of paper by the big boys?

Thu, 04/07/2011 - 13:42 | 1145964 Temporalist
Temporalist's picture

From Nov 1st 2010:

Iran joins Russia, China, and India in bolstering gold reserves

http://www.examiner.com/finance-examiner-in-national/iran-joins-russia-c...

Thu, 04/07/2011 - 13:40 | 1145956 Dr. Porkchop
Dr. Porkchop's picture

I've read a lot of FOFOA lately. I can't even begin to summarize the ideas, but I believe that the basis of future wealth preservation will be gold, when it realizes its true value. Central bankers know this, they are now net buyers of gold.

Thu, 04/07/2011 - 13:55 | 1146019 blindfaith
blindfaith's picture

Don't know, but I think investing in Unattainum is a best bet at 2 million an ounce, since you have to go to the ends of the universe to get it.

Thu, 04/07/2011 - 13:56 | 1146026 blindfaith
blindfaith's picture

Don't know, but I think investing in Unattainum is a best bet at 2 million an ounce, since you have to go to the ends of the universe to get it.

Thu, 04/07/2011 - 15:09 | 1146451 DoChenRollingBearing
DoChenRollingBearing's picture

@ Dr. Porkchop,

+ $55,000 re FOFOA

The CBs had long ago front-run us in buying gold, but those of us who have been buying steadily through the years have front-run them!

We shrimps and ants all will add up to a lot before we're all done.

Thu, 04/07/2011 - 16:29 | 1146783 RockyRacoon
RockyRacoon's picture

Gold will not be a transactional currency. That will be the dollar or other fiat currencies around the world. But gold will replace the centralized function of the US Treasury bond and other debt instruments, in a decentralized way.
http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html

Gold holds its unique position because it is pretty much used for nothing else. It has an extremely high stock to flow ratio. "Stock" means those who are sitting tight on their physical gold, letting it lie still for the future, and "flow" means those who are presently trading their gold.

One of the false assumptions of your linear model is that real physical gold must hold the same time-value-durability confidence level throughout 100% of the world that paper wealth holds in 25% of the world. So as people sell their paper wealth and buy physical gold, the price rise will bring down the stock to flow ratio to a much lower equilibrium point somewhere around $10,000 per ounce.

Gold is not like other commodities where supply is economically driven to ramp up and meet demand as prices rise. Nor is it like paper investments that have objective metrics like price-to-earnings ratios and interest rates. With gold, a rising price sends the exact opposite signal to the place where supply comes from. It confirms the belief in those that already hold the "stock" that it is a good investment and it is best to sit tight and not re designate it to "flow".
http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html

Thu, 04/07/2011 - 13:42 | 1145960 Dick Darlington
Dick Darlington's picture

And here's one reason why everybody shud be loading up gold:

04-07 13:34: CBO says US govt posted USD 830bln deficit in H1 of 2011 Gold Jerry, gold!
Thu, 04/07/2011 - 13:42 | 1145966 Jason T
Jason T's picture

Paging Andrew Jackson

Thu, 04/07/2011 - 13:44 | 1145974 Silverhog
Silverhog's picture

Our own Fed marks its 8,133.5 tons of gold at $42.22/ounce

 

The can mark it at whatever price they like, but lets see the Gold.

Thu, 04/07/2011 - 14:17 | 1146090 DosZap
DosZap's picture

According to the supposed facts;

Ft Knox has 25%, Fed Bank NYC 25%, West Point 25%,and one other  that escapes my memory right now.

Not a Bank.

Thu, 04/07/2011 - 13:47 | 1145985 Quinvarius
Quinvarius's picture

And once the Fed and Treasury bankers around the world realize that revaluing their gold reserves makes their countries solvent again, expect more of the same.  They need an asset to balance all that debt.  The only thing they have that will be accepted as collateral by foreigners is gold.

Thu, 04/07/2011 - 14:18 | 1146132 DosZap
DosZap's picture

Quin,

when it gets top be that valuable, do you think you will be able to redeem it at the NEW price?.

No, they will call it in.

Thu, 04/07/2011 - 13:48 | 1145988 yabyum
yabyum's picture

What happened to pslv? It had been going up like gangbusters ,then hit the doldrums.  Does Sprott to much silver and the comex covets it. A superb run up to now.

Thu, 04/07/2011 - 14:15 | 1146092 Ruffcut
Ruffcut's picture

Maybe sprott is selling some of his shares and buring some the 20 percent premium, where it is less noticable? Perhaps? Maybe so, maybe no.

Thu, 04/07/2011 - 14:20 | 1146147 DosZap
DosZap's picture

I think he sold another big shares deal.

Same thing he did last time, made him a killing screwed the customers already on board.

