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Financial Warfare

Tyler Durden's picture


Submitted by Mike Krieger of KAM LP


Geithner seems to abhor austerity and sacrifice, preferring any strategy which keeps debt growing to fund the investment banking, security, prisons and war industries on which the American economy now depends for so much of its GDP.
- From “London Banker” Blog, link to full piece is here

It takes a PhD in economics not to be able to understand the obvious.
- Irving Kristol


Financial Warfare

Unfortunately, I spend a good portion of my day trying to get into the mind of a deranged, academic, conflicted and panicked central planner.  In other words, I spend most of my day in the Bernank’s head.  August 2011 was an extraordinarily important month in the history of the financial world.  It is when I believe the “system” blew up for good.  The sovereign rating of the United States was downgraded by Standard & Poors and although treasuries have rallied ever since, it was 100% the equivalent of someone yelling the “emperor has no clothes” and the world indeed noticed.  It was also at this time that the European banking system and in reality the entire Euro project started to blow up.  Equities plunged and gold soared.  It was the worst of all scenarios for the Central Planner in Chief, the Bernank.      

As all of you know, I think it is nearly impossible to make money in this market (if you want to call it that) unless you assume all things are gamed and manipulated.  I think that if you are under the assumption that there is a free market and that there are rules when it comes to the government, the banks (Central and TBTF) then you can’t succeed because you are operating on an entirely false macro assumption.  August absolutely scared the living daylights of the central planners and all of us in the “fight the Fed” camp knew that they would have to pull something together to exact revenge on those that are betting against them.  One of the other things that happened in August that scared the living daylights out of the central planners was the massive flow of fiat money into what was perceived to be a “hard” fiat currency – the Swiss Franc.  This provided these guys with the perfect opportunity to launch a massive counteroffensive in what has clearly become a gigantic Financial War.  In what was an extremely well planned and aggressive move, the cabal of Western Central bankers convinced the Swiss to make the incredible announcement that they would print unlimited Francs to peg the currency at 1.20 to the dying euro.

You have to hand it to these guys.  The move was a stroke of central planning genius.  Not only did they destroy people with major long Franc positions versus virtually any other currency (the Franc went down 25% versus the dollar in a one month period and 20% versus the euro) which was a way for the central planners to extract a pound of flesh from those betting against them, but it also was just as much if not more so directed at the gold market.  Let me explain.  Anyone with a large long franc position also likely has a long gold position as they are (rather were) essentially the same macro bet.  Such a massive move in a currency such as the franc would have been so unexpected and such an outlier event that it would have wrecked severe havoc on many portfolios.  The central planners knew this and they used it to their advantage to stop gold in its tracks as it was headed to $2,000/oz and beyond.  This was no coincidence.  It was financial warfare.  You MUST know your enemy to survive and win the war because the central planners can win battles but not the war. 

Total Currency Chaos

What has ensued since the Swiss intervention has been nothing short of total currency chaos throughout the emerging markets world.  Here are some numbers to put things in perspective.  Since the beginning of August here this is how much various currencies has depreciated versus the U.S. dollar.  The Brazilian real - 20%, the Indian rupee -13%, the Korean won -13%, the Mexican Peso -20%!  I could go on, but you get the point.  Now, I am not going to say that these currency moves were also caused deliberately by the central planners although I wouldn’t put it past them.  More likely, they are the symptoms of a massive global economic slowdown and the view that the monetary policy in these countries will have to be loosened materially.  However, is this an appropriate conclusion?

While current inflation data may be brushed off as yesterday’s news the figures have continued to come in pretty hot in the emerging markets.  Moreover, the massive depreciation in these countries currencies lately has likely only made the inflation situation worse.  For example, let’s take a look at the most important commodity to global economic growth, oil, in the currencies of these various markets.

Brent Crude in Mexican Pesos

Brent Crude in Indian Rupee

Brent Crude in Brazilian Real

Brent Crude in Swiss Francs 

Those Charts are BAAAD

The point of the charts above is to show you that things aren’t as they seem.  While crude oil in dollars has indeed come down, what is actually going on is a massive devaluation of emerging market currencies.  This is why as you can see, oil is basically at the highs in the peso, rupee and real.  While not at highs in francs it did jump a striking 35% in a month after the devaluation was announced.  So the KEY point I am trying to make is that this is not 2008.  Yes, we are looking at a pretty significant cyclical slowdown globally; what I would call a recession within a depression.  However, what is happening is it is simply the emerging market currencies’ turn to devalue in the global fiat currency death spiral game.  The fact that oil is at highs for these countries at this point in the cycle is absolutely devastating.  Anyone “playing” overseas revenue names better revisit their thesis and fast.  Luxury names are supposed to hold up on emerging markets growth?  Please.  Luxury names are commodities in 1H08.  It is the same thing.  I called that right and I am saying it here.  I hear ALL the same arguments in that sector.  It is not immune.  It is not decoupling.  It will crash.

