What Happened The Last Time Gold And Central Banks Were So Far Apart?

Tyler Durden's picture

From 9/11 on, Gold and the world's central bank balance sheets were as correlated as over-consumption and a hangover (and linked just as causally we suggest). Then a funny thing happened in 2008 - gold slid as the central banks went extreme. Of course, as this divergence occurred, the world's stock markets imploded almost as if the central banks knew their status quo was about to go entirely pear-shaped. From 2008 until November of 2011 (when the world's central banks began their coordinated ease-fest) the correlation went limit up once again. Since then, Gold and CB largesse once again decoupled as liquidity is flushed around the world's markets to suspend reality just a little longer. While this divergence is not as extreme as in 2008, something is afoot.



and now...


Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
DoChenRollingBearing's picture

This is Yet Another Presentation why all who read Zero Hedge should be buying physical gold.  There are LOTS of things we should also be doing to prepare ourselves for a bad outcome (including preparing for the tail risks of a terrible ending).  Gold, IMO opnion is the main safe harbor for one's wealth.  Get some gold, get it soon.

BigDuke6's picture

Stacking aint easy.

But its worth it.

rehypothecator's picture

Europe hasn't recapitalized its banks, Japan is crossing the point of no return, the US, cliff or not, is beyond repaying its debts...  what could possibly go wrong?  Well, at least US treasuries are backed by something, which is comforting, unlike gold.  


tenpanhandle's picture

per yer url:


I'm surprised words can actually exit that womans mouth considering the vacuum in her head.  Seems to defy physics.

sgorem's picture

the ONLY thing that is backed by THIS government is inflated hot fucking air in the form of green paper and coinage costing more to mint than they are worth melted! Does that give you a clue?

rehypothecator's picture

My apologies for not including a sarcasm tag on the video.  I just love the conviction, certainty and finality of her intonation, coupled with the utter emptiness of her words.  It might be worth watching again, with that thought in mind.  It's a classic.

_ConanTheLibertarian_'s picture

So gold has some serious catching up to do. BTGFD!!

btb2010's picture

FRB holds gold because it's a tradition!!!

btb2010's picture

FRB holds gold because it's a tradition!!!

Fuh Querada's picture

Green curve: Viagra

Yellow curve: Valium with sodium bromide

tawse57's picture

So a drop in gold may be close. Pity the S&P 500 or DOW is not on those charts as well - would be interesting to see where the dips in the markets came.

Cognitive Dissonance's picture

Something stinks in the wood pile.

RockyRacoon's picture

You mean other than JPM and the CRIMEX?  That's all I caught a whiff of.

Cognitive Dissonance's picture

How long does it take for a corrupt body politic to decay and decompose? And left alone to its' own devices, devoid of fawning sycophants, scapegoats and cesspools, would anyone smell the stench of rotting fiat flesh?

akak's picture

You are forgetting that rot, stench, decay and putrifaction only empower the zombieconomy.

knukles's picture

It's a driect function of the half lives of Dancing with the Stars and Jersey Shore divided by the inequities of selfishness and tyranny of the evil.

Threethreethree's picture

Shortly after 911 Osama Bin Laden released a written manifesto telling all Arabs and Muslims to buy gold and transition away from the use of the American Dollar.


francis_sawyer's picture

<== OBL telling Arabs & Muslims to buy gold [with] joobux

<== Jews telling everyone to sell gold for fiat joobux

Atomizer's picture



Nadhmi Auchi

Antoin ‘Tony' Rezko

Elf Aquitane

Paul Bremer

Daniel Mahru


The Sierra Club

Penny Pritzker

Leo Gerard

Valerie Jarrett

Eric Holder

Orlando Jones

Jon Bon Jovi & Broadway Berry singing

The Joyce Foundation



Jabir Herbert Muhammad

Khalil Shalabi

Aiham Alsammarae

  • Geopolitics pass new tax laws so that WallStreet can play with new free monies.
Clowns on Acid's picture


You ave pointed thoisout before. The shadow banking market is collapsing and the excess uSD sloshing around in the system is going to the banks, not the public. When the banks are told to open the sluice gates by the Fed (or Obama) then we will see AU fly.

