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Gold Crashes and Asia Sinks
Good Morning Investors
Gold is crashing this morning, falling over $90 to $1413 per ounce.
This move is looking to be largely based on institutional liquidation in Asia where Japanese bonds are being sold.
The Bank of Japan announced a massive $1.2 trillion QE effort on April 6. The move was lunacy given that Japan has already announced QE equal to over 20% of its GDP in the preceding years and GDP growth was still slowing.
According to Central Banker thinking, if something doesn’t work for 20 years the only answer is to do even more of it. So the Bank of Japan attempted a “shock and awe” move with an unprecedented QE equal to $1.2 trillion. Japanese bonds, already strained as investments by the demographic and economic issues plaguing Japan, have since become extremely volatile.
With this in mind, the move in Gold looks to be several large institutions liquidating positions to meet margin calls or redemptions due to the plunge in Japanese bonds. The technical damage to Gold has been severe.
Another factor here is the slowdown in China. The post-2009 “recovery” has largely been driven by China’s growth. The People’s Republic reported GDP growth of 7.7% on expectations of 8% last week. This, combined with misses in retail and industrial production, doesn’t bode well for the global economy.
On that note, now is the time to be preparing for a potential bloodbath in the markets. Just looking around the globe we see China’s economy slowing, Japan’s bond bubble bursting, Gold crashing, and more.
We offer several free Special Reports outlining these issues and more for individual investors. You can pick up individual copies at:
Best Regards,
Graham Summers
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"This move is looking to be largely based on institutional liquidation in Asia where Japanese bonds are being sold."
Once again, Graham Summers proves to be a total effing idiot as he fumbles along using Zero Hedge as a free ad site. I had to read no further than the first line above, altho I skimmed the rest of his post, looking for any sign of brain cells. I'm done with posts from Phoenix Capital. Saves me a lot of skim time in the future. Give me Jim Rickards and GATA, Eric King and Jim Grant, Jim Rogers and von Greyerz. If the cartel ever tries to kill Summers as they tried to kill Maguire, I'll have another look. Until then, Adios Idioten.
To all the "analysts" out there trying to explain golds "crash", see GATA.ORG and look for the Andrew Maguire interview. What basically happened is that the London Gold Pool was going to have to default on gold contracts unless a drastic way to get physical gold was found. So the Central Banks, probably mostly the FED, sold 500 tons of paper gold into the market, then quietly the LBMA bought over 155 tons of PHYSICAL GOLD in one hour to cover their shorts. The public and investing community was that easily snookered, and if you have any brains, you'll get some PHYSICAL GOLD while you still can, expecially at these prices.
Nice going Bernanke, seriously. Negative wealth effect and fear all around as the asset price pump fails.
Good luck selling cars, houses or anything else at anything like these prices as the economic implosion gathers speed.
Bring back the Hunt bros. Margin..? Levarege sound familiar?
It was in late March 1980 that we had “Silver Thursday”, a day where the price of silver went from roughly $20/oz to $10/oz, a loss of over 50%. Ultimately, the Hunts had to be bailed out by New York banks so they could make good on their obligations. Their obligations had grown so large that the government forced the banks to issue credit so that wide spread failures could be prevented.
The Hunts had exposed themselves to huge amounts of leverage, which worked great in the beginning. It was this leverage from the futures markets that ultimately did them in.
actually they banned from rolling over the investment. they had to stand for delivery or sell it back to the comdex. they stood for delivery. comdex made the margin requirement 100 percent. they payed the 100 percent. there was no magical leverage fucking them over. they stood for delivery. and then had their accounts froozen by the government/banks. they needed to make good on there obligations because the new york banks frooze all there accounts and then sent them a bill. L2 Good old boys club.
TPTB are driving the sheep to USD and Bonds.....
It could get dippier.
Well said, Lordflin!!
A bit of a shock but with naked shorting and the paper gamblers being spooked...we knew this stuff happens now and then. Let them take it to 800. Will that put more physical in Crimex vaults?
"A bit of a shock but with naked shorting and the paper gamblers being spooked...we knew this stuff happens now and then. Let them take it to 800. Will that put more physical in Crimex vaults?"
