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Fed's Emergency Meeting With Primary Dealers Ends

Tyler Durden's picture


From RBS' O'Donnell:

  • NY Fed Meeting Over
  • No Contingency Plan For Aug 2 Discussed
  • No Decision On Next Week Treasury Auctions
  • Talks Focused On 'Market Conditions'
  • Primary dealers at NY Fed agreed Congress should act quickly to raise debt ceiling

Translation: Tiny Tim has absolutely no idea what he will do on Wednesday, aside from telling CTRL P-dawg to sell the gold-painted Tungsten in Fort Knox of course. At $460/ounce MTU that's not bad good: still about $100 billion $341 million based on today's market prices. Or something. In retrospect, maybe not the best idea. (the Fed has 261,398,899.3 ounces of [gold|tungsten])

h/t LDT


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Fri, 07/29/2011 - 13:11 | 1505477 redpill
redpill's picture

An "emergency" meeting on "market conditions?"  I smell a rat.  Was this supposed to be the tell that QE3 is incoming imminently?

Fri, 07/29/2011 - 13:14 | 1505499 malikai
malikai's picture

If your view of their view of "market conditions" is the R2K and ES, you'd probably be correct in assuming so.

Fri, 07/29/2011 - 13:39 | 1505632 AldousHuxley
AldousHuxley's picture

The next release of the approximate purchase amount and tentative outright Treasury operation schedule will be at 2 p.m. on August 10, 2011.


Bernanke just told Geithner how much more they will be printing.




Fri, 07/29/2011 - 14:18 | 1505795 Fish Gone Bad
Fish Gone Bad's picture

Has anyone noticed how Geithner looks like Eraser Head?

Fri, 07/29/2011 - 13:19 | 1505518 TaxSlave
TaxSlave's picture

 I smell a rat.

Ya think?

+$16,000,000,000,000 for understatement.

Fri, 07/29/2011 - 13:19 | 1505524 scratch_and_sniff
scratch_and_sniff's picture

Not really, because it wasn’t actually an emergency meeting, it was scheduled and happens regularly as clockwork;  pre-refunding meeting among primary dealers...but dont let me stop you pissing your knickers.

Fri, 07/29/2011 - 13:32 | 1505590 scratch_and_sniff
scratch_and_sniff's picture

Interesting, another 3 junkers who love Tylers cock in their mouth. "ummm Tyler baby, freak me out some more, i love the scary shit.

Fri, 07/29/2011 - 13:40 | 1505644 I am a Man I am...
I am a Man I am Forty's picture

oh come on folks, that's fucking funny

Fri, 07/29/2011 - 13:47 | 1505670 Vergeltung
Vergeltung's picture

maybe you should read more, before you make an ass out of yourself again soon.


More from Bloomberg which confirms this is not the previously scheduled meeting:

  • The Treasury has canceled its regularly scheduled individual meetings with bond dealers in favor of the group meeting, according to the people, who declined to be identified because the meeting hasn’t been publicly announced


Fri, 07/29/2011 - 13:53 | 1505700 scratch_and_sniff
scratch_and_sniff's picture

Maybe you should read the post beofore you get bogged down;

  • No Contingency Plan For Aug 2 Discussed .
  • now fuck off.

    Fri, 07/29/2011 - 13:57 | 1505718 Vergeltung
    Vergeltung's picture

    you said it was regularly scheduled. I showed you that you had it wrong. seemed to take the air out of your whole premise I imagine, eh?


    Fri, 07/29/2011 - 14:04 | 1505740 scratch_and_sniff
    scratch_and_sniff's picture

    Tell me again, how often are indivdual meets with PD's scraped in favor of group meetings? No need to go overboard, just tell me the last 3 times it happened.

    Fri, 07/29/2011 - 14:46 | 1505901 Calculated_Risk
    Calculated_Risk's picture

    Stop being a pussy and take the punch! You got 0wnEd!!!

    Fri, 07/29/2011 - 15:01 | 1505967 scratch_and_sniff
    scratch_and_sniff's picture

    oh really

    Fri, 07/29/2011 - 14:47 | 1505906 KrugmansChauffeur
    KrugmansChauffeur's picture

    "However, if there is no debt ceiling extension, three possible options were discussed:"



    Fri, 07/29/2011 - 13:45 | 1505663 Vergeltung
    Vergeltung's picture

    um, IIRC, the regular meeting was cancelled and this was in it's place.

    Fri, 07/29/2011 - 13:49 | 1505679 scratch_and_sniff
    scratch_and_sniff's picture

    fuck off

    Fri, 07/29/2011 - 13:57 | 1505719 redpill
    redpill's picture

    If you dislike this site so much, why don't YOU fuck off?


