This page has been archived and commenting is disabled.
Guest Post: This Gold Slam Is A Massive Wealth Transfer From Our Pockets To The Banks
Submitted by Chris Martenson of Peak Prosperity,
I am very disappointed by, but not surprised at, the latest transfer of weath to the bankers from everyone else. The most recent gold bear raid has vastly enriched the bullion bankers, once again, at the expense of everyone trying to protect their wealth from global central bank money printing.
The central plank of Bernanke's magic recovery plan has been to get everybody back borrowing, spending, and "investing" in stocks, bonds, and other financial assets. But not equally so - he has been instrumental in distorting the landscape towards risk assets and away from safe harbors.
That's why a 2- year loan to the US government will only net you 0.22%, a rate that is far below even the official rate of inflation. In other words, loan the US government $10,000,000 and you will receive just $22,000 per year for your efforts and lose wealth in the process because inflation reduced the value of your $10,000,000 by $130,000 per year. After the two years is up, you are up $44k but out $260k for net loss of $216,000.
That wealth, or purchasing power, did not just vanish: it was taken by the process of inflation and transferred to someone else. But to whom did it go? There's no easy answer for that, but the basic answer is that it went to those closest to the printing press. It went to the government itself which spent your $10,000,000 loan the instant you made it, and it went to the financiers that play the leveraged game of money who happen to be closest to the Fed's printing press.
This explains, almost completely, why the gap between the rich and everyone else is widening so rapidly, and why financiers now populate the top of every Forbes 400 list. There is no mystery, just a process of wealth transfer of magnificent and historic proportions; one that has been repeated dozens of times throughout history.
This Gold Slam Was By and For the Bullion Banks
A while back I noted to Adam that the gold slams that were first detected back in January were among the weakest I'd ever seen. Back then I was seeing the usual pattern of late night, thin-market futures dumping which I had seen before in 2008 and 2011, two other periods when precious metals were slammed hard.
The process is simple enough to understand; if you want to move the price down for any asset, your best results will happen in a thin market when there's not a lot of participation so whatever volume you supply has a chance of wiping out whatever bids are sitting on the books. It is in those dark hours that the market makers just dump, preferably as fast as possible.
This is exactly what I saw repeatedly leading up to Friday's epic dump-fest. The mainstream media (MSM), for its part, fully supports these practices by failing to even note them, and the CFTC has never once commented on the practice, and we all know that central banks support a well contained precious metals (PM) price because they are actively trying to build confidence in their fiat money, and rising PM prices serve to reduce confidence.
Here's a perfect example of the MSM in action, courtesy of the Financial Times:
Gold tumbles to two-year low
“There is no other way to put gold’s recent sell-off: nasty,” said Joni Teves, precious metals strategist at UBS in London, adding that gold would have to work to “rebuild trust” among investors.
Tom Kendall, precious metals analyst at Credit Suisse said “Once again gold investors are being reminded that the metal is not a very effective hedge against broad-based risk-off moves in the commodity markets.”
There are two things to note in these snippets. The first is that the main ideas being promoted about gold are that it is no longer to be trusted, and that somehow the recent move is a result of "risk off" decisions meaning, conversely, that there is increased trust in the larger financial markets that 'investors' are rotating towards. Note that these ideas are exactly the sort of messages that central bankers quite desperately want to have conveyed.
The second observation is even more interesting; namely that the only people quoted work directly for the largest bullion banks in the world. These are the very same outfits that stood to gain enormously if precious metals dropped in price. Of course they are thrilled with the recent sell off. They made billions.
In February Credit Suisse 'predicted' the gold market had peaked, SocGen said the end of the gold era was upon us, and recently Goldman Sachs told everyone to short the metal.
While that's somewhat interesting, you should first know that the largest bullion banks had amassed huge short positions in precious metals by January.
The CFTC rather coyly refers to the bullion banks as simply 'large traders' but everyone knows that these are the bullion banks. What we are seeing in that chart is that out of a range of commodities the precious metals were the most heavily shorted, by far.
So the timeline here is easy to follow - the bullion banks:
- Amass a huge short position early in the game
- Begin telling everyone to go short (wink, wink) to get things moving along in the right direction by sowing doubt in the minds of the longs
- Begin testing the late night markets for depth by initiating mini raids (that also serve to let experienced traders know that there's an elephant or two in the room)
- Wait for the right moment and then open the floodgates to dump such an overwhelming amount of paper gold and silver into the market that lower prices are the only possible result.
