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Mario Draghi Orders Cyprus To Sell Gold To Cover Bailout "Shortfall"

Tyler Durden's picture


Update, and sure enough:  


As a reminder, Panicos holds the now obsolete position of head of the Cyprus Central Bank.

* * *

As was noted two days ago (so certainly not the news catalyst for today's gold sell off as some are trying to make it appear) as part of its bailout expansion by 35%, Cyprus announced, then refuted, then re-admitted, it would need to fund a portion of the incremental €7 billion in cash demands by selling €400 million, or nearly all 13.9 tons, of its central bank gold. Today, we learn that this demand came from none other than the head of the ECB Mario Draghi. Bloomberg reports: "European Central Bank President Mario Draghi said the profits of any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks."

 Of course, to make it seem that the Cyprus central bank is "independent", the "European creditors today left a possible gold sale in the hands of the Cypriot central bank, which manages 13.9 metric tons of the metal, according to the World Gold Council." Naturally, it would not be very politically correct to give the impression that it is none other than the collateral and asset-starved European central bank that is effectively running local monetary policy of its member states, and certainly would not make Cypriots, already devoid of their uninsured bank deposits, happy that the next demand by the ECB for the privilege of staying in the EUR is for them to hand over the only real asset their country has.

More from Bloomberg:

“The decision is going to be taken by the central bank,” Draghi said after a meeting of euro-area finance officials in Dublin. “What’s important, however, is that what is being transferred to the government budget out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have from its ELA.”


ELA stands for Emergency Liquidity Assistance, a lifeline that can be offered by national central banks in the euro region to commercial banks that can’t get funding.


Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.


The independence of central banks in the euro area is enshrined in the treaty,” Draghi said. “The ECB will look at developments in Cyprus from this angle.”


Speaking alongside Draghi, Dutch Finance Minister Jeroen Dijsselbloem said selling gold “has always been an option put forward by the Cypriot authorities.”


“But as mentioned in the program documentation, this is a decision to be made independently by the Cypriot central bank,” he said. “And it’s not any demand from the troika or the eurogroup.”

In other words, central banks are independent, except for when the ECB tells them to sell gold to cover losses for loans made by collateralizing already worthless assets, or simply created out of thin air and backed by the full faith and credit of the Euro.

Naturally, for every seller of gold, there is a buyer. The only question now is whether Cyprus' gold will end up in the willing hands of China, Russia or the very ECB telling it to sell the gold, and at very depressed prices at that.

Finally recall that the Fed and BOJ are now injecting about $160 billion in newly created money in the G-7 market every month, and there is no end in sight to said monetarily dilution, a number which is set to rise to at least €200 billion once the BOE joins the fray this summer once Mark Carney finally arrives.

In this context, one wonders: should one side with those who are selling their gold, or those who are buying it, such as Goldman which advised its clients two days ago to sell their gold to Goldman's willing traders...


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Fri, 04/12/2013 - 11:55 | 3441222 EscapeKey
EscapeKey's picture

oh how nice.

i'm sure he deep down only have cypriots' interests at heart.

Fri, 04/12/2013 - 11:58 | 3441229 Say What Again
Say What Again's picture

Right on cue, here comes the ramp-ogasm is ES

Fri, 04/12/2013 - 12:01 | 3441262 Say What Again
Say What Again's picture

<-- Click this button


Brought to you by the Dept of Subliminal Messages Dept.

Fri, 04/12/2013 - 12:03 | 3441287 nope-1004
nope-1004's picture

Impeccable timing.  Smack gold, then issue a dictum that you must sell it.  Theifdom is alive and well, Draghi a banskter pimp.  Fuck you Draghi.  Fuck you Goldman.


Fri, 04/12/2013 - 12:05 | 3441311 FranSix
FranSix's picture

So we are seeing now, first hand, how the bail-in procedure is working.  Bullion banks are technically insolvent, therefore they will bail-in on certain uninsured accounts, such as safe deposit boxes, Gold ETFs, and Cypriot foreign exchange reserves holding gold.

Fri, 04/12/2013 - 12:09 | 3441344 nope-1004
nope-1004's picture

Hey, when in a pinch, steal gold.  When on camera, lie and tell the world it's a "tradition".  But the pinch here is interesting.  Complete admission that physical gold is sought after by any means.


Fri, 04/12/2013 - 12:14 | 3441379 Pinto Currency
Pinto Currency's picture


There are serious gold market physical demand "problems" arising.

Between London (LBMA & GLD), Shanghai, and the Comex, physical pull of bullion from these three markets alone is at a pace of 8,500 tonnes p.a.

Not sustainable.

Fri, 04/12/2013 - 12:19 | 3441396 Dr Paul Krugman
Dr Paul Krugman's picture

You guys have been writing this for years. If it was true then finra and the sec would have done something about it.

Fri, 04/12/2013 - 12:19 | 3441403 asscannon101
asscannon101's picture


Fri, 04/12/2013 - 12:28 | 3441446 Pinto Currency
Pinto Currency's picture



You may want to check out PBS's "The Untouchables" where Assistant Attorney General Lanny Breuer says that the banks are too big to punish because of the perceived impact on the financial system and also check A.G. Eric Holders subsequent comments along the same lines.

