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Is This Why Gold Is Selling Off?

Tyler Durden's picture





 

From the morning of Draghi's press-conference on 9/6, Treasury bond prices and Gold have danced an interesting waltz around one another. After recoupling on 9/26, they once again divorced for two weeks, only to reconcile their differences once again today. Is the toing-and -froing of inflation views driving gold and bonds  - and does that mean Gold is almost done with its drop here as Both the Long-Bond and Gold are now both up 1.22% from QEternity.

 

Gold vs Long-Bond price post-Draghi

 

and following QEternity - they are now perfectly recoupled at +1.22% - coincidence?

 

Charts: Bloomberg

 


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Fri, 10/12/2012 - 14:19 | Link to Comment FreeMktFisherMN
FreeMktFisherMN's picture

Time for gold and silver to explode irrespective of the broader 'risk-on' market. 

Fri, 10/12/2012 - 14:22 | Link to Comment ZerOhead
ZerOhead's picture

I admit I'm not a chartist but that looks a lot like two infinity signs on those graphs...

Fri, 10/12/2012 - 14:28 | Link to Comment I think I need ...
I think I need to buy a gun's picture

AN IPHONE 4 COSTS ABOUT 5600 YUAN OVER IN CHINA CAN YOU IMAGINE THAT PRICE HERE? wHAT IF THE EXCHANGE RATES CHANGE.....gold GOES NO WHERE UNTIL AFTER THE ELECTION AT THIS POINT, tHEY WILL REVALUE IT ONCE, AT SOME POINT. tHE GLD CHART WHICH MEANS NOTHING TO MOST AT ZERO HEDGE SHOWS A TEMPORARY TRIPLE TOP WHICH IS SHORT TERM BEARISH. BATTON DOWN THE HATCHES THE SHIT SHOW IS JUST ABOUT TO BEGIN AFTER OBAMA GETS REELECTED.

WRITE IN RON PAULS START MAKING A DIFFERENCE

Fri, 10/12/2012 - 14:50 | Link to Comment Dalago
Dalago's picture

The graphs kinda look like weird boobies.

Fri, 10/12/2012 - 15:14 | Link to Comment fourchan
fourchan's picture

 

 

as he fiat stream slowly makes its way into companys balance sheets,

the illusion of recovery will mezmorize those in the market, into thinking all's well.

they will sell gold to take more risk in the created market. this ponzie of the fed will show itself,

and the massive inflation before the crash will signal golds launch, now is just the time to get it on sale, a sure bet.

Fri, 10/12/2012 - 15:13 | Link to Comment malikai
malikai's picture

Indeed.

Fri, 10/12/2012 - 17:33 | Link to Comment Arcturus
Arcturus's picture

Why write in RP. I will just vote for Gary Johnson, he is on the ballot.

Fri, 10/12/2012 - 14:28 | Link to Comment TheCanadianAustrian
TheCanadianAustrian's picture

Clearly a dead snowman pattern is forming in the technicals.

Fri, 10/12/2012 - 14:36 | Link to Comment LongSoupLine
LongSoupLine's picture

Hmmm, I see an Exploding Texas Pattern.

Fri, 10/12/2012 - 15:14 | Link to Comment malikai
malikai's picture

Bikini holding a pair.

Fri, 10/12/2012 - 14:28 | Link to Comment blunderdog
blunderdog's picture

I see the good doctor Hunter S. Thompson's sunglasses in the first one...

Fri, 10/12/2012 - 14:38 | Link to Comment Blasé Faire
Blasé Faire's picture

My thoughts exactly when I saw it.  And it only makes sense, right?  This pattern will continue infinitely until the end of QEternity.  QE Infinity yields an infinitely repeating series of infinity-symbols.

Fri, 10/12/2012 - 14:19 | Link to Comment BKbroiler
BKbroiler's picture

yo, don't hate, correlate

Fri, 10/12/2012 - 16:25 | Link to Comment XitSam
XitSam's picture

re-hypothecate

Fri, 10/12/2012 - 14:19 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

These day-to-day price movements do not matter.  Buy physical gold now!  The best diversification in town.