Actually, it does:
http://www.usatoday.com/story/money/markets/2013/04/15/spence-gold-etfs-...
"ETFs are likely exacerbating the worst two-day fall in 30 years, which has sent the price of gold plunging more than $200 an ounce....
the amount of gold held by the largest gold exchange-traded fund, SPDR Gold Shares (GLD), on Friday fell below 38 million ounces for the first time since May 2010. And that was before Monday's massive drop.
The gold ETF's bullion holdings have declined more than 14% so far this year. Meanwhile, the amount of gold in global exchange traded products has fallen in recent months after hitting a record of more than 80 million ounces."
Gold is the base value of all assets. I agree with that. Hence "liquidation in that non yielding asset means liquidating in all the others." as as happened. I do think a discussion of the "time value of money" is in order here. Is it just a price "and that's that" or is there something that exists that compensates for the decreased value of fiat over time?
Sinclair suggested institutional buyers were soon to jump to the long side of the PMs trade, and that the metals would never look back on 1600... this was all suppose to happen before the end of March. I suggested skepticism in several posts here. Not because I believe myself to know more about the gold/silver market then Mr. Sinclair... I know a good deal less despite years of playing catch up in an effort to learn... Unlike many of you I was not a trader, but rather a chemistry teacher.
But I have also been a student of history and that gives me a perspective sometimes lost on those too close to the markets...
I am convinced the game is different this time... Not that there are not similarities, and not that the institutional shorts will not go long... they must, as gold is the only true money ( the chairs in the game of musical chairs) and silver gold's little brother...
But there are two things that differ from the seventies... On the one hand this game seems now to be played for all of the marbles, on the other there are those central planners caught in a desperate if not artificially contrived trap.
The only answer from my perspective is to stand pat on physical and wait for the resolution which is certainly coming and which will not be pretty...
And one last thing to those who labor on about how the government is coming for us. Our enemies are just human beings... Freedom, however, is a state of mind. No person can take your freedom from you, you are stuck with it... And responsible for it. If you allow others to dictate your actions you still make the choice to do so...
I will acquiesce to societies demands up to the point I will not... That line, for me, is clearly drawn. I was not placed here to be some other person's plaything... It is not a relationship that I will tolerate.
Based on inflation since 1913 gold is worth between $600 and $800 an ounce so I think that is the floor. The rest is a speculative play on inflation.
Are you like the guy in Breaking Bad?
If you're stuck in North Korea or other god forsaken place, I suppose you can be free in your mind, but as for me, if my ass aint free, then my mind can't be either.
"Free your mind and your ass will follow." -Funkadelic
Sinclair? He is the most likeable luchador of them all... ya know...hugging all those perros and stuff.
Always thinking about how your going to win the Gold luchador prize belt?
Have the fighters at fight club forgotten how to take a punch?
In my game, the trance is deep… the old in n out, up n down, Au magic trick is what we're seeing amigos.
Such gnashing of teeth here at ZH! Aye aye aye...
...and te sabes, whoever has the greatest access to counterfeit$ gets the gold luchador belt (quite literally). The Luchador that has the greatest ability to create fiat souls to do their bidding wins. To get access to the racket, you must bow to my control objectives. You must become a gear in the machinery (the machine WE created together compadre). Did you know that this realm, isn’t the progenitor of such questions, but it’s the symptom of my system. That’s right, all that we see is actually the baseline for our perception! And tambien, and, and…you don’t even know it!
Entonces, you never had a chance. You are in a world with people who were designed to succeed in the fraudulent system, all without knowing they are a fraud as well! Robots in a mechanical system, counterfeit people in a counterfeit world, fiat humans, intelligent automatons… YOU have a lot of nerve caca-talking as if the system is malo!