- Close their positions for massive gains and then act as if they had made a really precient market call
- Await their big bonus checks and wash, rinse, repeat at a later date
While I am almost 100% certain that any decent investigation by the CFTC would reveal that market manipulating 'dumping' was happening, I am equally certain that no such investigation will occur. That's because the point of such a maneuver by the bullion banks is designed to transfer as much wealth from 'out there' and towards the center and the CFTC is there to protect the center's 'right' to do exactly that.
This all began on Friday April 12th, and one of the better summaries is provided by Ross Norman of Sharps Pixley, a London Bullion brokerage:
The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract (see below) in what proved to be only an opening shot. The selling took gold to the technically very important level of $1540 which was not only the low of 2012, it was also seen by many as the level which confirmed the ongoing bull run which dates back to 2000. In many traders minds it stood as a formidable support level... the line in the sand.
Two hours later the initial selling, rumored to have been routed through Merrill Lynch's floor team, by a rather more significant blast when the floor was hit by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading. This was clearly not a case of disappointed longs leaving the market - it had the hallmarks of a concerted 'short sale', which by driving prices sharply lower in a display of 'shock & awe' - would seek to gain further momentum by prompting others to also sell as their positions as they hit their maximum acceptable losses or so-called 'stopped-out' in market parlance - probably hidden the unimpeachable (?) $1540 level.
The selling was timed for optimal impact with New York at its most liquid, while key overseas gold markets including London were open and able feel the impact. The estimated 400 tonne of gold futures selling in total equates to 15% of annual gold mine production - too much for the market to readily absorb, especially with sentiment weak following gold's non performance in the wake of Japanese QE, a nuclear threat from North Korea and weakening US economic data. The assault to the short side was essentially saying "you are long... and wrong".
The areas circled represent the largest 'dumps' of paper gold contracts that I have ever seen. To reiterate Ross's comments, there is no possible way to explain those except as a concerted effort to drive down the price.
To put this in context, if instead of gold this were corn we were talking about, 128,000,000 tonnes of corn would have been sold during a similar 3 hour window, as that amount represents 15% of the world's yearly harvest. And what would have happened to the price? It would have been driven sharply lower, of course. That's the point, such dumping is designed to accomplish lower prices, period, and that's the very definition of market manipulation.
For a closer-up look at this process, let's turn to Sunday night and with a resolution of about 1 second (the chart above is with 5 minute 'windows' or candles as they are called). Here I want you to see that whomever is trading in the thin overnight market and is responsible for setting the prices is not humans. Humans trade small numbers of contracts and in consistently random amounts.
Here's an example:
Note that the contracts number in the single digits to tens, are randomly distributed, and that the scale on the right tops out at 80, although no single second of trades breaks 20.
Now here are a few patterns that routinely erupted throughout the drops during Sunday night (yes, I was up very late watching it all):
These are just a few of the dozens of examples I captured over a single hour of trading before I lost interest in capturing any more.
As I was watching this and discussing it with Adam in real time, I knew that I was watching the sort of HFT/computer trading robots that we've discussed here so much in the past. They are perfectly designed to chew through bid structures and that's what you see above. They are 'digesting' all the orders that were still on the books for gold, to remove them so that lower and lower stops could be run.
Anybody that had orders up against these machines, perhaps with stops in place, or perhaps even asleep because this all happened in the hours around midnight EST, lost and lost big.
There is really no chance to stand again players this large with a determination to drive prices lower. At the very least, I take the above evidence of computer assisted declines of this magnitude to be a sign that our "markets" are completely broken and quite vulnerable to a crash. That the authorities did not step in to halt these markets during such a volatile decline, when they have repeatedly stepped into other markets and individual equity shares on lesser declines, tells me much about the level of official support for such a decline.
It also tells me that things are speeding up and the next decline in the equity or bond markets may happen a lot faster than anybody is expecting.
Unintended Consequences
If the intended consequences of this move were to enrich the bullion banks and to chase investors away from gold and other commodities and into stocks, what are the unintended consequences going to be?
While I cannot dispute that the bullion banks made out like bandits, I also wonder if perhaps instead of signaling that the dollar is safer than gold, that the banks did not unintentionally send the larger signal that deflation is gaining the upper hand?
With deflation, everything falls apart. It is the most feared thing to the powers that be and for good reason. Without inflation, and at least nominal GDP growth, if not real growth, then all of the various rescues and steadily growing piles of public debt will slump towards outright failure, and possibly collapse. The unintended consequence of dropping gold so powerfully is to signal that deflation is winning the day.