Fri, 10/12/2012 - 14:44 | Link to Comment Freegolder
Freegolder's picture

These price movements are of electronic/paper gold contracts only (as you know). There is currently no accurate price for physical gold, but when it comes, it will be 20-50 times higher today's false paper price.

All in is a great alternative to diversifying a little into gold, but only for those with a good understanding of the likely monetary changes ahead.

Sadly, Fofoa and his chums are more interested in videoing each other in an orgy of sycophancy these days, so not much more of value there. Fofoa himself comes across as somewhat of a dope, I do wonder if there is a ghost writer somewhere in the background who is a bit sharper than the guy in these videos?

http://news.bbc.co.uk/1/hi/england/leicestershire/4504526.stm

 

Fri, 10/12/2012 - 14:56 | Link to Comment The_Euro_Sucks
The_Euro_Sucks's picture

I seen at least 1 admission that some1 else wrote a piece posted under FOFOA his name (I read his whole blog + most of the comments). If you compair his earlier work with the quality now I say yes, there is one (or more) ghostwriters at FOFOA. It sure seems a promotion to me. Still what I learned there (and from another and FOA) has proven invaluable to me. Many things I wondered about for years make sense now. 

Fri, 10/12/2012 - 16:05 | Link to Comment Freegolder
Freegolder's picture

Most of Fofoa is just rehashed Another/FOA anyway, but for a period it was well done.

I agree at least one ghost writer, and the BBC article is a spooky coincidence, same name, and the same big plane hired.

All a bit fishy.

Fri, 10/12/2012 - 16:37 | Link to Comment The_Euro_Sucks
The_Euro_Sucks's picture

I agree completely with you. Since Iam not a schooled economist I had a very hard time understanding Another. I had a hard time understanding FOA since he explained more. FOFOA broke it down to understandable concepts so even I could understand. That I give FOFOA (and his ghost writer(s)) all the credit (pun intended) for because the concept is great. It has the potential to solve a lot of the mess we are in. So even though I think its a meme, for the change its a good one. I wish more of the elite meme's was of that honesty and clearity. If freegold can pull it off... after the tons of pain humanity can advance again finally. I sure hope so. Way better then the plan for a new american century for example.

Fri, 10/12/2012 - 17:00 | Link to Comment dbomb12
dbomb12's picture

I think John Embry really knows whats going on

Today John Embry told King World News, “We are literally witnessing a war between the physical buyers (Eastern central banks), and the paper manipulators (commercials or bullion banks), and that is why there is such a fierce battle being waged in gold between $1,735 and $1,800.”  Embry also stated, If the commercials run into trouble (with their massive short positions), KWN readers will see a move in gold that will leave them breathless.

Fri, 10/12/2012 - 17:41 | Link to Comment Arcturus
Arcturus's picture

Though I do believe there is a war raging, the east is winning not by raising the price of gold but by keeping it as low as possible to buy as much physical as possible at fire sale prices. They are playing the game like chess masters

Fri, 10/12/2012 - 14:20 | Link to Comment Pooper Popper
Pooper Popper's picture

Giggity Gold!

Fri, 10/12/2012 - 14:23 | Link to Comment Bastiat009
Bastiat009's picture

Day to day moves don't matter when gold goes down but when it goes up it's vindication time for the goldies.

Well, gold is back to the early days of September, you know before the QE thing.

Fri, 10/12/2012 - 14:29 | Link to Comment Winston Churchill
Winston Churchill's picture

So gold is back to $1680.

Which charts are you looking at,'cause I want to buy some gold at that price  please.

Fri, 10/12/2012 - 14:34 | Link to Comment fuu
fuu's picture

He only posts on down days for gold, it's his schtick.

Fri, 10/12/2012 - 14:45 | Link to Comment Magnix
Magnix's picture

It would be nice if it was below 1600

Fri, 10/12/2012 - 15:06 | Link to Comment knukles
knukles's picture

Why get greedy?

How's about a $1.60?
Truly reflect the price of a barbarous relic nobody should want or care for....

Fri, 10/12/2012 - 14:25 | Link to Comment Reven
Reven's picture

QE was priced in, but a Romney win, and therefore a deflationary cut to Government spending, isn't priced into gold yet.