Stay informed so that your comments are constructive.

Fri, 04/12/2013 - 12:30 | 3441483 Rubicon
Rubicon's picture

Maybe its the silver they are after.

Fri, 04/12/2013 - 12:42 | 3441492 Pinto Currency
Pinto Currency's picture


Re. silver, difficult to tell, Rubicon.

Krug's economic model of price discovery appears to be one where physical demand goes through the roof causing prices to plummet.

This anomally would seem to merit serious investigation by economists.

One model that fits this market behavior profile would be to smash the paper market with sell offers thereby cascading the stop-losses and sending the price south while taking delivery of physical metal.  And yes, that would be market manipulation and, yes, there are people who would acutually do that (and buy-off policiticians and regulators through regulatory capture so that they could get away with it).

Fri, 04/12/2013 - 12:43 | 3441555 HoofHearted
HoofHearted's picture

Oh Krugman, you ignorant slut.

The only way the SEC would look at gold or silver is if it was on some midget transsexual porn that they were watching instead of regulating it. Now there's an idea. Make a porno about gold and then maybe the SEC will notice it.

FINRA...what a joke. Have you even looked at their requirements.

And if you even mention Basel 3, we'll have to bitchslap your ass repeatedly. Hell, why not bitchslap Krugman repeatedly anyhow? He surely deserves it.

Fri, 04/12/2013 - 12:58 | 3441630 Divided States ...
Divided States of America's picture

Why anyone would dump gold/silver at these levels to buy stocks at all fuckin time highs really amazes me....makes no fuckin sense.

Fri, 04/12/2013 - 13:08 | 3441652 BaBaBouy
BaBaBouy's picture



WONDERFUL NEW World Of EU High-Finance And Policy!!!


SELL The GOLD (To Our OPeratives)  Or ELSE!!!!!!!!!!!!!!!!

Fri, 04/12/2013 - 14:13 | 3441679 Pinto Currency
Pinto Currency's picture


That is how desperate the situation has become; and the tide won't be stopped by threats.  Ask Canute.

Here is recent Shanghai Gold Exchange rate of gold physical bullion pull (note this is volume on ONE exchange):

... Maguire:  “Deliveries in Shanghai alone in March were 283 tons.  In the eight trading days of April, we have seen another 117 tons (of gold) delivered.  Today was another 20 tons delivered.  So what we are looking at here is over 400 tons (of gold) in less than a month and a half...


So the price of gold collapses and Cyprus is ordered to sell its gold.

Finally, note that the GLD ETF is not "dumping" gold.  Investors are taking physical delivery by buying GLD shares and taking delivery with the GLD stocks showing a decline thereafter.

Fri, 04/12/2013 - 13:04 | 3441659 redpill
redpill's picture

They are stupid, myopic, scared little lemmings that frantically run wherever the squid tells them to.

Fri, 04/12/2013 - 12:28 | 3441458 Ruffcut
Ruffcut's picture

Triple anus, his real one, his mouth and the hole he came from.

Fri, 04/12/2013 - 12:37 | 3441509 Dr Paul Krugman
Dr Paul Krugman's picture

Ad hominem.

Fri, 04/12/2013 - 12:50 | 3441599 Frozen IcQb
Frozen IcQb's picture

R U back-filling MDB again?

Fri, 04/12/2013 - 13:35 | 3441808 azzhatter
azzhatter's picture

Dr Krugman, does your mother know you're playing on zerohedge. Fuck You

Fri, 04/12/2013 - 13:57 | 3441834 akak
akak's picture


Ad hominem.

Red herring, Krugpigtroll, as I keep pointing out to you.

You would first have to be a homo (Latin: "man") in order to suffer an ad hominem attack.

As you are only a hobbit, you are incapable of suffering such an attack.

Now please, for the love of God, go buy that mouthwash already!

Fri, 04/12/2013 - 13:13 | 3441708 Cupid Stunt
Cupid Stunt's picture

Right there man.....and the ass rape of these poor fuckers is just the hors d'oeuvres...fuck Bernanke....fuck Draghi......& the rest of these  criminal motherfuckers....

Fri, 04/12/2013 - 13:16 | 3441727 El Oregonian
El Oregonian's picture

No, he's pus from the anus.

Fri, 04/12/2013 - 12:20 | 3441410 Harlequin001
Harlequin001's picture

Evidently they didn't. But then why should they, they aren't here to look after investors interests are they?

Fri, 04/12/2013 - 12:22 | 3441416 LawsofPhysics
LawsofPhysics's picture

I thought gold was a "barbarius relic", why would the ECB want it then?  Welcome back, troll of trolls and king of the walking contradiction.  As you have said and written before, "gold has no value", so why make such a silly demand?  Clearly the ECB isn't reading your work, losers.

Fri, 04/12/2013 - 12:29 | 3441474 Dr Paul Krugman
Dr Paul Krugman's picture

Draghi did not say he would buy the gold, he merely noted it would by wise for Cyprus to sell. This will raise funds for the island nation.

Fri, 04/12/2013 - 12:34 | 3441497 The Juggernaut
The Juggernaut's picture

Shut the FUCK up, Krugwoman!