If this view is correct, then the current sell off in gold, as well as in other commodities (detailed in part II), will simply be the trigger for a loss of both confidence and liquidity in the system and that will not bode well for the larger economy or equities.
In Part II: Protecting Your Wealth From Deflation we explore the growing signs that the money printing efforts of the central planners are seeing diminishing returns and are failing in their intended effect to kick-start global economic growth higher. Deflationary forces appear poised to take the upper hand here, sending asset prices lower -- potentially much lower -- across the board.
If deflation indeed manages to break out from under the central banks efforts to contain it, even if only for a short period, how bad will the ensuing wave of price instability be? How can one position for it? How extreme will the measures the central banks take in response be? And what impact will that have on asset prices, the dollar and precious metals?
We are entering a new chapter in the unfolding of our economic emergency, one in which the risks to capital are greater than ever. And the rules are increasingly being re-written to the disadvantage of us individuals.
The one unfair advantage we have is that history is very clear on how these periods of economic malfeasance end. Let's exploit that as best we're able.
Click here to read Part II of this report (free executive summary; enrollment required for full access).
»
- 47500 reads
- Printer-friendly version
- Send to friend
- advertisements -
-- but ONLY if you or your clients had to cash in your paper gold. Otherwise... stay Bullionish my friends.
"This Gold Slam Is A Massive Wealth Transfer From Our Pockets To The Banks"
Would that be a re-distribution of wealth? I thought re-distribution of wealth was supposed to be from the wealthy to the poor, not to the bankers.
You've been watching too many Robin Hood movies :-)
I think he's eithersar castic, or hasn't seen the latest remake of Robin Hood - Men in Tights: Robbing Bankfine - Men in Shorts. Get it: 'Shorts'? ;-)
None of this matters, it's all paper right?
How big is your stack?
forgive me for being stupid here, but if what I read on ZH is correct, why not borrow from the bank at these ultra low interest rates and negative returns and buy gold with the loan? Would this not reverse the transfer of wealth from the banks into my pocket?
Disclaimer:
No wealth was transferred from my pocket to the banks during the latest gold slamdown.
Good luck getting such a loan from ANY bank, at ANY interest rate, much less at the laughably manipulate and lowballed official Fed Funds rate.
I just skipped over to the Fed window. They said, "Fuck off slave! All your assets are belong to us!"
Using margin, is like letting the banks stick their hands in your underwear. It feels good until they start to squeeze.
Do that and you are liable to be skinned by a drop in gold paper price. Look what happened since last week, or the ups and downs since 2011.
It is very tough to stay in while 30% or 40% of your account evaporates, and the mortgage you owe is still there and you still have to make the payment every month.
If you bought the gold and buried it in the basement and looked on the mortgage payment like rent maybe you could tough out the drops.
In other words the danger is psychological. Most people would give up such a program and sell their gold at the bottom. If my gold and silver weren't in a safe deposit box, if I could sell with a mouse click, I would have been very likely to sell yesterday. Even though, mathematically I should be buying.
BUY THE DIPS!
Good article and analysis.
I think that the main unintended consequence will be more Chinese gains over the US and West--fiat will flow to the West/US center but gold will flow to the East/China.
With that said, I believe that the driving force for the PM-takedown is Iran. They are going to bomb them but need to control the PMs during and after so they took the PMs down, discredited them and will use the profits to keep a lid on them when the bombs fly.
Of course it's all win-win for the Chinese and Isreal and lose-lose for the US gov and their bankster masters and by extension us, the American people.
hujel
Possibly, but someone else has another opinion an why this is happening at this time.
(Note: I only read the article, have no vested interest in whether he's right or wrong.)
Clive Maund
I don’t think the fiat price can have that effect on Iran: Iran is trading oil directly for gold. If oil’s price is slammed down for everyone that only hurts Iran if it can’t get enough oil out for gold but I bet it can.
"If the intended consequences of this move were to enrich the bullion banks and to chase investors away from gold and other commodities and into stocks, what are the unintended consequences going to be?"
I got to stack the fuck up. I even bought SLV and GDXJ to play these CRIMEX fuckers at their own game. Who do I send the thank you card to? I even got to stack some phyz....premium was 5$ but who gives a shit? It's on sale either way! Thank you Satanists!!!!!!!