    Fri, 07/29/2011 - 14:06 | 1505747 scratch_and_sniff
    scratch_and_sniff's picture

    cause i took the blue pill motherfucker, and i just cant get enough of the abuse.

    Fri, 07/29/2011 - 13:58 | 1505722 Vergeltung
    Vergeltung's picture

    hard to outwit that. you win.

    Fri, 07/29/2011 - 14:09 | 1505761 scratch_and_sniff
    scratch_and_sniff's picture

    when it all boils down to wit alone, speaking from experience, both parties fall into a no-win situation, so don’t worry about it.

    Fri, 07/29/2011 - 14:16 | 1505788 Coast Watcher
    Coast Watcher's picture

    More like a no-wit situation.

    Fri, 07/29/2011 - 14:23 | 1505810 scratch_and_sniff
    scratch_and_sniff's picture

    hey they should really allow soundfonts on this site, cause that ones' crying out for a drum roll.

    Fri, 07/29/2011 - 13:31 | 1505565 SheepDog-One
    SheepDog-One's picture

    QE3 from what, this time 100% out of thin air printed debt? I dont think they have a way out of this one, anything that comes will dissapoint everyone. Except Robos much hated gold bugs.

    Fri, 07/29/2011 - 13:31 | 1505579 DosZap
    DosZap's picture


    Simple way out of this, if we had HONEST players.

    Convert the US system to United States Notes......NO cost or interest to Gov't.( The Fed would crap, but to save the country,someone w/NADS needs to pull a fast one on them).Congress could do it, without ANYONES approval.

    Use USD's for only overseas transactions.

    Fri, 07/29/2011 - 13:38 | 1505629 Scisco
    Scisco's picture

    Because politicians are more trustworthy than bankers.

    Fri, 07/29/2011 - 13:39 | 1505639 EscapeKey
    EscapeKey's picture

    "The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me, and the financial institutions in the rear. Of the two, the one in my rear is my greatest foe." 

    - Abraham Lincoln, 16th President of the US, November 1864. 

    Fri, 07/29/2011 - 13:51 | 1505688 Scisco
    Scisco's picture

    I completely agree and my point is made by that quote, which is, no monopoly should have the power to issue currency.

    Fri, 07/29/2011 - 14:05 | 1505746 Noah Vail
    Noah Vail's picture

    So which do you prefer, abolishing the Fed and returning control of money over to congress, or leaving the Fed in place.

    CHECKMATE: man vs. man - no winners.

    Fri, 07/29/2011 - 15:10 | 1506012 Scisco
    Scisco's picture

    False choice. Force the issuance of currency to be transparent and auditable. Then restrict any new issuance or even prohibit it altogether.

    Sat, 07/30/2011 - 02:22 | 1507350 Doyle Hargraves
    Doyle Hargraves's picture

    How about competing currencies, only the strong survives...

    Fri, 07/29/2011 - 14:02 | 1505734 scatterbrains
    scatterbrains's picture

    when's the last time you voted in a Banker ?


    Fri, 07/29/2011 - 14:26 | 1505827 Downtoolong
    Downtoolong's picture

    Ditto. Since they apparently didn't use the Cone Of Silence, I wonder if they were speaking in code?

    Fri, 07/29/2011 - 13:11 | 1505478 malikai
    malikai's picture

    Where does $460/oz come from?

    EDIT: Nevermind, just realized that's the price of Tungsten.

    Fri, 07/29/2011 - 13:19 | 1505521 Palmer Eldritch
    Palmer Eldritch's picture

    Hey at least that's 12 times higher than the $42.22/oz they have the gold valued at on their Balance Sheet!  Knowing Eraserhead he'd sell it to JPM and GS at that price and say he 'done good.'


    Fri, 07/29/2011 - 13:19 | 1505522 Palmer Eldritch
    Palmer Eldritch's picture

    Hey at least that's 12 times higher than the $42.22/oz they have the gold valued at on their Balance Sheet!  Knowing Eraserhead he'd sell it to JPM and GS at that price and say he 'done good.'


    Fri, 07/29/2011 - 13:11 | 1505479 Cdad
    Cdad's picture

    Sargent at Arms!  Arrest those men leaving the NY Fed building...immediately!  Save the nation and arrest the criminal syndicate Wall Street bankers.  They are all grouped up and vulnerable.

    Sargent at Arms!  Do your job!