Fri, 04/12/2013 - 13:02 | 3441577 Pinto Currency
Pinto Currency's picture

Krug - your friends at the c.b.'s create money by the trillions from nothing.

Why sell any real asset that is a critical insurance policy?

Fri, 04/12/2013 - 14:18 | 3441988 Kirk2NCC1701
Kirk2NCC1701's picture

Because they will need that Relic for the Barbaric times ahead, when possession will be 10/10's of the Feudal Law.

Fri, 04/12/2013 - 19:33 | 3443349 mjcOH1
mjcOH1's picture

"Krug - your friends at the c.b.'s create money by the trillions from nothing.

Why sell any real asset that is a critical insurance policy?

Wow...I'll take this one.

How about because they're begging everyone else in the EU to pay their fucking bills. And on roughly weekly intervals claiming the size of the bailout they're being offered, courtesy of the good taxpayers of the other EU members (cough...Germany) will have to be increased to meet the lifestyle level they would prefer.

How about they choose one:
- keep the gold, get their hand out of the EU's wallet, and fund the Cypriot bank bailout with Cypriot tax dollars and assets
- when soneone else is paying their bills and says it's time to sell the gold....get smart fast and sell the gold before they cut you loose to figure out a solution (or not) without the handouts

Fri, 04/12/2013 - 12:49 | 3441518 Mad Mohel
Mad Mohel's picture

You can bet your bearded asshole that they will be selling to Draghi affiliated goons. Bet on it motherfucker!

And the double whammy is that his butt buddies get the gold and he gets the cash from the sold gold. Ouch.

Fri, 04/12/2013 - 12:41 | 3441540 TeamDepends
TeamDepends's picture

Damn it!!!  Tried to downvote you but it backfired and it won't let us change.  Tyler(s) please, everybody gets a fat finger now and then!

Fri, 04/12/2013 - 12:48 | 3441581 LawsofPhysics
LawsofPhysics's picture

Like you said, "gold has no value".  Have cryprus sell something else, you better call Draghi just to be safe.

Fri, 04/12/2013 - 13:01 | 3441643 debtor of last ...
debtor of last resort's picture

Draghi was drooling when he said that. And behind the scenes Cyprus will get 15% over spot when selling to one of the big banks, the difference filled up by HSBC drug laundring money. Bunch of creepy fucks.

Fri, 04/12/2013 - 13:43 | 3441733 jbvtme
jbvtme's picture

why would draghi want gold when he could traffic with cyprus for some fresh (and much more valuable) internal human organs, as he does with china and israel?  how many ounces does a kidney fetch these days?

Fri, 04/12/2013 - 12:50 | 3441601 TrumpXVI
TrumpXVI's picture

Exactly, LofP.

This shit is so transparent, especially to someone like me.  I grew up with a diabolical older sister who played every sick prank in the book on me.  And as her gullible little victim brother, I fell for every damn joke, every damn time.  But she did me an enormous favor.  I grew up to be one of the best trained S.O.B.s on planet Earth.


Fri, 04/12/2013 - 12:25 | 3441424 Badabing
Badabing's picture

Are you in denial?

Cypress is being forced to sell its real gold while the fake stuff is hammered to a two year low.  

Fri, 04/12/2013 - 13:31 | 3441796 El Oregonian
El Oregonian's picture

I don't understand why Cyprus doesn't sell them their GLD paper shares instead. Surely, they would gladly accept their issued asswipe back even after it has been run through the system at least once.

Fri, 04/12/2013 - 15:45 | 3442425 Hulk
Hulk's picture

and the hammering gold got today insures some entity gets it on the cheap...

Fri, 04/12/2013 - 12:26 | 3441439 FieldingMellish
FieldingMellish's picture

finra and the sec would have done something about it.


I haven't laughed so much since I read your screed in the NYT today. You should write children's books... oh wait.

Fri, 04/12/2013 - 12:24 | 3441444 PubliusTacitus
PubliusTacitus's picture




Bullshit, dumbass.


The SEC is busy trying to figure out how to fuck up the financial system even more by catching up on their 2-year backlog on Doddering-Fwank rulemakings.


God are you stupid.  I only wish you were the real Krughole. Imbecile.

Fri, 04/12/2013 - 12:28 | 3441462 Bastiat
Bastiat's picture

FINRA and the SEC are tools of the same fascist goons you pimp for-but of course you know that.

Fri, 04/12/2013 - 12:31 | 3441478 DavidC
DavidC's picture

If that was irony it was hilarious!


Fri, 04/12/2013 - 15:41 | 3442396 Guy Fawkes
Guy Fawkes's picture

Why? Why would they have done something about? When was the last time the SEC ever discovered a problem BEFORE is blew up? When was the last time the SEC charged anyone? 

Central banks do not adhere to GAAP. What do they hold on their books as assets? 

Fri, 04/12/2013 - 15:43 | 3442403 quasimodo
quasimodo's picture

Just go back to rimming MDB already

Fri, 04/12/2013 - 21:35 | 3443718 MeelionDollerBogus
MeelionDollerBogus's picture

FINRA & SEC have no say over Cyprus, EU or China for gold. Holder is already trying to get a convict, Jeff Skilling of Enron, out of prison. What’s your explanation for that?