Fri, 10/12/2012 - 14:49 | Link to Comment seek
seek's picture

You must have a different playbook. Mine says there's only one party with two candidates, and whichever wins, government spending goes up.

Fri, 10/12/2012 - 14:51 | Link to Comment fuu
fuu's picture

You actually believe Romney will cut government spending? Lulz. His "plan" is to lower Federal Revenue while increasing military spending.

Fri, 10/12/2012 - 14:25 | Link to Comment thomasincincy
thomasincincy's picture

OT: Jeopardy

Werewolf

Silver

Werewolf in London

Silver Bullets

JPM

Fri, 10/12/2012 - 14:27 | Link to Comment Aegelis
Aegelis's picture

"Money
Well, get back
I'm all right Jack
Keep your hands off of my stack"

Fri, 10/12/2012 - 14:29 | Link to Comment luckylongshot
luckylongshot's picture

Poor JP Morgan, on the wrong side of the market and no matter how much they short it their losses just keep getting bigger...so long Jamie.

Fri, 10/12/2012 - 14:42 | Link to Comment Quinvarius
Quinvarius's picture

I looked how fast that banking short position in silver blew up.  They have to be getting pretty uncomfortable here.  They started that position before QE3 and all the miner strikes.  Then they just kept piling it on.  SLV has been flatlined on inventory levels for a long time after losing exactly 10% from peak inventory (what does that suggest?).  I think they mined that well dry.  I don't know what they are going to do this time.

I am pretty sure that there is something bad for the bankers going on in the gold market at the moment now as well.  There are too many oddities taking place.  My spider sense is tingling.

Fri, 10/12/2012 - 14:53 | Link to Comment seek
seek's picture

Next stop, jacking up margin rates, and after that, whatever the next MF Global move looks like. Must not permit physical delivery or inventory loss.

There's a lot of odd things going on in paper metals right now -- to me, the charts seem to be showing in addition to the regular manipulation, some sort of HFT-type trades happening as well.

Fri, 10/12/2012 - 15:06 | Link to Comment Quinvarius
Quinvarius's picture

Margin games are always a possibility.  But I think the real production/replacement breakeven cost of silver is in this general area.  For gold it is probably still negative on replacement costs, but running mines are probably getting $200-$300 per ounce on top of all costs.  There is probably not a good argument from the idiot miners to protect hedges with a margin raise yet.  The COMEX claims to have inventory, they were almost done in 2010.  So they don't have a direct reason to raise.  Only bank traders have a reason to raise.  It might be too soon after LIBOR to get that worked out.  Plus the old CME CEO got shitcanned after the MF Global theft.  I am pretty sure they are running a more scrutinized operation now.

Fri, 10/12/2012 - 16:04 | Link to Comment Lore
Lore's picture

South Africa was the fourth largest producer. That's a big swipe of production taken offline.  Should have some impact, in the REAL market at least.

The question everybody wants to answer is: HOW MUCH REAL GOLD IS OUT THERE, AND WHO HAS IT?  China isn't talking, Russia isn't talking, the un-Federal Reserve isn't talking.  Big scandals are brewing: tungsten, Libya, Suisse, etc.  Jeff Christian's 100:1 quote still haunts him. 

Impossible to know what is true at this point. EVERYBODY IS LYING ABOUT EVERYTHING.

Fri, 10/12/2012 - 19:35 | Link to Comment Ctrl_P
Ctrl_P's picture

May I suggest a towel?

Fri, 10/12/2012 - 15:00 | Link to Comment Bay of Pigs
Bay of Pigs's picture

What losses? They've been fleecing the public and making money on these raids for 12 years now.

As in billions of dollars worthThey are doing this with the FED's and UST's full support and approval.

Fri, 10/12/2012 - 14:29 | Link to Comment Silversem
Silversem's picture

Time to leverage the goldprice using CFD's!

Fri, 10/12/2012 - 14:29 | Link to Comment Gringo Viejo
Gringo Viejo's picture

Selling off because Asia has not completely cornered the physical. It's coming. Patience is all that's required.

Fri, 10/12/2012 - 14:30 | Link to Comment Jason T
Jason T's picture

1980 to 1999 was a 19 year correction.. September of 2011 until April 2013 will mark 19 months.. so thus, a 19 month correction.  This is Martin Armstrong logic.

i'll take a buying up in April of 2013.