    Fri, 07/29/2011 - 13:20 | 1505527 slaughterer
    slaughterer's picture

    Wish I had a fly on the wall at this meeting.  Any intel leaks would be welcome. 

    Fri, 07/29/2011 - 13:20 | 1505528 YesWeKahn
    YesWeKahn's picture

    "Sargent at Arms!  Do your job!"


    Be careful with what you say. Some poor gey just got jail sentence for a similar wish.

    Fri, 07/29/2011 - 13:21 | 1505537 scratch_and_sniff
    scratch_and_sniff's picture

    Its amazing what ignorance sounds like, kind of brutal really.

    Fri, 07/29/2011 - 13:47 | 1505671 Doyle Hargraves
    Doyle Hargraves's picture

    'Its amazing what ignorance sounds like, kind of brutal really.'


    You certainly know firsthand, you sure spout a lot of it!

    Fri, 07/29/2011 - 13:11 | 1505482 smlbizman
    smlbizman's picture

    does anyone remember when the prime rate mattered?

    does anyone know when it will matter again?

    Fri, 07/29/2011 - 13:12 | 1505483 Paul S.
    Paul S.'s picture

    Timmy, call Steve Jobs.  He can give you a bridge loan.


    Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).

    Apple's most recent financial results put its reserves at $76.4bn (£46.9bn).

    Fri, 07/29/2011 - 13:16 | 1505511 Spitzer
    Spitzer's picture

    Speaking of steve jobs, where is all of that cash ?


    I have always wondered who the first corporation is going to be, to hold some of their cash in physical gold. That day is coming.


    King Euro freegold.

    Fri, 07/29/2011 - 13:25 | 1505561 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Who is to say they don't?

    (Other) Tangible Assets....perhaps.

    They do use gold, and quite generously considering the board see the dumpmore often than not.

    Fri, 07/29/2011 - 13:49 | 1505682 Spitzer
    Spitzer's picture

    No, I don't think this is as common as you think or happaening at all.

    Even the boards of allot gold mining companies don't know what the fuck is going on with gold. Like Berrick buying copper plays, hedge books, stuff like that.

    Show me some evidence of a large corp who is holding any gold, physical gold.

    Fri, 07/29/2011 - 13:12 | 1505485 Jim B
    Jim B's picture

    Play acting.... Trying to induce panic....

    Fri, 07/29/2011 - 13:12 | 1505486 ??
    ??'s picture

    Did they serve lunch?

    Fri, 07/29/2011 - 13:14 | 1505501 Doyle Hargraves
    Doyle Hargraves's picture

    Yeah Peasant under glass and blood from the local blood bank to wash it down. Fucking douchebags!

    Fri, 07/29/2011 - 13:54 | 1505704 MichaelG
    MichaelG's picture

    "Time to eat our peas(ants)."

    Fri, 07/29/2011 - 13:22 | 1505545 Raynja
    Raynja's picture

    They had beer and chicken wings while cheering on the nyu interns who are "saving" the "market".

    Fri, 07/29/2011 - 13:12 | 1505487 monmick
    monmick's picture

    How much money could Timmy raise by going after tax cheats? Errrr; nevermind...

    Fri, 07/29/2011 - 13:13 | 1505492 jomama
    jomama's picture

    this has to be a set up for massive changes in congress managing the country's purse.  

    that and/or looting whatever public money there is left.

    or it could just be complete and utter incompetence.

    Fri, 07/29/2011 - 13:27 | 1505568 DosZap
    DosZap's picture


    It's the latter.................

    BHO would have to do some fancy footwork to end game Congress on funding.

    The Democrats would go apeshit at the thought of losing control.

    Their entire voting base would be destroyed..........instantly.


    Fri, 07/29/2011 - 13:13 | 1505495 faustian bargain
    faustian bargain's picture

    Talks focused on how to manipulate market conditions.

    Fri, 07/29/2011 - 13:20 | 1505533 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Or they discussed which hookers to take to their masked ball at the Hamptons this weekend.

    Fri, 07/29/2011 - 13:18 | 1505497 Doyle Hargraves
    Doyle Hargraves's picture

    Just had to talk over who was gonna get the working parts of BofA and who to send to testify this time in front of the faux hearings on the default. Just had to get their story straight ahead of time. Might have also came up with a coordinated answer in case they are asked if gold is money...

    Fri, 07/29/2011 - 13:22 | 1505541 slaughterer
    slaughterer's picture

    Looks like they are giving Merrill Lynch to Greece, and the BAC retail franchise is going to ... the IMF.

    Fri, 07/29/2011 - 13:14 | 1505500 buzzsaw99
    buzzsaw99's picture

    PDs: If we don't keep jacking up the public debt we'll soon all be as useless as tits on a RoboTrader.

