Putting It In Perspective: In 2013 The Fed Will Conjure Enough Paper Money To Buy 11% Of All Existing Gold

Tyler Durden's picture

When people throw around "trillions" (and in the case of Yen-denominated Japanese debt and/or total outstanding gross derivatives, quadrillions) with the facility that mere billions was being dispensed with as recently as 5 years ago, it is easy to lose sight of the big picture.

So what is the big picture? Well, recall the following quote from Warren Buffet's letter to investors:

"Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion....You can fondle the cube, but it will not respond."

Gold is now 7% lower, and even when netting incremental mining production in the interim since this letter was written, one can roughly say that the total value of all gold in the world is ~$9 trillion. In other words, in 2013 the Fed, alone, excluding all the other central banks, which as we pointed out earlier is vary naive, will conjure out of thin air enough 1s and 0s, equivalent to $1 trillion, or enough money to buy 11% of all the gold in existence in the world. Add all the other central banks, all of which are now engaged in "unlimited easing", and this number will likely rise to about 20% of total.

In 3 years of unlimited easing, which at this pace looks quite possible, after all all Chairmen have made it clear there will be no end to the global paper printing until 2015, enough electronic money will have been created to buy more than half of all god in existence.

In 5 years? All of it.

So, once again, which is the scarcer commodity?

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Xibalba's picture

a million $billions$ to enslave us all

johnQpublic's picture

if the fed had any sense ,they would just buy ALL the gold

oh wait, fergot they were just gonna take it all by gunpoint later

my bad

Banksters's picture

A good defense is a strong offense- dr the bernank.



MillionDollarBonus_'s picture

Interviews with average Americans 

What do average Americans want from their government?

John Dartwood, age 59, AL

America needs to start facing the hard reality of the threat of terroristic activity in this country. Terrorism is foreign AND domestic. There's terrorism everywhere, not just overseas. If somebody criticized our foreign policy, that's terrorism. If somebody threatened our government or the CYA, that's terrorism. It's a mindset - you got to see the threats to America before you can see it. Terrorism is serious business. We need to increase our national security and support our military. Terrorists are ruthless, and our national security measures need to be ruthless too. 

johnQpublic's picture

whats ruth got to do with anything?

ruth is a sweet old lady

TruthInSunshine's picture

My back of the envelope calculations have gold approaching $60,000 USD per ounce, if it weren't assaulted as the threat to sovereign toilet...oops...I mean fiat monopoly paper, precisely as Alan "I Was For Gold Before I Worked At The Fed And Was Against It" Greenspan wrote about several decades back.

And if anyone thinks this is "tinfoil-y," Paul Volcker said the exact same thing, using roughly the same estimate, in October of this year, while speaking to the NYU Stern School of Business with William L. Silber, after being asked about a gold standard. I will try and find a video clip and post it....WAIT, here it is:

VOLCKER: The Triumph of Persistence - YouTube

It's towards the end - I can't find the exact point (last 10 minutes, Q&A session)

Going Loco's picture

It wasn't Volcker who mentioned gold, it was Silber, at 1:16:00 and he just said he bought some gold, 3% of his portfolio. He never mentioned any future value. He said he hopes it goes to zero and he is worried about what would happen if it goes to 50% of his portfolio.

Might as well get these things right.

TruthInSunshine's picture

You missed it, then. You're going to make me find it?

(Volcker definitely spoke of what I said he did)


edit - Found it: 49:30 "If the gold standard is re-instated, you have to ""fix"" the price of gold...replace all the dollars out there with gold, the price of gold would be ENORMOUS," etc.


p.s. - At 0:50:40 Volcker destroys the "effectiveness" of Quantitative Easing.

Bananamerican's picture

Isn't Cliffsterity nominally supportive of a stronger dollar?
Isn't that, along with CB manipulation of AU, also responsible for Gold's dip?

Lore's picture

The 'cliff' is a sham. The tax revenue numbers are a drop in the bucket. The GDP report is another lie. Private writers track real GDP as turning negative ~2008. Real problems are untouchable and unspeakable.

Gold got hit because the order was given. End of story. If you trade, you get stomped. If you buy physical, you put on your coat and head downtown.

Going Loco's picture

You said it was in the last 10 minutes. I listened to the last 11 minutes, to be on the safe side. Only doing what you said.

Glad you listened to it right through though, because now we have it. He didn't say it is going to happen. He said what would be the result if it did happen. Ergo, it won't happen. Anyway, that's my take.

Going Loco's picture

Ruth is a sweet old lady, therefore she is irrelevant and dispensable. Like the post said, we will be Ruthless.

Bindar Dundat's picture

You are making it to complex!   The gold and stocks will go down until we the average investor pukes and gives up.  The banksters with all there low interest cash will buy up all they can and when they have filled their boots inflation will get underway and gold and stocks will skyrocket.  We will have all our wealth stolen from us , just like they did with housing.    It is not a plan but just an opportunity.