Te Fed startegy is to save thebanks first, and then if necessay, open the gates of hell.

It's getting close.

sgorem's picture

i like you clown, but don't drink, or drop, and type at the same time please....:)

Clowns on Acid's picture

Hehe...was watching football while typing above. Too many balls in the air.

Musta been down arrowed by an English teacher.


Motorhead's picture

Or is this one of those correlation, not causation things?

disabledvet's picture

it's a gold thing. "price only moves in one direction." and if not "it's being manipulated." with interest rates this low how the hell can i "manipulate" anything? prices should be SOARING. instead "it's all those fiatsco's" that have soared in value. If this article is correct (and it isn't) we should be on the verge of a massive DEFLATION. Okay...WHERE? the burden of proof is on those who believe in "non interest bearing accounts" being the big winner. well...i'm a saver and a worker...and i'm getting OBLITERATED. so i thank my self that i listened to myself and took thirty percent returns "with interest" instead of prepping for an Armageddon that never came. When are we going to talk about COMPETITION around here? Seems like the idea factory is getting a little stale of late...

akak's picture

I am guessing that your disability is not entirely, and perhaps not even largely, physical.

Please point to the fiatscos that have "soared in value", as I think you are suffering from Cranial-Rectal Inversion Syndrome here.

stormsailor's picture

i have a backpack dredge and know where the gold is in creeks around charlotte,concord,jefferson,kershaw,lovelace,  if it does what i think,  a pleasant afternoon could be extremely profitable.  as it is, i don't own it and do not have to worry about confiscation.  i can get it when the time is right. 


nothing like cleaning out the trays and finding a half-ounce nugget

americanspirit's picture

Hi Stormsailor - a backpack dredge hey. Nice idea. I know of a couple of streams nearby that might be worth spending a pleasant afternoon or two doing a little dredging. They have good fishing too. I just googled 'backpack dredge' and it looks like there are a few good choices. Thanks for the tip.

akak's picture

Why do "madness" and "modern" almost seem to go hand-in-hand nowadays?

stormsailor's picture

try this one.  http://www.keeneeng.com/Merchant2/merchant.mvc?Screen=PROD&Product_Code=... i dredged during the summer in college worked with backpack dredges all the way up to 8 inch.   average cut about 2 ounces a week back when gold was in the 200 range,  long ago.  beat crap out of some boring summer jobs.

tenpanhandle's picture

sailor:  we must be about the same age as I dredged for a living right after highschool when gold was 120 or so an oz (1976-77).  I continued dredging into the mid 80's until the jack booted thugs of the USFS waged war on us.  Making a living was pretty tough and I wouldn't recommend anyone quitting their day job to go dredging but the memories were worth millions. The gold was in the times.  Now it is against the law (rules and regs backed by the so called forest rangers weilding 40 caliber weapons) in California aka the "Golden state".

Any dredging now must be done guerilla style in that state.  However a new movement by the elected sheriffs of Northern California is attempting to bring law enforcement back to the people and dredging may have a comeback as Sheriffs refuse to enforce the draconian regulatory rulebook the feds call law.  From what I understand, the County sheriffs have ultimate law enforcement powers in their respective counties above the state and feds and these sheriffs are taking that authority back.

Many other states are restricting dredging under a myriad of rules and regs promulgated by the US Wildlife Service and the US Forest service among others.  Water quality issues are a panacea for the extreme environmentalist to shut down dredging in many places (coming to a stream near you).  Soon dredging will be outlawed everywhere and only outlaws will own dredges.