    Fri, 07/29/2011 - 13:19 | 1505504 Gunther
    Gunther's picture

    Tungsten is about 450$ per metric ton.

    they quote "mtu"what means Metric Ton unit, see

    The value of 8,000 tons tungsten is 3.6 millon US$.


    Fri, 07/29/2011 - 13:24 | 1505553 Silver Dreamer
    Silver Dreamer's picture

    Ton, ounce, what's the difference?  Who has a ton of gold to sell me?  ;-)

    Fri, 07/29/2011 - 13:17 | 1505514 Stuart
    Stuart's picture

    To say they did not call discuss contingency plans is complete BS.  It would be, no, it IS inconceivable that responsible people would not discuss contingency plans..  If they did not, then they deserve to be shot..

    Fri, 07/29/2011 - 13:26 | 1505563 Cleanclog
    Cleanclog's picture

    Maybe it isn't called "contingency plan" but there is no way that the primary dealers weren't informed that they WOULD be doing their jobs of making bids and offers regardless on Tuesday, Wednesday, Thursday - and would not be making any noise about counterparty risk among the primary dealers.  They also would be instructed that they may need to do repo lending and borrowing more than overnight . . . and keep it quiet.  No raising liquidity or credit concerns.  Keep focus on word DEBT.  Not nearly as scary.

    Fri, 07/29/2011 - 13:34 | 1505601 A Lunatic
    A Lunatic's picture

    There is no contingency plan. The party will proceed as scheduled. You're either with us or against us, Blah, blah, blah, blah........

    Fri, 07/29/2011 - 13:20 | 1505515 Threeggg
    Threeggg's picture

    Um ! Did everyone see this ? 

    You might want to because I bet it will BLOW your mind !

    A bill called "Martial Law" trying to pass in the House.

    WHAT !

    Fri, 07/29/2011 - 13:21 | 1505538 bill1102inf
    bill1102inf's picture

    there will be no martial law.  Armed civilians outnumber armed military personel and blackwater type orgs 1000:1 if not 10-50 times that.  Blackwater would last all of one day should they 

    Fri, 07/29/2011 - 13:24 | 1505554 Threeggg
    Threeggg's picture

    Well, as Ms. Pelosi says they have to pass it to see what is in it !


    Doesn't that kinda sound odd ?

    Fri, 07/29/2011 - 14:14 | 1505779 Thisson
    Thisson's picture

    No, review the clip.  They're going to force the politicians to be available to vote.  That's what is meant by "martial law" so let's not be alarmist.

    Fri, 07/29/2011 - 14:14 | 1505780 Thisson
    Thisson's picture

    No, review the clip.  They're going to force the politicians to be available to vote.  That's what is meant by "martial law" so let's not be alarmist.

    Fri, 07/29/2011 - 13:32 | 1505588 DCFusor
    DCFusor's picture

    Man do you ever have that wrong.  I'm well armed myself to say the least, and have all sorts of weapons, and 50+ acres to spread out on I know intimately.

    One pass with an A10, and my whole mountain&valley paradise is now a puddle of molten lava - -and it would be even more likely if there were 200 friends "outnumbering" them here.  Not a good plan, mr bill.

    Better to hope the national guard and army refuse to shoot their own.  But they do know how to make that happen, by using army units from a city to patrol them dffrnt 'necks in the country, and vice versa.  Add in a touch of formented class warfare, turn off social media (remember the internet kill switch?), and hey -- they got a plan.


    Fri, 07/29/2011 - 13:36 | 1505619 bill1102inf
    bill1102inf's picture

    DCF, just so you know where I am coming from, I am ex US Army 11B, OEF and OIF vet, etc etc.  If you think that the US Army is going to use an A-10 to strafe and or bomb your house on 50 acres, I think your a bit too paranoid.  Its not going to happen my friend.  The guys that fly those things, and 99% of the rest of us are JUST LIKE YOU and would never do something like that.  EVER.  Let me repeat, it will NEVER happen, we are on YOUR side brother.

    Fri, 07/29/2011 - 13:46 | 1505666 DCFusor
    DCFusor's picture

    Thanks for that, bill.  I guess I knew that, but was just extrapolating.  Kent state did after all actually happen, and the mere thought of our army going to war against its own people is kind of a desparate admission of failure.  While I was never in uniform, back when I worked in DC it was as an analyst at the Pentagon and other places, so I kind of know what it's about, a very little.  I didn't dislike most there except the windbags. But I got tired of being paid to be paranoid for a living and cut and ran in the '70s.