A. Magnus's picture

Where the fuck did you pull this supposed 'interview' with an American, the Dick Cheney Chickenhawk Piece of Shit fan blog? I haven't read a piece of unconvincing propagandist tripe this bad since the whore presstitutes started talking about Assad's 'weapons of mass destruction' last week...

Eternal Complainer's picture

What a pile of brainwashed crap that is!
Geez, even though we know you're the most extreme shill & troll alive it's hard to believe that you are so easily duped by the propaganda.
It speaks even less of you bonehead!

Nobody For President's picture

Oh for God's sake Magnus and EC - he's trolling your ass! It's MDB - and this is a little better than some of his recent stuff, which was too obvious. Put a /sarc tag on it and read it again. MDB is one of the best writers of fiction on ZH, especially when he is on form, like today.

I'd give him a grennie, 'cept I don't want to encourage him - his stuff almost always takes us off topic to some extent. We're talkin' paper money and gold here.

And besides, there probably are assholes like the fictional guy MDB interviewed out there, which is scary enough that you got hooked. The old 'right or wrong, my country' crowd.

The NDAA is plenty scary enough...

Renewable Life's picture

I think the Chinese have other plans! We couldn't even take the gold in Iraq at gunpoint, you think the Bernank could get it done here or in China????

francis_sawyer's picture

 "In 2013 The Fed Will Conjure Enough Paper Money To Buy 11% Of All Existing Gold"


I've pretty much been saying that IS, EXACTLY the plan [and has been since at least August 2010]... Since then, the only sight alteration to the plan is that the rest of the major central banks & wannabe reserve currencies have jumped on the bandwagon as well (so ~ all you mathemeticians better figure that one into the calculus when you start projecting out)...

This does not only apply to gold, it applies to anything...

- oil (especially if you don't have it)

- lumber

- Cu (nickles bitchez!... & copper sheets to make distilleries out of)

- while you're at it ~ might as well stock up on silver solder to combine rising silver prices along with practical value

- steel derivatives

In short ~ stock up on shit... Get rid of your joobux as fast as you can...

I Am Not a Copper Top's picture

Joobux.  I don't know why I find that funny, but I do.

francis_sawyer's picture

Some "junker" up there seems to think joobux are the cat's meow... I guess they're valuable because I've heard you could conjure them into existence out of thin air...

Anasteus's picture

Agree, that's most likely the plan. And what I believe it's going on under the hood is the following...

Just few years ago the Western banks were net sellers but then they suddenly realized they had done a big mistake, likely by having noticed unexpected increasing demand from the East. Since then they've been net buyers and trying to recover as much gold as possible; in addition to inaction we can also suspect a pretty pile of gold to have been lost after numerous unsuccessful swap transactions. The value of gold seems to have been definitely recognized worldwide (once again) so only buying in competition with the Easterners is now possible. But how can they manage large deliveries at low prices? In Old Normal markets this would be impossible. But in the paper phantom market decoupled from physical demand running behind the scenes along with mutual silent agreement with the Easterners, the price of paper gold can be artificially screwed down for the sake of all parties. That's why China does not interfere in the paper market during nights like it did before. The price of gold exposed to the public must remain relatively low and confusing enough to deter both speculators and investors (which, for the Fed, is also necessary for keeping the dollar visually valuable) so that only absolute minimum of members can join the party, such as China and other BRICKS in the wall. For all the rest the paper farce must go on as usual... until the divide and conquer game is completed.

francis_sawyer's picture

My theory is that there are [& have been] on-going backdoor deals which COLLUDE to help keep paper prices seemingly stable enough to not tip over the canoe until all the gold can be heisted...

For example:

Crude oil IS NOT the paper price of WTI or Brent... It's a 'backdoor' agreed upon gold transfer + an adjusted paper price on top of that which 'seemingly' keeps things looking like they're trading within a market range...

It's like the NFL or MLB [wrking with salary caps]... You work out some kind of salary structure which keeps you within the prescribed limitations...  

malikai's picture

This needs that rendered picture of what $1T is.

Renewable Life's picture

Just wake me up when the rebellion begins! Until then, I'll be listening to good music, eating good food, and having good sex!

(Oh and when I'm not doing those things, I'll be buying silver, ammo, and ag land).

Happy Holidays!

caimen garou's picture

+100 R L,at least I'm not the only one with that plan!

youngman's picture

BAD sex is much more fun...

Clesthenes's picture

You wrote, “Just wake me up when the rebellion begins… [in the meantime] I’ll be buying silver, ammo, and ag land].”

I have bad news for you.

“When the rebellion begins”, you’d be lucky to survive five days.  When it begins, starving men will roam city and country like clouds of locusts searching for food, liquor and women to use.  If they suspect that you have any such resources, 1) word will spread like wildfire among the hungry, 2) huge crowds will camp around your cabin, and, when you can’t stay awake any longer, 3) they will march in, unopposed, and take everything you have, including your life.  American governments have been training these hordes of men for twenty years, at least; most people know them as “the homeless”.  Just a few experiences with the homeless and you’ll see the genesis of the next criminal organization.

