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Fed 'Currency Debasement 3' Sees Gold And Silver Surge 2% And 4.3%

Tyler Durden's picture




 

From GoldCore Gold Bullion

Fed 'Currency Debasement 3' Sees Gold and Silver Surge 2% and 4.3%

Today’s AM fix was USD 1,772.50, EUR 1,359.70 and GBP 1,093.53 per ounce.
Yesterday’s AM fix was USD 1,730.50, EUR 1,339.81 and GBP 1,073.64 per ounce.

Silver is trading at $34.64/oz, €26.53/oz and £21.43/oz. Platinum is trading at $1,700.20/oz, palladium at $695.75/oz and rhodium at $1,050/oz.

Bernanke’s announcement of further money printing and ultra loose monetary policies saw gold and silver surge in all currencies yesterday. Gold rose $34.30 or 1.98% in New York and closed at $1,732.00. Silver soared to a high of $34.781 and finished with a gain of 4.34%.


XAU/USD Currency – (Bloomberg)

Gold surged to a 6 month high in dollars, to very close to new record highs in euros and importantly to an all time record nominal high in Swiss francs (see chart below). Gold climbed as much as 2.2% in the “safe haven” Swiss franc to 1,657 per ounce.

Platinum topped $1,700 an ounce for the first time since March and silver and palladium also hit their highest prices in 6 months, as the Fed announced an open-ended debt buying program and promised to keep interest rates near zero until at least mid-2015.


XAU/EUR Currency – (Bloomberg)

Commodities and oil surged alongside equities. Oil rose to $100 a barrel in New York for the first time since May after the Fed news while unrest in the Middle East and North Africa fanned concern that supplies will be threatened.

Commodities are set for the longest run of weekly gains since 2010. The Fed decision is fuelling expectations raw-material use will rise.

The Standard & Poor’s GSCI Spot Index of 24 raw materials gained nearly 1% to 692.62, the highest level since April 4. It is set for a 2.3% increase this week, a seventh weekly advance and the best run since October 2010.

Bernanke took the plunge yesterday by embarking on QE3 or what would be better described as “Currency Debasement 3”. 

Improving the U.S. job market and therefore economy was the reason given for the extremely radical measures. However, the scale of the open ended monetary commitments suggests the Fed is worried about another Great Depression and an economic collapse. 

The move was described as "stunningly bold" by some analysts as it is "open ended" with Bernanke pledging to print or electronically create, with no time limit, an extra $40 billion every single month until the labour market improves. 

This is the frightening vista we have been warning of for some time. It means that should the US economy enter a recession and or depression, which still seems very likely, that the Fed will continue printing money and debasing the dollar thereby leading to dollar devaluation and inflation - potentially virulent inflation on a par with or worse than that seen in the 1970's.

We had long said that QE3 was inevitable - the question was when rather than if. Indeed, we had said that given Bernanke's closeness to Wall Street we expected that QE4, QE5 etc.  were likely. 

The "open ended" nature of this new round of QE as enunciated yesterday means that the Fed could if it wished or believes it is necessary print unlimited quantities of dollars.

The consensus continues to be that Bernanke and the Fed's actions in addressing U.S. economic ills are bold and progressive. The same consensus holds that the ECB’s (hindered by the Bundesbank and the will of the German people) failure to print euros 'bazooka' style is regressive, negative and risky. 

The consensus is mistaken again and in time the more prudent monetary policy stance of the Bundesbank, while painful in the short term, will be seen as having been the monetarily responsible course of action.  

Printing money is easy with central bankers just pressing a few buttons on a keyboard and electronically creating billions and indeed trillions of dollars, euros and pounds today.

Mining for gold and other precious metals is far from easy and gets harder every year.

Miners are having to go deeper and deeper into the ground to attempt to extract the precious metal from declining ore grades. Peak gold has been reached in South Africa and may have been reached globally.

The poor miners in South Africa who are wielding machetes today will testify as to just how very hard it is to mine for the earth’s precious metals – despite the huge advancement in technology seen in recent years. 

Blood, sweat and tears  are involved in extracting small amounts of gold from the earth's crust.

Bernanke's 'QE3', which should be known as 'Currency Debasement 3' means that the dollar, the euro, the pound and all fiat currencies in our current fiat based monetary system will continue to fall in value versus gold, silver and the precious metals.

On a slightly more mundane and less important note, today European Finance Ministers are meeting in Nicosia, Cyprus.

The Fed action is manifestly bullish for inflation hedging assets such as equities and gold and bearish for cash in all its forms and bonds.