    At any rate, my point stands.  We don't outnumber them in force should they decide to use it.  I do believe that as you say, the actual people involved would just refuse, however.


    Fri, 07/29/2011 - 14:01 | 1505731 Raynja
    Raynja's picture

    The guys that fly those things, and 99% of the rest of us are JUST LIKE YOU and would never do something like that. EVER.

    You are missing the fact that soldiers will be reminded they are patriots protecting their families and fellow citizens from domestic terrorists. The soldiers job will not be to decide the oppositions guilt, but merely to follow orders.

    Fri, 07/29/2011 - 23:46 | 1507208 coded language
    coded language's picture



    Try Congressional Martial Law on for size.


    Congressional Martial Law

    The House leadership is using a parliamentary gambit to evade a longstanding House rule that is supposed to ensure that this kind of obfuscation does not occur. That House rule (Rule XIII(6)(a)) provides that a resolution (called a rule) reported by the Rules Committee cannot be considered by the House on the same legislative day that the rule is reported (except by a two-thirds vote of the House). This is supposed to ensure that Members of the House and the public have at least one day to examine and analyze what is in legislation before they have to debate and vote on it.

    This extraordinary procedure is known as a “martial law” rule because it suspends the normal procedures and safeguards and allows the House Leadership to operate in a more authoritarian fashion.



    Fri, 07/29/2011 - 13:27 | 1505566 Silver Dreamer
    Silver Dreamer's picture

    The people that penned the bill's name thought they were being funny, huh?

    Fri, 07/29/2011 - 13:37 | 1505596 Threeggg
    Threeggg's picture

    alot of people on the Net are just like "oh poo poo" this is just a Bill to get the debt situation straightened out bla bla bla,ha ha ha you are a scardy cat bla bla.

    But a bill with a name like "MARTIAL LAW"

    Tell me this does not raise a brow !

    Come on !

    Fri, 07/29/2011 - 13:29 | 1505573 jdrose1985
    jdrose1985's picture

    Where have you been since the emergency banking and agriculture acts were enacted in 1933, the emergency war power acts, the war on terror, drugs and so on and so forth?

    Does anyone realize the USG defaulted in 1933 and has been operating in chapter 11 reorganization ever since? Ever wonder why the constitution no longer seems applicable and even against public policy? Courts of martial in every county yet none seem to comprehend..

    Fri, 07/29/2011 - 13:38 | 1505624 CrankItTo11
    CrankItTo11's picture

    Woa... "Believe it or not, the rule is called the Martial Law Rule" - All eyes on Boston for the Faction Busting Squad next week!

    Fri, 07/29/2011 - 13:51 | 1505687 nah
    nah's picture

    who wants martial law bitchez

    Fri, 07/29/2011 - 13:18 | 1505517 YesWeKahn
    YesWeKahn's picture

    All they care is the stock price which reflects their 401K. Do they day trade?

    Fri, 07/29/2011 - 13:19 | 1505520 Mr Lennon Hendrix
    Mr Lennon Hendrix's picture

    Let's not confuse the issue:  The Teasurie would not sell gold per se, they would sell their paper claims on such gold, if there is gold to sell, and that is another matter.  The Treasurie, like couintless other institutions, has gold on loan from the Federal Reserve Bank.  The lease agreement is akin to that of GLD.  There is no delivery.  Case in point, see Germany, and "its" gold housed at the FRBNY.

    Fri, 07/29/2011 - 13:19 | 1505525 bill1102inf
    bill1102inf's picture

    I call BS, the gold and or tungsten will NOT be sold.

    Fri, 07/29/2011 - 13:24 | 1505529 bob_dabolina
    bob_dabolina's picture

    Emergency meeting convenes: 

    Statement to come - 

    Everyone is going to starve to death, civil disorder to ensue, seniors will not get healthcare, and we will all die.....if the debt ceiling is not raised by 3 trillion immediately. 

    Also, Osama will rise from the dead and fly the International Space Station into your house and TSA agents will rape your children. 

    Do or die, you must comply....the clock is ticking.

    ....oh and by raising the debt ceiling we will also save life on earth according to Nancy Pelosi (but this has to happen RIGHT NOW, we don't even need to read the bill, we'll pass it and than find out what's in it)

    Fri, 07/29/2011 - 13:54 | 1505696 slewie the pi-rat
    slewie the pi-rat's picture

    hey, bob_d!

    if this gets any strrrranger, timmah will be another "brown bottom"

    Fri, 07/29/2011 - 13:20 | 1505531 Caviar Emptor
    Caviar Emptor's picture

    In the week ending last Friday, according to the latest issue of the Vickers report, this sell-to-buy ratio stood at 6.43 to 1. This is higher than 95% of other weeks’ readings over the last decade.