Fri, 04/12/2013 - 12:20 | 3441400 NotApplicable
NotApplicable's picture

For everyone wondering why the reset hasn't happened yet, well, it's all about shaking out as many weak hands as you can first.

Cuz it's the shakin' that does the final breakin'.

Fri, 04/12/2013 - 12:15 | 3441381 disabledvet
disabledvet's picture

No no. "steal the money first." as a COURTESY "hand over your gold too." and don't forget when your economy collapses either! "we're here to help and stand ready to subsist you!" you really can't make this shit up.

Fri, 04/12/2013 - 12:16 | 3441385 Dr Paul Krugman
Dr Paul Krugman's picture

Why not sell the gold? It is weighing down their economy like a heavy anchor.

Fri, 04/12/2013 - 12:21 | 3441415 jmcadg
jmcadg's picture

It is you on the down arrow button Krugman. LOL.

Fri, 04/12/2013 - 12:24 | 3441430 LawsofPhysics
LawsofPhysics's picture

Your are the one who has written that "gold has no value"?  Why sell it indeed, don't those losers at the ECB read your work?

Fri, 04/12/2013 - 12:41 | 3441531 centerline
centerline's picture

A barbarous relic.  Has no place in modern monetary systems.  So, what's all the fuss about?

Wait - don't tell me the Fed lied.  OMG.

Fri, 04/12/2013 - 12:23 | 3441436 ParkAveFlasher
ParkAveFlasher's picture

Ballast.  Get it right, chummer.

Fri, 04/12/2013 - 12:46 | 3441575 HoofHearted
HoofHearted's picture

Anyone notice how PANICOS DEMETRIADES looks a lot like ARCHDUKE FERDINAND?

Fri, 04/12/2013 - 12:27 | 3441460 Cacete de Ouro
Cacete de Ouro's picture

For the record, the references to gold holdings in the balance sheet notes of the Central Bank of Cyprus annual reports are even more opaque than most central banks. Questions to the media email of the Cypriot Central Bank went unanswered.

Cyprus had however a gold set-aside account at the Bank of England, opened in 1977 in order to receive the IMF restituted gold. It also delivered gold to the FRBNY for its IMF subscriptions so in all probability has an FRBNY acccount.

However this 10 tonnes of Cypriot gold may not even be in custody, it may be leased out already or else it could be a time deposit at the Bank of England or the BIS. So it could be cash settled.

So its not a big deal, its like 800 bars. I think Draghi, as a mouthpiece, is sort of using this to kick gold down a bit more.

But having said that, he should be hunted. How does it feel to be hunted?
You tell me!

Fri, 04/12/2013 - 12:45 | 3441569 eclectic syncretist
eclectic syncretist's picture

If the goldmanite Draghi was really trying to help Cyprus would he publically announce they were to sell their gold?  How fucking stupid are you?  A 5 year old understands economics better than you, charlatan.

Fri, 04/12/2013 - 13:00 | 3441637 waterwitch
waterwitch's picture

Don't feed the troll.

Fri, 04/12/2013 - 13:05 | 3441668 Anasteus
Anasteus's picture

I did so! I shorted my position and earned money. Now, in the second phase, I'm going to buy cheaper physical for the earned money.

The strategy of these days: Short/long paper and buy physical PMs for the profit.

Fri, 04/12/2013 - 15:42 | 3442401 Guy Fawkes
Guy Fawkes's picture

How so? Holding it as an asset of value? How does gold act as a liability?

Fri, 04/12/2013 - 21:37 | 3443720 MeelionDollerBogus
MeelionDollerBogus's picture

You contradict yourself. If gold isn’t money then it has no negative effect on anyone’s economy where it is held.

Sat, 04/13/2013 - 20:42 | 3445560 auric1234
auric1234's picture

It does all that merely by sitting there?

What do you need the gold for? If you need more paper you can print as much as you want. Until it is no longer accepted, of course.


Fri, 04/12/2013 - 12:19 | 3441394 Cognitive Dissonance
Cognitive Dissonance's picture

Yes, they are playing with a delicate Cognitive Dissonance here. On the one hand Gold is a barbarous relic, on the other hand Gold is a valuable item to be sold when things get tight and all else fails......such as a banking system.

<Shhh, not too loud CD.>

Fri, 04/12/2013 - 12:19 | 3441407 Dr Paul Krugman
Dr Paul Krugman's picture

Draghi wants them to sell to raise funds, that's all. He has their best interest in mind.

Fri, 04/12/2013 - 12:23 | 3441427 jmcadg
jmcadg's picture

Krugman you are THE laughing stock. Keep it up buddy, we're all loving your complete delusion.

Fri, 04/12/2013 - 12:23 | 3441437 Confundido
Confundido's picture

You made me chuckle. Thanks, Paul. The best thing for them is to default and leave.

Fri, 04/12/2013 - 12:50 | 3441595 Dr Paul Krugman
Dr Paul Krugman's picture

I agree - they should leave the euro - but they haven't and if they won't then they need to raise funds; the best way for them to raise funds is to sell their dead weight gold.

