The Fed vs The ECB - Presenting "The Correlation Of 2012" And What It Means For Gold

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Thu, 12/22/2011 - 22:43 | 2006192 SHEEPFUKKER

Roubini must be looking at this data to proclaim gold was a bubble. ;)

Thu, 12/22/2011 - 23:11 | 2006239 strannick
strannick's picture

Great article.

While the stock markets sit on edge and disappointedly wait for  Bernanke's mouth to say 'QE3', he twists and swaps QE3 into the monetary system.

Likewise the market twiddles its thumbs waiting for the ECB debt monetization of deadbeats, it LITRs more QE than even the FED (la bazook).

Eventually all this inceditary paper is going to light a fire under golds ass, and send it leaping over the moon

Thu, 12/22/2011 - 23:11 | 2006256 I think I need ...
I think I need to buy a gun's picture

i can tell by all these articles and the comments everywhere that everyone is anxious now about gold.......this is it people the paper market is done,,,,,,,it could come anyday now,,,,,,its almost all over

Fri, 12/23/2011 - 00:45 | 2006448 Oh regional Indian
Oh regional Indian's picture

"The Lisbon treaty prohibits the monetary financing of debt". Paraphrase. Therefore, ergo etc., all the slosh wil come through back-doors. Which no one can see.

And gold's price correlation matrix has Oil and Petrodollar as it's key off-sets.

How are they doing? How are they going to be doing? 




Fri, 12/23/2011 - 01:48 | 2006517 fnord88
fnord88's picture

A Christmas carol for our times: Granny got indefinatley detained

Fri, 12/23/2011 - 02:20 | 2006551 PulauHantu29
PulauHantu29's picture

Gold price up ~35% in euros:

So the yellow metal does reflect the expamsion of the money supply in the EU when priced in euros. Right now the dollar is strong so it has pulled back temporarily in dollars...imho.

Thu, 12/22/2011 - 23:25 | 2006288 JumpinJonnyK
JumpinJonnyK's picture

Ron Paul supporters sign the pledge at  Dont let the media steal this election!

Thu, 12/22/2011 - 23:35 | 2006312 Teamtc321
Teamtc321's picture

Ron Paul supporters can also use to get the word out. 

Fri, 12/23/2011 - 00:06 | 2006377 Silver Bug
Thu, 12/22/2011 - 23:47 | 2006342 Freddie
Freddie's picture

Anyone know if Ron Paul has come out and said he would repeal that military/govt rentetention/arrest of Americans?  I know based on The Constitution that Congress should undo it.  All the GOP candidates should take the pledge to dump that.

Gingrich is the worst of the bunch.


Fri, 12/23/2011 - 00:23 | 2006403 GMadScientist
GMadScientist's picture

Demoncrats: 141 Y, 96 N

Repugnants: 234Y , 46N

Yeah...good luck with that!

Fri, 12/23/2011 - 15:00 | 2007884 DaveyJones
DaveyJones's picture

I guess they voted down the fact that you posted their votes, weird

Fri, 12/23/2011 - 00:04 | 2006372 Silver Bug
Silver Bug's picture

Gold of course is incredibly under valued. Nothing has changed in this last month, the paper pushers have sent a massive amount of the western gold east in this last month. They and unfortunately us, will regret that in the coming years.

Fri, 12/23/2011 - 01:39 | 2006505 xela2200
xela2200's picture

There was a lot of emotional damage inflicted on bulls. Another way of looking at also is that gold and silver have been beating to a strong support level, and it is now like a coiled spring. I don't think that the Dollar index will go up too much higher than 80 because of the Euro at 1.30. Zero Interest rate, Insolvent banks, debt ceiling, and real estate are good arguments for prices going up. Not least, who wants a down stock market on an election year (spill over)? As a caveat though, in a market with so much uncertainty (FED/Government/Manipulation) it is a bit of a gamble.

It is unbelievable the amount of gold central bankers had to dump to cause that fall just to give "value" to the money they are printing. They literally gave China, Russia etc such a generous x-mas gift. The transfer of gold just blows my mind.  The Chinese are building the back bone of their future currency, and they got it wholesale from ours. That is an incredible act of desperation and disregard for their own people. Unelected bureaucrats selling their countries' assets which are doing more economic damage than a war.  If you through all of them down a well, all that You would hear is me me me

I believe that on the long run the markets will impose themselves like a force of nature. Hopefully, I am still around to see that day.

Merry x-mas expendables

Fri, 12/23/2011 - 01:53 | 2006521 UnderDeGun
UnderDeGun's picture

You and I, both.

Fri, 12/23/2011 - 01:45 | 2006513 SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

nothing else vacation is on right now

Fri, 12/23/2011 - 05:04 | 2006619 philipat
philipat's picture

I am amazed that even the financial media are not calling the ECB action QE. If the Fed pushed EUR 500 Billion into the PD's it would immediately be described as QE. But if the ECB pushes the same amount into the European banking system, is it somehow NOT QE? If NOT QE (IE Printing) where do they think the "Money" cane from. The tooth fairy perhaps?