    Fri, 07/29/2011 - 13:29 | 1505574 Silver Dreamer
    Silver Dreamer's picture

    Nothing's going to happen.  But then I guess it depends on your definition of "nothing."

    Fri, 07/29/2011 - 13:34 | 1505606 Caviar Emptor
    Caviar Emptor's picture

    Just goes along with what I've been saying: Nobody much is actually holding stocks. Bots, algos and daytraders account for about 90% of trading. That's precarious. And many holders are actively selling

    Fri, 07/29/2011 - 14:52 | 1505929 Iam_Silverman
    Iam_Silverman's picture

    "That's precarious"

    Yup, but only to bots, algos and daytraders.  Let them crash and burn, I say!

    Fri, 07/29/2011 - 15:16 | 1506042 Silver Dreamer
    Silver Dreamer's picture

    When it comes to economics and the markets, I'm here as a student, CE.  From what other far more informed people such as yourself have posted, the market certainly hasn't reflected reality in a very long time.  To me at least ignorance is not bliss, and I'm thankful for a place like Zero Hedge.  Tyler's handle is certainly appropriate too, for Zero Hedge has become a brotherhood of sorts.

    Fri, 07/29/2011 - 13:20 | 1505532 ivana
    ivana's picture

    As amateur, I assume US10y bond yields completed wave 2 to low of 2,84% (0,618 retrace target 2,867%) and is about to confirm strong long upward wave 3 ... which may end with rate caps and QE3 .. or some other form of market manipulation

    Fri, 07/29/2011 - 13:25 | 1505560 scratch_and_sniff
    scratch_and_sniff's picture

    They say imagination is the highest form of intelligence, sometimes i wonder.

    Sat, 07/30/2011 - 01:56 | 1507329 udecker
    udecker's picture

    The last headline made me spit out my water.


    • Primary dealers at NY Fed agreed congress should act quickly to raise debt ceiling


    I swear, I read:


    • Vultures circling the killing fields agreed that the Wolves should act quickly to kill more sheep than they can eat



    Fri, 07/29/2011 - 13:21 | 1505535 f1aw1essv1ctory
    f1aw1essv1ctory's picture

    OPINION: Gold is about to get hammered.  A U.S. default has always been gold's dream scenario.  This week or early next week is the closest that scenario will come to materializing for a long time.  Two alternatives: (1) the debt ceiling is raised and gold implodes as fear recedes (85%+ chance) or (2) the debt ceiling is not raised (15% chance) and we get (a) sell the news as the fear is already priced in, (b) massive forced liquidations from fallout in equity and/or treasury market, and/or (c) a tanking economy that drags gold down with it.  The other joker in the deck is the Damocles Sword of margin hikes.  Its been a good run but this moment is the one gold bulls have been waiting for and it may be about to pass. 

    Fri, 07/29/2011 - 13:24 | 1505557 slaughterer
    slaughterer's picture

    Gold will plunge, equities will rocket.  No change in strategy from the one we all know so well. 

    Fri, 07/29/2011 - 13:26 | 1505564 Caviar Emptor
    Caviar Emptor's picture

    To avoid deflation Fed needs to print up a storm. QE3 is coming. 

    And the drag on the value of the dollar from the debt ceiling hike and ensuing disputes may be permanent

    Fri, 07/29/2011 - 13:36 | 1505615 SheepDog-One
    SheepDog-One's picture

    Good. Reinforces my decision in the '08 debaucle that its all going down, load up on gold at $400 and let the idiots beat each other to death fighting over worthless paper.

    Fri, 07/29/2011 - 13:30 | 1505576 Beam Me Up Scotty
    Beam Me Up Scotty's picture

    Raise the debt ceiling and have gold fall.  It will be short term.  In 2 years, we will be right back where we are now, and instead of the debt being 14.5 trillion it will be 17.5 trillion.  Then what?????

    Fri, 07/29/2011 - 13:37 | 1505621 Caviar Emptor
    Caviar Emptor's picture

    Gold is only starting to hit it's stride. There will be a second wave of a rush to gold as events liek this week unfold.

    Each 'crisis' has allowed a peak behind the curtain showing just how dangerous the situation really is. Dollar's leadership and all major currencies are now in question. 

    And there are other forces, grasshopper

    Fri, 07/29/2011 - 13:30 | 1505578 Comay Mierda
    Comay Mierda's picture

    as long as there is inflation, gold prices will increase.  we're about to get doused with inflation.  why dont you short gold and tell me in 6 months how it worked out for you?

