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Bernanke Reprises His Role As a Gold Bug's Best Friend

Tyler Durden's picture




 

The initial reaction to the release of Bernanke's speech this morning was 'QE3 is on' and this was borne out perfectly in the data. TSYs rallied (with the short-end performing best), the USD dropped and with it commodities soared (though Oil stayed much more in sync with it than we have seen historically) and the nominal price of stocks jumped handsomely. What was most notable though was Gold's outperformance (and Silver given its high-beta juice) compared to other asset classes. Then as the US day session opened, Treasuries turned around with the whole curve rising in yield and the long-end steepening as the correlation-algos stepped in to pull the TSY complex back into a twist around the 10Y (10Y unch from 8amET, 30Y +2bps, 5Y -2bps and Mortgage spreads - which widened initially - are now back to unch from 8amET and well down on the day) and we note that the entire TSY complex is also now higher in yield from Friday's close. Oil and the USD have tracked sideways from the open and aside from a gap up around 10amET (on dismal data we assume locking in more QE hope), stocks have leaked back a little as volume faded. Gold (and Silver), however, have continued to surge - now over $1685 and at near two-week highs as once again the cleanest and largest impact of Bernanke's hint at further debasement is exemplified in the price of precious metals.

 

 

and the Treasury complex's reaction...

 

Charts: Bloomberg

 

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Mon, 03/26/2012 - 11:36 | 2291160 slackrabbit
slackrabbit's picture

Print Ben print!!!

Mon, 03/26/2012 - 11:47 | 2291195 WestVillageIdiot
WestVillageIdiot's picture

Does he know how to do anything else?

If I were a gold bug I'd rather have a dog for my best friend than this fucking mutt Bernanke.  That dog should be brought back to the pound. 

Mon, 03/26/2012 - 12:31 | 2291263 TruthInSunshine
TruthInSunshine's picture

LOLOLOLOLOL!!!!!!!!

 

I apologize for that admittedly childish LOLaThon (after all, it truly is childish), but only an acronym that has come to be the literal electronic equivalent of raucous laughter can convey the very loud real life laughter I have been involuntarily engaged in this morning as I see some more evidence (though a modest reveal of the actual level of carnage that actually exists via demand destruction) that The Bernank is killing the real economy, and my laughter only grows louder when I see the dope-addicts who are the indispensable institutions to society that are TBTF financial entities queing up for more QE and cheap n' easy fiat from The Bernank on the back of the leaking of more bad economic data - which if their cravings are satisfied, will only lead to a worsening of the fundamental economy (yes, the quite unvirtuous circle is in full bloom).

We now have a bigger stock bubble than existed in 2007, and parts of it are actually approaching the asinine levels of early 2000, when The Winners of The New World were being peddled by the Carnival Barkers like Blodget & Cramer - all thanks to The Bernank's simple scheme to blow another bubble to try and paper over the rot and infection that is the real economy.

Analysts & Economists spend so much time and effort in dissecting and explaining The Bernank's "thinking," "motivations," "goals," and "strategy."

All they need do is look back to the Greenspan years at the helm of The Non-Federal Reserve-less Non-Bank, and multiply Greenspan The Bubble Blower by about 20 times, and that equation yields The Bernank.

There's no need to make it complicated.

But it's different this time, so it will end differently. /sarc

Ben Bernanke Blows Bigger Batshit Bubbles

Ben Bernanke Bringing' Bartertown, Bitchez

Mon, 03/26/2012 - 12:08 | 2291284 Treeplanter
Treeplanter's picture

But this mangy dog is predictable.  After a good run up to a profit taking opportunity he will have his buddies slam gold and silver down to a buying opportunity.  Just keep moving those stops.  Spikes really scare the mutt.

Mon, 03/26/2012 - 12:11 | 2291294 WestVillageIdiot
WestVillageIdiot's picture

In Bernanke's world you throw the dog and the stick retrieves the dog. 

Mon, 03/26/2012 - 12:15 | 2291306 spiral_eyes
spiral_eyes's picture

Ben, the two of us need look no more

You — print money and we watch gold soar!

 

Mon, 03/26/2012 - 12:25 | 2291346 tickhound
tickhound's picture

In Bernanke's world, without the stick, the dog would be useless.