Thu, 12/22/2011 - 22:45 | 2006196 ACP
ACP's picture

Jesus Christ. All this means is that the Fed will have to come up with some more complicated ways to fuck with investors who invest in things that SHOULD increase in value.

Thu, 12/22/2011 - 23:33 | 2006307 spiral_eyes
spiral_eyes's picture

2012 will be a fun year.

"There’s one thing I can’t help noticing: a third world country with America’s recent numbers — its huge budget and trade deficits, its growing reliance on short-term borrowing from the rest of the world — would definitely be on the watch list.

So is America safe, despite its scary numbers?

Third world countries typically suffer from institutional weaknesses. They have poor corporate governance: you can’t trust business accounting, and insiders often enrich themselves at stockholders’ expense. Meanwhile, cronyism is rampant, with close personal and financial links between powerful politicians and the very companies that benefit from public largesse.

The crisis won’t come immediately. For a few years, America will still be able to borrow freely, simply because lenders assume that things will somehow work out.

But at a certain point we’ll have a Wile E. Coyote moment. For those not familiar with the Road Runner cartoons, Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge.

What will that plunge look like? It will certainly involve a sharp fall in the dollar and a sharp rise in interest rates. In the worst-case scenario, the government’s access to borrowing will be cut off, creating a cash crisis that throws the nation into chaos.

I know: it all sounds unbelievable. But would you have believed, three years ago, that the U.S. budget would plunge so quickly from a record surplus to a record deficit? And would you have believed that, confronted with that plunge, our leaders would offer excuses rather than solutions?"

— Paul Krugman (2003)


Fri, 12/23/2011 - 00:28 | 2006414 LowProfile
LowProfile's picture

One of your blog's commenters summed it up neatly:  "I think Krugman is more a Democrat than an economist – to him Bush’s deficit is warning but Obama’s is good for the economy."

Fri, 12/23/2011 - 04:45 | 2006605 onebir
onebir's picture

"Third world countries typically suffer from institutional weaknesses. They have poor corporate governance: you can’t trust business accounting, and insiders often enrich themselves at stockholders’ expense. Meanwhile, cronyism is rampant, with close personal and financial links between powerful politicians and the very companies that benefit from public largesse."

Not sure whether he meant to or not, but I think Krugman just said the US is a third world country. :)

Thu, 12/22/2011 - 22:46 | 2006200 DaveyJones
DaveyJones's picture

"We, also, for one, hope to be fully prepared"

where have I heard that?

Fri, 12/23/2011 - 00:12 | 2006391 BigDuke6
BigDuke6's picture

Maybe they mean they got plenty of lead to look after that gold

Fri, 12/23/2011 - 00:24 | 2006407 DoChenRollingBearing
DoChenRollingBearing's picture

+ 9 mm!

Fri, 12/23/2011 - 01:57 | 2006525 UnderDeGun
UnderDeGun's picture


Fri, 12/23/2011 - 10:23 | 2006914 n8dawg84
n8dawg84's picture

I'm undecided on 9mm or .45.  my buddy says 9mm cause its cheaper and is used worldwide.  I lean towards .45 cause of the stopping power.  I guess it's personal preference, but I'd like some input from the ZHers regarding this matter, please.  Thanks in advance

Sat, 12/24/2011 - 00:52 | 2008847 ThrivingAdmistC...
ThrivingAdmistCollapse's picture

If we have a full scale economic collapse followed by a mad max world, then perhaps copper wrapped lead would be a good commodity investment :P

Wed, 12/28/2011 - 16:20 | 2017069 ultraticum
ultraticum's picture

.308 battle rifle's the way to go.  That is, if you can't get to your .50 cal.

Fri, 12/23/2011 - 13:12 | 2007439 IrritableBowels
IrritableBowels's picture


Thu, 12/22/2011 - 22:50 | 2006209 Snakeeyes
Snakeeyes's picture

I wrote this a few days ago. This will NOT end well.

Clash of the Titans: Fed Versus ECB Balance Sheets. ECB Offers As Much Money As Banks Want for 1,124 Days!

Thu, 12/22/2011 - 23:03 | 2006234 navy62802
navy62802's picture

The currency wars have begun. Got gold??

Fri, 12/23/2011 - 01:58 | 2006529 UnderDeGun
UnderDeGun's picture

Got food and toilet paper?

Thu, 12/22/2011 - 23:04 | 2006237 greedo
greedo's picture

So basically "central banks" have injected €500 billion or about $700 billion in extra liquidity, since June and gold has gone... down?

And all those chatterboxes on TV are talking about gold dropping because it took out some daily moving average?

And we have to learn about this from a blog?

Thu, 12/22/2011 - 23:10 | 2006250 Mad Marv
Mad Marv's picture

Blogs are the new media.  I think of the major TV networks as those Telescreens in Orwells 1984. 

Thu, 12/22/2011 - 23:15 | 2006264 mayhem_korner
mayhem_korner's picture



You left out the coordinated margin calls.