Gold is Falling?  Really?? 

Ok, so let’s take a step back from propaganda and look at what is really happening.  Gold is down a little over $150/oz from the highs in U.S. dollars.  That said, let’s look at gold in the currencies above that have recently experience devaluation. 

Gold in Mexican Pesos

Gold in Brazilian Real


Gold in Indian Rupee

Gold in Swiss Franc

See, once again things aren’t as simple as they may seem.  Gold is not falling, emerging market currencies have just been devalued.  This is what might be expected within the current macro environment of general fiat currency death as the globe enters a recession within a depression.  Things are going to be very, very choppy and I would be extremely cautious in all markets but physical precious metals should absolutely be accumulated on weakness.  The system has already blown up and while that makes thing extra volatile and confusing, as JP Morgan said in 1912 “gold is money, everything else is credit.”  It shall be seen to be true again.

Peace and wisdom,


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Thu, 09/22/2011 - 14:08 | 1697951 Motorhead
Motorhead's picture

Precious metals, bitchez!

Thu, 09/22/2011 - 14:15 | 1697989 bigdumbnugly
bigdumbnugly's picture

"You MUST know your enemy to survive and win the war because the central planners can win battles but not the war."


but how bloody the battles and how many?

individual soldiers don't always come out whole.

Thu, 09/22/2011 - 14:29 | 1698064 Cash_is_Trash
Cash_is_Trash's picture

It's not left versus right, dollars versus euros or pakis versus indians, it's the state versus YOU.

Thu, 09/22/2011 - 15:05 | 1698266 daxtonbrown
daxtonbrown's picture

Yup, we are in a civil war over debt bondage, made necessary by the welfare state but supported by the central banks. The problem, as everyone on zerohedge knows, is that this Ponzi scheme is a dead chicken and the welfare state is in utter collapse. So there will be a flight to Gold and commodities that continues despite the hits we are taking today, because those are the only solids left in this financial diarhea.

So we are headed towards a civil war over the financial destruction wrought by the central banks and politicians, and it will be over slavery again (debt slavery, bondage of your children to $666k per capita in unfunded debt). I wrote a book on what this new type civil war will look like, it will be fought with proxy armies (unionists, anarchists, illehgals) and especially with monetary manipulation. Long term one way out may be cybercurrency like Bitcoins, though don't hold your breath.


Thu, 09/22/2011 - 15:39 | 1698431 I Got Worms
I Got Worms's picture

So there will be a flight to Gold and commodities that continues despite the hits we are taking today, because those are the only solids left in this financial diarhea.

Just wanted to make sure this gem got some love. Poetry. Bravo!

Thu, 09/22/2011 - 15:50 | 1698491 RockyRacoon
RockyRacoon's picture

You got worms... and the squirts.   Boy, you're in a real pickle.

Thu, 09/22/2011 - 15:41 | 1698444 ratso
ratso's picture

The net result of the SwissFranc devaluation was to reassert the position of the USD a the world's reserve currency along with gold.  The direction of the dollar since then is evidence enough for anyone.  Exactly what is going on behind the curtain at the present time however, is far from clear despite all the differing opions found on zerohedge. Three months should unravel the mystery

Thu, 09/22/2011 - 16:07 | 1698620 Smiddywesson
Smiddywesson's picture

Everyone has to deflate their currencies, but currencies have to deflate against other currencies, so they are taking turns.  When the USD takes it turn in the tank, gold will start to rise again.

Thu, 09/22/2011 - 23:01 | 1699798 CompassionateFascist
CompassionateFascist's picture

Informative site, DB....tho I think the eventual CW will be somewhat more "military" than you predict: when whole states secede, National Guard units go with them and that means heavy, hi-tech weaponry will be deployed on both the Free State and State Socialist sides; plenty of local anarchy too along the way. And it may come sooner than most of us think. One probable scenario has the Republican Pty going the way of the Whigs, fragmenting into Tea Party vs RINOS during the 2012 election season, which will occur in an atmosphere of converging political and economic crises. Obama could win in the EC with no more than 40% of the popular vote, with Texas then leading 20-30 heartland and southern states out of the USA before inauguration. 1860------>2012.