When there is nothing left to lose I should think Bernanke is a dead man. He is busy taxing everyone who has saved from post-tax income and trying to proletarianise them. He should read Hayek about the Road to Serfdom when people do not have capital to be independent of the State. The policies of Greenspan and Bernanke seem focused on enslaving the population to Megabanks and Big Government. If they have not thought this through it is a bit too late now. The consequenes may be very bloody
When the SHTF Bernanke will definately be a dead man. But he will be tortured first. They will cut off his balls, hang him upside down and use a rusty large bladed saw to slice open his body till his body is split apart between the legs. He will die when it gets to about his mid chest because the blood will stay in his head.
Personally, I would not be so merciful.
I would lower Bernanke into a gold-lined vat containing concentrated sulfuric acid several inches deep, allowing him to slowly dissolve and sink down into the acid while contemplating his fate.
I will personally thank him for handing so much money in gold and silver at such cheap prices (real price: my time, as forced into fiat wages).
I won’t stop his execution by any means if that’s what the crowd wants but I’ll thank him for helping me get more than I otherwise would. If not for the Bernank and the Spanner of Green holding open the gates I’d have seen $2000/oz gold in the year 2001 and I wouldn’t have any in my pocket right now.
ASE are $30+ on apmex. so about a $7 difference between spot and phsyscial.
are any metals sellers moving prices down with this paper price move.
Yes, but the delivery dates are currently indeterminate.
Meaning, you can order, but they'll deliver when they get the product at the price below what you ordered + their spot.
You can order, but you may end up waiting months for delivery.
(Side note: even if you pay the higher premium, you could still be waiting some time for delivery.)
(PPS: If your wondering who these shops are, just peruse all the gold articles and their comments on ZH from last Friday forward. Good luck in your research.)
I called everyone this morning and the quickest delivery was 4-6 weeks and one guy told me frankly that no one really knows, timeframes are just estimates, it could be months.
I was hoping that wouldn't happen.
Where's my precious, my little golden precious.
I want it delivered now!
Whaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!
(Stomping feet, falling to floor, kicking and screaming, holding breath, now turning blue, gasping for air!)
ASE are $30+ on apmex. so about a $7 difference between spot and phsyscial.
are any metals sellers moving prices down with this paper price move.
Anyone who does business with these SOB's deserves what they get.
Their Bank in the same bldg is JP MORGAN.
Most here understand that hyperinflation is waiting for us just up ahead. Most here also understand the role of PHYSICAL gold. So why cry? Unless one insists upon skimming the last penny out of the market we can benefit with a long term view and acquire physical gold and be patient. Some may get that last penny in front of the steamroller but many foolish traders will get crushed.
I find it hard to see why Chris, who has a good long timeline understanding, is so upset by these gyrations. Yes they were magnificent in amplitude but they will just be death throes in the historical record when future folk look back to see how the dollar died.
So what if gold goes up or down this week? No one here was going to sell their physical either way. It's like living in a home you're in forever, you don't care what the value is. I wish my home was assessed at zero so I'd have no property taxes.
FWIW, my local dealer is completely sold out.
I did a wire transfer from my bank and the "new procedure" is hilarious. Rep #1 puts the info into her system, then prints it out. Then Rep #2 scans and emails the paperwork to Rep #1. Rep #1 saves file and emails it back to Rep #2.
No lie. I could not make this shit up.
You were just written up under the Suspicious Activity Alert. If you wired over $10K your now considered a domestic terrorist. Prepare your family to lie quietly on the floor until we can send DHS agents to arrest you.
If you have any SISSORS please lock them up before we enter.
Like I'm worried. Hold on, there's a knoc
By the looks of it both Roubini and Krug are laffing at the gold bugs; clear about what aces the FED holds and plays at the right moments; scoffing at the gold bugs who had big stashes of paper gold like Paulson and apparently Ron Paul.
"They can keep the market irrational longer than the speculator can stay liquid."
Is what you hear the Keynesians sing as they clap QE plays as the only way...
Gold to 800 USD? : Gold’s fair value is $800 an ounce - Mark Hulbert - MarketWatch
falak: "They can keep the market irrational longer than the speculator can stay liquid. Is what you hear the Keynesians sing as they clap QE plays as the only way..."
Funny, I just watched a similar quote on a Kitco interview with Vince Lanci, last Fri., 4/12 : http://www.kitco.com/news/video/show/Reset/283/2013-04-12/Reset-Draghi-D...
The key is to stay liquid and protect the assets (from deflation/inflation, taxation, confiscation), rather than worry about things like ROI. Wow, how far we've fallen, when we don't worry about Return OF Assets, instead of Return ON Assets.
p.s. What's with the big diamond-studded ring on Camboni's finger? Got married to the boss?
kiss it
Force Majeur was the endgame all along, Comex will default....
http://silverdoctors.com/force-majeur-was-the-end-game-all-along-comex-w...