Thu, 12/22/2011 - 23:18 | 2006271 Sam Clemons
Sam Clemons's picture

From my limited experience, investing requires anticipating action.  Price generally increases before the causes become apparent. 

Gold started rising around 2000 when I believe people were proclaiming how great it was that Clinton balanced the budget.

And even now, buying gold still doesn't seem that strange because there is so much debt in the system that all the world's central banks are going to have to loan more money into existence to cover.  What about funding those $100Tr in unfunded liabilities?  Magic?

Thu, 12/22/2011 - 23:20 | 2006276 mayhem_korner
mayhem_korner's picture

investing requires anticipating action. 


Don't confuse investing with trading.  Investing is about preserving and augmenting future purchasing power and subordinates temporal price movements to fundamental drivers. 

Fri, 12/23/2011 - 00:19 | 2006399 Vint Slugs
Vint Slugs's picture

"..subordinates temporal price movements to fundamental drivers."

What kind of intellectual slop are you talking?  How about spelling out for us how you have "invested" so as to preserve/augment future purchasing power?  And let's not hear about buying gold or silver in the past 5 years.  Let's hear about that "investing" that you did back in the 20th century - preferably before 1990.

Fri, 12/23/2011 - 08:53 | 2006722 mayhem_korner
mayhem_korner's picture



Maybe dose down the xanax there, slug.  I was just offering my view that "anticipating price action," like charting, is a perspective for trading (monetizing short-term price movements based on speculation about sentiment, trends, etc.).  I don't believe that chasing returns (trading) will matter much when the collapse takes hold if you can't access those holdings and convert them to useful things.  Between now and then, the game is staying liquid while accumulating tangible assets.

Since you asked, the main thing I've invested in is a diversified client base.  My from-scratch business has provided a good return, and the primary thing to preserve future value from that is to ensure it isn't wiped out by some sector-specific plague.  That investment has allowed me to accumulate things in which to store that value, including what most here would consider significant holdings of physical gold and silver, plus stockpiles of hard assets and real estate.

Thu, 12/22/2011 - 23:48 | 2006343 disabledvet
disabledvet's picture

"thought thiefs" will fund the deficit. imagine the spending reductions in such a world. We all are forced to tell the truth no matter what? that would mean a lot of guilty pleas. the Court System would immediately be "de-clogged." One could "conquer a country with an Army of Actors." Truly AWESOME amount of power...and one the entire planet has already..."bought into" i might add. Should we be afraid of that world? Where people feel "compelled to tell the truth unless they were acting" because "that internet thing knows what i am thinking"? I would not be a buyer of what Wall Street is selling in this world of course. Since when did they ever tell the truth? They do have an "impressive megaphone" however. Believe me when i tell you ..."when those guns go silent it will be as if they were never there ever." Try it sometime. "Turn off your television for one week and see how you feel." You will become angry, irritable..and then suddenly "you'll feel this amazing sense of freedom. like i never needed it at all." And of course you don't!

Fri, 12/23/2011 - 02:15 | 2006549 Oh regional Indian
Oh regional Indian's picture

DV, for the record, I find your comments incisive and/or funny. Most of the time. :-)


Thu, 12/22/2011 - 23:21 | 2006277 earleflorida
earleflorida's picture

some blog - how dare you!

this is ZeroHedge, not some shit-ass blog

that is tyler speaking not some con artist fwiw

Thu, 12/22/2011 - 23:06 | 2006243 bob_dabolina
bob_dabolina's picture

If gold goes up, stocks go up; stocks pay dividends.

Thu, 12/22/2011 - 23:18 | 2006272 mayhem_korner
mayhem_korner's picture



Try yer correlation matrix, bd.  I'm guessin' it's not quite an IID diagonal, given that gold's up 14% YTD and stocks are flat.  :D

Fri, 12/23/2011 - 00:08 | 2006383 AC_Doctor
AC_Doctor's picture

Can we all pitch in together and get this a-hole a one oz. AG Eagle so he can shut the fuck up?

Fri, 12/23/2011 - 00:36 | 2006431 jez
jez's picture

And we can't eat our gold, right Bob?

Fri, 12/23/2011 - 02:06 | 2006537 UnderDeGun
UnderDeGun's picture

5% of zero is still nothing when the spark evaporates the markets. Gold requires seriously high temps to turn to vapor.

Thu, 12/22/2011 - 23:09 | 2006247 trentusa
trentusa's picture

The ECB commenced w/ the LTROs the day after Bank of America dipped below $5 into junk status.


Did the ECB just bailout BAC, or is that timing a coincidence (bc i thought for a min Germany wasn't going to let them print)??

Thu, 12/22/2011 - 23:10 | 2006248 Goldilocks
Goldilocks's picture

About SocGen: (Without getting into specifics...)... WTF !?!

Fri, 12/23/2011 - 00:15 | 2006395 Vint Slugs
Vint Slugs's picture

I agree.  SocGen presents pretty graphs but reality doesn't conform (or confirm).

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