Why would they want gold when it is dropping like the rock it is, anyway? Sell it and put money to use!

Fri, 04/12/2013 - 13:00 | 3441619 Pinto Currency
Pinto Currency's picture

Because observant analysts can see that the entire financial system is insolvent - this will send gold much higher and create the need for gold holdings to stabilize economies.

Debt outstanding far exceeds money available to pay it off and economies are declining in real terms (when properly accounting for goods price inflation - see ).

Fri, 04/12/2013 - 13:20 | 3441742 Anasteus
Anasteus's picture

I absolutely agree with you, Paul, on "they should leave the euro".

Indeed they should. ASAP!

Fri, 04/12/2013 - 12:24 | 3441440 eclectic syncretist
eclectic syncretist's picture

They should tell him to fuck off and keep his worthless paper Euros that can be printed to infinity. 

Fri, 04/12/2013 - 12:38 | 3441445 Ghordius
Ghordius's picture

read again: the Cypriot NCB governor wants to stop the Cypriot President from selling this gold and Draghi is supporting the governor

(i.e. at the end they want to keep the Au in the ECB/EuroSystem and the Prez has other plans)

Fri, 04/12/2013 - 12:26 | 3441453 LawsofPhysics
LawsofPhysics's picture

Draghi needs to read your work.  As you say, "gold has no value".  They need to sell somthing of value, not the barbarius relic, get on the phone Paul help straighten Draghi out.

Fri, 04/12/2013 - 12:35 | 3441499 Dr Paul Krugman
Dr Paul Krugman's picture

Let's say I have a rock that has value only as an industrial product. Then let's say I could sell said rock to raise funds to get me out of bankruptcy. It's a no brainer! I sell the rock.

Fri, 04/12/2013 - 12:41 | 3441529 eclectic syncretist
eclectic syncretist's picture

Then you wouldn't have anything to live under.

Fri, 04/12/2013 - 12:50 | 3441592 oddjob
oddjob's picture



Fri, 04/12/2013 - 13:32 | 3441791 akak
akak's picture

I thought that scorpions lived under the soil along with the worms and other creepy-crawlies.

How sad for them, too --- no windows in their homes to break.  At least they're safe from aliens.

Fri, 04/12/2013 - 13:59 | 3441920 John_Coltrane
John_Coltrane's picture

Nice.  Its fun, but unfair to match wits with an unarmed man like the Krug! 

Fri, 04/12/2013 - 12:42 | 3441536 Mad Mohel
Mad Mohel's picture

Let's say that I have paper, whose only real value is to wipe arses. Why don't I just actually wipe my arse with it because there is an endless supply of it.

Fri, 04/12/2013 - 12:45 | 3441559 centerline
centerline's picture

Rocks we hide in bunker-like vaults deep underground with the highest security on the planet.  

Fri, 04/12/2013 - 12:52 | 3441605 Dr Paul Krugman
Dr Paul Krugman's picture

Thus why you are a doomer - you have gold in a bunker.

Fri, 04/12/2013 - 13:00 | 3441636 centerline
centerline's picture

(golf clap).  +1.

Fri, 04/12/2013 - 13:04 | 3441656 Pinto Currency
Pinto Currency's picture


Krug - ad hominem.

Fri, 04/12/2013 - 13:31 | 3441801 akak
akak's picture

An attack on Krugman:

ad hobbitem

Fri, 04/12/2013 - 13:18 | 3441736 centerline
centerline's picture

edit:  I guess it makes the Fed a doomer too.  Along with other banks, nations, investors, hedge funds, etc.

Fri, 04/12/2013 - 12:45 | 3441567 malikai
malikai's picture

What do you sell when your rocks are gone and you're stil sitting under a pile of debt?

Fri, 04/12/2013 - 14:55 | 3442185 oddball
oddball's picture

Your kids.

Fri, 04/12/2013 - 12:50 | 3441594 LawsofPhysics
LawsofPhysics's picture


Like you said Paul, "gold has no value".  Have cryprus sell something else, you better call Draghi just to be safe.  Lot's of other "assets" to sell, just look at what is on the bank's balance sheet.  You are the one who said this rock has no value, not me.  Are you changing you tune?  Does this rock/gold now have value to you?


Fri, 04/12/2013 - 12:53 | 3441613 ParkAveFlasher
ParkAveFlasher's picture

Why doesn't Draghi ask for the CCB's aggregated, outstanding mortgages and loans?  They're "productive assets", right Paul?

Fri, 04/12/2013 - 13:18 | 3441738 ParkAveFlasher
ParkAveFlasher's picture

Still waiting for an answer, Paul Krugman. 

Do formulate an ad hominem, false dichotomy, casually slanderous, redirection, faulty logic, fact misrepresentation, or outright lie ...







You're beaten.

Fri, 04/12/2013 - 12:54 | 3441616 LawsofPhysics
LawsofPhysics's picture

Bingo!!!!!!!  Lots of other assets on those books (unless they are lying about that too).  Stop the presses, Paul Krugman admits gold has real value, is good store of wealth and purchasing power!

Fri, 04/12/2013 - 12:56 | 3441624 ParkAveFlasher
ParkAveFlasher's picture

On the books, got that right.  It says right there on the books, loans are assets, deposits are liabilities.  If the gold is a deposit, what does Draghi want with it?  Who needs an "anchor"?