Mon, 03/26/2012 - 11:56 | 2291217 derek_vineyard
derek_vineyard's picture

You can allow corporations to make all the money they want and they still will NOT invest in infrastucture or expansion

When the shit hits the fan to pay deficit tax rates will soar astronomically and consumer spending will halt

So I guess a long term fair PE would be 4-8  ?????   Because the huge profits today will not be there tomorrow (except the 1% of the 1% who will have all the marbles)

Second thought:  remember Japans Nekkei was at 39,000 in late 80's and its current 30 year JGBs yield 1% domestic deflation for 2 decades -----they have debased and their demographics are similar.........why is USA different??  (hint: we believe in bubbles)

Mon, 03/26/2012 - 11:53 | 2291225 brewing
brewing's picture

formost expert on the depression...

Mon, 03/26/2012 - 12:10 | 2291289 WestVillageIdiot
WestVillageIdiot's picture

Watching Bernanke perform monetary policy is like watching a one-armed cheerleader rebuild a carburetor with her teeth. 

Mon, 03/26/2012 - 12:20 | 2291328 Paul Atreides
Paul Atreides's picture

Thats gold +1, you mind if I twitter this?

Mon, 03/26/2012 - 13:10 | 2291437 TruthInSunshine
TruthInSunshine's picture

Watching The Bernank do the PR rounds at schools and universities, trying to maintain 'zee price stabilitee' credibility of The Federal Reserve, is like watching a drunk man try to cross an ice covered street while wearing roller skates.

Mon, 03/26/2012 - 12:54 | 2291469 SemperFord
SemperFord's picture

You'd be surprised how talented cheerleaders are with their mouth ;)

Mon, 03/26/2012 - 11:59 | 2291253 Treeplanter
Treeplanter's picture

Need to get those miners up so I can take some profits.  I have way too much on margin.  The country is going bankrupt two ways: slowly, then suddenly.

Mon, 03/26/2012 - 13:28 | 2291613 AgShaman
AgShaman's picture

Sounds like a good environment to be playin' with margin

Mon, 03/26/2012 - 15:42 | 2292117 Papasmurf
Papasmurf's picture

Run Forest, run.

Mon, 03/26/2012 - 11:37 | 2291161 GetZeeGold
GetZeeGold's picture

 

 

 

Thanks Ben!

 

Mon, 03/26/2012 - 11:39 | 2291171 Sans-culottes
Sans-culottes's picture

Last one to print is a rotten banker

Mon, 03/26/2012 - 11:48 | 2291202 WestVillageIdiot
WestVillageIdiot's picture

The system was not saved in 2008.  The system ended in 2008.  The new system is the "never ending printing" system.  They are NEVER going to stop.  Anybody speculating that they will is going to get run over.  They are going to keep the printers on high until the whole damn thing falls apart and fall apart it must.

And when that happens we will move on to the next system. 

Mon, 03/26/2012 - 11:40 | 2291172 malikai
malikai's picture

Queue the MSM bubble brigade in 3.. 2.. 1.

Mon, 03/26/2012 - 11:50 | 2291211 Jayda1850
Jayda1850's picture

My lucky day today, got a silver quarter in my change from the grocery store. Sadly the average american has no sense of silver's worth. You'll know when silver is a bubble once you see average americans rooting through jars of change looking for old silver coins.

Mon, 03/26/2012 - 12:06 | 2291257 tickhound
tickhound's picture

The last time that happened to me...

Last year I got @$5 in change on a Big Gulp gettin' a '64 quarter.  I'm sure 'even the count' at the end of the night didn't show him short in the drawer.

Mon, 03/26/2012 - 12:34 | 2291377 Treeplanter
Treeplanter's picture

What are the cutoff years for high silver content?

Mon, 03/26/2012 - 12:44 | 2291423 tickhound
Mon, 03/26/2012 - 11:40 | 2291178 Dr. Engali
Dr. Engali's picture

It didn't take old Benny boy long to show his handon QE3. I'm liking it though.

Mon, 03/26/2012 - 11:50 | 2291214 WestVillageIdiot
WestVillageIdiot's picture

Something tells me Benny has a long history of premature ejaculations. 

Mon, 03/26/2012 - 15:44 | 2292122 Papasmurf
Papasmurf's picture

Something tells me Ben's had a dead stick for a while.

Mon, 03/26/2012 - 11:42 | 2291183 penexpers
penexpers's picture

I hear a helicopter...

