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Fed’s Ballooning $4 Trillion Balance Sheet Bodes Well For Gold In 2014

GoldCore's picture




 

Today’s AM fix was USD 1,233.25, EUR 896.97 and GBP 754.05 per ounce.
Yesterday’s AM fix was USD 1,237.25, EUR 898.71 and GBP 759.42 per ounce.

Gold fell $10 or 0.81% yesterday, closing at $1,230.70/oz. Silver slipped $0.06 or 0.3% closing at $19.90/oz. Platinum dropped $13.51, or 1%, to $1,348.75/oz and palladium fell $14.78 or 2.1%, to $701.52/oz.


Gold (Black) and the Federal Reserve Balance Sheet (Red) - October 2008 to December 11, 2013

Gold, platinum and palladium all gained in London before the U.S. Federal Reserve’s policy statement on a potential 'taper' to its massive debt monetisation programme.

The taper caper continues and for the second time in three months, world markets are braced for the possibility of a slight reduction in the size of history’s greatest and most radical monetary experiment.

The Federal Reserve’s open market committee closes its meeting today and decides whether to start to taper the nearly $20 billion per week, or $85 billion per month, it creates each month in order to buy U.S. bonds.


Federal Reserve Balance Sheet and S&P 500 - The Financial Times

The Federal Reserve’s balance sheet is set to exceed a whopping $4 trillion today, prompting warnings its ultra loose monetary policies are inflating asset price bubbles and will lead to a devaluation of the dollar and significant inflation in the coming years.

The Fed’s assets rose to a record $3.99 trillion on December 11, up from $2.82 trillion in September 2012, when it embarked on a third round of bond buying. It’s balance sheet has ballooned by more than $3 trillion or 300% since September 2008 when it was at just $0.91 trillion.

The deterioration in the balance sheet of the Fed and most central banks in the world bodes well for gold prices in 2014.


Gold in U.S. Dollars, 30 Days - (Bloomberg)

Legendary investor Warren Buffett has described the U.S. Federal Reserve Bank as “the greatest hedge fund in history.” Buffett is underestimating the risks involved in the radical debt monetisation programme which poses serious risks to the dollar, the U.S. economy and the global economy.

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Thu, 12/19/2013 - 06:42 | 4260088 Kina
Kina's picture

Of course the only thing that will see gold resume its 1900+ levels again is if and when the Fed & Co decide they no longer need to control it.

 

  • The current price of gold is entirely a TPTB dictated price, bears no relevance to dwindling supply, massive demand in bulk over years, or cost of production and so on.

 

Pretty much how the share marker reflects nothing of the economy's fundamentals or the fundamentals of individual companies...all entirely manufactured prices.

 

I just wonder how low they can manipulate gold and silver before those big players with massive holdings in silver and gold take either the Fed, BIS, CFTC and or SEC to court - for corruption, criminal negligence.

 

In the case of the CFTC it would  be very very easy to make a case for deliberate negligence, criminal negligence, and sue for losses. It is not as though there isn't massive amounts of evidence of corruption of markets on the COMEX

 

 

Thu, 12/19/2013 - 06:05 | 4260069 solgundy
solgundy's picture

when Bill Murphy & Eric King give up their pump houses....that will bode well for gold.....or not....lmao

Wed, 12/18/2013 - 23:06 | 4259572 Wahooo
Wahooo's picture

RFLMAO

Wed, 12/18/2013 - 21:46 | 4259373 ejhickey
ejhickey's picture

how can i get my share of the money created to expand the balance sheet?

Wed, 12/18/2013 - 21:36 | 4259344 Kina
Kina's picture

That is right ride QE in the stock market, knowing you will be the first out the exit when things go Sour.

 

Ride the S+P to 900,000 --- 1 oz of gold would be worth more than all your shares.


 

Two things keep the USA out of debtors prison.  they can and will print without end, and the USD is still enough of a reserve currency to keep the USD sinking to the bottom.

Both of these are precarious

I

 

Wed, 12/18/2013 - 20:32 | 4259207 Al Huxley
Al Huxley's picture

The only thing that bodes well for gold is that GLD is dumping inventory at an increasingly rapid pace.  It's the last big supply the bullion banks have unfettered access to, so once it's empty the price should normalize.  But even at current rates, that's over a year away.  Stop with the 'money supply, deficit, tapering, etc...' reasons, the banks have proven they can manage through all that shit, as long as they can sell paper with impunity.