Oye, what you're doing (especially that Xavier hoto) is like cleaning the body fluids of the mat of the ring that will soon have another fight in it... useless. You're attempting to throw a floating plastic pink flamingo life preserver to someone who doesn't want it! Even if they did, the very lingua, symbols, colores, shapes y textures are all manipulations. You see amigos, you will come back to me. You've been trying to change the temporal realm with temporal realities - babosos! Why is it that when you're naked in the changing room, you silently admit that your own knowledge hasn't even changed yourself? Waste of time! Waste of effort! You can't enjoy your mescal and tequila when so confused me estudiates. All these 'souls' are my souls. Your soul is my soul... quienes? I created it. Su think you can change one of my luchadors... buena suerte, good luck! You can't even change yourself. You can put out bait for them, they will nibble, but always spit it out.
Mira, most me luchadors already know that my scam fractional reserve banking, and fiat money system allows us to steal the labor, and illusory time of our audience, but they havent yet considered all its uses. Why is it hypercompetitive for the audience who want to create businesses? It's because of credito, uh... the ability to borrow mas counterfeit money dinero. One of my luchadors can print their own counterfeit, and subjugate any audience member as they please! Me gusta!
Those who wish to escape the arena, will have the most temporal pain, more than being kicked in the huevos for eternity, because they're dealing with those who are invested in my scam, and they're dealing with the other side of themselves that is invested in the scam. They need my scam, they are my scam, they don't know and don't want to know if they are invested in a scam. It's that Xavier guy, who thinks he can get away, thinks he can convince my bots to change their mind! Aye aye aye. Talk about having his cabesa deep inside my fondio. This is forever. This is my system. This is why I don't automatically kill most who reveal my plots. This is why I don't eliminate them immediately. I know the score. I have won, I am winning, and will always win.
Comprende, if you have ever taken out a loan, you are my disciple.
If you have used my currency, ever, you are in the audience, dupes and babosos.
If you have used a credit card, you have spilled blood in the ring.
If you have borrowed money from any institution to start a business you are complicit. If you are looking for a way to save your oh so hard earned booty, you are an estudiante of mine.
You want out now?
I am the opium chain of integration that'll always be. Counterfeit money created y transacted, con velocity that ends up in so many luchador manos - all are holding currency soaked in sangre.
My marionette strings reach deep, where all the dogmas including science, religion, academia, philosophy, point back to my world.
The trick is to distract you with all sorts of apocalyptic distractions, some of which true, but none of it controllable. And if we can get some destruccion regardless, es mas mejor.
Comprende... todos palabras, all words are meant to distract.
You can never escape by using the methods of your own enslavement.
You can never free another.
Viva El Luchador!
www.askchumba.com
Oh, I forgot... You can never drink mescal and not swallow the gusano... worm.
You are in hell, you are fucked. Give up, and help me build my world. Stop being so obstinate.
I have to say that given the tightness in the physical market, the plunge in "value" is amazing and shows the depth of the "paper" market where multiples of the YEARLY production of a product can be sold/traded in a single day. There are folks who are going to be hurt very bad by what's coming down the pike and it will all be sold as "nobody could have seen this coming".
Given the news about Rio Tinto's landslide in their open pit mine that seriously impacted production, this drop is all the more surprising. If you can afford it, buy the opportunity as it continues to fall and then buckle up, it's going to be a bumpy ride.
jmho, but I only want to be short during a deflationary depression...and it looks like we are going to get a bout of deflation 1st, and then when, not if, the inflation really catches fire, then your PMs will shine
Nevermind, I re-read your posts and realize that i was saying the same thing. Oops.
Is gold the only asset institutions hold in case they need to liquidate something, or is there a rule gold must be liquidated first, before any other asset?
One of the few things with 'intrinsic' value.
Its the easiest to unload quickly.
Next comes financial stocks and bonds.
After that commodities and then equities.
Forgot to add,
Then comes bankruptcy!
Slowly..........then all at once.
All of us who've held gold a few years and understand its history know it's always a bumpy ride up and never a smooth ride up. Gold has always been highly volitile when priced in fiat and that will never change. In a long term perspective this temporary correction will be viewed as a very minor speep bump in what has proven to be the only truly safe investment in existence.