Mon, 03/26/2012 - 11:42 | 2291185 lunaticfringe
lunaticfringe's picture

I am long Bernank and Obama! Fuckers never let me down.

Mon, 03/26/2012 - 11:52 | 2291223 WestVillageIdiot
WestVillageIdiot's picture

Just wait until oil catches the bid with everything else.  I'm guessing about 2 p.m. today.  It is really windy in NYC today.  I'm guessing that is keeping the helicopter from landing yet.  But I think I hear it circling. 

Mon, 03/26/2012 - 12:00 | 2291256 derek_vineyard
derek_vineyard's picture

UNG just printed a fresh all time low?   Obama??????  Where are you???

Mon, 03/26/2012 - 11:43 | 2291188 francis_sawyer
francis_sawyer's picture

So when does the Enteprise get to the Persian Gulf anyway? Benny's jaws must be getting tired...

Mon, 03/26/2012 - 11:49 | 2291204 lunaticfringe
lunaticfringe's picture

Love that handle. Any of you homos touch me, I kill ya. Lighten up Francis.

Mon, 03/26/2012 - 11:44 | 2291189 WALLST8MY8BALL
WALLST8MY8BALL's picture

ManBernKrug -Half Man - Half Bearded Psychotic Keneysian (and a friend of Gold Bugs everywhere)

Mon, 03/26/2012 - 11:49 | 2291206 Vincent Vega
Vincent Vega's picture

The desperation of The Bernank is palpable.

Mon, 03/26/2012 - 11:59 | 2291248 WestVillageIdiot
WestVillageIdiot's picture

He's not desperate.  He's loving this.  This is his life's dream to get the chance to prove his bullshit academic theories about Depression '29.  He now gets to own his own Depression.  That is like giving Hillary a penis.  Bernanke proves that dreams can come true.

Mon, 03/26/2012 - 12:06 | 2291273 WALLST8MY8BALL
WALLST8MY8BALL's picture

She doesn't have one already?

Mon, 03/26/2012 - 12:12 | 2291299 WestVillageIdiot
WestVillageIdiot's picture

I'm not going to be the guy to check.  I'm not that brave.

Mon, 03/26/2012 - 12:34 | 2291374 Likstane
Likstane's picture

That's the job of the real "secret service" yuk.

Mon, 03/26/2012 - 12:11 | 2291293 Vincent Vega
Vincent Vega's picture

I think that he truly believed all his own B.S. in the beginning. At this point he has to be questioning himself. He has doubled and redoubled to no avail. I bet his pucker string is maxed out.

Mon, 03/26/2012 - 12:13 | 2291302 WestVillageIdiot
WestVillageIdiot's picture

The definition of a "fanatic" is somebody that doubles their efforts after losing sight of their goals.

Doe s that sound familiar? 

Mon, 03/26/2012 - 12:22 | 2291335 Vincent Vega
Vincent Vega's picture

Yes. Sounds desperate.  ;- )

Mon, 03/26/2012 - 11:51 | 2291212 Silveramada
Silveramada's picture

no surprises... BEN SHALOM : YOU PRINT your shit and WE SMILE MOTHERFUCKER

Mon, 03/26/2012 - 11:51 | 2291216 tickhound
tickhound's picture

And the short metals trade screams... "Manipulation to the upside, bitchez!"     

 Q: Wapner, CNBC "What should you buy, now that Bernank's got ure back?"   - A: A bike and appetite suppressants

 

Mon, 03/26/2012 - 12:00 | 2291259 WestVillageIdiot
WestVillageIdiot's picture

Whiskey - it's what's for dinner in Pottersville.

Mon, 03/26/2012 - 12:16 | 2291311 tickhound
tickhound's picture

Okay!  But add training wheels, bells, horns, and reflectors for that bike.

Mon, 03/26/2012 - 11:51 | 2291219 swissaustrian
swissaustrian's picture

Big miners (e.g. ABX, NEM, SLW) got hammered at the NYSE opening.

Options expiry (tomorrow) manipulation will push gold and silver to a round number come the closing bell...

Mon, 03/26/2012 - 12:06 | 2291277 Zero Debt
Zero Debt's picture

So what better than to "hint" at some QE to suck in some longs before the takedown, and then another grinding sideway move...

Mon, 03/26/2012 - 12:02 | 2291266 q99x2
q99x2's picture

FB awaits the ramp. The ramp awaits FB.

