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Why Isn't Gold Higher?
My colleague and erstwhile nemesis Gonzalo Lira posed the question above in a recent essay, and it is indeed a most puzzling one. Given that the world’s central banks — joined most recently by a shockingly reckless Switzerland — are waging all-out economic war by inflating their currencies, shouldn’t gold be soaring,? In fact, prices have continued to meander between $1500 and $1700 since September of 2011, when gold topped out at $1945 after a spectacular run-up from $728 in just three years.
What could have caused the bull market to go lifeless since then, even as more and more countries appear hell-bent on devaluing their currencies to keep their exports competitive? The answer that Lira has offered is novel and engaging, but it did not persuade me, perhaps because the underlying conceit seems forced. For he has likened the current gold market to the one for credit default swaps (CDS) prior to the Great Financial Crash of 2008. Because swaps provided insurance against bond defaults, they rose in value as the crisis mounted. But then, suddenly, they ceased to appreciate, Lira says, because “the markets collectively realized that the counterparties to those CDS contracts might not be able to pay up.” This, Lira asserts, is exactly what is occurring in gold, as paper certificates have come to greatly exceed the supply of ingots held in vaults. The result, he says, is that “the global precious metals markets are essentially a game of musical chairs, with far fewer seats than players—far less gold than gold holders. And market participants collectively know this. Which is why they don’t trust their counterparties. Which is why gold isn’t rising like a shot.”

I think there’s a more convincing explanation for why gold isn’t rising, and I will get to it in a moment. But first let me say that my intention is not to assail Lira or his ideas. Even though we had a nasty spat on the Web a couple of years ago over the inflation vs. deflation conundrum, I’ve always found his essays insightful, original and well wrought. Putting aside our differences over whether the inevitable collapse of the financial system will be brought on by hyperinflation or deflation, we probably agree on 90% of the things we write about.
‘Vague’ Insurance
This time, however, his logic would seem to equate apples and oranges. To begin with, the swaps he would compare to gold are a contractual form of insurance against default risks in certain types of financial instruments. As such, it is at least theoretically possible to calculate exactly how much risk is insured, even in a market as large as mortgage securities. Gold, on the other hand, and relative to inflation, offers only a vague kind of insurance. Moreover, unlike swaps, gold does not give its owner a claim on anything.
Lira’s argument might have been more persuasive if he had simply asserted that an effectively unlimited supply of “paper gold” has been absorbing enough demand to suppress the price of physical. But if, as he evidently believes, ruinous inflation, never mind hyperinflation, were immediately in prospect, then we should have expected to see the demand for bullion soar, pushing up paper gold no matter how large the supply.
Physical vs. Paper Gold
Lira lumps paper and physical together to argue that “the current spot price of gold is reflecting market uncertainty as to who has actual gold, and who has worthless paper certificates of gold.” Again, if this were so, then we should have expected uncertainty itself to have spiked the preference of investors for physical over paper, overwhelming carry-traders and other feather merchants playing gold from the short side. And if investors were indeed worried about whether the insurance they hold is properly matched to the endgame, would they be buying the Treasury paper of a country that owes so much more than it will ever be able to repay? In fact, the risk of a U.S. default is the last thing on their minds at the moment, and it will likely remain so until the day when events no one can predict cause creditors or debtors – it will have to be one or the other – to get stiffed.
In the meantime, whither gold? My own theory as to why prices aren’t bounding above $2000 is simply this: the central banks have so far failed to produce any meaningful inflation. The untold trillions worth of stimulus they have shot at this goal have barely kept deflation at bay. Granted, prices for groceries, health care and some other necessities have gone through the roof. But the inflationary impact of all of these things together is inconsequential in comparison to the deflationary down force of a quadrillion dollar financial edifice that remains in a state of incipient collapse.
Hyperinflation Scenario
Under the circumstances, I continue to believe that deflation, rather than hyperinflation, will wreck the global financial system. I did not, by the way, “switch sides” in this argument as Gary North asserted in an essay he wrote for LewRockwell.com. It was when the debate turned unendurably ugly that I was impelled to take a closer look at what some of the hyperinflationists were saying. Peter Schiff, for one. In his scenario – which, along with the running debate at FOFOA blogspot is the most persuasive case for hyperinflation that I’ve come across — a run on the dollar would force the Fed to absorb the entire supply of Treasury paper at auction. An unintended result, says Schiff, is that ostensibly unsupported bond markets such as corporates and municipals would collapse, forcing the Fed to extend open-ended buying to all fixed-income securities.