For breaking news and commentary on financial markets and gold, follow us on Twitter.


Cross Currency Table – (Bloomberg)

NEWS
Gold extends rally on Fed's new stimulus - Reuters

Gold, Silver Prices Soar After Fed Fires Off QE3 – Investors.com

Gold at best in nearly 7 months on Fed bond plan – Market Watch

Gold, Silver Surge on Fed Plans – Wall Street Journal

COMMENTARY

Get Ready For The Return of the Golden Age – Market Watch

Ron Paul: "Country Should Panic Over Fed's Decision" – Zero Hedge

Norcini - A Violent Wave Of Short Covering In Gold & Silver – King World News

America's Hold On AAA Rating Risks Collapse Next Year – The Telegraph

 

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Fri, 09/14/2012 - 09:14 | 2794245 LawsofPhysics
LawsofPhysics's picture

The dogs of war are growing impatient.  Look at the Baltic Dry index, when goods and services stop crossing borders, troops will.  hedge accordingly.

Fri, 09/14/2012 - 09:18 | 2794275 GetZeeGold
GetZeeGold's picture

 

 

Ummm.......now?

 

Fri, 09/14/2012 - 09:25 | 2794287 Dalago
Dalago's picture

Just a friendly reminder that 4 years ago on the Ides, Lehman brothers went kaput.  Will this happen to countries this weekend?

Fri, 09/14/2012 - 09:31 | 2794351 American34
American34's picture

Since the Fed is now buying Treasuries and MBS with fake money shouldn't that money go directly into the US economy and therefore cause inflation. And since the amount in 2013 aline is 1.17 Trillion shouldn't minimum inflation next year be about 10%. That is kind of scary!

Fri, 09/14/2012 - 10:43 | 2794684 MachoMan
MachoMan's picture

Eh no.  The fake money does not go directly into the U.S. economy in any material way in proportion to the amount printed.  This is how inflation has been relatively contained despite massive monetary prolifigacy.  That hasn't stopped them from trying...

However, some portion DOES eventually trickle out into the economy, but mostly as cost push rather than demand pull inflation (in other words, through indirect channels).  Wages are stagnant to declining, but the cost of living is increasing.  Essentially, the inflation is pushed through the supply chain from increased resource costs (note: not labor), curtailing margins and eventually gutting the end consumers who dare consume (holy shit at grocery prices).  Those sitting on the sidelines are likewise punished due to debasement and decreased purchasing power.  The logic is to force us to move, however this is faulty given any material movement necessarily entails market participants to subsequently move faster to keep pace, eventually leading to an inability to do so (objective, hard constraints).

As for who benefits from this type of monetary arrangement, see generally the cantillon effect.  http://en.wikipedia.org/wiki/Richard_Cantillon  http://www.zerohedge.com/news/guest-post-cantillon-effect

 

Fri, 09/14/2012 - 11:46 | 2795205 kralizec
kralizec's picture

Excellent post sir!

Fri, 09/14/2012 - 09:19 | 2794276 HelluvaEngineer
HelluvaEngineer's picture

.

Fri, 09/14/2012 - 09:26 | 2794318 Ruffcut
Ruffcut's picture

Time magazine needs to change to "Asshole of the year" from man of the year.

Problem is benny would constantly be on the cover, with obama as honorable mention.

Fri, 09/14/2012 - 09:41 | 2794423 Bicycle Repairman
Bicycle Repairman's picture

And Romney as an afterthought.

Fri, 09/14/2012 - 09:15 | 2794249 SheepRevolution
SheepRevolution's picture

It's just simply wonderful watching gold being priced at 1776 USD/oz.

Fri, 09/14/2012 - 09:17 | 2794258 LawsofPhysics
LawsofPhysics's picture

Death of the dollar.   The plan is to make the EBT card worth more than the people's money and it is working perfectly.  Remember the endgame is about power and control, period.  What did that one Rothschild say about controlling a countries money supply?

Fri, 09/14/2012 - 09:27 | 2794319 Spastica Rex
Spastica Rex's picture

My 16 your old son said the following to me at the grocery store yesterday:

"I never want to have a credit card. I'm going to pay for everything with cash."

He and I never talk money.

Fri, 09/14/2012 - 09:37 | 2794402 ebworthen
ebworthen's picture

Yup.

Elimination of paper and coin currency within the next decade, if not sooner.

NSA installation in Utah will track all mobile phone/credit-debit card transactions and be fed directly to I.R.S.

Bullish for small plastic bottles of liquor, cigarettes, and anything else of value that isn't considered "money".