 

 

Fri, 10/12/2012 - 14:34 | Link to Comment Quinvarius
Quinvarius's picture

That doesn't even make any sense.

Fri, 10/12/2012 - 15:41 | Link to Comment Jason T
Jason T's picture

Fractal pattern..

http://en.wikipedia.org/wiki/Fractal

 "the same from near as from far"

19 months, 19 years, 19 minutes.. 

 

Fri, 10/12/2012 - 14:33 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Wait a second, just checked and my physical hasn't done anything, paper will do all kinds of crazy shit because it's manipulated three ways to Sunday.  No worries. As far as my portfolio goes, gold is not an investment, it's a safe store of value and purchasing power.

Fri, 10/12/2012 - 17:02 | Link to Comment dbomb12
dbomb12's picture

Gold today Gold tomorrow

Dollar today Gone tomorrow

Fri, 10/12/2012 - 14:40 | Link to Comment SmallerGovNow2
SmallerGovNow2's picture

Thanks Tyler, knew you would get around to it...

Fri, 10/12/2012 - 14:58 | Link to Comment scatterbrains
scatterbrains's picture

talk about to-ing and fro-ing how's about some 1325ish for a meet up?

http://fiatflaws.blogspot.com/

Fri, 10/12/2012 - 14:59 | Link to Comment Bastiat
Bastiat's picture

Off topic but . . .

http://miami.cbslocal.com/2012/10/12/secret-service-agent-found-passed-out-later-arrested-in-miami/

I'd be drunk too if my job was to take a bullet for that clown.  The thought the Biden would be next in line though might keep me going, sorta.

 

Fri, 10/12/2012 - 15:00 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Yeah, right like the US will relever sustainably... pfff... garbage chart

Fri, 10/12/2012 - 15:02 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Gold is the sitting right now, waiting for opportunities elsewhere. You can trade a bit of gold for Gallium Indium, Germanium, Tellurium, it is a good swap...

 

Fri, 10/12/2012 - 15:16 | Link to Comment malikai
malikai's picture

I wonder, did the LME ever get those muppets to trade their gold for hopium?

Would be hilarious if it worked..

Fri, 10/12/2012 - 15:05 | Link to Comment Ted Baker
Ted Baker's picture

NOT TO WORRY FOLKS - WE ARE TODAY BUYING MORE PHYSICAL GOLD AND SHORTING HEAVILY THE NASTY EURO, GBP AND AUD BUT GOING LONG MXN, CAD AND CHF...THE REST IS RUBISH - WE CONTINUE BUYING MORE FACEPLANT SHARES BUT WONT TELL YOU WHY

Fri, 10/12/2012 - 19:33 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Faceplant is the most puzzling, though still prefer Germanium and Gallium.

 

Fri, 10/12/2012 - 19:39 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Are you thinking payment system?

Fri, 10/12/2012 - 15:13 | Link to Comment abgary1
abgary1's picture

Private debt deflation is going to bring everything down.

The central banks of the world cannot stop it.

Fri, 10/12/2012 - 15:18 | Link to Comment kito
kito's picture

gold is starting to ponder romney..........he gets his honeymoon, people are expecting another real conservative--- he comes in, rips apart regulations, backs off on taxes for the rich, money on the sideline flows in, jumpstarts the economy, revenue picks up..................gold gets pummeled...............decimated.................

Fri, 10/12/2012 - 15:24 | Link to Comment fuu
fuu's picture

$1575 or $175?

Fri, 10/12/2012 - 15:24 | Link to Comment fonzannoon
fonzannoon's picture

It's going to be quite the honeymoon if while doing that he hikes the debt ceiling, punts the fiscal cliff and gold roars.

Also in your honeymoon scenario Interest rates spike as money floods out of bonds and wrecks the housing market and then eventually whacks the stock market.

Fri, 10/12/2012 - 15:36 | Link to Comment kito
kito's picture

animal spirits fonz.................there will be sense from the big biz community that he is the second coming of reagan.....tear down regulations....give certainty to the markets..........nobody will give a crap about the debt ceiling or deficit during his honeymoon because the hope is that he is going to fix it through massive growth in the economy......stock market will take off.....................people think the next volker is coming..........that bernanke will be out............................nobody crunches numbers about the reality of what lies beneath the hoopla.....................................animal spirits fonz...........................