Mon, 03/26/2012 - 12:07 | 2291279 pleseus
pleseus's picture

The correction in Gold and Silver is over.  Huge Rally in Precious metals to take place.  We could hit all time highs in both Gold and Silver before April 25, 2012.

Mon, 03/26/2012 - 13:19 | 2291577 EL INDIO
EL INDIO's picture

Have you got a crystal ball?

Gold’s uptrend will very probably continue but who knows what shit is waiting for us ?

Mon, 03/26/2012 - 12:07 | 2291281 Conax
Conax's picture

Although it sucks, you gotta hand it to old Ben Shalom Bernanke. Silver 'spikes' and is still well below a paltry $33.

Last spring it was well over 40. All the printing and easing since then has been negated, price-wise.

Incredible.

Mon, 03/26/2012 - 12:08 | 2291283 Wixard
Wixard's picture

Fatastic!

 

Its funny for every QE, he pumps the market a dozen times without even injecting money.

 

Give the guy some credit, he's good at this shit.

Mon, 03/26/2012 - 12:12 | 2291298 tickhound
tickhound's picture

ramp up with qe 'off the table'

ramp up with qe 'on the table'

ramp up with qe 'off the table'

ramp up with qe 'on the table'

there's a trend here bitchez and I'm gonna find it.

Mon, 03/26/2012 - 12:19 | 2291324 Conax
Conax's picture

QE on the table = more cash sloshing around = ramp up equities

QE off the table = recovery is here = ramp up even sharper

PMs start to respond, paper blizzard ensues.

it's simple, stocks go up, metals are shit.

Reality be damned.

 

Mon, 03/26/2012 - 12:27 | 2291356 eddiebe
eddiebe's picture

Notice how the smackdown in PM.'s started quite a while ago to pre empt the price from exploding when additional QE was announced. The boyz know exactly how to play it in that regard. What remains to be seen is if they can let the air out slowly where it comes to the treasuries; now that will be quite the trick, especially without allowing the $ to sell off too steeply. Of course they have more negative news they can release about the yen and euro, if the $ really starts to slide.. The beat goes on.

http://www.youtube.com/watch?v=umrp1tIBY8Q

Mon, 03/26/2012 - 12:28 | 2291362 Silversinner
Silversinner's picture

Even if you would asume the Bernank isn't printing,

the rest of the world sure is.

Balance sheet of euro now bigger than Fed's balance sheet!

some nice catching up indeed,well done Europe.

America to start a new war,spend some trillions and

show who is boss now?! //sarc?

Mon, 03/26/2012 - 12:35 | 2291381 sbenard
sbenard's picture

Could we bring back Marilyn Monroe long enough to sing a reprise of, "Bernanke Is a Gold Bug's Best Friend"?

Mon, 03/26/2012 - 12:39 | 2291404 sbenard
sbenard's picture

When the only tool you have is a hammer, everything looks like a nail! Bubbles Bernanke is obsessed with nails!

Mon, 03/26/2012 - 13:06 | 2291513 Sizzurp
Sizzurp's picture

Ben says the gold standard does'nt work, but the printing press does.  I suppose he is right and wrong.  He is right as long as people have confidence in the paper money, but wrong as soon as they lose that confidence.  All paper money eventually fails as people lose confidence, and come to realize the ugly truth. They have have lost the fruits of their savings and labor.  It has been stolen from them by the printer.

Mon, 03/26/2012 - 13:16 | 2291557 EL INDIO
EL INDIO's picture

I think Ben is more like Gold bug’s boyfriend

because most of the moves that happened after Ben’s talks have been reversed, even though after a while.

Mon, 03/26/2012 - 20:43 | 2293006 StychoKiller
StychoKiller's picture

Six Things Bernanke is Clueless About

  1. Bernanke somehow missed the fact that demographics are vastly different today than they were 50 years ago.
  2. Bernanke somehow missed the fact this a not typical cyclical recession.  Instead, it's a consumer deleveraging and balance sheet recession.
  3. Bernanke missed student debt problems.
  4. Bernanke missed structural problems of debt deflation.
  5. Bernanke missed disability fraud explanation of falling [labor] participation rate.
  6. Bernanke missed middle-age re-schooling reason for falling [labor] participation rate.

Through it all, Bernanke wonders why Okun's Law does not appear to work.  Is that clueless or what?

Mike "Mish" Shedlock

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