"So, knowing that “game over” has arrived, they are dumping a massive volume of paper contracts with impunity to push the metals prices as low as possible before the “default”."
Speechless.
thanks for link.
I call that BS.
How on earth could there be a deflation in the US?
http://www.shadowstats.com/
http://www.shadowstats.com/imgs/sgs-cpi.gif?hl=ad&t=
More broken price discovery, this time in precious metals.
http://winteractionables.com/?p=1050
All I know is, the SEC and the CFTC need to be defunded and disbanded, everyone investigated for malfeasance, and a new agency, made up of people absolutely independent of the banks, created to do the job they were supposed to be doing all these years. Some of those GATA fellows should work out nicely in these new positions.
Never happen of course, we might end up with a free market that way.
as always, I am the only person who reads ZH who feels some pain when gold prices drop a ton. Yes, I only own Physical (and CEF in my IRA). And yes, I probably won't sell any time soon.
but I'm upside down on my purchases (I think i own 50 oz, 10 oz were bought at around $1900!) and it certainly doesn't feel GOOD. (yes yes I understand that it's an unrealized loss).
as I pointed out in 2011... the Gold market manipulation may be primarily in the paper markets, but it is also in the physical markets (CB buying and selling) and gold prices can be, and have been, suppressed for decades.
sad.
A honest Man, what a pleasure.
As I read posts here, it would seem that all were in at $700.
Strangely, your (temporary) misfortune makes me feel better, how curious.
I thank you!
Does it matter to you how much the premiums were/are on your homeowner's Insurance when your house burns to the ground? Au/Ag are Wealth Insurance.
key point of the article "the intended consequences of this move were to enrich the bullion banks and to chase investors away from gold and other commodities and into stocks"
Gainesville out of stock and late shipments..
http://www.gainesvillecoins.com/category/467/american-silver-eagles-uncirculated.aspx
Scroll down
In his next speech the bernank will tell us that the global gold shortage is transient.
I just stopped by Tulving, Colorado, Apmex and the only way to buy is to drop like 2k+......delivery is like 35 days. I'd say we have our paper/phyz decoupling in process.
I'd say we have our paper/phyz decoupling in process
+1000
I feel like I'm walking bare ass in tall cotton.
Gainsville has been my "go by" for prica and availability. For me that makes it official that the paper market is totally broken. If you want the right price now then go to ebay or good luck at the local coin shop.
Keep this post sticky until the COMEX defaults. Now it's war.
If the FED can bring down the price of gold, and then buy gold, they then have gold to ship to Germany. Or is that too simple? And money going into the market is jus a little added bonus for them.
The German people don't want U.S. minted toilet paper - they want metal. And it seems to be toilet paper that the Fed crashed the market with. At least with tungsten you can plate it :-) The late Hugo Chavez got his nation's physical out just in time, but it may yet wind up wherever Gadaffi's former big stash is.
The GLD dumped 67 tons from their inventory (inb4 what inventory?) between Apr 1st and yesterday. Meanwhile the NAV barely budged until last Friday. Another example of GLD frontrunning.
Want to know what direction gold will go? Keep an eye on the GLD inventory and you can frontrun too.
So you're suggesting that the bullion banks bought shares in order to redeem them, not for arbitrage but to frontrun the smackdown?
I don't see how this gives them any profit in paper terms, as it doesn't change their net position.
However I can see your argument makes a lot of sense in paper vs physical terms (e.g. to frontrun the physical shortage / COMEX default scenario).
Is that what you meant?
here cum da pump.
have you clowns no shame
Nuf' Said.
http://silverdoctors.com/force-majeur-was-the-end-game-all-along-comex-w...
hey rocket scientists.
you just got bent over. When you gonna learn that the boss is da boss and when da boss wants his physical he justs farts and you all scatter like the serfs you are.
Not quite a downvotable comment for me but damn close to it. Yeah right, I am so bent over after buying my last AU in 2008. Every time a little shit happens with the PM market, fucktards like you come out and just have to say something. Here's a piss warm can of shut the fuck up. Enjoy!
When you gonna learn that we don't listen to authority well and also like to run with scissors? We ain't day trading ES here punk.
Someone raised an interesting point on another article- which caused me to ask: What is the black market price of gold in GReece. ZH won't be surprised to know that a good link is from ZH in 2010.
http://www.zerohedge.com/article/greek-scramble-physical-brings-gold-pri...