Fri, 10/12/2012 - 15:40 | Link to Comment WhiteNight123129
WhiteNight123129's picture

poor kito...

Fri, 10/12/2012 - 15:42 | Link to Comment Likstane
Likstane's picture

no doubt. Kito should go back to OJ's garage.

Fri, 10/12/2012 - 17:13 | Link to Comment Troll Magnet
Troll Magnet's picture

don't know why everyone's knocking on kito.  i think he has a point.

Fri, 10/12/2012 - 18:46 | Link to Comment kito
kito's picture

thanks troll magnet!! wait, are you baiting me???..............really..........im not a troll................

Fri, 10/12/2012 - 15:31 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Have you pondered the impact of Napoleon coming from Elba in 1815 on Gold price in unconvertible sterling?, I suggest you read kito and a lot and pronto. How about the impact of the war on Gold price in greenback during US civil war. Actually a good war in Israel is going to look funny on commodities. Also check the parallel between Hugo Stinnes and Romney, he paid companies with DM loans and then had his own DM printing press. Bain = buy companies with borrowed money, war = dollar confetti = repay LBO debt with bananas....................... 2 and 2 kito.... 2 and 2.....

 

Fri, 10/12/2012 - 15:41 | Link to Comment kito
kito's picture

perhaps im not clear????.............have i given the impression, based on my time here, that romney will be a savior??????............

Fri, 10/12/2012 - 15:32 | Link to Comment Dr. Engali
Dr. Engali's picture

I doubt that kito. If Romney gets in then we get a fed chair person who is even more dovish than the Bernank.

Fri, 10/12/2012 - 15:38 | Link to Comment kito
kito's picture

im only talking about what happens during romneys honeymoon.... pms take a big hit initally if he gets in............

Fri, 10/12/2012 - 15:38 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Gold has to do with monied capital converted into circulation, nothing less nothing more. Gold gets wacked when we relever from a low leverage point or if we have a new monetary standard, check 1913-1920, 1933-1950 and 1981 , peak long bond yield = commodities wacked, new monetary system = gold and commodities wacked..... read kito....read

 

Fri, 10/12/2012 - 15:57 | Link to Comment kito
kito's picture

whitenight......i think you memorize a few chapters from some arcane economics book and spit it back out.....even if it has nothing to do with my point(perhaps you are an algo????)which is only that romney will be perceived as a savior at the outset....and markets will expect him to follow through on bringing in a fed hawk among other pro market things...which will temporarily hammer gold.......................show me the chapter in your dusty book that talks about 700 trillion in derivatives coming crashing down on the globe, wiping out every commodity including gold.............would that set us back to a "low leverage point"????

Fri, 10/12/2012 - 19:19 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Kito, sorry you are correct I had not read properly, on your point of another crash, it can only happen in a redeemable currency system, otherwise it is staged. 2008 lehman collapse was staged.

There is no limitation to printing kito, a cotton paper bill has a cost of 0.03 USD... The Lehman crash was organized, the Fed decided that the game of leverage had lasted enough, if they had done LTCM type of resolution we would have another credit euphoria today and total inability of passing any regulating law. We needed a sacrificial lamb to move toward deleveraging.If the Fed had wanted to save Lehman they could have asked : "how many zeros? and here you go move on ".

The only collapse that can happen theorically is hyperinflation, not a deflation collapse because you run out of Gold in redeemable currency system, for that to happen in our system we would need to run out of cotton or run out of computer power to run the zeros.

Fri, 10/12/2012 - 15:53 | Link to Comment akak
akak's picture

 

gold is starting to ponder romney..........he gets his honeymoon, people are expecting another real conservative--- he comes in, rips apart regulations, backs off on taxes for the rich, money on the sideline flows in, jumpstarts the economy, revenue picks up..................gold gets pummeled...............decimated.................

Kito, if I have told you once I have told you 100 times, NEVER take hits from AnAnonymous' bong! 

You better watch it, or you are going to find yourself beginning to babble about "US Citizenism farming of the poor and extorting of the weak"!

