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Blast From The Past As Cable Plunges To Seven Month Low

Tyler Durden's picture




 

And now for a quick blast from the past: on November 26, moments after Mark Carney was announced as the Bank of England's next "shocking" head (confirming our prediction that just this would happen), we made a very simple prediction, one which ran contrary to the conventional wisdom of the day, that Carney would pursue a sensible policy of preserving the strength of the British pound, namely the following:

Sure enough, after rising very modestly in the days after Carney's coronation, cable has since imploded and moment ago touched on a new seven month low. Those who have been long the GBPUSD throughout the ensuing 600 pip plunge, can invoice Goldman Sachs with their therapy bills.

Why? Because back in early 2012 Goldman was already planning for the next round of global currency warfare, and needed its own operative to make sure that the BOE, which weeks prior to his appointment, said it was done with QE, would resolutely follow the trailblazing path set previously by such other Goldman tentacles as Mario Draghi and Bill Dudley. And, just as expected, it is already benefiting from the market's expectation that once the BOJ's reflation experiment ends in flames, it will be the Bank of England's turn to pick up the torch and boldly go where so many other Goldman central planning muppets have gone before.

Expect much more pain for GBP longs as every central banks does the only thing it can to boost global risk prices: devalue the purchasing power of its citizens while benefiting just the 1% of the legacy banker oligarchy whose wealth is dependent on the ongoing explosion in sovereign balance sheets.

Which begs the question: for all those who say don't fight the Fed, do they realize they are explicitly saying fight the BOE, BOJ, SNB, ECB and PBOC? And Venezuela of course.

 

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Tue, 02/19/2013 - 13:17 | 3256521 VonManstein
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USD to follow

Tue, 02/19/2013 - 13:22 | 3256544 TruthInSunshine
TruthInSunshine's picture

Somewhere in New Jersey, one Professor Paul Krugman, Ph.D., grins from ear to ear.

Tue, 02/19/2013 - 13:25 | 3256557 SheepDog-One
SheepDog-One's picture

Someday he'll get an ear to ear Columbian necktie.

Tue, 02/19/2013 - 13:50 | 3256608 BaBaBouy
BaBaBouy's picture

Why The Phuck Do We Have CB's, Fin Ministers & Presidents ???

 

SackMan GOLD  Runs Everything, The World...

Tue, 02/19/2013 - 13:27 | 3256564 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is he? 

I figured he was in his crib shaking a rattle and sucking on a pacifier.

Tue, 02/19/2013 - 13:24 | 3256552 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke is getting his ass kicked in the currency wars.

He needs to get to work.

Tue, 02/19/2013 - 13:30 | 3256560 TruthInSunshine
TruthInSunshine's picture

Krugman wants to see all fiat currencies debased to the literal end of the road, which will dovetail with the end of anything remotely resembling capitalism.

"...the best way to destroy the Capitalist System [is] to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

 

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

---J.M. Keynes on inflation in The Economic Consequences of the Peace (p. 235-6):

FORWARD!

Tue, 02/19/2013 - 17:43 | 3257516 auric1234
auric1234's picture

This makes too much sense. Are you sure J.M. Keynes wrote it?

 

Wed, 02/20/2013 - 10:04 | 3259036 TruthInSunshine
TruthInSunshine's picture

Whether one believes Keynes was brilliant or not, or contributed signficantly to economic theory, or not, one thing is beyond factual dispute: People like Krugman have helped to torture Keynes's legacy posthumously.

Tue, 02/19/2013 - 14:46 | 3256847 resurger
resurger's picture

NO!!!!!!

he has to stand in the Q!

First JPY, Second EUR, Third GBP, Fourth CNY, Fifth USD ...

W.R.R:  

Tue, 02/19/2013 - 14:44 | 3256839 Panafrican Funk...
Panafrican Funktron Robot's picture

Yes, I agree that the $85 billion a month is just an appetizer.  The clue will be treasury rates.  Consider, a rise in rates will blow the motherfucking shit up out of the mortgage backed security REITs (for major component companies, look at REM).  This implies:

1.  They'll need to ramp treasury buys up even more, to get the rate structure under control.

2.  They'll need to bail out the leveraged to the gills MBS held by these REITs.  

This is in addition to just general currency warfare considerations around juicing the import/export number so that we don't have any more "negative GDP surprises".  This is just me, but I think $250 bln a month is not out of the question.  

Tue, 02/19/2013 - 13:21 | 3256539 Shizzmoney
Shizzmoney's picture

"This isn't the inflation you are looking for"

 

Tue, 02/19/2013 - 13:22 | 3256542 The Shootist
The Shootist's picture

Cable? I thought it was Sterling. {Yuan, RNB, Renyimbi...}

Learn somethin' every day...

Tue, 02/19/2013 - 13:24 | 3256553 Id fight Gandhi
Id fight Gandhi's picture

Gbp/usd pair is called cable.