This would most surely trigger a hyperinflation – would in fact be a hyperinflation. However, this scenario, and virtually every other hyperinflation scenario of which I am aware, envision hyperinflation occurring as a result of political decisions made, Fed actions taken and markets “rescued.” My gut feeling, however, is that the collapse of global markets will be so swift as to preclude intervention, let alone rescue. Pent-up forces will take their course, and the entire financial system will experience an instantaneous collapse for which the May 2010 Flash Crash will seem to have been just a warm-up.
Whatever we might predict about the outcome, one result that seems entirely likely is that banks in the U.S and elsewhere will not open for business the next day. Over the short-run — a few weeks, perhaps — this would be ruinously deflationary, since a hitherto inexhaustible supply of digital money will have become inaccessible via checks, ATMs or charge cards. The fragility of the clearing system that allows such money conduits to function will be tragically obvious by then, as will the distinction between cyber money and the real stuff. And you had better have some of the “real stuff” stashed away in your home, by the way, since, The Morning After, that’s the only kind of money Safeway cashiers and gas station attendants will understand. Nor should you expect them to be up to speed right away on the junk silver you’ve socked away, since, at the retail level, although perhaps not in barter circles, pre-1964 coins are likely to be treated the same as the pot-metal coins that have driven silver dimes, quarters, halfs and dollars into secure storage.
Gold Hoarders, Beware
A couple of caveats for gold hoarders. Don’t count on exchanging gold at $5000 an ounce for something with high intrinsic value, such as farmland. For all we know, supply-chain disruptions could be so severe that you’ll pay a Krugerrand just for a loaf of bread. And while it has always been possible in theory for short-squeeze pressures to push gold well above the $5000 level, this is most unlikely for reasons that Lira’s essay implicitly recognizes. Consider who is short all of that paper gold: carry-traders such as Morgan Stanley, J.P. Morgan, Goldman Sachs and other bullion bankers who have always been able to borrow gold for next to nothing. The likelihood of regulators forcing them to make good on their paper gold obligations can be dismissed in advance as negligible.
Despite the seeming paradox of intrinsically worthless fiat money gaining traction in a post-apocalyptic economy, there will remain the possibility of a hyperinflationary spike. It could happen if, say, the Fed were to attempt a lump-sum pension payment to all government workers. For political reasons, this would have to be matched by similar windfall benefits to private-sector workers in the form of Social Security, welfare payments, unemployment compensation and food stamps. The Catch-22 of this approach is that any benefits in excess of what is needed to keep the economy functioning, if only barely, would touch off an inflationary spiral. Imagine how the world would react if someone in Congress merely mentioned that The Government was going to cover all of the obligations and liabilities of public and private pensions and health plans. If and when that day arrives, I will have no argument with Lira and the hyperinflationists about the likely outcome.
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Yeah, I guess someone doesn't buy any groceries....... BACON is now over $7 a package - up from a still high $4 a few months back. The local utility is reaming us on the price of electricity and wants a rate hike. I'm gagging at the cost of heating oil and meanwhile my local property tsaxes have gone up over 350% in the last 20 years (my house sure hasn't goen up that much in value - even at market peak).
Just because OFFICIAL government numbers VASTLY understate inflation, it doesn't mean there isn't any. BTW - REAL unemployment is over 1932's level of 23% as well.....
As others have put it - DEFLATION is occurring only in the cost of things you DON'T NEED while INFLATION is very real for the price of anything you DO NEED
doesn't matter how cheap I can buy a house or new car - I don't NEED either - but food and energy......it's costing more to eat and stay warm.
This is Ackerman. Logic will get you nowhere. He's still too busy reading fedgov tea leaves for clues.
Dude, he is just offering a potential premise or an opinion. It is hardly worthy of a large declaration of war and a nuclear launch of profanity.
Well, that depends upon one's ability to absorb inflation, no?
Living life on the margins is a wholly different perspective than Rick's clueless (not to mention misdirected) premise. His entire apple vs. oranges example had nothing to do at all with his gold price theory (the whole point of the article). Rather, it merely served as an opportunity to critique Lira over a faulty analogy. BFD
We can always eat our AK-47s.
Holy shit, we're rich. My wife bakes the best bread in the world, and each loaf is worth an ounce of gold. Call the granary, order a new oven. I'm quitting my job.
