"Transitory" Inflation Tally: Gold, Corn Record Highs, Silver 31 Year High, Brent 2.5 Year High

Tyler Durden's picture

Yesterday the Chairman said something about inflation being "transitory", and that he would be prepared to act by the time inflation becomes more then just "transitory", which we read as "permanent." So, in other words, by the time inflation is set in, Bernanke will be prepared to act, do we have that right?  We hope this is just another Transocean-esque vocabulary disaster, because while we all know how good the Fed is at predicting things, being incapable of sensing grammatical nuances is a Fed Chairman first... which is not surprising: nobody had any clue what Greenspan said most of the time. We just hope Benny's reference was not in the context of a "transition" to a permanently higher "new price normal." Which is maybe how the market interpreted his words: after enjoyed picking apart the irony in the Chairman's statement and once again calling his bluff, the net result is: gold and corn all time high, silver fresh 31 year high, brent 2.5 year high. At some point these prices may revert, and Bernanke will be right. We just hope that by then TEPCO is not in charge of cleaning up radiation ("it's only 1 nano sievert- we swear") from everywhere, not just Fukushima.

From Reuters:

Gold jumped to an all-time high above $1,450 an ounce on Tuesday, as peak crude and corn prices fanned inflation fears and a downgrade of Portugal's credit rating drew attention to euro zone problems.

Bullion rose more than 1 percent, its biggest gain in more than a month of range-bound trading. Silver soared to a 31-year peak. Both drew support from Federal Reserve Chairman Ben Bernanke's comments late on Monday suggesting he was committed to completing a $600 billion stimulus program as scheduled in June.

On technical charts, gold broke above a recent double-top technical formation around $1,440 an ounce. This added to a rush of buying triggered by news that Portugal's leading banks threatened to stop buying government debt hours after a Moody's downgrade.

Silver gained 1.8 percent to $39.12 an ounce, after hitting a session high of $39.25. That was the highest since the Hunt Brothers cornered the market in the early 1980s, when silver briefly hit a record of just below $50 an ounce.

Silver outperformed gold in the first quarter, rising 22 percent while gold rose 0.7 percent. The gold:silver ratio, which shows how many silver ounces are needed to buy an ounce of gold, fell to a 28-year low at 37.3.

 U.S. corn futures hit a record high on Tuesday, extending their biggest rally in six months as traders feared supplies could run out unless ranchers or ethanol makers cut back on purchases.

Corn has surged more than 15 percent in four days since a U.S. government report showed unexpectedly low inventories as of March 1. Gains slowed on Tuesday, with prices up a 0.7 percent as traders bet that the U.S. Agriculture Department on Friday will further downgrade its end-of-season stocks forecast. But with supplies at their tightest since the 1930s many saw more gains ahead.

"Corn has the potential to go higher and I see spot up to $8.25 to $8.45 and it will happen in April or early May," said Tim Hannagan, analyst for PFG Best.

Other grains have lagged the rally and ended lower on Tuesday, with soybeans depressed by a fourth interest rate rise in China, a move that threatens to reduce oilseed imports by the world's biggest buyer.

For all those waiting for Dennis Gartman's permission to jump in the pool (at all time record highs) it is finally here:

 Investor Dennis Gartman, publisher of the Gartman Letter, said gold was free from liquidation pressure once it breached $1,441 an ounce, a level which had triggered selling.

"It appears that gold is beginning a new up-trend after its recent consolidation," said Adam Sarhan of Sarhan Capital. "If gold negates this breakout and falls back below $1,440 to $1,430, one would expect sideways action to continue."

If the preceding wasn't enough for people to consider locking in some profits here, the following from UBS should serve as a wake up call:

UBS said silver investors show no sign of being ready to sell, even though there is a "real danger that silver prices have travelled too fast, too soon." Silver at $40 an ounce appears inevitable in the near term, UBS said.

And so more continue to "predict" the future, and be paid the big bux for their big calls.

Bottom line: if yes QE3: gold goes to $2,000. If no QE3, gold drops to $1,200, then jumps way beyond $2,000 following the deflationary tsunami that will flood the world, crash markets, and push the Fed's hand for one last expoeriment in failed voodoo economics.

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unwashedmass's picture

 

whaa?????????

but?????????????

Ben said there is NO inflation. What's he talking about now????????/

Mark McGoldrick's picture

What's he talking about now????????

The better question is:  what is ZeroHedge talking about?

Tonight, in typical fashion, Zerohedge suggests Bernanke is to blame for high corn prices.

Yet, a few days ago, something got through the ZH "blame everything on Bernanke" filter, and the real truth behind corn prices was revealed.

http://www.zerohedge.com/article/goldman-raises-corn-price-forecast-30-just-corn-surges-highest-2008-food-crisis

Haven't the new ZH writers been fully indoctrinated, yet?

Anonymouse's picture

No worries.  In 2008, he prevented the collapse of the CP market with 3 hours to spare.  Just think how much better he is 2 1/2 years later.