Fri, 04/12/2013 - 13:01 | 3441640 centerline
centerline's picture

Apparently deposits are assets now too.

Fri, 04/12/2013 - 13:06 | 3441673 ParkAveFlasher
ParkAveFlasher's picture

Really?  Because nobody told me. 

Fri, 04/12/2013 - 13:30 | 3441783 centerline
centerline's picture

Something tells me we are not on the mailing list.  Go figure.

Fri, 04/12/2013 - 14:02 | 3441930 ParkAveFlasher
ParkAveFlasher's picture

I don't know about you guys, but I value myself quite highly, regardless of the valuations of others.

Paul, you haven't answered. 

Why not debt, Paul?  Why not debt?


Fri, 04/12/2013 - 13:16 | 3441664 P Rankmug
P Rankmug's picture

Krugman's industrial use of gold comment is as misleading and stupid as anything else he writes.

There is never a supply/demand imbalance for gold. About 85% of all the gold ever mined in all of history still exists, as jewelry and stockpiles of bullion. Certainly no shortage of supply. Demand for gold -- for genuine industrial purposes, such as electronics -- amounts to about 2% of world production per year, and 0.04% of the existing supply, (I consider use in dentistry to be jewelry-like.) Not much demand there either.

Fri, 04/12/2013 - 13:43 | 3441846 akak
akak's picture

"Krugman" + "misleading":

Brought to you by the Department of Redundancy Department.

Fri, 04/12/2013 - 14:31 | 3441995 Anasteus
Anasteus's picture

"Let's say I have a rock that has value only as an industrial product. Then let's say I could sell said rock to raise funds to get me out of bankruptcy. It's a no brainer! I sell the rock."

Let's say Cyprus has gold and I urgently need more and cheaper physical gold to a) settle oil trade b) keep FIAT afloat; while competing with rapacious Easterners who are depleting reserves and could screw the party sooner than desired, along with growing number of people who do not want to understand the commodity status of gold (perhaps some of them noticed that this commodity somewhat mysteriously always ends up in bank vaults and asked themselves why the same didn't happen to zinc, aluminium, silver, or platinum).

Then let's say I could sell paper to raise funds they need to get them out of bankruptcy in exchange for their commodity gold. It's a no brainer! I sell the paper they sell their gold and will eventually end up in bankruptcy anyway.

Fri, 04/12/2013 - 15:53 | 3442417 Guy Fawkes
Guy Fawkes's picture

Except gold has no industrial value. Its a store of value.

Fri, 04/12/2013 - 13:37 | 3441816 azzhatter
azzhatter's picture

When Draghi takes a dump, a Krugman comes out. Somebody please flush it

Fri, 04/12/2013 - 13:43 | 3441851 akak
akak's picture

Actually, a Bernanke comes out.

Krugman is just the stain left afterward.

Fri, 04/12/2013 - 14:55 | 3442147 Kirk2NCC1701
Kirk2NCC1701's picture

Surely You're Joking, Dr. Krugman! (not to be confused with're_Joking,_Mr._Feynman; a real PhD with a real Nobel Prize.)

I think we get the JPG: 

[1] QE = CB_LedgerGames = "Wealth Effect Mechanism", whereas

[2] Induced Insolvency = PaperDebt - RealAssets - Gold = "Wealth Transfer Mechanism"

The real Effect (financial kick in the groin) happens when the one is traded for the other: QE is used to snap up the Real and Gold assets of the (artificially-induced) Insolvencies of people, companies and countries.  Put together, it's a true Binary Weapon, a Financial WMD.

QED, Doc.

Fri, 04/12/2013 - 15:42 | 3442404 Guy Fawkes
Guy Fawkes's picture

Opinion stated as fact ... does not make it FACT

Fri, 04/12/2013 - 12:11 | 3441351 Manthong
Manthong's picture

Portugal should demand its gold back.

Fri, 04/12/2013 - 12:11 | 3441361 fonestar
fonestar's picture

Panicos.. I love that name.

Panic and sell all of your real assets to pay off fake debts.

Fri, 04/12/2013 - 12:17 | 3441386 NotApplicable
NotApplicable's picture

Now is a good time to Panicos!

Draghiula is coming tonight.

Fri, 04/12/2013 - 12:12 | 3441369 Dark_Horse
Dark_Horse's picture

The EU will gain unity through fear.

Their current M O, hollow out the weak hands by forcing a sell-off of tangible assets. Then, they will ONLY have the EU.

The PIIGS weren't forced to sell their gold, yet. More downward pressure to gold coming.


Fri, 04/12/2013 - 12:19 | 3441347 Paper CRUSHer
Paper CRUSHer's picture

Speaking on timing,even worse and to add more insult to the gold community GSux just announced Blankfiend will be paid $21million in salary for' 12.......ugly day?.

Fri, 04/12/2013 - 12:18 | 3441392 McMolotov
McMolotov's picture

This is exactly what I asked about on the other thread:

It was only half-serious speculation, though, because I probably don't understand half the shit I read on ZH. Never thought they'd be so blatant.