Fri, 10/12/2012 - 15:58 | Link to Comment kito
kito's picture

its a great bong...very smooth.......the base of it has a mao head made of ceramic..................ohhh sooo nice......................

Fri, 10/12/2012 - 16:04 | Link to Comment fonzannoon
fonzannoon's picture

If you are talking about a month correction, maybe 2. I could see it. The media could probably push gold under $1,500 with all their bubble bursting mania. I just don't see how we get around the bond market though. Those animal spirits send money flooding out of bonds and rates move up. Bernanke will be sweating like a bald bastard while he tries to smile and cheer.

Fri, 10/12/2012 - 16:07 | Link to Comment kito
kito's picture

during his honeymoon period............months....................

Fri, 10/12/2012 - 16:11 | Link to Comment fonzannoon
fonzannoon's picture

It's a very plausable scenario. I would hope you are right so I can have one last shot to buy. I think Obama does fine in the next debate. Ryan was more polite and had better manners last night but he got exposed. It is clear they either have no plan or if they do they ain't tellin. I think Obama exploits the hell out of that next week.

Fri, 10/12/2012 - 17:20 | Link to Comment kito
kito's picture

oh they have a plan.........and its been going quite well for obamney...............................

Fri, 10/12/2012 - 19:33 | Link to Comment dogbreath
dogbreath's picture

 

Kito

the past few months have been sureal in that TPTB have successfully kicked the can continuously.  Merkel in greece.......a distraction.   The election seem to be the " gotta keep the shit glued together untill" moment.  Personally I think that if the ruination of the US is the objective then obummer will win.   I think we are in the honeymoon period right now because I am not sure that they can hold it together much longer.   Maybe the bernanks 40 billion a month can paper over the problems.  I think the spark will come from a european bond/bank problem.   Its still a the strategic withdrawl period and the rout is still to come

Fri, 10/12/2012 - 16:32 | Link to Comment MeelionDollerBogus
Fri, 10/12/2012 - 16:21 | Link to Comment DosZap
DosZap's picture

gold is starting to ponder romney..........he gets his honeymoon, people are expecting another real conservative--- he comes in, rips apart regulations, backs off on taxes for the rich, money on the sideline flows in, jumpstarts the economy, revenue picks up..................gold gets pummeled...............decimated.................

Uh, the damage is already DONE.No matter what he does, the global econ is screwed, and that takes us along with it.

Romney may make the economy better(hell who couldn't),except those bent on detroying it........u got my drift.

Expect a huge buying opp, of Romulus wins, likely a pull back of a couple of hundred,FOR a short time.

Until the HIT comes on Iran, and Syria.

Fri, 10/12/2012 - 15:32 | Link to Comment pingpongthesecond
pingpongthesecond's picture

Broke a decent amount of technical levels, should be quite th correction next few weeks.

Fri, 10/12/2012 - 16:08 | Link to Comment Lore
Lore's picture

If we only had a real market.

Fri, 10/12/2012 - 16:18 | Link to Comment Confundido
Confundido's picture

GOLD BEARS: I WILL PAY ATTENTION TO YOU THE DAY  EITHER TWO OF THESE THINGS HAPPEN:

 

A) THE FED CANCELS FX SWAPS WITH OTHER CENTRAL BANKS AND LIBOR-OIS BECOMES RELEVANT ONCE AGAIN

 

OR

 

B) THE US STOPS RUNNING TRILLION/YR DEFICITS

 

DO I SEE ROMNEY CANCELLING FX SWAPS? THE ROMNEY WHO COMES FROM BAIN CAPITAL, WHO IS SPONSORED BY GS, MS, JPM? NO!

DO I SEE ROMNEY BRINGING THE DEFICIT DOWN? THE ROMNEY WHO IS IN FAVOR OF INCREASING DEFENSE SPENDING? ABSOLUTELY NOT!

 

OVER TO YOU, BEARS!

Fri, 10/12/2012 - 19:29 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Watch the spread of money market over Fed Funds as well and the 30 years yield.LIBOR-OIS is only a systemic indicator, money market is both systemic and "comnercial bills" activity, right now the spread moves up when ILBE inflation expectations move down, along with LIBOR-OIS (systemic). When Libor-ois gets flat while money market rates spread widens above Fed funds, if at the sane time inflation expectations move up and treasuries move down we have real inflation, Fed does not need to debase anymore...