Thu, 09/22/2011 - 14:39 | 1698124 Nothing To See Here
Nothing To See Here's picture

Indeed my friend. I must confess that I'm hurting from this past month, and today is a killer since I am long silver. About to give up now, and it pains me. I know we must not get our eyese off the ball long-term, but you've got to make it there first... These central bitches are making it tough I must admit. There is just no sense or logic in what's happening in the PMs. Logic and sense tell me they should go up, but as things are, the masters might as well manage to take them to the floor. Can't rule it out now.

Thu, 09/22/2011 - 14:48 | 1698175 Pegasus Muse
Pegasus Muse's picture

We've lived through worse.  This is but a flesh wound.  A scare tactic.  Another failed effort to manipulate.  I still believe we will be near all time highs in both gold and silver by year's end. 

Thu, 09/22/2011 - 15:52 | 1698501 RockyRacoon
RockyRacoon's picture

If you don't have physical, you don't have silver.    You paid for paper silver.... and didn't even get paper.  Hell, you can't even wipe with that.

Thu, 09/22/2011 - 16:14 | 1698660 Smiddywesson
Smiddywesson's picture

These central bitches are making it tough I must admit. There is just no sense or logic in what's happening in the PMs. Logic and sense tell me they should go up, but as things are, the masters might as well manage to take them to the floor. Can't rule it out now.

Your problem is contained in that statement.  You acknowledge that the central banks are manipulating silver, but then admit you are trading based on logic about what is good for silver.  The manipulators know what your logic is, therefore they know when you are clustered on one side of the trade with all the other silver longs.  If you cluster with them on one side of the trade, the central banks will run your stops.  It's as simple as that.  You can't take any positions that are obviously good for silver.  You have to cover when a scheduled event arrives that should be good for silver.  You have to use reverse logic, because that's what the central banks are doing. 

The gators in the swimming pool are lingering under the diving board, because they know where you are going to jump in.

Thu, 09/22/2011 - 18:50 | 1699185 theinebriatedsot
theinebriatedsot's picture

man that's crazy talk. You're letting your emotions rule you; the worst possible thing you can do. IF THE CENTRAL PLANNER MOFOS OF THE WORLD REALLY COULD MANAGE LIKE YOU THINK, GOLD WOULD STILL BE AT $275 / OZ. Tell you what: go out, have a beer [or 6], see or rent a what makes you happy to forget about'll pass! It always has and always will. In fact, I can see maybe 50 more Canadian Maples in my future - like tomorrow! Now c'mon, get your shit together <kick in the gluteus>..... :-(

Thu, 09/22/2011 - 20:37 | 1699448 Henry Hub
Henry Hub's picture

I'm sorry to hear you took a hit today, I sympathize.

But I would suggest that you keep an eye on the gold chart from now on. The gold chart was showing a classic double top. It was time to head for the hills a few weeks ago. It's only temporary. A buying opportunity is coming. Accept you losses and move on.

Thu, 09/22/2011 - 21:49 | 1699641 Aguadulce
Aguadulce's picture

I hope you said the same thing about natty a few weeks ago mr. Hub

Thu, 09/22/2011 - 23:12 | 1699824 CompassionateFascist
CompassionateFascist's picture

It's not complicated. Buy the dips, then hold. Stop trying to "make money"; the dollar might be the last to burn, but burn it will.  This is going to be about raw survival.

Thu, 09/22/2011 - 16:42 | 1698788 caconhma
caconhma's picture

The last "hard" fiat currency Swiss Frank (SF) has proven once and for all to all investors (including to all various hedge funds managers) that it is still a fiat currency easily manipulated and devalued by Central Bankers.

Consequently, the only real "store of value" that is left is Physical Gold and nothing else!

As for the SF holders, it is the time to more into the real money, i.e., PM


  1. So, Will Gold see $1,500 or $2,000+ by the yearend? I bet on $2,000+
  2. It appears to me that Obama's reelection in 2012 will result in a second American civil war. The US society just cannot function as it is for much longer. We are approaching the endgame.
Fri, 09/23/2011 - 02:44 | 1700148 Ghordius
Ghordius's picture

the swiss franc is a fiat currency - yes

may I humbly point out that the swiss were not willing to jeopardize their economy so that a few investors could do highly leveraged bets on their currency?