I figure Bernanke can wait until 15 minutes before inflation goes asymptotic, then pull the levers and fix it all.  He's that good.  Just ask him

That's what I call Just-In-Time management

doggings's picture

will you fuck off spamming that shit blog on here with lame  and meaningless one liners you moron.

 

Sudden Debt's picture

In 2 months, news like that will be called: Same old Same old.

 

SOSO NEWS!!!

 

 

DoChenRollingBearing's picture

By chance I was watching CNBC at 3:15 PM.  Maria and what's-his-name were interviewing ERIC SPROTT.  He told the CNBC dynamic duo that there were only three things that could bring prices of gold and silver down.

When he mentioned getting government spending under control, there was a little bit of nervous laughter...  Like THAT is going to happen.

He then mentioned that maybe when gold went up over $100 for 2 - 3 days in a row, that might be a sign of a top.  I think Maria then asked something like:  So, gold will go to $1500?  Sprott just chuckled.  Priceless moment, Maria had kind of a stunned & dyspeptic look live I have never seen her have.  Made my afternoon!

Well gold and silver going up so much did as well.

Ray1968's picture

Does anyone know why Sprott's PSLV and PHYS seriously underperformed the PMs (and SLV and GLD)????????

Anonymouse's picture

Yeah, I don't understand how PHYS was down when gold was up $25, especially when it happened earlier in the day. There's no dilution risk (given the new offering) in his ETF is there?

DoChenRollingBearing's picture

I have seen PHYS and Sprott's silver ETF discussed here at ZH and why they trade so badly at times.  Maybe there is dlution risk...

Sorry I can't remember and can offer no references.

Buying the physical is just so much simpler...

Careless Whisper's picture

PHYS is not an ETF, it's a closed-end fund. The PHYS was weak today because Sprott is increasing its size and buying $300 million more gold. The pricing of he new shares caused the weakness. Long term it will perform the same as gold because they actually own it and buyers of shares have the right to convert shares to actual gold (there's a minimum to do that, I think it's around $1 mill).

Pegasus Muse's picture

Sprott announced a Follow-On Offering after the market closed yesterday.

 

Sprott Physical Gold Trust Prices Follow-on Offering of Trust Units In An Aggregate Amount of US$311,255,340 04/05/2011 Download this Press Release 

TORONTO, ONTARIO -- (MARKET WIRE) -- 04/05/11 -- Sprott Physical Gold Trust (the "Trust") (TSX: PHY.U)(NYSE: PHYS), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, announced today that it has priced its follow-on offering of 24,821,000 transferable, redeemable units of the Trust ("Units") at a price of US$12.54 per unit (the "Offering"). As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 2,347,500 additional Units. The gross proceeds from the Offering will be US$311,255,340 (US$340,692,990 if the underwriters exercise in full the over-allotment option). Certain lead investors, including certain funds managed by Sprott Asset Management LP, will purchase 9,171,000 Units in this Offering.

 rest of the release here:  

http://www.sprottphysicalgold.com/Investors/Press-Releases/Press-Release-Details/2011/Sprott-Physical-Gold-Trust-Prices-Follow-on-Offering-of-Trust-Units-In-An-Aggregate-Amount-of-US3112553401124768/default.aspx

Ray1968's picture

Thanks. I guess that 'splains it.

I'm not happy. Feels like holding onto a dog.

Bay of Pigs's picture

11 year bull run in PM's and those idiots on CNBC still don't "get it".

Assclowns or what?

suckerfishzilla's picture

CNBC's mission is to keep the public in the dark about PM's.  If the FED put the brakes on QE3 there is still a huge lag between the events that jump started this bull market in metal and where the price should be adjusted accordingly.  Discounting the difference in the nation's money supply between 1980 and now market manipulation and in fact a historic manipulation of Silver going back to the late 1800's are all coming to a head and under scrutiny in the light of day.  Physical Silver investors are actually starting to see everybody else in their rear view mirror.  10000% or bust!

FIAT_FixItAgainTony's picture

agreed jolly.  silver and gold are what they are - ultimate extinguishers of debt.  they are not promises to pay, they are final payments.  sure wish more understood this fact.

DoChenRollingBearing's picture

More people will understand this fact before long.

RockyRacoon's picture

Still available, 90% silver proof quarters from the Mint.

Price: $39.95 per set and $4.95 flat shipping for any size order.

The goobermint ain't going to take your numismatic coins!

There is a tad more than 0.90 ounce per set -- do the math.

2010 United States Mint America the Beautiful Quarters Silver Proof Set™

billhilly's picture

 silver and gold are what they are - ultimate extinguishers of debt.  they are not promises to pay, they are final payments

EXCELLENT !

emsolý's picture

to transmisquote poor Irving Fisher:

"iPad prices have reached what looks like a permanently low plateau." - William Dudley dude

Sudden Debt's picture

It's in Dutch but: SAP GOES ALL IN ON THE IPAD.

http://datanews.rnews.be/nl/ict/nieuws/nieuwsoverzicht/2010/09/08/sap-wordt-grote-ipad-afnemer/article-1194813704175.htm

I've also did the testings with Citrix to acces SAP and it works like a gemstone. SAP, CRM, BW... you name it you can use it.