Fri, 04/12/2013 - 13:47 | 3441868 saints51
saints51's picture

Its fucking confusing to everyone and for a reason. TPTB must make it confusing so they can create loophole on top of loophole to commit theft. Just look at the tax code crap by the IRS. I honestly think it will grow forever until we the people say lights out.

Fri, 04/12/2013 - 14:23 | 3442011 caconhma
caconhma's picture

People, just ignore smokescreens from mass media and Big Banks (including FED, ECB, BOE, and BOJ).

The only things that keeping their economies going are their fiat paper currencies especially world reserve currencies like US$ and euro. By losing US$ world reserve currency status, the USA economy will collapse. Note that America is not anymore in a position to dictate militarily to China, Russia, and India. These are the nuclear powers.

America is not in a military position even to get into a fight with North Korea. Yes, America can nuke N. Korea out of its existence BUT a) N. Korea can potentially nuke Japan and some US military and economic assets; b) China will not tolerate a major war on its border.

Consequently, the West will do everything in its power to keep the reserve status of its currencies as long as possible. This is why FED and ECB are fighting gold so hard since gold is the primary enemy of any fiat currencies. The West is very desperate since it cannot prevent its economic/political decay and/or it is losing its conventional military superpower status.


Fri, 04/12/2013 - 12:05 | 3441301 greyghost
greyghost's picture

and what was the benefit for being in the euro?

Fri, 04/12/2013 - 12:16 | 3441377 Ghordius
Ghordius's picture

in this case, for Cyprus? well, they got billions to save their banks. or where you going to save them? Russia wasn't, the UK neither, and the US also not

so it's done by the partner countries in the eurozone, after a long, long discussion where the Team Cyprus somehow managed to piss everybody off, including it's own people, the Russians, the Greeks, the Americans, the Germans, the Dutch, the Finns, the IMF, the EU Commission, the other national governors in the ECB

whatever this deal is - it's an agreement that the Cypriot parliament accepted, indeed made a couple of ad-hoc laws to make it possible

now the Cypriot national bank governor is accusing the Cypriot elected President to sell national bank gold without the bank's permission. ding, ding? notice something?

Fri, 04/12/2013 - 12:27 | 3441451 toys for tits
toys for tits's picture

You must have different new sources in Europe.  What I read in the states was that the Cyprus parliament unanimously rejected the haircut given to all Cypriot account holders and that because only the account holders of the troubled banks would be scalped, no parliamentary vote was necessary.

That's not to say that Cypriot lawmakers couldn't have grown a pair and told the Troika to "FUCK OFF" and gone through a lawful bankruptcy and issued their own currency.

The laws are already established for what to do in the event an entity goes broke, but these mother fuckers want first dibs on the assets so they keep making up new rules as they go.

Fri, 04/12/2013 - 11:57 | 3441234 Bearwagon
Bearwagon's picture

If by "cypriots" you mean Goldman Sack, you are dead on.

Fri, 04/12/2013 - 12:00 | 3441256 Banksters
Banksters's picture

Isn't it about time someone tells these mother fuckers:


SUCK  MY DICK.   Cancel that


Suck my dick and shine my shoes.  


Excuse the profanity, but certain enviromental factors sets off tourettes.

Fri, 04/12/2013 - 12:08 | 3441336 Go Tribe
Go Tribe's picture

We're all tourettes sufferers now.


Fri, 04/12/2013 - 12:30 | 3441480 eclectic syncretist
eclectic syncretist's picture

I think a better name for this post would be Goldman Sachs Cyprus

Fri, 04/12/2013 - 12:08 | 3441318 CheapBastard
CheapBastard's picture

he's very tearful about this heartfelt action....sad to see a grown man 's eyes water....

Fri, 04/12/2013 - 12:42 | 3441535 H E D G E H O G
H E D G E H O G's picture

FUCK YOU Mario Dracula!!! And ALL of you blood sucking despots. The sooner someone kills you fuckers off, the better the World will be.

Fri, 04/12/2013 - 12:49 | 3441593 Kaiser Sousa
Kaiser Sousa's picture


Fri, 04/12/2013 - 14:20 | 3441996 sgorem
sgorem's picture

KILL 'EM WITH A SILVER BULLET!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Fri, 04/12/2013 - 12:58 | 3441634 Bangin7GramRocks
Bangin7GramRocks's picture

A Duh Hitler! This is how to rule Europe. And look at you wasting all that money on bombs and planes! On a more positive note, the colony states of Germany can look forward to really nice roads. So they got that going for them.

Fri, 04/12/2013 - 11:57 | 3441248 rogeliokh
rogeliokh's picture

And why exactly they have to sell it? Can just transfer GOLD to Central Bank.

Fri, 04/12/2013 - 12:19 | 3441395 nonclaim
nonclaim's picture

"Come here and take it" is the only proper answer at this point.

Fri, 04/12/2013 - 11:59 | 3441249 Cognitive Dissonance
Cognitive Dissonance's picture

Problem, Reaction, Solution. Perfectly played Ponzi masters. I salute the magnificent game play you've demonstrated to date.

<But your time WILL come.>

Fri, 04/12/2013 - 12:00 | 3441255 EscapeKey
EscapeKey's picture

it's called kicking the can

eventually, they run out of other people's gold.