And more, if you have made it to any list maintain by our “political officers” (CIA, FBI, Mossad) and, if the starving don’t take you out, death squads will.

Is there a solution?

Of course there is; but you won’t find it in that mental sewage known as indoctrination.  Briefly, you have to excise it and replace it with real facts of history; you have to learn lessons of American Founders.  One of those lessons pertains to the establishment of First-Amendment assemblies; among other things, these will give you the means to associate with others for the purpose of protecting what’s yours; another purpose is to make criminal and useful-idiot classes accountable for what they have done.

Here is a short account of how a few men, so very few, brought down judges and tax collectors, bishops and kings who thought they had a divine right to impose taxes on other men without the latter’s consent; the same men who, 150 years later, would guide American Founders.

Raymond K Hessel's picture

At the end of the site the link in your post brings us is a pitch to trade membership for gold.

I don't see how scamming us out of gold will further the cause of liberty anymore than a carbon tax will stop hurricanes.

Renewable Life's picture

Wow, you puked so much bullshit there partner, I'm not sure where to begin.....

But I'll start with, you don't know shit about "how long I'll last" or what I got to protect myself or my family, secondly, your reality of who you need to "worry" about, if so fucked up, I know your just some two bit salesmen, pedaling fear to the avg idiot on the street!!

So go piss off, the people I know and myself, wont be getting killed by "the govt trained homeless" or "death squads", you need to put down the crack pipe, and talk to people who have witnessed first hand, how societies collapse, before opening your mouth again!!

Godisanhftbot's picture

 at the rate of golds demise, make that 22%

grok's picture

What is that amount relative to all of the money in the world?

johnQpublic's picture

less than 1% by my math

scatterbrains's picture

hard to say, no one really knows what money's worth anymore.

Mercury's picture

In 2013 The Fed Will Conjure Enough Paper Money To Buy 11% Of All Existing Gold

...only if they somehow bought it all in one transaction.

As soon as they started buying the price would go up and they'd never get half that amount in before they ran out of money.

If anything gold should be up 11% after the printing is done.

Pseudo Anonym's picture

not necessarily

As soon as they started buying the price would go up and they'd never get half that amount

in fact, the opposite might be happening now:  hofjuden sell paper gold, momentum sells paper gold, price of paper gold goes down while hofjuden hoard and hide the phyz gold until there is no phyz to deliver (to you) and then the price of phyz explodes to infinity.  the outstanding paper gold contracts, to be fair,  are then settled by hofjuden conjured confetti aka frn.  can you follow that?

Polonius's picture

This article is as good as any to lead into the final solution: central banks bid for gold instead of MBS junk credit.  Why there isn't a hue and cry for the central banks to buy the liability-free ultimate asset is insane.  "Bid for gold!" should be a rally chant at the next Fed press conference.

booboo's picture

"You can fondle the cube, but it will not respond."  Warren learned that from playing with himself.

Clowns on Acid's picture

"You can fondle the cube, but it will not respond." - That's what Becky said....

BigMike's picture

Hey will Eric King PLEASE put up some blog post and interviews so that I know everything is ok? I'm dying here man! 

James Turk where are you? Andrew McGuire, John Embry, Stephen Leeb -- I need to hear your soothing voices telling me this is all a bad dream!!! 

fats's picture

Only Louise Yamada can save us now.

ParkAveFlasher's picture

It's true, I myself have been waiting for the most important. interview. EVAH. From legendary, fabled, expert, master of $1T fund, etc.

What is also true, is that if you dove under the table when $1,000/oz became $750/oz in 2008 (that's a 25% move), you'll jump through the window now. Do me a favor and leave your metal behind when you do.

Stackers will stack, and not miss the next big move up, which mightn't take as long as you think.

SilverDoctors's picture


James Turk just released a new 3 year gold outlook today: INCREASED his gold call to OVER $8,000/oz by 2015!



KWN just had Maguire on yesterday- documenting the massive amount of paper gold dumped on the market to induce this intervention. 


TheSilverJournal's picture

$1T is the base case for 2013. QE5 is just around the corner and who knows how big that round and the next round will be. By the end of 2013, there will probably be another addition to QE every month.

Kaiser Sousa's picture

only morons would fall for this blatant "bananna in the tailpipe" cocksucker banker enginered phony paper price attack on the only 2 forms of REAL MONEY - GOLD AND SILVER....

aint nobody selling no physical Gold or Silver.....




realtick's picture

Can some please explain to me how a precious metals blogger who is consistently wrong and who instructs his followers to "do the opposite" of what he says has any followers at all?


Nevermind, just remembered there's a sucker born every minute.

A. Magnus's picture

I'm starting to think the Fed is going to use a significant portion of QE4 to suppress the PMs in order to bail out dipshits at JP Morgan from their underwater short positions. As those fucktards have a shit-ton of shorts piled onto silver I fear that the PM dick-downs may continue for a while...