Great tool for the salesforce. And with the catalogues soon to go online it's going to be the best on the road tool to cut costs on the order fullfillment process.

I know 3 big other international companies who are implementing SAP because of this choice.

ps: GO LONG SAP!

 

EvlTheCat's picture

Good news! Thanks for the post and link!

Ray1968's picture

I'm leading an effort to implement usage of the iPad to doctors and nurses in my hosptial (a big US hospital). The iPad is cheaper than a PC or laptop and the user experience is superior. With VMWare virtual deskop already in place, we have fully functional PCs on the iPad. Citrix and SAP (Yes, we use Citrix on many clinical apps and we have SAP) will be the icing on the cake. It really is a nice machine.

A Nanny Moose's picture

I've got a client that just delivered Win7+apps via XenDesktop (XD), and a Hospital/Clinical mgt company looking to deliver GE Centricity via XenApp/XenDesktop, and eliminate full desktops altogether. I've seen this entire desktop replacement paradigm fail before, but virtualization was the missing piece to the puzzle. There is a metric shit-ton of momentum behind the Deskop Virtualization Kool-Aid lately, with the usual drivers in place. This time it is truely a matter of IT departments getting control of, and enumerating their shit.

From a techical perspective (IT...not financial markets bullshit technical), CTXS has the most mature tool set in the App/Desktop virtualization world, and certainly seems well positioned to ride the BYOD tsunami. VMWare and others have some catching up to do.

Disclosure: No CTXS, SAP, or AAPL, but I did sleep at a Holiday Inn Express last night, and might BT some Effing D.

Dr. No's picture

Boom, Bust.  Keynesian economics.  Bernanke has focused on the new bubble: commodities.  Like housing before this one and dot-com before that, "froth" in the markets is labeled as healthy.  He is building the bubble and preparing for the pop.  Thats what they do.

sabra1's picture

well, corn is golden in color!

RobotTrader's picture

As predicted, JPM is totally unfazed from the breakout in PM's today.

A clean breakout in GLD and SLV is accelerating into Outer Space.....

And JPM is obviously hedged accordingly.

The gold and silver breakout can mean only one thing.

Things are getting better, not worse.

There is currently a run on Abercrombie and Fitch jeans, as the stock broke out today, up 10% on 3x normal volume which is bound to catch the eye of all the CANSLIM mo-mo monkeys.

And LULU made yet another new high today....

As for JPM, chart still looks OK to me.

Looks to me like the Weimar Party has started, and virtually everything is going to be skyrocketing in price.

Including bank and retail stocks.

tmosley's picture

What, like Enron was unfazed, right up until they started collapsing?

Sudden Debt's picture

I hear you. I was assfucked when they went belly up and was totally blindsighted to see the facts. I kept buying untill it was scratched from the boards.

 

Careless Whisper's picture

@ Robo

add the s&p500 to that 1 year chart of ur beloved jpm and u will see that jpm is up about 3% while s&p500 is up about 12%. it's a p.o.s. dewd. not to single them out, so, wfc, bac, gs, pnc, sti, all have relative weakness too.

MarketTruth's picture

Robo is just trying to get others.... nevermind. Robo's BS is getting so predictable he'll next be touting that nuclear waste is a growing industry worth investing in, showing the usual BS chart of some company.

+++++ Robo, you really are getting overly predictable and exceedingly boring. +++++

hambone's picture

T - the current global CB policies are creating massive liquidity on one side of the ledger to use in speculation of liquid assets against the deflationary pressure of the RE / CRE / credit bust on the other.

Budget deficits so large now they can't stop...so they won't.  I'm betting we see stagflation and maybe "megaflation" or hyperinflation before we finally see the much awaited deflation.

Flations bitchezzz.

Internet Tough Guy's picture

Momotrader is our Gartman. See my post below.

Internet Tough Guy's picture

Gold getting brutalized pre-market, AAPL also getting crushed
RobotTrader - Tue, Apr 5, 2011 - 09:18 AM

Perhaps some of these ultra high risk investments will get slaughtered today?

Pladizow's picture

To: RoboTrader

You spend an aweful lot of time in a forum that thinks your a douche.

Debtless's picture

golf clap. and another for the comment.

Votewithabullet's picture

Imagine. He has an opinion.Some of these pussies want to form a mutual  masterbation society.

lieutenantjohnchard's picture

tard, so that you can live vicariously through the gains of silver and gold investors in the zh community imagine all the zh and jim sinclair types tonight popping cab corks over a steak and a wedge.

Richard Head's picture

Fuck off.  Your next post will be the complete opposite, and then you'll try to claim victory somewhere else regardless of what happens.

 

umop episdn's picture

Gold, silver, corn, crude, all more expensive. Now the price of transitories is going up too.