What a tool Ackerman is on that one. Sure, everything will go up in price, but did it take an ounce of gold in Zimbabwe to buy bread? Nope, either a bunch of 100 tril notes or the same value in ZAR, euro, or USD. Someone said it before. Get your head out of your ass and look at past situations. Dumb ass.
Indeed. Ackerman should have checked what the price in gold for a loaf of bread is in Zimbabwe before throwing out an outlandish number of 1 oz = 1 loaf.
Search youtube for "zimbabwe bread" for the report.
The answer: a loaf of Bread in Zimbabwe goes for 0.1 grams of gold.
Ackerman was off by a factor of 311.
Yeah, if supply disruptions were so bad that it actually did cost 1 oz. of gold for a loaf of bread, we'd really be talking about "The Road" level of apocolypse.
http://en.wikipedia.org/wiki/The_Road
Ie., Ackman is really predicting the end of human civilization in stating this. What a consipracy kook!
O.k... Keep in mind I'm just a blue collar dummy here.
I fail to understand how there can be any meaningful monetary deflation whatsoever as long as central banks are having to create money in ever-increasing quantities to support their holographic debt Ponzi.
If you're talking further deflationary pressures on things like house prices against gold or something sure but deflation in a monetary sense? How? How is real CPI approaching 10% deflationary?
Does the author actually believe the reported metrics the government publishes and that the PM markets are totally free of manipulation?
Some folks don't believe in QE to infinity. It going to stop.
The US dollar was steadily and significantly losing value for decades before QE reared its ugly head.
You need to step back and take a broader historical perspective --- there simply is not, and never has been, ANY SUCH THING as a fiat currency that is NOT being continually debased.
Deflation, hyperinflation, two sides of the same coin, both result in impoverishment for most. I would prefer deflation as my savings would retain value, although hard assets would fall.
Gold may help you during the crisis.
BUT! Gold will also help you after the crisis. When a new monetary system is created. You can then exchange your gold for buying power which you are storing now.
The people who stored their buying power in dollars will have lost that buying power.
My guess is that gold will back the next global currency, but it will be illegal for anyone to "profit" personally from it by exchanging it later. Instead you'll be given a window before hand to do so before the action is criminalized.
If FDR did it, you can bet it is being planned again. As for enforcement, they'll just put a bounty on it while labeling noncompliance as terrorism.
Once one realizes that government is synonymous with mafia, this stuff isn't really that hard to figure out.
Just drive across the border. Sell or buy it in Canada or even Mexico like people (quietly) did when it was illegal. No big deal.
If people will pay 1 ounce of gold for a loaf of bread : I'M GOING TO HAVE A FORT KNOX IN MY BASEMENT!
Read the book "When Money Dies." Summary of Germany after WWI. Reparations demanded by France and Great Britian caused Germany to print...print and print. They simply couldn't satisfy thier debts. Result=Hyperinflation. Farmers refused to bring their products to market because they realized the price would be higher the next day...and the day after that.
People were bartering pianos for a loaf of bread or a few potatoes. Every wonder why the Germans are so frugal today....?
Needless to say, the collapse of the Weimer Empire taught the Germans a lesson. Obviously, the US will eventually be taught the same lesson.
#owned :D
1. I wouldn't be trading my silver or gold with some moron who thinks it's worth a loaf of bread.
2. I wouldn't need to be trading for food because I got enough for a few months :)
3. After those 6 months, I would be a food producer.
4. If shit hits the FAN => MOVE AWAY WITH YOUR GOLD AND SILVER OUTSIDE THE COUNTRY
Look for a place with sounds economics.
Trade your gold and silver there.
Come back with whatever Americans or Europeans need and are willing to trade your their assets with in return.
If they pay 1 ounce of gold for a loaf of bread...
And you can bring it inside the country at a bottom price...
and you have bought your stuff in a sound economy with your high valuable gold and silver...
YOU'LL OWN THE CITY IN A YEAR!!
Sorry, but this writer assumes everybody is a sitting duck!
Second: IF SOMEBODY IS WILLING TO CHARGE YOU A OUNCE OF GOLD FOR A LOAF OF BREAD
THAN THOSE WITHOUT GOLD DON'T HAVE A LOAF OF BREAD
BUT THEY ARE STILL HUNGRY. AND SOME HAVE BIG HOUSES.