Good luck to us all.

stormsailor's picture

california gold, have read some accounts of huge nuggets being found in placer deposits.  yep, we are right about the same age.   i live close to charlotte nc.  if you do the research,  more gold was minted from the charlotte mint than was ever minted in california.  all of uptown charlotte is built over old abandoned mine shafts.  i grew up south where there were several old gold mines.  biggest nugget ever recovered in the united states was about 20 miles northeast of charlotte nc.  biggest i ever found was a one ounce nugget that was half crystal quarts, half gold.  in 1980 a collector gave me 5k for it.


i had an incredible time in my dredgeing days. 

swissaustrian's picture

In November 2008 gold briefly went into backwardation indicating severe physical shortages. Physical Silver premiums also skyrocketed. Spot prices plummeted however because leveraged paper players had to cover losses in other markets (stocks, derivatives, industrial commodities etc.) The gold futures and options players (specs) at the COMEX were biased heavily to the long side in the summer of 2008, too. The following waterfall decline occured due to panic liquidations. Commercials (bullion banks) made a killing during that time and covered their shorts.

Fast forward to December 2012: Paper longs again overstreched their balance to the long side as the FED announced QE3+4 again. Commercials took advantage of that by forcing them out again. Meanwhile physical demand seems to be ultra strong again according to several sources. Rapidly falling forward rates are confirming these reports.

forwardho's picture

In "reality" there is a direct correlation between AU and any given fiat. As AU goes up in price the value of the fiat is shown to be worth less.

We are trapped in the land of OZ

The ruby slippers have been burned.


cynicalskeptic's picture

The ruby slippers were silver in the book - changed to ruby for technicolor......   

silver's been getting severly abused

Mr. Hudson's picture

As long as Bernanke keeps printing money for his friends to buy and sell paper gold, and as long as people buy and sell paper gold, they bankers will always control the price of gold.

radix46's picture

ECB removed their support for paper gold.

Gold price? Look out beloooooooow!


ruffian's picture

If the system managers were removing their support form the paper gold market then the Bullion Banks would not have covered nearly 90,000 short futures contracts since 12/5/12. That's 9,000,000 ounces or 280 tonnes worth of paper gold. Why would they do that id the end of the paper gold mkt was neigh?

More likely thay are going to lift paper gold prices, suck in the hedgies and other paper players and then bring the hammer down later. They will need to make this rally look very convincing too as many are suspicious of the bullion banks these days............

radix46's picture

You are assuming the ECB and the bullion banks are "on the same side".

I don't.

ruffian's picture

So the ECB is not on the "side" of the banking system? Who have they been propping up for the the past 4 years then? You think the ECB would allow the bullion banks to default and not give them a heads up? I read FOFOA too and there is nothing to say that even if the MTM party is below Euro 1260 that the BB's could not give the paper players one last good headfake.

Repeat....BB's will be given a heads up when the sytem mangers want to revalue physical. They will not "surprise" the BB's.........


radix46's picture

I agree, they won't surprise them. The BBs know they'll be bailed out by the FED regardless. No surprise.

All paper gold contracts will be cashed out to save the banking system.

JamesBond's picture

there is cash on the sideline just waiting to purchase gold if the price slides; it will be a momentary blip down...



jldpc's picture

Unfortunately, the ultimate collapse is still far off; this non-reality can go on for years/decades. But having your .45-70 govt for when the police can no longer be paid will give you a few hours more than your neighbors - as the masses on the dole go rampaging for the last of the "free" food. It is self-deluding masturbation to argue what to call this mess in polite economic terms; history is full of failed countries/civilizations. Look back, look around, read about the collapses - France; American Indians; Cuba; South Africa; Russsian Revolution; various Mexican and South American "revolutions," etc. Better to be armed with the weapon than the high finance book.

JamesBond's picture

ahhhh...  the bend over and grab your ankles and open wide position....



sink critically's picture

While the debates over what the meaning of "is" really is, the junkie keeps pressing the morphine button frantically whilst selling the hope of a miracle recovery. The patient is all but dead folks, and "is" becomes critical to posterity.