Thu, 04/07/2011 - 13:49 | 1145991 Cdad
Cdad's picture

It would seem that Gaza is heating up.  I'm sure that will be bullish for things...since black swans are now entirely bullish indicators.

Thu, 04/07/2011 - 13:49 | 1145999 Cdad
Cdad's picture

And it is only now dawning on NATO that the Libya situation could go on...indefinitely.

http://www.spiegel.de/international/world/0,1518,755616,00.html

 

Thu, 04/07/2011 - 13:52 | 1146011 Cdad
Cdad's picture

http://www.spiegel.de/international/world/0,1518,755616,00.html

Just in case the how FUBAR, here comes a promised government shut down...which I think is great...but for which I'm sure the criminal syndicate known as Wall Street will begin its "surprise" thingy.

But keep buying Lulu Lemon for just a little longer now...'cause unicorns eat yoga outfits...k?

Thu, 04/07/2011 - 13:56 | 1146025 Cdad
Cdad's picture

And this just in...in case you are totally toxic from eating Ipads, a criminal syndicate Wall Street banker just announced on the BlowHorn [CNBC] that the whole Pacific Ring of Fire is still active.  No shit.  Just announced.  Buy Vix he says.

Is it martini time yet, Tyler?  I want to be good and drunk when this fucking flash crash arrives because there is NO WAY ANYONE CAN SEE THIS ONE COMING.

Fuck me...and where are the zombies, dammit!

Thu, 04/07/2011 - 14:03 | 1146039 Cdad
Cdad's picture

Oh...and I thought that was it...but no.  The Greeks are at it again...on strike.  That is always good for forward equity multiple calculations done my miracle, fractional banking geniuses.

http://www.theblaze.com/stories/the-latest-strike-in-greece-includes-reporters/

Just more evidence of how fun it is on the other side of a collapsed Ponzi scheme.  Can't wait.

Thu, 04/07/2011 - 14:24 | 1146165 DosZap
DosZap's picture

The ONLY reason to shut this down is politicall ploy to SCREW the GOP.

As they will get all the blame ion 2012.

When your military doesn't get paid, (as most are well below pov level as it is).I am sure this will go over well.

Welfare & free largess is like prostitution.............the Dems are not giving it up.

Thu, 04/07/2011 - 14:37 | 1146238 FeralSerf
FeralSerf's picture

It's "mission accomplished" already.  The Libyan oil needed to be removed from the market so the price could go up.  This was/is the reason for the Iraq debacle.  It's also the reason Iran "needs" to be attacked.

The best way to control The Flock is to control their energy supply.  When they're cold, hungry and the tank is on empty they'll spread their cheeks as wide as necessary.

Thu, 04/07/2011 - 14:43 | 1146300 mt paul
mt paul's picture

no gold or oil in Gaza

non issue...

Thu, 04/07/2011 - 13:47 | 1145992 GFORCE
GFORCE's picture

The MSM pushed gold long ago. Even Cramer's involved. Doesn't get more parabolic than that.

Thu, 04/07/2011 - 14:22 | 1146153 Quinvarius
Quinvarius's picture

Have you ever made a dime trading off of cliches like what is on the cover of a magazine?  Have you ever stopped to think your trading off of folksy cliches makes you the herd that is most dangerous to itself?  A very little knowledge is a more dangerous thing than none.

Thu, 04/07/2011 - 15:16 | 1146478 Temporalist
Temporalist's picture

Yea go take Cramers advice and buy some GLD or SLV...

BTW, many sources say less than 1% of people are invested in PMs, and some would say it is only that high now because of the rise in price or it would be a smaller percentage of holdings.

Thu, 04/07/2011 - 13:54 | 1146009 Catullus
Catullus's picture

Everyone who knows how central banking works knows that it must constantly confront gold as the alternative. Even in the face of the current largely counterfeit gold paper market. The people in the know realize that global central banking is the only alternative to the current system where they maintain control. The only difference between a true gold standard and an international global central bank is going to be is control. On one extreme you have the completely decentralized gold standard and the completely centralized global central bank. logically, the way you prevent the system from decentralizing is to centralize the gold. Buy it, melt it down, and recast it into mega gold bars. It's a new gold confiscation, except they're using the printing press to get it back. So what if gold goes to $55,000/oz? just print more and take the supply out of the market. There should be no alternative to the system they're building.

Those of you who own gold and silver need to really divorce yourselves from watching the price in fiatscos. You're not going to sell your physical. this is just a trick they're playing with you to rob you of your physical. You know why you bought it, you bought it to deleverage yourself from fiat. Time is on your side. They have to implement global banking when faith is lost. They have no control over the timeline. Anyone with enough physical will just have to be allowed on the liferaft.