I'LL TRADE YOU THAT OUNCE OF GOLD OR LOAF OF BREAD FOR YOUR HOUSE!!
NOW PASS ME THAT BOX OF DOLLAR BILLS BECAUSE I'M DONE SHITTING AND NEED TO WIPE MY ASS!!
Anyone that can work in Zimbabwe is panning for gold - a poinch of gold dust gets you enough food for a day - and it takes a full day's labor to come up with that pinch of gold dust.
In Weimar Germany a wheelbarrow full of banknotes couldn't get you a loaf of bread but a gold coin tipped to a waiter could buy the hotel he worked at.
History has shown that when financial regimes collapse the value of paper money can - and often HAS - gone to zero. In the past people have sought 'safe havens' - when Yugoslavia collapsed, people held German Marks. In other instances, people have held US dollars. We are looking at almost ALL fiat currencies being at risk - ther are NO 'safe haven' refuges large enough to accommodate a 'flight to safety' if people fear collapse of the Euro or dollar. Swiss Francs? Norwegian Krona, Singapore dollars? - 'sound' currencies do not have anywhere near a large enough base to deal woith the coming demand for safety - hence the purchase of gold by Eastern Central Banks and the conversion of dollar reserves into tangible assets. Better for China to own farmland in Africa, mining companies in Australia or ANYTHING of value than to be stuck holding T-Bills when the game ends.
Hey Rick. May I humbly suggest that you remove your head from your rear end and look up Freegold. The fact of the matter is that central banks STOPPED supporting the paper gold market in the late 1990s. The only ones left there are the bullion banks and the paper speculators. The paper market is faltering because there is a loss of faith in paper derivatives. At the same time the physical market is tightening tremendously. Dismiss it as a conspiracy theory if you will, but gold's actual price, the price paid by CBs, is multiples higher than the paper price we see. Sooner or later the paper gold market will burn to the ground. You will rejoice and Lira will cry, until the day AFTER trading halts and the new public value of gold is announced at between $32,500 and $55,000 per ounce. Free your mind and your ass will follow.
http://www.usagold.com/goldtrail/archives/another1.html
http://fofoa.blogspot.com/2013/01/legs.html
http://preciousmetalspete.blogspot.com/
Buzzworthy
I'm enjoying the blog from "Another" you provide in your first link. The connection between gold sales for oil purchases ties in nicely with what I learned indirectly while working in the UAE: that the Emirate elite had amassed enough gold to live their current lavish lifestyle for the next 150 years. That was in 2000.
Thanks for the links.
Thanks for the tidbit, WW. It is these little glimpses into the world of real wealth held by Middle Eastern and Asian countries that repeatedly demonstrate the truth imparted by Another, FOA, and now FOFOA. Quick summary - Western world, we know our oil is priceless. Pay for it in gold and you may have it. Keep yer damned paper funny money.
[The result, he says, is that “the global precious metals markets are essentially a game of musical chairs, with far fewer seats than players—far less gold than gold holders. And market participants collectively know this. Which is why they don’t trust their counterparties. Which is why gold isn’t rising like a shot.”]
I know it's not the author's POV, but he kinds of sees [agrees with] the point. However, if this is true, it's true at any price, i.e. counterparties aren't trusted - so you're 'ok' with possible losing [or profiting from] 10,000 contracts @ $1500, but 'unhappy' ' with 5,000 @ $3000? This makes no logical sense to me. It merely says there is a disconnect between the paper & physical [deliverable] market. All of which would imply that at least a significant % of players would be taking delivery of physical gold.
[A couple of caveats for gold hoarders. Don’t count on exchanging gold at $5000 an ounce for something with high intrinsic value, such as farmland. For all we know, supply-chain disruptions could be so severe that you’ll pay a Krugerrand just for a loaf of bread.]
If food were in such short supply (1 loaf = 1 gold Kr.), even 10 Kr. wouldn't buy it, nor 1000 acres of framland buy a loaf of bread (since it must take 9 months to grow the wheat & bake the bread, that level of bread scarcity means youd starve long before the wheat was even sprouted). That level of shortage could be envisaged on a lifeboat with one small box of bread & 20 mouths to feed - if we did truly descend to this, I suggest it's game over for everyone anyway.
