Gold Spikes After Fed's Kaplan Says "Market Correction Could Be Healthy"

Tyler Durden's picture

Gold is spiking, USDJPY dropping, and stocks leaking lower after Dallas Fed's Kaplan dropped some serious tapebombs ahead of Yellen's speech...

Speakingon Bloomberg TV, Kaplan headlines wwre as follows...

  • FED'S KAPLAN: WE CLEARLY ARE ACCOMMODATIVE RIGHT NOW
  • KAPLAN: INVESTORS USED TO IDEA RATES WILL BE LOWER FOR LONGER
  • FED'S KAPLAN: MARKET OR REAL-ESTATE CORRECTION COULD BE HEALTHY
  • KAPLAN SAYS MARKET CORRECTION WOULDN'T NECESSARILY HURT THE ECONOMY, AND MAY HELP IT
  • KAPLAN: WE SHOULD BE MOVING ON B/SHEET AS SOON AS POSSIBLE
  • KAPLAN: FED CAN SHRINK B/SHEET WITH MINIMAL IMPACT ON MARKETS

And the reaction was swift...

Gold spiked and USDJPY tumbled...

 

Bonds were also bid... but stocks barely budged?

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Erek's picture

"Market correction could be healthy..."

Only if you aren't in the market, and even then it's gonna hurt.

Muslimania's picture

Haven't been in the market since 2007 crash. How do you lose 75 years of accumulated wealth in 7 months? (Hint: "IT'S FIXED") Keep stacking gold.

Honey-Badger's picture

Short gold during Yellen speech, I normally go JDST or DUST 15 minutes prior and sell shortly after she's done.

Easy 3% - 5%

Edit: Watching Sushi, decided to hop in DUST at 25.60 early tight stops.

Edit 2: Stop triggered, looking to jump back in cheaper.

tmosley's picture

Gold spiked higher, then dropped much, much lower.

Meanwhile BTC is up 4% in the last 24 hours, near its all time high. Again.

38BWD22's picture

And BTC Is certainly a great speculation, I hold a bit less than 1% in BTC. But, I have skin in the game!

38BWD22's picture

GOLD should be a core holding for anyone with savings, even mainstream financial advisors are OK with 5% of their wealth in Au.

"Be your own central bank, buy gold!"

Silver Savior's picture

So if they put 5% in gold they are ok with losing 95% of their portfolio? 

bluskyes's picture

Everyone is in the market - unless thay are living self-sufficiently - squatting on some tax-free land. Even then, they likely need to buy salt, and shells.

JamesinNM's picture

How low can it go? Not low enough.

Faberfla's picture

It's a free chioce to be in....

Plunge Protection's picture

Gartman just took his "virtual" short positions off so time for a nice stock dump. 

Uncertain T's picture

They can never raise rates, reduce their balance sheet, or normalize markets.  Too much depends on keeping the top spinning. 

flacon's picture

What if they want to stop the top from spinning?

wanderer9641's picture

Then you had best be prepared.

 

tmosley's picture

Ironically, their understanding of economics is so backwards, they will cause a brief recession, and then things will start to get better quickly as they jack up interest rates.

Iskiab's picture

Their thinking isn't backwards, it's just that the stock market /= the economy. Compare domestic sales of the stock market companies to gross GDP, the difference are things like small business that are essential to the economy.

That's why political crony capitalism can be so damaging. By subsiding large companies small business can suffer, and small business are the largest employers in the economy. The whole confusing economic success with stock market success is part of a PR campaign by large business, and the stock market is nothing more than a leading indicator of a recession, not a measure of success.

tmosley's picture

No, they do have it backwards. They think growth is fueled by spending. It isn't. It is fueled by SAVING. By discouraging saving, they have made growth all but impossible. Just M2M nonsense. Real growth can only come when people contribute to the economy by earning money, and then HOLDING that money rather than immediately taking real contribution back out of the economy. Real contribution to the economy will be turned to capital to provide a greater lever on labor, making production easier, making goods and services cheaper, and making everyone's money worth more.

Yes, the stock market isn't the economy. It's just a sideshow that has been turned into the main event thanks to the utter ignorance of our economic policymakers.