Wed, 12/18/2013 - 18:52 | 4258962 Kina
Kina's picture

A dump of paper gold late on thin market - just to get the best price possible.....

yeh...more corruption from the protected ones.

 

Everybody knows now the CFTC is in their pockets. 

Wed, 12/18/2013 - 18:34 | 4258907 lasvegaspersona
lasvegaspersona's picture

For those in the know

GLD inventory down to 812.62 tons. The rate of depletion of inventory is picking up after some slowing over the Summer.

When those last tons are gone where will the system source gold to keep all the various derivative markets (Forex, swaps, Comex. ETFs etc) legit?

Oh wait, maybe China and it's citizens will lose their appetite for the yellow metal. Maybe India will finally 'crack down' on all those nasty gold lovers. Maybe none of the above and failures to deliver begin in earnest....and then...the end...

Wed, 12/18/2013 - 17:45 | 4258777 naughtius maximus
naughtius maximus's picture

4 trillion is nothing. Like the enlightened ZHer said here (not me): you think they are out of bullets? They print bullets. They got the dial on 3 and this thing goes to 11!

Wed, 12/18/2013 - 15:32 | 4258208 ncdirtdigger
ncdirtdigger's picture

Let us all be thankful that we don't NEED our gold, and that for the time being it only serves as an insurance policy. May God bless you all this Christmas season.

Wed, 12/18/2013 - 17:44 | 4258783 naughtius maximus
naughtius maximus's picture

May God bless you too!

Wed, 12/18/2013 - 14:18 | 4257780 rainingFrogs
rainingFrogs's picture

blah blah blah ... the world is going to end ... blah blah blah ... gold is going to take off ... blah blah blah ...

Friggin' gold shills ...

Step up and set a date when things are going to unravel and gold is going to take off.  Its easy to predict the world is going to end.  We all know THERE WILL BE a day of reckoning. Will it be in 2014 ... 2015 ... 20?? ... blah blah ...

So, gold shills => GOLDCORE ... lock in a date.   Tell me, how long do I ride the QE gravy train which CLEARLY drives stock appreciation?  When will the Fed killl QE and crush the market?  When is gold going to crack the suppression cycle?

Enquiring minds want to know ...

 

Wed, 12/18/2013 - 21:02 | 4259269 Exponere Mendaces
Exponere Mendaces's picture

Yeah, starting to think that these "preppers" and "stackers" don't give a shit about being prepared or hedged, they just want to lord it over everyone about how well-off they'll be when the shit hits the fan. A variation on the "keeping up with the joneses" except its played out with how big your bunker is, and how large of a walk-in vault you have for your 'stack'.

Consumerism translated over into the realm of the paranoid, but not so paranoid as not to brag about it. Witness Hedgless Horseman's lovingly photographed locally-made meals, the excess of comments about what kind of gun/ammo to buy, the recommendations of dealers in gold bars and coins. They want to share, they NEED to share, to show everyone how "right" they are and how willing they are to see the world burn.

Take the labels off and recontextualize it, it might as well be a bunch of Bentley owners talking about their deluxe concealable pop-down garages, their security systems and of course, the wall safe full of rare cigars and hunting trophies.

Its the displacement of disposable income masquerading as a somber and sensible investment. No wonder they make fun of Bitcoin, not only do they not understand it, but they don't see how they can use it to brag about their foresight and preparedness.

Like it matters to me, at all, while they're counting down eagerly, waiting for the doomsday clock to hit midnight, Bitcoiners are actually fighting the system by participating in something that has benefits that go beyond a bunker or wall safe. Something that adds up to social justice in the face of rampant corruption and wealth inequality.

But they'll keep it up, because that's all they know, much like the inmate that goes back to prison after being freed, because the real world is too much of an unknown compared to the spartan cell they lived in for 30 years.

Wed, 12/18/2013 - 15:09 | 4258016 Clint Liquor
Clint Liquor's picture

We won't tell you. It's a surprise.

Wed, 12/18/2013 - 17:48 | 4258791 naughtius maximus
naughtius maximus's picture

I will out live this world

Thu, 12/19/2013 - 04:57 | 4260035 jballz
jballz's picture

 

 

is Goldcore bullish for 2014??

 

ALERT THE FUCKING MEDIA.

 

sad watching you all get swindled every which way you turn.... they are never going to let gold rise, these guys just can't admit it because they have no purpose except to be goldbulls, every day and every year.

Throw it all away the bull is fuckin dead.

Wed, 12/18/2013 - 13:33 | 4257599 NotApplicable
NotApplicable's picture

I guess nobody's told GoldCore about the blatant paper slam-downs?