[And while it has always been possible in theory for short-squeeze pressures to push gold well above the $5000 level, this is most unlikely for reasons that Lira’s essay implicitly recognizes. Consider who is short all of that paper gold: carry-traders such as Morgan Stanley, J.P. Morgan, Goldman Sachs and other bullion bankers who have always been able to borrow gold for next to nothing. The likelihood of regulators forcing them to make good on their paper gold obligations can be dismissed in advance as negligible.]
Again, the logic escapes me. Because the (short) libbility is so great it might bankrupt the large shorts & govt. may dismiss liability, then people in the physical market would react by disposing of their real gold at low prices? Pray tell me, if you were robbed of say, $1000 dollars or had an unisured item stolen, would you react by saying, 'heck, I might as well throw away the rest of my money & giving away my house now..'
Tripe, imho , I'm afraid.
Look at past 'disruptions' - peopel don;t trade gold for food - at least not in large amounts. Gold is to PRESERVE wealth and buying power, to get through a collapse. Your biggest risk is not having 'small change' to pay for food during such times. In Yugoslavia people held German Marks - usually 100 Mark Notes. You could get bread for a few Marks - but if you paid with a 100 Mark note you weren't likely to get change back in Marks.
I expect silver - old 90% junk - will be readily exchangable for food and other items at a 'reasonable, realistic' rate. Anythign with perceived 'real' value - jewelry, even bullets, alcohol or other food items (or diapers, tampons, etc) - will work in a barter economy. Such things are short lived until a new stable economic order is established. The point is that SAVINGS held in fiat (or electronic 0's and 1's ) end up worthless.
Excerpt from article:
the deflationary down force of a quadrillion dollar financial edifice that remains in a state of incipient collapse.
My thoughts:
But doesn't the quadrillion still exist? My assumption is that once money is created, it is never destroyed. This is where I get confused on the inflation/deflation argument. In my own eyes, regardless of debt, the money still ends up somewhere. I would be more satisfied if deflationist people could explain things around this proposed law of money creation:
1) Once money is created(printed as dollars), it is never destroyed.
While I understand that in a given situation if money was hoarded or needed to pay off debt could produce a deflationary situation, deflationary people do not explain to me if their could be a long term inflation, thus I am more comfortable with an argument that states:
1) First deflation, then massive inflation (And not necessarily an outcome that I root for, simply trying to see things as they are!)
I am a metals hoarder btw, thus my bias in the opinion expressed here.
Since money is debt (a promise to pay), every loan/bond default is destruction of money, as the promise is broken.
Question is, which defaults will be allowed and which will be further monetized by "someone" else's promise?
Well, if the day comes when the government will tell you that 1,000 "old" dollars will from that day onwards equal 1 "new" dollar, you might get the feeling of money being destroyed. Technically it would be just a calculation change, but you would have a hard time trying to convince your fellow Americans that there is no "destruction" in such a change.
That would be obviously the hyperinflationist scenario. I'm not necessarily expecting it to happen by the way.
It's happened before, for the Greeks after WWII or the most recent Zimbabwe people.
This guy is pretty funny
"if, say, the Fed were to attempt a lump-sum pension payment to all government workers"
What branch of the federal government does he work for?
I will bake my own bread, thank you... Got a much better use for the physical...
"Moreover, unlike swaps, gold does not give its owner a claim on anything."
Are you fucking kidding me?
How embarassing...
When he says "claim on anything", I think he means an enforcable claim on anything. So in the case of the national debt or the master derivative that is the court enforcable claim = foreclosure. Maybe I'm wrong. I happen to think the deflationist are correct because that is the end game after inflation destroys the currency and wealth, Deflation will destroy the value of the remaining assets. Herald the carpet baggers.
"Moreover, unlike swaps, gold does not give its owner a claim on anything."
Except gold.
LOL
Yeah, just a claim on the immutable metal valued by all civilizations for eons and having even more uses and value in the post-industrial age.
An instantaneous collapse that resulted in a bank holliday would be a political decision, not as the result of the inability to create digital money and get it to the banks. Your scenario is more far-fetched than the steady debasement of the dollar until there is a run on physical assetts.
Repudiation of toxic fiat narcobux is the story, not hyperinflation. Fits of morality by banksters and paperbugz is the icing on the cake.
"Gold is an asset based currency, thus it represents payment in full, where as fiat currency is a debt based currency that represents a claim in the system. In this light, the ‘preservation of wealth’ simply means - he who holds gold has already been paid." Ender
He who holds paper gold holds paper, which at nut-cutting time may or may not get you any physical. Actualy, anyone who owns any simulcra, any derivative of something real, is exposed. Germany, Ecuador, Holland be getting nervous about not being able to reach out and touch; Kyle Bass not so much.