Tue, 02/19/2013 - 13:26 | 3256558 Shell Game
Shell Game's picture

What's the euro/usd pair called - fucked?

Tue, 02/19/2013 - 13:32 | 3256569 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The Yen/GSP pair is called "Fucked Island".

It sounds sexy but it's not.

Tue, 02/19/2013 - 13:55 | 3256635 Yen Cross
Yen Cross's picture

 You are spot on with that comment. GBP/JPY is a bitch.

Tue, 02/19/2013 - 16:03 | 3257146 Totentänzerlied
Totentänzerlied's picture

Ah I get it, GSP - Goldman Sachs' Pound

Tue, 02/19/2013 - 13:22 | 3256543 Inthemix96
Inthemix96's picture

Put a bullet in the lot of the nation wrecking bastards.

These fuckers wont be happy till each and every last one of us is living in a cardboard fucking box.  Time for a bit neck snapping lads, and I really believe its gonna come to this.  Its us or them.

Pick sides boys, this isnt far away from a complete fuck up.

Tue, 02/19/2013 - 13:28 | 3256567 Frozen IcQb
Frozen IcQb's picture

Nothing but a rope, tall tree and a horse can't handle.

Tue, 02/19/2013 - 13:36 | 3256587 WillyGroper
WillyGroper's picture

Well, 1 of the 3 is now on your plate.

Tue, 02/19/2013 - 14:07 | 3256674 Frozen IcQb
Frozen IcQb's picture

So I've read.

I need one that's more alive than blue-rare.

Tue, 02/19/2013 - 13:22 | 3256546 NoWayJose
NoWayJose's picture

The Bernank better study how these other countries are doing it. He is losing the currency devaluation wars, and may need the upcoming help from Congress playing their partisan games.

Tue, 02/19/2013 - 13:24 | 3256547 Yen Cross
Yen Cross's picture

I need therapy. I'll catch this falling knife. The eur/gbp ,aud/gbp,eur/aud , crosses are overbought. I'll just average in. I'm playing the yen side of the trade.  Yes the $ is in overbought territory S/T.

Tue, 02/19/2013 - 13:57 | 3256640 Orly
Orly's picture

Harmonics are calling for a short-term reversal here.  Also, the pair could be making a longer-term rounding bottom, as seen from late September 2011,

It could move back to 1.59 if the bottom here holds.  Otherwise, it's on to 1.52.

(I have found it useful to look for reversals around the time everyone else notices...)

:D

Tue, 02/19/2013 - 14:46 | 3256848 Yen Cross
Yen Cross's picture

 Gotta love Orly. :-D

Tue, 02/19/2013 - 13:25 | 3256550 dark pools of soros
dark pools of soros's picture

iPads get cheaper.. they'll raise everything else but them and say inflation not moving up

Tue, 02/19/2013 - 13:24 | 3256554 Jason T
Jason T's picture

prob good short.

Tue, 02/19/2013 - 13:26 | 3256563 azengrcat
azengrcat's picture

Stong Printer Policy!

Tue, 02/19/2013 - 13:30 | 3256573 djsmps
djsmps's picture

Off-topic, but the Huffington Post just advised their readership to get into stocks.

Tue, 02/19/2013 - 13:32 | 3256579 Yen Cross
Yen Cross's picture

 Why do you read that rag?

Tue, 02/19/2013 - 13:34 | 3256582 djsmps
djsmps's picture

To see the opinions of the enlightened ones.

Tue, 02/19/2013 - 17:48 | 3257533 auric1234
auric1234's picture

Sounds very bearish. Got a link?

 

Tue, 02/19/2013 - 13:31 | 3256577 Jack Sheet
Jack Sheet's picture

Who actually makes money in FOREX apart from the banks and clearing houses creaming off commissions, and HFT algos?

Tue, 02/19/2013 - 13:34 | 3256583 Yen Cross
Yen Cross's picture

 I do, but it takes serious commitment, and patience.  If you want to make $ trading F/X you need to understand price action.

Tue, 02/19/2013 - 13:45 | 3256602 BeetleBailey
BeetleBailey's picture

In FX I do.....but YenCross is 100% correct. That and a committment & strict trade rules.

Tue, 02/19/2013 - 14:14 | 3256688 Frozen IcQb
Frozen IcQb's picture

Who actually makes money in FOREX?

 

Mrs Hildebrand and Mrs Watanabe

Tue, 02/19/2013 - 13:31 | 3256578 Kaiser Sousa
Kaiser Sousa's picture

and yet again.................

http://www.kitco.com/charts/livesilver.html

and 20 oz's on Saturday....

locking in another 20 on todays phony paper price slam...

stupid fucking sociopathic bankers....thanks for helping my stack to push thru 5 digit mark you cocksuckers!!!!!

 

Tue, 02/19/2013 - 13:34 | 3256580 Dr. Engali
Dr. Engali's picture

The Bernank better turn those printers up to twelve. 