Someone needs to send them a link to Nanex.

Wed, 12/18/2013 - 13:30 | 4257597 The Wisp
The Wisp's picture

When people learn to trade gold back and forth among themselves same with silver, then it will become alot more useful and more realistically priced, skipping the tax man as well will really piss them off

Wed, 12/18/2013 - 17:46 | 4258785 Redneck Hippy
Redneck Hippy's picture

So gold and silver has been in circulation for thousands of years and would be the perfect currency if only people would learn to trade it correctly?

And if pigs had wings they could probably fly.

Wed, 12/18/2013 - 17:49 | 4258799 naughtius maximus
naughtius maximus's picture

If only if only.. If only you could send gold though the internet to buy things. Kind of like that device from the movie "the fly".

Wed, 12/18/2013 - 12:22 | 4257313 piker
piker's picture

Only time will tell.  Scary, yet interesting times we live in though.

Wed, 12/18/2013 - 10:35 | 4256922 FieldingMellish
FieldingMellish's picture

Shitty balance sheets did nothing for gold in 2013. Why should 2014 be any different?

Wed, 12/18/2013 - 11:58 | 4257215 paint it red ca...
paint it red call it hell's picture

Every day has it's dog...

As for 2014 derivative-coin, the dollar or both appear to have a shot at the next turn in the bear barrel.

Wed, 12/18/2013 - 10:38 | 4256929 fijisailor
fijisailor's picture

Wait until the funny money starts working its way into the economy.

Wed, 12/18/2013 - 11:55 | 4257205 quasimodo
quasimodo's picture

Wait until what? That has been going on for eons, but if you care to go back a few years the arguement is moot still. Funny money has been working it's way into the eCONomy for some time now, and metals......as much as I am in favor of them......keep behaving like the red headed step child.

Been many that have been screaming "FIRE FIRE" since around '08, myself included, and yet here we are having the same damn arguement.

 

Wed, 12/18/2013 - 13:03 | 4257496 fijisailor
fijisailor's picture

I jsut think that the bad assets on the banks' balance sheets are being replaced with QE cash slowly but surely.  It trickles out intohigh priced luxury goods initially like it already has and then with time will become a flood of cash into anything of value.  Have patience

Wed, 12/18/2013 - 11:39 | 4257141 FieldingMellish
FieldingMellish's picture

and when will that be? When gold hits $700? $500? $300?

Wed, 12/18/2013 - 08:33 | 4256530 Nothing but the...
Nothing but the truth.'s picture

Yet the supposed brightest economists in charge , still cannot see the fallacy and futility of their actions and choose instead to compound the problems. History will not reflect kindly on these idiots.

Wed, 12/18/2013 - 17:52 | 4258805 Redneck Hippy
Redneck Hippy's picture

But in the mean time, the market will eviscrate the idiots who bought gold, thinking that fiat currencies were doomed to fail.

The Fed, to the surprise of all who bought the ZH Kool-Aid of QE infinity,  is tapering.  That means first that the yen drops like a rock, which it did today, because Kuroda is fixed on more QE.  But more importantly to precious metal fanboys, gold gets a lot less precious.

But hey, buy more of the yellow rock on margin, if you don't believe me.  Double down, when the zombie apocalypse finally occurs, you'll see just how much nutrition you can suck out of a stone.

Wed, 12/18/2013 - 10:33 | 4256920 LawsofPhysics
LawsofPhysics's picture

"History will not reflect kindly on these idiots." -  Will it matter if these "idiots" are living a life of luxury? 

Roll the motherfucking guillotines and let's bury the fuckers. 

Nothing changes otherwise, making that future "history" irrelevant.

Wed, 12/18/2013 - 11:59 | 4257212 boogerbently
boogerbently's picture

The only thing that will "Bode well" for gold is the news that they stopped manipulating it.

Wed, 12/18/2013 - 21:21 | 4259316 Mr Pink
Mr Pink's picture

Exactly. I'm so fucking sick of reading articles about THIS being the year for gold and silver I'm about to paint my wall with my brains.

I may not be the brightest bulb but at least I have figured out that gold and silver aren't going anywhere until THEY want them to

Wed, 12/18/2013 - 21:31 | 4259336 Mr Pink
Mr Pink's picture

Oh and one more thing...

FUCK YOU  Goldcore. Time to go sell your book somewhere else

Thu, 12/19/2013 - 00:42 | 4259765 A Nanny Moose
A Nanny Moose's picture

If that "book" includes physical, I will buy...when the price is right.

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