I just want to point out that some commentators give me sometimes the idea they have lost their grip on what reality and real economy is...

Thu, 09/22/2011 - 14:09 | 1697957 CitizenPete
CitizenPete's picture

Kitco says 17 of the 45 was due to USD increase...

Thu, 09/22/2011 - 14:09 | 1697959 Edward Fiatski
Edward Fiatski's picture


Looking at the price of oil in India's rupees, Mexico's pesos - brilliance.

Well done, Bernanke. I share the views of the genocidal maniacs behind the printing press in this regard, that the planet is over-populated and Ben is doing everything he can to promote hunger, revolutions and war.

I tip my hat to Ben, you old Jekyll Island chap you.

Thu, 09/22/2011 - 14:46 | 1698163 toothpicker
toothpicker's picture

Bernanke, Geithner, Obama = Puppetshow

Thu, 09/22/2011 - 15:02 | 1698251 Edward Fiatski
Edward Fiatski's picture

I wouldn't dare naming their masters, because I support the Agenda. :)

Thu, 09/22/2011 - 14:09 | 1697960 El Gato
El Gato's picture

Paranoid, paranoid bullshit this Mike Krieger writes

Thu, 09/22/2011 - 14:12 | 1697973 Edward Fiatski
Edward Fiatski's picture

el gato, but it works!

Inflation being exported: peasants have their food taked away -> less people on the planet in the future.

Thu, 09/22/2011 - 14:24 | 1698035 El Gato
El Gato's picture

So that was the whole goal of the SNB the whole time? How nefarious, how intriguing, how unlike-them -- print the theory immediately!

The Swiss are a country of 8 million who have never involved themselves in international politics or organizations (with rare exceptions of complacent acquiesence) and all of a sudden, because they decided to peg their currency to the Euro, they are out to maim and kill people?

What about the more obvious explanation that no one could afford their exports and they were getting killed? This venerable website posted an article about a Big Mac costing >$14 in Zurich. At some point, even the epitome of the conservative central bank realizes that having such a strong currency is no good either.

Thu, 09/22/2011 - 14:44 | 1698141 fdisk
fdisk's picture

Those guys never heard about buy low sell high. Those who pile up in frank at 0.75 to USD what the f*Ck they were thinking? It's going to ZERO? Or GOLD? Going to 10k non stop? Buy MSFT now it's still AAA and dividend just been raised Ain't going to go to ZERO.. :)))

Thu, 09/22/2011 - 14:45 | 1698159 Zola
Zola's picture

So was said of GM at a certain point... Most assuredly on a long enough timeline all stocks go to 0

Thu, 09/22/2011 - 14:51 | 1698179 fdisk
fdisk's picture

Dude, if everything what you've said was true. you would probably leave in the stone age walking in the woods naked and eating your GOLD.

Thu, 09/22/2011 - 16:41 | 1698786 MsCreant
MsCreant's picture

And then he would shit gold!! Think about it.

Thu, 09/22/2011 - 14:49 | 1698166 Edward Fiatski
Edward Fiatski's picture

You don't know who the Swiss actually are. Remember those j00s' teeth being smuggled via BIS in good ole 1939-1945 times?

The CHF semi-peg viewed via the exports angle is a valid one, but there are never such trivial matters at stake when such moves are being made. The Swiss frank was pegged to the Euro in the event of a financial collapse in Europe, which the Swiss already knew would happen and have discussed with their colleagues at the ECB.

USD is king now.


Think very carefully for a second about this Novus Ordo Seclorum.

Thu, 09/22/2011 - 23:16 | 1699835 CompassionateFascist
CompassionateFascist's picture

"King", i.e., last port in the storm....

Thu, 09/22/2011 - 14:48 | 1698172 Nothing To See Here
Nothing To See Here's picture

What I suggested at that time was not that they realized that they had a too strong currency, but rather that the weak currency policies everywhere else forced their hand. And in some way, I get to agree with you that you can see why they chose to do something.

It's a bit like a country which has a good regulatory environment is likely to attract more investments and is thus going to suffer more in a worldwide crash even though it had the good policy.

What this tells me is that free markets work if everyone plays the game. Otherwise, the thugs always create the incentives to cheat the game and it spirals out of control. We're fucked.