The more volatile the Central Banks can make it seem by trading derivative paper promises far exceeding the available supply and thus undermining the stable price relationship in fiat, the better off they can make the "stable" destruction of paper look like the preferable option...of course, until it's not. The real question is how are they going to control the "black" market prices when supply is scarce to non-existent. I suppose they could go all Dictatorship on the population by first selling off their holdings to the citizens and then confiscate them later as National Security thus really putting the screws to those who dare to interpret anything not created by the Gov't as currency and thus not support the corrupt system.
It's amazingly sad but I'm pretty sure that given the choice to fix the system and make it fair to all versus using the system's force to retain control, TPTB will not take the honorable road.
gold is a "dooms day for paper" investment, its not a trading vehicle but a fundamental trade more like the finite number of years you have to live. a fixed value for exchange with the most valuable thing any of us has, the time we have on earth.a paper system that is debased daily is a poor exchange for that value and is fundamentally evil because of its intent of robbing you silently of that which you have given your life for. the day to day swings of this evil enslaver, debt note, has nothing to do with the reason for holding gold or people too brainwashed to recognize what true value actually is. gold stands on its own, it is free, like americans were.
'Gold is a "dooms day for paper" investment....True. I have the persistent notion its not going to matter what you 'hold'. Its going to be bad enough actually trying to get food and stay safe. Thats a very real possible future based on the out and out greed and corruption Ponzi Mac World going on. When the 'this evil enslaver' falls it will herald an unmitigated collapse of society with attendant horrors and Govt countermeasures. And that brothers is something you cant in all honesty say will not happen. Even some huge natural event could trigger it. Lets face it our civilisation is fragile and not robust. But humans paradoxically are. So it will be a good thing for all the falseness to fail
Amen to that!
The shift in popular perspective is going to be a sight to behold.
BTFD
I will be scooping up as most "PHYSICAL" gold and silver that I can during this dip. Get ready for mayhem!
http://sprottmoneyblog.com/
No"monster box" of Maple Leafs.
Only shipping OUTSIDE the US.
I cannot shake the feeling that we are witnessing history in the making. Things will never be the same and it all started here. It was a pleasure, gentlemen.
I totally agree with you, totally. This doesn't happen because one day they decided to sell their gold or paper gold contracts. Something is coming.
Seems unreal. Ever yearn for the '50's?
Good to you all. /no sarc
Felt the same in Aug 2008... surprised we got 5 years since then. Never underestimate the slight of hand or the Central Bankstas!
Yes.
Truly historic.
Old Chinese curse;
"May you live in interesting times" - has come true!
Gold is just the canary in the coal mine here, the system is coming down, hold on to your hats it going to get rough soon
The only thing I now regret is putting my money in "paper-gold-silver" ie. stocks(FU!)
As easy as I can ignore the paper value of my physical I can't say the same about a 50%+ decline in my stocks
Hold fast, soldier. Lots of week left and not so much downside. The adults are about to make their voices heard.
Don't be catching falling chainsaws. Watch DEFLATION in everything and a spike in the USD. Depression is about to show it's ugly face and come from underneath the sheets the Bankstas have thrown over it. But you know that, hanging out at ZH, right?
No depression (depreciate in asset prices), but stagflation (appreciation in commodities and hard assets) because too much money is already Control-P.
Boston Marathon, WTF?! Amerikan False Flag or on Tax Day, angry tax payer!? Please do not is blaming Islamofascist - so turn of century terrorism.
You don't really sound like yourself.
Wake up and is not look like self either.
waking up and things seem different. looked in the mirror and nothing is different. looked outside and it all seemed the same.
checked prices of stuff and wow, something changed. how could that be? so much so fast. what is safe? i truely can not come up with anything that is static anymore except for my core belief systems. all else arbitray and relative to the distortions of ongoing monetary policies to bag your freedoms. for me freedom is hours left over to do as i please after the bills are paid. seems senseless to save for a radiation day in the near future, and guess what: i can not stop that either...
less is truely better, and time spent doing nothing in particular is the only freedom i yearn for. so chase your gold, oil and shit for that day you can't do a goddamn thing with it - what a fucking waste of life you(the average human) must live...
You are Pink Floyd.