And there are those who wonder how Sprott's PHYS could have traded at "ludicrous" NAV premium of over 20%. Coinupdate.com reports that prices at which the Greek Central Bank is selling one ounce gold equivalents are as high as $1,700 (40% over spot), and prices on the black markets are even higher. The punchline, as Athens slowly returns to a forced gold standard: " A popular spot for street vendors to sell their coins is near the Athens Stock Exchange. There the traders wait for citizens to bring payments received from unloading their paper assets like stocks and bonds." That's good - downtown Manhattan close to the NYSE has some free space for gold vendors to set up shop as well, they just need to push some of the frontrunning/collocation boxes off to the side. And in other rhetorical ruminations, is it safe to say that the last days of the fiat experiment are among us now that people themselves are bypassing the government and enforcing their own gold standard?
If their "shock and awe" ploy doesn't shake loose owners of physical and simply entices preppers to buy more at lower prices, then who is going to supply that gold and silver to stop a total decoupling of the prices of physical and paper? They may have just shot themselves in the foot. One may hope. People with PM's in their mattress don't get margin calls :-) I have some physical silver and the idea of selling it because of a market crash never even occurred to me. And it was obvious from the start that it was a huge naked short raid by the central banks and the primary dealers.
When the decoupling really takes off exponentially, then even the idiots and crooks will realize that paper gold is only good to wipe your butt with. So ask them not to print it out on glossy.
Paper gold is a note of receipt from the guy with the vault that you own so much gold. The problem is that 20 other guys are holding the same note you are and to the same gold. That's how this whole shit system of fractional reserve banking got started with the crooked goldsmiths in Venice 600 years ago. Beer and popcorn anyone?
The Gold Market is leveraged 100 to 1, tons of paper gold is being dumped...the institutions tethered physical gold and silver to their counterfeit derivatives...with these astronomical leverages being manipulated in a relatively short period, the virtual price will drop exponentially. The ongoing criminal investigations of the alleged gold price manipulation will amount to nothing. Of course this is blatant manipulation, but like always, nothing substantially will be done about it.
Read also:
The reasons behind the gold crash
http://homment.com/gold-depression
Who wants to bet that Au is over $2,000 by Autumn of 2014 and Silver is over $50 by Autumn of 2014?
I'll give 10:1 odds.
http://www.youtube.com/watch?v=QDosr6CJuC4
CNBS is shamelessly crowing about gold's fall yesterday. They have made even larry Kudlow shrill about how gold falling is a good sign for the US economy and the stock market.
The producers of CNBS have obviously receved their marching orders from the Obama Admin and the Fed (are they different?).
Bernanke should not feel too good, Robert Mugabe of Zimbabwe beat Bernanke with his own print fiat / pump equity strategy.
Hey, whats good for Zimbabwe is good for the USA !
From 300 gold to 1500 gold CNBC didn't even mention gold. that was the main reasonn I bought at that level.
Maybe the next bomb will go off at CNBC.
I don't know about you, but it was time to stack. Whatever "just happened" basically put a few extra pounds of PMs in my pockets.
According to Bank of America Merrill Lynch:
http://www.scribd.com/doc/136285938/The-S-P-500-Rally-From-Mar-2009-is-the-6th-Best-Rally-Since-1929-Bank-of-America-Merrill-Lynch
The rally from March 2009 is the 6th best rally since 1929
The S&P 500 has rallied 127.85% from the 09 Mar 2009 low to the 06 March 2013 high. This is the sixth best rally or “bull market” for the S&P 500 since 1929. The rally from March 2009 is four years old and is the eight longest bull market. We are defining a bull market as a rally of at least 20% without a 20% correction using daily closing basis data. There are 25 of these bull markets going back to 1929 with an average return of 103.5% and a median return of 73.5% - see pages 2 and 3 for complete tables of bull and bear markets.
http://www.safehaven.com/article/29509/the-gold-takedown-another-glimpse-into-the-central-banking-matrix
The Internet has also made it possible for truth seekers to understand the complex policy of financial repression that explains the current historically low negative real interest rates, restrictions that appear to benefit government and banks at the expense of pensioners and savers and the desperate need to shake people out of gold and savings and into the stock markets. Financial repression is a policy that explains the "why" of this mystery. A thorough investigation of financial repression can be gleaned from such documents as the NBER working paper, The Liquidation of Government Debt by Carmen M. Reinhart and M. Belen Sbrancia or the exhaustive work of financial analyst Gordon T. Long.