Fri, 09/14/2012 - 09:15 | 2794255 HelluvaEngineer
HelluvaEngineer's picture

The Fed essentially forced people to invest in Gold.  Brilliant.

Fri, 09/14/2012 - 09:18 | 2794270 LawsofPhysics
LawsofPhysics's picture

Just be damn sure that you take delivery of the physical metal.

Fri, 09/14/2012 - 09:58 | 2794516 Sofa King Confused
Sofa King Confused's picture

That works out great until they come to confiscate it.

Fri, 09/14/2012 - 10:20 | 2794601 TheCanadianAustrian
TheCanadianAustrian's picture

If they can find it on the bottom of the lake, they can have it.

Fri, 09/14/2012 - 10:37 | 2794691 Baal
Baal's picture

They will have to take it from my cold dead hands.... oh shit I've been shot.

Fri, 09/14/2012 - 09:15 | 2794259 ParkAveFlasher
ParkAveFlasher's picture

gold bitchez!

[clocks in, puts feet up on desk, opens crossword]

Fri, 09/14/2012 - 09:20 | 2794291 GetZeeGold
GetZeeGold's picture

 

 

What's a four letter word for getting screwed without asking for it.

 

Starts with an R.......I'm coming up with nothing here.

 

Fri, 09/14/2012 - 09:36 | 2794395 fuu
fuu's picture

Coffee?

Fri, 09/14/2012 - 10:17 | 2794584 ParkAveFlasher
ParkAveFlasher's picture

hiya bill, hiya george

Fri, 09/14/2012 - 09:17 | 2794264 Sofa King Confused
Sofa King Confused's picture

The last official act of any government is to loot the treasury

Fri, 09/14/2012 - 09:24 | 2794306 krispkritter
krispkritter's picture

A few decades too late for that...

Fri, 09/14/2012 - 09:27 | 2794322 Sofa King Confused
Sofa King Confused's picture

Just wait.....You aint seen nothing yet

Fri, 09/14/2012 - 09:28 | 2794328 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

"...loot the treasury"

No treasure is left in the Treasury!

Fri, 09/14/2012 - 09:43 | 2794443 krispkritter
krispkritter's picture

Yep. I think the next step is 'retirement savings'; all those private plans are going to be rolled up into one big ball of Fed-owned moola and you'll never see it again...

Fri, 09/14/2012 - 10:19 | 2794597 Sofa King Confused
Sofa King Confused's picture

+1  You are exactly right... OUR retirement plans are nothing more then collateral for the debts...When the debt equals the total savings of the Amerikan people,  it will be taken from us and given to the FED.

Fri, 09/14/2012 - 09:17 | 2794267 Buzzworthy
Buzzworthy's picture

QE was instituted to save the banks of Europe.  They are starved for liquidity and as ZH has explained time and again they benefitted the most from Helicopter Ben's earlier CTRL+P experiments.

Fri, 09/14/2012 - 09:19 | 2794285 LawsofPhysics
LawsofPhysics's picture

Correct, banks and financial houses must appear to have valuable assets on their books in order to appear solvent.  This will fail eventually, but for now "mark to fantasy" is very much in play.

Fri, 09/14/2012 - 09:21 | 2794295 Comay Mierda
Comay Mierda's picture

exactly.

QE3 is a banker bailout in disguise

Fri, 09/14/2012 - 09:22 | 2794304 GetZeeGold
GetZeeGold's picture

 

 

Fooled three times.......dammit.....I hate when that happens.

 

Fri, 09/14/2012 - 09:31 | 2794348 Spastica Rex
Fri, 09/14/2012 - 09:43 | 2794440 Buzzworthy
Buzzworthy's picture

LOVE THIS!  One of my favorite W gaffes.

Fri, 09/14/2012 - 09:17 | 2794268 caimen garou
caimen garou's picture

GOLD and SILVER, there is nothing like the real thing!

Fri, 09/14/2012 - 09:17 | 2794269 Comay Mierda
Comay Mierda's picture

start practicing how to wipe your ass with FRNs

Fri, 09/14/2012 - 09:19 | 2794282 francis_sawyer
francis_sawyer's picture

The beatings will continue until morale improves...

Fri, 09/14/2012 - 09:26 | 2794307 Quinvarius
Quinvarius's picture

And with the Republicans asking for a gold standard, who is going to be the hero and try to stop it?  The conversion rate being over 10k, that is a big loss to take overnight someday in the future.  The only hope of the bankers is to push gold up so high that the US becomes solvent without a gold standard.  Then the bankers and the gov can keep playing their leverage and print unbacked garbage game for another 40 years because the issue will be dead.  It worked in the 80's. 