Thu, 04/07/2011 - 13:52 | 1146010 ivars
ivars's picture

So can FED bail out (buy)  JPM silver shorts?

Thu, 04/07/2011 - 14:18 | 1146116 Ruffcut
Ruffcut's picture

Fed, Jpm and GS, same people. But fed has treasury privileges like we all wish we had.

Berank, print me a loaf or two, please.

Thu, 04/07/2011 - 16:31 | 1146797 RockyRacoon
RockyRacoon's picture

Pinchin' off a loaf might be more like it.

Thu, 04/07/2011 - 13:53 | 1146014 mind_imminst
mind_imminst's picture

Derrr! Print money and buy gold. My wife has been alluding to this possibility for months now. If I was the FED and/or TBTF bankster, I would do the same thing.

Thu, 04/07/2011 - 13:57 | 1146028 GOSPLAN HERO
GOSPLAN HERO's picture

Silver remains the "poor man's gold."

Thu, 04/07/2011 - 14:00 | 1146031 ThirdCoastSurfer
ThirdCoastSurfer's picture

I would be rich but they sold into the downturn. Now they buy to replenish. Both are means to manage liquidity, soaking it up or letting it loose they have a distinct advantage as they don't pay taxes on gains -they receive them! Imagine how your investment strategy would change if taxation was not a potential liability but an asset! At a tax rate of 35% you could sell to me and then buy it back when it's 30% higher and still post a profit! Buy at $1,400 * .65 = sell at $910 and this doesn't even factor currency manipulation!

Thu, 04/07/2011 - 14:04 | 1146036 gkm
gkm's picture

deleted. 

Thu, 04/07/2011 - 14:03 | 1146040 gkm
gkm's picture

deleted

Thu, 04/07/2011 - 14:00 | 1146042 gkm
gkm's picture

Is that it or is does the Fed need the offset to prevent insolvency with respect to its underwater t-bills?

Thu, 04/07/2011 - 14:05 | 1146058 Snidley Whipsnae
Snidley Whipsnae's picture

PMs are holding recent gains while oil continues to creep up.

Gad aff ee is now bombing, or shelling, his own oil fields.

Japan rocking and rolling again.

When do we take on Granada again? Are they ready for a rematch?

Thu, 04/07/2011 - 15:18 | 1146489 Temporalist
Temporalist's picture

Based on the way oil is going the U.S. will be in the Falklands either beside the U.K. or against both Argentina and the U.K.

Thu, 04/07/2011 - 14:06 | 1146060 ruffian
ruffian's picture

Of course the cental banks want the price of gold to rise. Why else would they have so much in reserves? They just dont want it to rise too quickly....yet, as their bastard children the bullion banks are still short via their fractional promise game and  Asian central banks do not have enough yet and want stable prices so they can continue to accumulate on the cheap

Thu, 04/07/2011 - 14:06 | 1146063 suckerfishzilla
suckerfishzilla's picture

We've all been watching the same charts here.  Gold is floundering or in a consolidation phase before its next breakout in so-called terminology of our false economic paradigm that we are boxed into.  With all of the Central Banks efforts to acquire Gold it has been left in a trail of dust by Silver investors.  Gold has limited uses in the economy.  It is a better currency than paper.  That is most definitively clear.  That doesn't refute the fact that if you are buying into Gold you are an unwitting dupe to the plans of the CB's.  Not to mention that for the past 9 years Gold investors have reminded me of somebody who shows up at the car show with a Caddy while everyone else showed up with an Italian sports car.  I'm going to sell some of my Gold this year to pay my taxes and will continue to focus on acquiring Silver the people's money.

Thu, 04/07/2011 - 14:10 | 1146068 Highrev
Highrev's picture

Wouldn't surprise me as the asshats were dumping gold at the 2000-2001 lows.

Thu, 04/07/2011 - 14:10 | 1146069 Zina
Zina's picture

Today a crazy shooter killed 10 children in a school of Rio de Janeiro, here in Brazil, in a "Columbine-like" rampage.

The shooter left a letter, saying he was "a Muslim".

Last week, Brazilian weekly magazine "Veja" published a report about "terrorist cells" in Foz do Iguaçu, in the Brazilian border with Paraguay.

Coincidence?

Of course not. Veja magazine always was the voice of CIA in Brazil. This is a covert operation. This guy, the shooter, was brainwashed by "islamic terrorists" in the CIA payroll.

CIA is trying to manipulate the Brazilian public opinion against Islam, to make Brazil join the "War on Terror".

FUCK YOU CIA!! We won't join any war! FUCK YOU, BASTARDS!!!!

Thu, 04/07/2011 - 18:14 | 1147255 akak
akak's picture

You tell 'em Zina!

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