    Fri, 07/29/2011 - 13:47 | 1505630 DCFusor
    DCFusor's picture

    I've been posting that same scenario here and on several other boards for two weeks now.  I think you're right f1aw....I'll never short gold because of what it is, but I do think it will correct most likely.  That specious comment aobut shorting it for 6 months must be from some mythical "investor".  I trade -- that would be a 1 or 2 day trade, and if you want to wait 6 months to ask me how much I made, that's on you....Assuming our likely scenario comes to pass, that'd be why I'm down to core PM holdins and waiting for the drop with my finger on a very large trigger and the truck backed up....


    I'm guessing that if anything, the wide spread of this meme is why things haven't gone down as expected.  If we've all figured this out, there's no easy way to prevent a mass wealth transfer in what is the wrong direction as far as TPTB are concerned, so they have to figure out how to throw us a curve somehow.

    Fri, 07/29/2011 - 13:54 | 1505703 Spitzer
    Spitzer's picture

    Thanks for providing the much needed worry for this bull market to rocket higher.

    Fri, 07/29/2011 - 13:38 | 1505631 SheepDog-One
    SheepDog-One's picture

    Bullshit. Printing more debt will not make the worlds gold fall. Dollar falls, gold rises, countries around the world are not fooled.

    Fri, 07/29/2011 - 14:30 | 1505708 Threeggg
    Threeggg's picture

    Gold is about to get hammered. ?

    I have seen the PSY-OP going around the MSM for the last few weeks.

    So we are going to cut 1.2 T over the "next 10 years" and our deficit is 1.6 trillion "PER YEAR"

    WHAT !

    Alright mathematician do the math for me. ?

    Everyone knows that the MSM is trying to telegraph a drop in PM"s so that the A_HOLES that are short can cover their short paper when a deal is done. Afterall can you imagine the paper they have printed trying to keep the price down building up to today. OMG ! INSANE!

    People are much wiser from the last few years of these lies.

    I see everyone on the net waiting for this paper blizzard so that they can load the boat !

    Nice try though


    Fri, 07/29/2011 - 13:58 | 1505721 jomama
    jomama's picture

    hey man feel free to dump all your gold for bennybux.  i know i ain't that fucking stupid.

    Fri, 07/29/2011 - 13:21 | 1505540 Dr. No
    Dr. No's picture

    I thought you said this was a primary dealer-FED meeting, so why would TImmah be there?  He is like that uninvited party crasher.  Of course there was not Aug 2 contingency dicsussed.  It is a non-issue.  In the event of deteriorating bond prices, the FED will buy the primary dealers toxic assets at face value.

    Fri, 07/29/2011 - 13:22 | 1505543 Catullus
    Catullus's picture

    "Let us know about large fund demanding redemption out of MMFs. We'll send our people to take care of it. Also remember the reverse repo desk is open and willing to take on large swaths of treasuries if need be. Don't worry about the rate. If you guys can agree to set it below the current .05 rate you're currently all bidding, we won't take notice."

    Fri, 07/29/2011 - 13:23 | 1505548 reader2010
    reader2010's picture

    The staged show will need to continue until some new national tax schemes are unleashed and more cuttings on social services are approved.

    Fri, 07/29/2011 - 13:23 | 1505550 Long-John-Silver
    Long-John-Silver's picture

    Call all that Gold Plated Tungsten Gold Pressed Latinum and sell it to Trekkies.

    Fri, 07/29/2011 - 16:10 | 1506246 Chain Gun Smoke
    Chain Gun Smoke's picture

    Trekkies like you?

    I have some Captain Kirk moon rocks for sale if you're interested.

    Fri, 07/29/2011 - 13:24 | 1505556 Caviar Emptor
    Caviar Emptor's picture

    Concern is mounting that Cyprus may join Greece, Ireland and Portugal as the next ward of the European Union’s new bail-out fund.


    Fri, 07/29/2011 - 13:24 | 1505558 random shots
    random shots's picture

    Lehman Aggregate Bond INdex keeps going up! Would seem this is the opposite of a country that is about to default on its obligations, lose its AAA rating, and face increased borrowing costs in the future.

    Fri, 07/29/2011 - 13:28 | 1505572 Eireann go Brach
    Eireann go Brach's picture

    It was a scheduled emergency meeting, supposedly Boehner was in on the meeting too via conference call while he was tanning in preparation for his TV appearance today!