I think it will go up like a dead artist's works once it can't be delivered in physical form. Although people might lose interest in it and start hording electrons. Never know.
I would posit that gold (and silver) are down in price because the central banks are selling theirs to support their currencies.
Central banks can create as much paper money as they want; they cannot print gold.
Do you really think central bankers are that fucking retarded?
Have you not been paying attention at all to their turning into net buyers?
Not retarded, but the Central Banks are most definitely liars and cheats when it comes to gold or anything else.
Their leasing and swapping operations have zero transparency. The gold secrets are all hidden from public view.
They talk their book, just like everyone else...they simply have different goals and timeframes due to their unique positions.
They'd have to report selling--and selling would look bad to the public. hat I suspect they're doing is "lending" it to their cash-short national banks, which are selling it to raise cash.
meh
" the central banks have so far failed to produce any meaningful inflation"
Corrected: "the central banks have so far failed to REPORT any meaningful inflation".
Ackerman - what is your definition of 'Inflation' ? Because mine is an increase in the money supply.
One thing becomes immediately clear: Neither Ackerman nor Lira is actively involved in or familiar with the physical gold bullion markets.
Exhibit A: Ack--"if this were so, then we should have expected uncertainty itself to have spiked the preference of investors for physical over paper,"
I can remember when the premium over spot for a Krugerrand was $7. Today a gold bullion ounce is more like $75 over spot. The premiums for physical over paper are getting wider by the day. Same is true for silver, only more so.
Exhibit B: Lira--"There is only one market in gold, not two. There is no way to segregate gold bullion holders from gold certificate holders"
Ugh. Completely wrong. Not only are there separate markets for paper gold and fiztrade, there is an easy way to separate the gold holders from the paper ticket holders; ask them whether their receipt came from the Comex or Tulving.com. Ask them whether their "gold" is in a warehouse or hidden under the basement floor.
Where do Ackerman and Lira go wrong? They are looking only at the BIG players. See, funds don't own warehouses. They have no means of taking delivery. Thus, their only option to hedge with gold is "paper tickets"---warehouse receipts. But the warehouses aren't dependable. Note that JPM (think GLD fund) says "We don't audit our custodians [HSBC] or the subcustodians, either. We don't really care whether the gold is there or not. Because we know it's NOT there, but we're never gonna tell you that".
I think Ackerman misunderstood Lira's argument, i.e. the part he got right. I read Lira like this: There is X gold bullion in vaults and warehouses, but exchanges have issued (let's say) 100X in paper tickets. Banks and funds don't want the paper tickets because they have no way of knowing whether their ticket is good for gold when the SHTF. Remember, Nymex can settle gold trades in cash as of 2005. Thus, if the USD goes Zimbabwe and you ask for your gold, you may just get a check for cash. But cash is the LAST thing you want when the currency is spiraling towards zero. So the paper tickets are only a short-term trading vehicle.
The real reason gold isn't zooming higher is probably the simple explanation: Everyone in finance knows the paper tickets aren't good for real bullion, and the man on the street doesn't have the understanding (let alone the funds) to buy real physical gold. It's too expensive. Silver, that's a different story. The US mint just sold a RECORD number of silver eagles in January....after running completely out of them for a while.
If you can't afford gold, get silver and lead. They're a lot cheaper, for now.
Kyle Bass on paper vs. physical gold and the fractional reserve COMEX system, and why University of Texas owns $1 billion + dollars worth of physical gold stored in Texas:
http://www.youtube.com/watch?v=i6m4nSxokXI
If these guys can't understand Kyle's two minute explanation, then they shouldn't be posting on Zerohedge.
"Give me the gold"
Except in the stock market. From Tyler's margin debt article yesterday:
"With the Fed no longer even pretending it is not all about the stock market, where some mysterious trickle down force is supposed to boost the economy the second the S&P hits new all time highs, and injecting billions into stocks via Primary Dealers courtesy of the daily now-unseterilized POMO (today's edition saw another $3.4 billion enter risk assets), there is apparently no reason to worry about anything."
Rick, The Ben Bernank is TELLING YOU where all the money is going and you still don't get it?
WTF?
And the animal spirits are almost ready. Wait for it. Any day now.