Through such investigation we will find that, just as Cyprus revealed bank depositors are viewed as "unsecured creditors" by the central banks, financial repression teaches us that pensioners and savers are viewed as a direct source of funding for government debt and are the victims rather than the beneficiaries of such government policies. The global fiat- or debt-based model that has existed since President Nixon removed the U.S. dollar's final international peg with gold in 1971 is in many ways the polar opposite to the value-based model that exists when a currency is pegged in some way to gold. Although most pensioners were brought up to believe that debt is bad, that saving and living within one's means is virtuous, in the bizarre world of fiat debt-based finance, the opposite is true.
Mounting debts are becoming unsustainable at government, business and personal levels, and must be addressed. Yet the fiat reality has spoiled Western investors, and direct taxation and austerity measures are a Western politician's guarantee of removal from public office. Therefore, indirect taxation, rules that make assumption of government debt through mandatory Treasury purchases by large funds, and debt reduction through currency debasement are the preferred option for reducing debt. All of these policies rob taxpayers and punish savers.
Dollar is now puking against the Euro. RUH ROH!
Silver For The People
Actually, no matter what they do to gold or the stock market, we all know that the western sovereigns and their banks are broke and about to go belly up. All it takes is another financial stress. US, EU, UK, Japan, all just kicking the can until they can figure out how to fleece the citizens without losing votes. Would you rather be holding US dollars or gold at any price?
I read this article on Chris Martinsson's blog before I went to sleep this morning. I dreampt all night of running through JP Morgue taking 100 ounce bars and 100 Golden Eagles and then meeting up with Thor to split up the proceeds before heading back to our respective villages.
If I had dreamed of returning paper gold to the people the dream wouldn't have been very powerful.
Mr Martenson should include the increase in a bond's value as he bemoans the pitiful, but declining yield. I can't believe that I'm the only one that is aware of the inverse relationship between Price and Imputed interest!
"Who wants to bet that Au is over $2,000 by Autumn of 2014 and Silver is over $50 by Autumn of 2014? I'll give 10:1 odds."
What the line on Bit coins?
http://www.bitcoincharts.com/charts/mtgoxUSD
Those with staying power in possession of physical gold have not experienced any wealth transfer. Of course, it is painful to see such a significant drawdown but the odds are hight that eventually "paper" and "physical" gold will decouple as explained here:
http://www.dowtheoryinvestment.com/2013/04/dow-theory-special-issue-rand...
For one day i want to play with Waddell & Reeds algo's on the nyse - hehehehehehehehhehe Kick some ass!
Damn those Islamofascist global bankers, they have destoyed our economy, our money, and our future!
OT: Fresh in from the WTF dept:
http://www.realclearpolitics.com/video/2013/04/16/gop_rep_peter_king_on_...
Is that what it was about? 8 people including little kids had to die just so these fucks can justify more cameras?
King has been pounding the table for a pre-emptive on NK recently. He's long been quite a boisterous puppet.
so they are offering the precious for less and less benny /slave bucks?
whats not to love???
Yo, wish I could get some at those prices. No one is selling.
Another crime scene
And another crime scene
What a load of old shit.
Gold got dumped because the market ran out of people willing to pay >$1400.
What you really meant by "market" is that one guy's computer was bigger and faster than the other guy's.
Miners not participating in rally today. Bottom has not been reached. What's even scarier is when silver and gold surge higher, it is followed by a quick sell-off. The push higher will not hold. We are still a ways from the bottom. Use this opportunity to sell some PM. The next leg down will be just as swift and painful as the last 2 sessions. It may be a week or a month, but 1150 gold, 19 silver are on the way.
Miners not participating in rally today. Bottom has not been reached. What's even scarier is when silver and gold surge higher, it is followed by a quick sell-off. The push higher will not hold. We are still a ways from the bottom. Use this opportunity to sell some PM. The next leg down will be just as swift and painful as the last 2 sessions. It may be a week or a month, but 1150 gold, 19 silver are on the way.
Dude you are dead on.That is exactly the pattern I have seen forever,just like clockwork.If you can sell at $1400.00,and pick it up later at $1,000............why not.People( a lot) will be afraid to BUY and I expect there to be a supply.
SLV failed to move above the open all day, despite 3 attempts at it. Resistance each time, which screams more downside. SLW is now below yesterdays close, which, indicates to me we are heading to 23 on SLW maybe even 21.50 area before we get the next support. Ugh...so glad im not long right now. Miners are negative on the day now.
3pm till close will be fun. If you have the balls to buy ZSL Apr 75 calls you could make some jack....