Fri, 09/14/2012 - 09:28 | 2794327 SheepDog-One
SheepDog-One's picture

Republiclowns sound like dorks 'asking' for a gold standard....no one wants to hear that shit except fuddy-duddies. Now if they were asking for free iPhone5's they'd get a huge following! 

Fri, 09/14/2012 - 09:29 | 2794340 Quinvarius
Quinvarius's picture

In the end, the general population will be begging for it.

Fri, 09/14/2012 - 09:32 | 2794367 Spastica Rex
Spastica Rex's picture

Begging for gold?

Or just perpetually begging. I can see that happening.

Fri, 09/14/2012 - 09:24 | 2794308 Vincent Vega
Vincent Vega's picture

I love the smell of PM's in the morning. Oh Hell, who am i kidding...I love the smell of PM's anytime!

Fri, 09/14/2012 - 09:24 | 2794310 SheepDog-One
SheepDog-One's picture

'SHOULD' the US economy enter recession'.....lol only here in america could people look around and say 'Gee, I hope things dont get shitty!'

LOL fuktardville.

Fri, 09/14/2012 - 09:28 | 2794313 PaperBear
PaperBear's picture

This unlimited limit will be reached once all of the mortgage backed securities on the balance sheet of the big banks have all been sold to the non-Federal non-Reserve

so the use of the word ‘unlimited’ is absurd.

 

Fri, 09/14/2012 - 09:28 | 2794330 Quinvarius
Quinvarius's picture

I think we will find that if you do an unlimited subsidy of MBS, you get an unlimited amount of MBS.

Fri, 09/14/2012 - 09:33 | 2794370 Mister Ponzi
Mister Ponzi's picture

There is virtually no limit. Once the Fed has bought up all MBS, it can buy other assets: Corporate bonds, stocks, old bicycles, land, houses, foreign bonds - you name it.

Fri, 09/14/2012 - 09:26 | 2794316 voltaire2030
voltaire2030's picture

One word : LIQUIDITY TRAP....

Fri, 09/14/2012 - 09:28 | 2794324 buzzsaw99
buzzsaw99's picture

QE is no fundamental reason for the stock market to rise though. The only corporations that will benefit are the big banks and all those earnings will be pilfered by employees.

Fri, 09/14/2012 - 09:27 | 2794325 adr
adr's picture

The good news in QE3 will send the unemployment rate to 0% in short order as record people leave the workforce. According the the "reason" Ben launched QE3, it won't be needed past a month or two.

Fri, 09/14/2012 - 09:28 | 2794329 mr_bad
mr_bad's picture

We're all doomed.

Fri, 09/14/2012 - 09:29 | 2794332 youngman
youngman's picture

In the future...yesterday will be considered the Baseline of all statistics......

Fri, 09/14/2012 - 09:29 | 2794333 Waterfallsparkles
Waterfallsparkles's picture

I think this policy is RECKLESS.  Just what is he trying to do to our Country?

Our Dollar will be worthless and we will eventually lose our Reserve Currency status.

Fri, 09/14/2012 - 09:29 | 2794339 jomama
jomama's picture

that's the idea, kitten.

Fri, 09/14/2012 - 09:28 | 2794335 krispkritter
krispkritter's picture

QE 3 and ME unrest(ok, more of it). Is this the fuse lit now for the pre-election blow up? Is this part of the big fireworks show where we're all looking up when the rug is pulled out from under us? Anyone think this is going to be contained until after the election? I'm relatively prepared but still nervous as hell.

Fri, 09/14/2012 - 09:37 | 2794403 1100-TACTICAL-12
1100-TACTICAL-12's picture

There is definitely a disturbance in the force......

Fri, 09/14/2012 - 09:31 | 2794350 Fix It Again Timmy
Fix It Again Timmy's picture

This is like putting more cakes and pastries in the bakery window while the starving continue to look in...

Fri, 09/14/2012 - 09:39 | 2794412 ebworthen
ebworthen's picture

$40 Billion a month in perpetuity to buy Mortgage Backed Securities?

Where is my bailout?  For $100,000 I'll pay off my mortgage, get a new roof, and fix the sewer line.

Of course, that would mean the bank can't take my home and the gubbermint can't house me in a FEMA camp so...

Fri, 09/14/2012 - 09:53 | 2794493 NeedtoSecede
NeedtoSecede's picture

+1 ebworthen.  Bankster get the elevator the rest of us get the shaft.

I wonder if I can find that silver that fell through the ice when I had my ice skating accident last winter?  I might be needing those PMs...