    Fri, 07/29/2011 - 13:33 | 1505598 SheepDog-One
    SheepDog-One's picture

    Its bullshit these people having these secret meetings all the time, they should be arrested for subversive activities. 


    Fri, 07/29/2011 - 13:39 | 1505640 augie
    augie's picture


    Fri, 07/29/2011 - 13:34 | 1505605 bugs_
    bugs_'s picture

    end the NY Fed.

    Fri, 07/29/2011 - 13:38 | 1505628 bania
    bania's picture

    "CTRL-P dawg" - funny and brilliant guys!

    Fri, 07/29/2011 - 13:40 | 1505647 Caviar Emptor
    Caviar Emptor's picture

    Bloomberg: Home Ownership Falls To Lowest Since 1998


    Fri, 07/29/2011 - 13:42 | 1505656 SheepDog-One
    SheepDog-One's picture

    Wow bullish. Im sure the Blowhorn is already in full spin saying this is confirmation the massive bounce point in RE is the closest its ever been!

    Fri, 07/29/2011 - 13:40 | 1505648 SheepDog-One
    SheepDog-One's picture

    People still think theres miracles left in the printing press, the dollar has already defaulted, gold IS the new reserve currency. Its not 2008 anymore filled with Keynesian hopes dreams and promised miracles. Printing even more dollars wont change that a bit, dollar is dead. Print more, I dont care, it changes nothing.

    Fri, 07/29/2011 - 13:42 | 1505658 MAGICWIZARD
    MAGICWIZARD's picture

    no contingency plan discussed my a$$.  what utter imcompetence

    Fri, 07/29/2011 - 13:42 | 1505661 data_monkey
    data_monkey's picture

    selling the gold is not really an option. even if it's not tungsten, it' likely been allocated to other countries/banks.

    Fri, 07/29/2011 - 13:45 | 1505664 Caviar Emptor
    Caviar Emptor's picture

    Trending on Twitter: #fuckyouwashington

    Fri, 07/29/2011 - 13:52 | 1505695 Doyle Hargraves
    Doyle Hargraves's picture

    Trending on youtube: "The Exploited"

    Fri, 07/29/2011 - 14:02 | 1505728 dwdollar
    dwdollar's picture

    A bunch of retards who don't understand America is bankrupt either way are using it.  I best stick to zerohedge.  May God make their pain short when they're eating each other.

    Fri, 07/29/2011 - 16:22 | 1505819 TwelfthVulture
    TwelfthVulture's picture

    Sounds like 1 of Timmy's 80 million, dependent upon the forced expropriation of the productive capacities of another (er, federal government largess).

    I, for one welcome a default.  The sooner, the better.  The sooner the default, the sooner the downgrade, the sooner the end of reserve currency status, the sooner the end of endless dollar printing, the sooner the END OF THE FED.

    I hope it's a real nasty default.  I for one find it reprehensible that we as a people have come to point where we cower in fear over the fact that some stranger holds our grandmother's fate in their hand and can throw her off the cliff by withholding a "social security check."  A default so long and lasting, one so bad, that we, as a nation, are forced to begin to once again care for own grandmothers.  We become self-sufficient once again, dependent not upon some nameless faceless bureaucrat able to grant or deny our basic needs, but capable of putting food on our own table, a roof over our loved ones, and care for our loved ones, both friend and family.  I pray that we begin to behave as our forefathers once did and show what really made this country great. 

    Fri, 07/29/2011 - 13:56 | 1505717 Iam_Silverman
    Iam_Silverman's picture

    Well, hopefully the PD's were all handed pink slips - no debt extension predicted for the short term!


    Unemployed bankers, that's priceless!

    Fri, 07/29/2011 - 16:54 | 1506422 Buck Johnson
    Buck Johnson's picture

    He most likely said that they won't sell any treasuries what so ever, so they won't start a major panic on top of the panic that will come.

    Sat, 07/30/2011 - 05:02 | 1507411 TwoShortPlanks
    TwoShortPlanks's picture

    Correct me if I'm wrong here, but if the Fed sold that Gold, wouldn't that add about US$400 Billion to the monetary base, since that Gold offsets USDs created for other contries economies in the first place (other countries Gold for global reserve currency). Selling the Gold converts the metal to cash, which then circulates within the US economy aftre buying bonds, and then out into the global economy. Adding to the USD Tsunami
    Would that not in itself be a US$400B QE3????????
    What the fuck am I thinking?! Ben said Gold isn't a currency, so it should be okay. I must be as thick as 'TwoShortPlanks' to have said that.

    Wed, 09/14/2011 - 04:08 | 1667200 chinawholesaler
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