'
'
'
'
'
I keep hearing all this whining about deflation.
Let me think: Since I'm a saver, and have seen this mess coming--courtesy of da Hedge!--what the hell is wrong with deflation?
The banksters don't like it? Sucks to be them!
Hmm… Let me think again… Would I like to pay more or less for the crap I buy? Would I like to see my purchasing power increase, or decrease?
Thinking…
Still thinking…
And still thinking…
Oh! I think I've got it!
•J•
V-V
Be careful for what you wish for as you may get it. Remember, deflation benefits savers for only a short period of time as almost all deflationary periods are followed by a hyper-inflation environment (and sometimes very quickly) for one simple reason. Why you may be a saver, the backer of your currency is the largest indebted country in the world (if you live in the US). As deflation takes hold, the bax base begins to collapse as wages decline, asset gains evaporate, people delay purchases creating negative GDP growth, etc. As the tax base collapses, the government not only has to borrow more to stay afloat but in addition, has to repay old debt with fewer available currency units. This will accelerate the debt death spiral as the debt to GDP ratio explodes and eventually, the debt can not be serviced. This will lead to a debt default, massive banking failures (if they already haven't failed from collateral values dropping below loan values), and eventually, a currency failure.
Remember, deflation will only be phase one of the economic implosion and if it firmly takes control, will be the worst nightmare of goverments and CBs alike. Look to past experiences in Argentina for case studies. Also, watch Japan closely as they have reached a point of needing to go all in (given their enourmous debt loads and economic troubles). If deflation does take firm hold, then the higher the leverage the quicker the implosion.
First Bitcoin crashes, then the next week gold paper is sold en mass? Nothing rigged here.
US Mint opens 2013 gold coin set sales Thurs, April 18. Probably with a $400 premium, but hey gold in only worth $1,380 now right?
I do believe the exchange is about to collapse.
No stop losses no dollar cost averaging- that is so 1996. Pre HFT, the brokers would SL hunt- using a SL is a loosers game.
I wonder if HFTs themselves put SLs in place. If humans do orders in the thousands and HFTs in the tens then why doesn't everyone just bait them by putting small SL's in, then combine them with big buy orders at the same range with a sell order just above it.
HFT bait. they make pennies I make dollars on a trade that bounces the price back up. either way I get in a bargain.
As soon as SLW turns red.... short
This isn't a buying opportunity. They can "rinse and repeat" any time they want.
Just like Bitcoin. Shake the baby.
Find another asset.
Great article.
"I will stick my tongue down the throat of inflation"
Norm MacDonald SNL circa 1994
"I will stick my tongue down the throat of inflation"
Norm MacDonald SNL circa 1994
First off "here me out before you give me a negative mark" if anyone was smart, yes, everyone should short the Gold and Silver market. Why wouldn't you, your shorting paper value, everybody who is smart should be getting out of false paper.
This being said, we have to understand, as most ZH'ers do, there is a great divergence between paper and true in hand commodities. What really needs to happen is the demise of all false paper and the market needs to set pricing on the true commodity. If they want to have both, let them, but who wants to trade or hold something of no value.
Stay only with the real deal, don't get caught owning paper, it will get you nowhere.
Cheers
What is gold's future? The price will vacillate wildly in a trading range with the occasional gut wrenching drop. They want to get the capital of every gold trader. And they'll get it all.
But if they try to get it all, they'll just give gold bugs every ounce of physical, that they then lose in a lake.
They're also shedding a lot of light on the threat that gold is, so there is a price to all the manipulation. I mean, the more they don't want me to have it, the more that confirms I should...
Yes and no, they will get every penny out of the gold trade "ON PAPER", that is dumb money. Smart people are into the real hard asset, most "home gamers" are not in the market to sell. There are however the big time boys that will trade the hard true assets to make their living, in realty those who do this for a living know what is going on.
Hold onto your PM's, they can make money on you that way, it will be back. Let this paper market shake the dumb money out....
Good day
Something I'd like answered: if they hate gold so much, why not make it illegal to purchase?
You need more than one shell to play the shell game.
If in fact the gold price can be manipulated easily by the banking system and governments, isn't that a powerful enough reason not to own gold?
Let me correct that for you .....
If in fact Fiat can be manipulated easily by the banking system and governments, isn't that a powerful enough reason not to own Fiat?
There ya go.
No, because we don't buy gold with intent to exchanging it for dollars. Not at this price.
Sooner or later, the fundamentals reassert themselves. And the pace is accelerating.
Hedge accordingly.