Fri, 09/14/2012 - 09:42 | 2794431 bushwarcrime
bushwarcrime's picture

Remember when we used to say, " he or she were depression era folks, they never threw anything away"  

How does if feel to feel the past come up and smack you in the back of the head?  You thought you were special huh? Maybe we could squeak by this time.  I swear I'll never drive the porceline credit bus again!  You ain't nobody.  Time to find out what your bootstraps are made of boyz.

Fri, 09/14/2012 - 09:42 | 2794435 f16hoser
f16hoser's picture

No industrial base, small businesses closing down, only part-time jobs left in Amerika and now the FED to print 40 Billion/month. Hmmm, I'll put my trust in Gold/Silver thank you. Wall Street is the new Vegas. Great place to visit once every 10 years or so.

Fri, 09/14/2012 - 09:47 | 2794468 Mitch Comestein
Mitch Comestein's picture

I have to say I hate this environment.  I say this as a person that has held and profited from gold for almost 8 years.  It is getting real expensive to live.  Meat, holy crap, it got expensive since QEII.  The looks on people's faces as they read the meat prices tells you about the economy!

This money printing is getting painful.  I can't wait till it is over.  If that means my coins have to go down in value by 50%, so be it.  As long as it is permanent.

BTW, if you want another example of a crashed market, look to horses.  I say this from never owning one, but my wife knows about them.  Horses used to be sold dear.  But now, if you cannot find a free horse on craigslist then you are not looking!

 

 

Fri, 09/14/2012 - 09:55 | 2794505 giovanni_f
giovanni_f's picture

The bunch of criminals aka CME with its two trading halts yesterday did its best to minimize the price surge so as to allow for the bankster mafia buddies to regroup at the 1770 level. You won't  see them that dedicated when silver gets taken down 10% in a couple of minutes. But the CFTC is after them, I am sure.

Fri, 09/14/2012 - 10:00 | 2794525 Waterfallsparkles
Waterfallsparkles's picture

Will anyone be Richer?  If your Dollar is worth 30% less will anyone be Richer?  You may make more Money in the Stock Market but will it buy more goods?  NO.

Fri, 09/14/2012 - 10:52 | 2794842 MachoMan
MachoMan's picture

Yes, relatively speaking, some will benefit substantially from the devaluation...  including, but not limited to, those closest to the money spigot.

Fri, 09/14/2012 - 10:27 | 2794629 JohnKozac
JohnKozac's picture

"The bottom line is the monetary printing is out there, and gold is going to be the big beneficiary, and possibly silver as well. The chart of gold is beautiful. We have seen a perfect consolidation wedge forming for about a little over a year now."

Read more at http://globaleconomicanalysis.blogspot.com/2012/09/panic.html#CTEws44AQslRMLRi.99
Fri, 09/14/2012 - 11:01 | 2794895 pebblewriter
pebblewriter's picture

SPX just hit its Bat Pattern target at 1472.43.  This is the .886 retracement of the 1576 - 666 crash.  Could be really interesting...

https://pebblewriter.com/learn/harmonics/bat-pattern/

Fri, 09/14/2012 - 12:43 | 2795524 KingdomKum
KingdomKum's picture

we few, we happy few, we band of silver holders  .  .  .  

Fri, 09/14/2012 - 16:38 | 2796918 Democratic koolaid
Democratic koolaid's picture

Wealth is going to be pulled into the comodity markets even the obscure ones like lithium etc.

http://www.google.ca/finance?q=PINK:LIEG&ei=QpVTUKDjE6vJ0AHnmAE

Mon, 09/24/2012 - 09:06 | 2823905 dfwbcorp
dfwbcorp's picture

If you have wealth accumulated that as it sits there is worth less and less because the US dollar is worth less and less, what is the point?  I have converted much of my wealth to gold and silver.  It has proven LESS frustrating than real estate: no tennant issues, no maintenance issues, and easy to liquidate to cash.  It has proven more secure than money held by the so called 'Experts' who billed me REGARDLESS of fund performance and with all their expertise, sent my account into the toilet.  Now in the form of tangible assets (bars, coins, etc) safely held in my bank vault and safe, my wealth is under my control, costing me nothing to maintain, holding its value with growth in value too.  So impressed was I with the performance of my very secure TANGIBLE gold and silver assets, I researched and found the opportunity to supply the historic and growing demand.  People ARE buying gold and silver.  They may as well buy it from YOU!  Any entrepreneurs out there?  www.goldandsilverbizopp.com

Do NOT follow this link or you will be banned from the site!