Fri, 04/12/2013 - 12:23 | 3441422 nonclaim
nonclaim's picture

Then they will get rid of the people. Might even agree to lob a few nukes at each other's major cities to do it 'cleanly'.

Fri, 04/12/2013 - 12:00 | 3441261 Banksters
Banksters's picture

Even better, drive down the price before the sale.  That'll show em.

Fri, 04/12/2013 - 12:04 | 3441302 Bearwagon
Bearwagon's picture

 "But the day of the Lord will come like a thief."  2 Peter 3.10

Fri, 04/12/2013 - 12:29 | 3441467 toys for tits
toys for tits's picture

Oh ... so that's why we're supposed to be storing our treasures in heaven and not give them swimming lessons.

Fri, 04/12/2013 - 11:59 | 3441250 fijisailor
fijisailor's picture

OK wait Mario.  We should see a bottom soon and that will be your cue to force the sale of cypriot gold.

Fri, 04/12/2013 - 11:59 | 3441251 Anasteus
Anasteus's picture

Now it's really high time for Cyprus to say good bye.

Fri, 04/12/2013 - 12:03 | 3441291 Winston Churchill
Winston Churchill's picture

Normalcy bias, and the human hate of any change stops them.

Some of my Cypriot relatives think Cyprus has been saved, not raped by

the ECB.

I going to start talking to myself in future.At least I'll have at least one

intelligent listener.If the authorities don't lock me up that is.

Fri, 04/12/2013 - 12:08 | 3441334 Manthong
Manthong's picture

They will disarm you first because you are talking to yourself and are a danger to yourself and then it will be off to camp for re-orientation.

Fri, 04/12/2013 - 12:11 | 3441363 Anasteus
Anasteus's picture

Actually, it all perhaps starts making sense now... to increase the physical supply being constantly depleted, the central bankers start looting gold from the 'poor' EU countries... at paper-fabricated discount prices. The old imperialist politics known for centuries.

Fri, 04/12/2013 - 12:00 | 3441253 Misean
Misean's picture

Force 'em to sell during the gold "Sale of the Year"! I wonder if the Bundesbank is buying?

Fri, 04/12/2013 - 13:09 | 3441682 ParkAveFlasher
ParkAveFlasher's picture

All the Gold-trading TRIBALISTS in NYC know it by heart, "Buy on Friday, sell on Monday."

Fri, 04/12/2013 - 13:42 | 3441827 Croesus
Croesus's picture

500 Tons of Paper Gold Sold:

So today's action in Gold NOT necessarily caused by the Bernank, but probably by buyers looking to acquire physical....

What does the trend tell you?

The East wants physical, and is forcing the West to cough up supply.


Stack today, you'll thank me tomorrow!


Fri, 04/12/2013 - 11:59 | 3441257 LawsofPhysics
LawsofPhysics's picture

But why would they want this "barbarius relic"?  < sarc off >  fuck you bernanke!

Fri, 04/12/2013 - 13:43 | 3441849 Croesus
Croesus's picture

@ Laws of Physics:

Bernank is a "Physical Stacker's Best Friend"..........

Fri, 04/12/2013 - 12:01 | 3441258 Glass Seagull
Glass Seagull's picture



Cyprus to channel the spirit of Gordon Brown with (ahem) timely gold liquidations.


Fri, 04/12/2013 - 12:01 | 3441270 swissaustrian
swissaustrian's picture

Draghi's bottom.

Fri, 04/12/2013 - 12:17 | 3441390 ChanceIs
ChanceIs's picture

Hey!!!  I bet with all of that gold, Draghi et. al. can make some serious bullion caves to live in.  I would have to check the physics, but I suspect that gold is every bit as effective as lead (if not more so) in stopping the netrons from the coming air bursts over North Korea.

Fri, 04/12/2013 - 12:02 | 3441265 swissaustrian
swissaustrian's picture

Draghi is doing exactly doing what Goldman told him to do: cause a dump, so they can pump

Fri, 04/12/2013 - 12:03 | 3441268 ziggy59
ziggy59's picture

double post 

Fri, 04/12/2013 - 12:01 | 3441269 ziggy59
ziggy59's picture

Whats the first part in Goldman? GOLD
They can go to hell

Fri, 04/12/2013 - 12:01 | 3441272 Seize Mars
Seize Mars's picture

Ha ha. Fucking liars. Guys I think we all get it here. As pointed out above: the agenda is to drive you into poverty and obtain the real assets. Problem reaction solution. Gold taken.

Fri, 04/12/2013 - 12:02 | 3441274 The Abstraction...
The Abstraction of Justice's picture

Cyprus should demand that all the gold in Switzerland and the City of London be accounted for, and that JP Morgan and HSBC be investigated for market someone who is not being paid off by the same banksters.

Fri, 04/12/2013 - 12:11 | 3441350 EscapeKey
EscapeKey's picture

they are hardly in a position to negotiate

no doubt this bit about gold wasn't mentioned in the initial "draft", however, language which would allow "misc asset classes" to make up part of the "asset rebalancing requirements" was very much present like the trojan horse it was meant to be.

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