 

Shorting tge 30 years is a hedge on end of money printing and Gold hiccup when that happens, then buy it back on real inflation, right now we have debasement, later we will have inflation (higher nominal wages).

 

Fri, 10/12/2012 - 16:29 | Link to Comment MeelionDollerBogus
Fri, 10/12/2012 - 17:21 | Link to Comment ZeroAvatar
ZeroAvatar's picture

Here's how I see it:  First, they're printing, right?  And they're gonna keep ON printing.  So that fiat is going to hit the economy, commodities and food are going UP in price (Inflation).

 

Second, there are no jobs, we're (in a depression) re-entering a recession, corporations' bottom lines are gonna suck.  Result?  Stock market going down.  We all know S&P will be AT 500, at some not-too-distant future point.

 

Third, everyone knows bonds are in a bubble, and that dog's just about ready to give up the hunt.

 

Conclusion?  Those fiat dollars have to go somewhere......the stock market isn't going to be the place, bonds aren't going to be the place.  Hmmmm.  Where will the smart money go? 

BTFDYFI!

Fri, 10/12/2012 - 18:08 | Link to Comment Arcturus
Arcturus's picture

They are printing to support the banks so they can get that toxic debt off their books. The printing results in more debt, the debt will be paid by taxpayers. The taxpayers will have no money to increase the money velocity. All this results in deflation. The stock market going down is also deflationary as people get hammered especially those saving for retirement the largest of all demogrphics, so they MAY buy gold, maybe not. This group is deleveraging as fast as possible.

No jobs is deflationary. Gold rises with inflation. So when will that happen?

Sun, 10/14/2012 - 23:28 | Link to Comment honestann
honestann's picture

And gold rises in value with deflation too.  Why?  Because deflation turns the screws on everyone in debt... and today, almost everyone is deep, deep, deep in debt.  This naturally drives down prices of purchased goods versus gold, so the value of gold rises (where value is measured in terms of how much goods you can trade your gold for).

Fri, 10/12/2012 - 20:27 | Link to Comment orangegeek
orangegeek's picture

If the Euro slides - probable - the US Dollar rises (57% of US Dollar is weighted against the Euro).

 

If the US Dollar rises, Gold in US Dollars will likely fall.

 

http://bullandbearmash.com/chart/gold-today/

 

If Europe gets things turned around quickly and gets their trillions in debt paid off and can solve their double digit unemployment in the next few months, gold may rise again.

Fri, 10/12/2012 - 22:26 | Link to Comment ZeroAvatar
ZeroAvatar's picture

The dollar rising/falling depends on who's charting/talking.  Morris Hubbart, 321gold, sez dollar will 'long term' go to new lows sub 71.

 

http://www.321gold.com/editorials/sfs/hubbartt101212.html

 

Because when all else fails, and there really isn't anything else, THEY ARE GOING TO PRINT.

Fri, 10/12/2012 - 22:06 | Link to Comment Money 4 Nothing
Money 4 Nothing's picture

Because we won't have price discovery until it's too late. supression is the name of the game right now or the Bernanke model will be revealed as farcical. Just my opinion.

Fri, 10/12/2012 - 22:19 | Link to Comment ZeroAvatar
ZeroAvatar's picture

Without googling it, what is it, Exeter's Pyramid?  People finally lose faith in ALL paper instruments,  leaving Gold as the last store of wealth.

 

Right now, who wants Real Estate?  Bonds?  (Maybe a few idiots left, there)  Stawks?  FUHGED....ABOUD....IT!

 

I personally believe there will be a rush to metals the likes of never seen before in the history of mankind.

Fri, 10/12/2012 - 23:35 | Link to Comment Venerability
Venerability's picture

Tyler,

To answer your final question - Yes.

But via my preferred system - Technical Analysis of Propaganda - there is also the very real possibility of yet another small hedge fund trading from the Uber-leveraged Short side about to go under.

This is the standard end-of-week pattern when that is about to happen.

Probably one your friend Mr. Kaminsky likes. Or one can hope so.

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