Tue, 02/19/2013 - 13:38 | 3256594 JustObserving
JustObserving's picture

The solution to all the world's problems seems to be to kick gold and silver when they are down.

There can be no challengers to Central Bank toilet paper.

Gold and silver will soon be free but no one will want them - unlike real money, you can't wipe your ass with them.

If not for fraud, Central banksters would have nothing to do.

Tue, 02/19/2013 - 13:45 | 3256603 Yen Cross
Yen Cross's picture

 XAG is a fantastic buy right now! I'm loading up. The upside in that trade is even better than gold. If you look at the charts it's completing an inverted H/S pattern on the daily chart. It's also forming a wedge, and getting ready to move up.

Tue, 02/19/2013 - 14:13 | 3256691 VonManstein
VonManstein's picture

Damn straight!

Tue, 02/19/2013 - 13:44 | 3256600 DavidC
DavidC's picture

Well at least George Osborne reckons Mark Carney will be good for the BoE.

DavidC

Tue, 02/19/2013 - 13:45 | 3256601 busted by the b...
busted by the bailout's picture

The fiat endgame is afoot.

When there is no underlying asset to which a currency is tied, such as gold, then there is no limit to how much can be issued. 

When all countries (or at least the major economies) realize this and engage in competitive devaluation in order to gain an economic advantage through exporting in a world of excess productive capacity, then the eventual (perhaps inevitable) outcome is zero value for their fiat currencies.

Which currency will be the first to implode to zero?

Place your bets, please.

Tue, 02/19/2013 - 13:53 | 3256627 Shizzmoney
Shizzmoney's picture

LOL:

Costa Coffee in UK says 1,700 people applied for 8 jobs in Nottingham coffee shop...ahead of unemployment figs tmrw

What a recovery!  I basically have a better chance of hitting a gutshot straight draw in poker (16%) than to be "lucky" enough to be a barista (0.004%)!

Tue, 02/19/2013 - 14:05 | 3256668 orangegeek
orangegeek's picture

GBP has been falling since January 1, 2013.  It is wave 3 down - sharp moves to the downside.   We are headed to below 1.40.  Enjoy the ride.

Tue, 02/19/2013 - 14:20 | 3256732 walcott
walcott's picture

they're all doing the same shit every fucking country. While their living mummy populations multipliy exponentially and they and their 2nd and 3rd generational spawn fall deeper and deeper into a "Big Fish" soft bubble distopia of zeroness.

Tue, 02/19/2013 - 14:24 | 3256749 earleflorida
earleflorida's picture

'Implizit`Klassisch'...

Trotzen'!!!

:-))

Tue, 02/19/2013 - 14:45 | 3256843 Village Smithy
Village Smithy's picture

Carney made the mistake that many over-achievers who wound up in the right place at the right time have made. He started to read and believe his own press. Good luck Mr. Carney!

Tue, 02/19/2013 - 15:01 | 3256908 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

Here's aprediction for ya'll,I predict Carney is going to devalue sterling by 50%-yes you read that right FIFTY PERCENT. The markets are merely frontrunning the BofE,everyone wants out of sterling,the UK govt debt is £1.6 TRILLION.

There is no way in hell they can pay that back,even with interest rates AT ZERO!!!it is going to have to be big,massive to try and revive the UK economy,ordinary peple haven't got a clue what is coming down the line for them,alll the MSM keep telling them,is that deflation is bad,and the inflation is good.Nobody questions it,I nearly got into fights at work asking people why they think inflation is good,and when they can't explain,and you point out the cost of food and energy have doubled as a result of inflation they don't even see the connection,they just think prices are going up -WELL BECAUSE THEY'RE GOING UP!!!!!

So they will envisage trying to pay back half,and tell the sheep it is to boost exports.Well they devalued sterling 20% in 2007 and it didn't work then either,so why would it work now?Well obviously to ZH'ers it won't,it is done to merely keep the game going,and kick the can,so that the next government can borrow more again.

Tue, 02/19/2013 - 22:12 | 3258149 mkhs
mkhs's picture

Chart porn at its finest.

Tue, 02/19/2013 - 16:41 | 3257311 Bam_Man
Bam_Man's picture

The money printing/de-valuation isn't about "boosting exports". That is the cover story. It's about inflating away unpayable/unserviceable debts. Period.

Tue, 02/19/2013 - 18:12 | 3257596 suckerfishzilla
suckerfishzilla's picture

As long as Silver is still priced in dollars when the dust settles fine by me. 

Tue, 02/19/2013 - 18:20 | 3257623 auric1234
auric1234's picture

When the dust finally settles, there will be no amount of dollars that can buy you a single ounce.

 

Tue, 02/19/2013 - 21:04 | 3257958 Grimviewer
Grimviewer's picture

Cable down 5% in 6 months...Gold down 10% in 6 months.

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