Thu, 09/22/2011 - 14:14 | 1697986 Edward Fiatski
Edward Fiatski's picture

Ho ho ho, almost forgot: with oil being traded in USDs and all, major towelhead countries are getting their trade balances collapsed, thus we can get a genocidal war or two in that general region of the world.

Thu, 09/22/2011 - 14:32 | 1698077 Cash_is_Trash
Cash_is_Trash's picture

I am long towelhead helmets.

Kashmir, bitchez

Thu, 09/22/2011 - 15:42 | 1698452 I Got Worms
I Got Worms's picture

Looking for a bread helmet ETF.

Thu, 09/22/2011 - 16:23 | 1698712 slewie the pi-rat
slewie the pi-rat's picture

slewie's goin w/  the sourdough round & the cinnabon ear protectors

cali-egyptian chic


Thu, 09/22/2011 - 14:10 | 1697962 unky
unky's picture

Silver will be lower than the magical $36 any minute now..

Thu, 09/22/2011 - 14:19 | 1698016 Ms. Erable
Ms. Erable's picture

Silver below $36 is what's called a 'discount purchasing opportunity'.

Thu, 09/22/2011 - 14:29 | 1698061 tmosley
tmosley's picture

It is "magical" because that is the level that "Wynter Benton" claimed would trigger the execution of silver derivatives contracts (after silver traded above that level for 60 trading days straight).  Dipping below $36 supposedly resets that clock.

Probably BS, if you ask me.

Thu, 09/22/2011 - 14:45 | 1698162 Snidley Whipsnae
Snidley Whipsnae's picture

'London Trader' claimed that support for gold would be good around $1730 because many high tonnage buy orders were waiting in that area. Big buy orders mostly from China, SE Asia, Mid East... the usual people that know what real money is.

So far, looks like LT is correct.

Meanwhile, more PMs flying away to the East.

Thu, 09/22/2011 - 14:49 | 1698183 pods
pods's picture

Is Wynter Benton any relation to Leo Wanta?


Thu, 09/22/2011 - 15:13 | 1698293 SilverRhino
SilverRhino's picture
Silver Bid: 35.84 Ask: 35.94 Change:  -4.55


Looks like they reset the clock.   Fuckers. 

Thu, 09/22/2011 - 15:44 | 1698460 I Got Worms
I Got Worms's picture

Check out Ebay - folks are still paying 43$ for an oz. $46, if you include 3$ for shipping.

Thu, 09/22/2011 - 14:25 | 1698044 IQ 145
IQ 145's picture

Bought December Silver this morning, @36.74; 4;03 HST; guess again.

Thu, 09/22/2011 - 15:56 | 1698540 RockyRacoon
RockyRacoon's picture

Ooooh.   Electronic silver.  Now there's a sound "investment".

Thu, 09/22/2011 - 14:26 | 1698050 fuu
fuu's picture

Bouncy bouncy.

Fri, 09/23/2011 - 06:57 | 1700280 polak potrafi
polak potrafi's picture

thanks for the warning

hope the slide is over for the week

Thu, 09/22/2011 - 14:10 | 1697964 Robslob
Robslob's picture

Silver bitchez?

Thu, 09/22/2011 - 14:29 | 1698063 SumSUN
SumSUN's picture

Even though silver dropped 4 dollars today, it only came down 2 dollars at the place I buy coins.

Thu, 09/22/2011 - 22:31 | 1699736 chindit13
chindit13's picture

Try to sell your dealer a coin and you'll get a more clear idea of how far silver fell.  I'm guessing it is pretty darn close to that "paper price".

Thu, 09/22/2011 - 14:11 | 1697970 DonutBoy
DonutBoy's picture

This is not impressive, it's a rationalization.  If you'd written that the Swiss would put a floor under EUR/CHF and that gold would immediately fall, that would have been something.  This is hand-waving after the fact.

Thu, 09/22/2011 - 14:19 | 1698007 El Gato
El Gato's picture

QE^(1/0): Spot fucking on. Like people who follow the cult of Jesus Christ: "In retrospect [and 2,000yrs since the dude was alive], he probably DID perform all those miracles."

Thu, 09/22/2011 - 14:33 | 1698086 DaveyJones
DaveyJones's picture

in 2000 years will that comment make sense?