Bay of Pigs's picture

You have it 100% wrong on "things getting better quickly" by the FED normalizing interest rates. It would cause a Greater Depression. That's why you got junked.

tmosley's picture

You are too stupid to talk to me.

Iskiab's picture

Yea, I somewhat agree but disagree with monetarism on this issue because it's not savings that become productive assets, it's investment. Right now the excess money isn't turning into investments which is where the theory falls apart. Large companies are sitting on cash, at the end of the day the driver is investment and productivity and not savings.

tmosley's picture

Savings IS investment. It is the investment of goods and services that can then be consumed by those who will produce capital goods instead of goods for their own (effective) immediate consumption.

Don't make the mistake of thinking that dollars in a bank account are stable savings. The idiots in power debase that savings to try to create more demand--more consumption. This destroys capital investment, misallocating resources towards immediate consumption.

Read "How an Economy Grows, and Why It Doesn't". Should be able to find it for free online. Laid out in a very easy to understand manner.

flacon's picture

That's not a spike... I just looked at the gold chart. 

Storm-Clouds's picture

It's on like donkey kong!

The dead don't care....

backspaceone's picture

this is not really news 

DCon's picture

"FED CAN SHRINK B/SHEET WITH MINIMAL IMPACT ON MARKETS"

 

I want some of what he is smoking


shizzledizzle's picture

That's what Mr. Kaplan says... They know however, they can't afford to let a correction start.

Quinvarius's picture

If the Fed reduces their balance sheet, it will have nothing to do with selling anything.  Their balance sheet is whatever they say it is.  There isn't a market for what cnetral bankers have to sell--Not at these prices.

Bay of Pigs's picture

ZH's own John Titus (Cheyenne) did a superb video on this very topic on YouTube. Check it out.

https://m.youtube.com/watch?v=jt377DV2BKs

Latitude25's picture

Well there's a house near mine in SW Florida that's been empty since the 08 crash.  I suppose the mortgage for that house can just evaporate on the FED balance sheet, but the house sure won't.

BrokeBroker's picture

"Market correction could be healthy"

So the Fed can get in on this stock rally and "stimulate" the economy.

GunnerySgtHartman's picture

An increase of less than 0.5% in the price of gold constitutes a spike?

Latitude25's picture

In today's "markets" with algo circuit breakers that is all that is allowed.  It should be called a spike because who knows how high it could have gone otherwise.

Give Me Some Truth's picture

Re: We'll never know how high prices would have gone if a giant invisible hand didn't hold them down ...

Good point. Gold and silver are NOT ALLOWED to rise more than 1 percent in a day. However, they are allowed to FALL more than 1 percent in a day. In fact, they are allowed to fall more than 2 or 3 percent in a few seconds ... all the time. It happened this morning with silver.

Ever read that Stephen King book (or see the mini-series) about the town that was encased in an invisible bubble? That's the force that gold and silver run into on a routine basis.

 

SoilMyselfRotten's picture

In this gold market, anytime it doesn't drop it's considered a spike

 

PS gold just went from up 6 to down 5 in a minute, free markets indeed

FreeShitter's picture

Tyler jinxed it again...now in the red

tmosley's picture

A decrease of only 0.5% constitutes a spike.

Tulak's picture

Is like old song " don't worry be happy "

Dg4884's picture

Correction?  I think he meant to say Cleansing.

mily's picture

That is NOT what i'm seeing

Goldbugger's picture

Today will be very volitile for GOLD.

bigkahuna's picture

gold just needled!

Sky flyer's picture

I'm confused. Does this article mean a spike down? That's all I'm seeing.

Uranium Mountain's picture

I think a monkey is playing with the Algo switch. 

loves the truth's picture

There is no gold market,, its in a strangle hold by the JEW Zionist Bankers to keep their Ponzi going.

A82EBA's picture

and 25 min later it spikes down 2x

numazawa's picture

Article correction:  'is spiked'

CHX13's picture

Correction - unbacked, naked short "papergold" certificates of all kinds are being whipped around. The price is shakin' while the real gold ain't stirred.

Conax's picture

Silver just moved 45 cents in two minutes with a volume spike of about 400,000 contracts traded to do it.  (NetDania charts) Whoever said they are losing control hasn't seen them jerk the steering wheel lately.  

We are Blessed.