Thu, 09/22/2011 - 15:01 | 1698248 El Gato
El Gato's picture

I think in 2,000 years people will have moved on to one of many of their next gods

Thu, 09/22/2011 - 14:42 | 1698142 Pladizow
Pladizow's picture

The Easter Bunny, Santa Claus, the Tooth Fairy and Jesus Christ - NONE of them ever existed outside of the imagination.

Jesus Christ is simply the Sun anthropomorphised.

Thu, 09/22/2011 - 15:48 | 1698483 HeNateMe
HeNateMe's picture

Hmmm.  Maybe you don't exist outside my imagination.  Boooyahhh!


Thu, 09/22/2011 - 21:30 | 1699575 Jerome Lester H...
Jerome Lester Horwitz's picture

You must not be aware of Josephus.

Thu, 09/22/2011 - 14:29 | 1698065 IQ 145
IQ 145's picture

Another thing that was impressive was me coming on this blog and telling you to sell CHF/USD at the day and the hour when you could do this without even having a stop loss; this was huge, huge trade. This was the day it went vertical above 1.40; The authors statement that you can't make money in these markets is complete shit. It's the same as always; short the tulips when the sheeple all run in one direction; and buy the dips when they are full of remorse and they all blow out together. NOthings any different , at all.

Thu, 09/22/2011 - 14:54 | 1698206 Rick64
Rick64's picture

Are you still short treasuries?

Thu, 09/22/2011 - 16:28 | 1698710 MichaelG
MichaelG's picture

That's fine if all you care about is the next 36 hours. This time IS different - it's much, much worse. Not one of the '08 problems has been solved, merely postponed, and new ones crop up everyday.

Which is not to say Armageddon is coming in 37 hours. We used to live under constant threat of nuclear war. If the entire global financial system crashes, it will be bad, but it won't be as bad as that. (However, your BAC shares at 6.07 probably won't be a great deal of use.)

Thu, 09/22/2011 - 14:12 | 1697972 HpDeskjet
HpDeskjet's picture

How hard is it to understand that everything with a $-price tag, will go down in price now we are experiencing a massive credit crunch as the FED does not engage in more QE (for the moment). This has nothing to do with "manipulators trying to hold the price of gold down". Sooner or later, the FED might engage another huge printing program, until that time expect everything priced in $ to go down (including gold).

Thu, 09/22/2011 - 14:18 | 1698005 Zola
Zola's picture

Only an idiot would take the TLT as a greater safe haven than gold or dividend paying gold stocks

Thu, 09/22/2011 - 14:25 | 1698043 HpDeskjet
HpDeskjet's picture

Its not about "fundamentals" or "investing". This is about 1) liquidity => US Treasuries are still the most liquid market in the world. So if you hold those, it's very easy to start buying cheap things in a while (like high dividend paying quality stocks) and 2) return OF your money not ON your money. Where would you rather put your money? In an insolvent fuked up bank, or a liquid instrument that (for now) has no default risk. Everybody knows US has budget issues, but defaulting is simply impossible in the foreseeable future. People don't buy bonds to hold them for X years.

Thu, 09/22/2011 - 14:32 | 1698083 IQ 145
IQ 145's picture

Of course this is correct; but you're disturbing the Zeroists; who are having fun predicting the end of the world again. They have successfully predicted the last 13 ends of the world, you know.

Thu, 09/22/2011 - 15:00 | 1698244 Dapper Dan
Dapper Dan's picture

With your IQ you should understand the implications of the following press release, (if confirmed)

GENEVA (AP) -- Scientists at the world's largest physics lab say they have clocked subatomic particles traveling faster than light, a feat that - if true - would break a fundamental pillar of science.

For the record, I predict the end of the world,  eventually.

Thu, 09/22/2011 - 15:35 | 1698406 Uncle Remus
Uncle Remus's picture


Thu, 09/22/2011 - 15:37 | 1698425 sgorem
sgorem's picture

sub atomic gold particles, bitches!!!!!!!!!!!!!!!!!!!

Thu, 09/22/2011 - 17:13 | 1698910 polak potrafi
polak potrafi's picture

... ucieszyc sie z wielkiego odkrycia


Finally, the curvature of space gives us back some time. The conference from CERN

New results from OPERA on neutrino properties

scheduled for tomorrow 16-18 local time (with a webcast).

Good bye flatsos - you may join the flat-Earth section together with Ajnsztajn.

There may be some serious shifts in some fat research funds pretty soon.

Neutrinos are not massless.

Even light can move faster than light.


Thanks for the only good news today


ps. by the way, even those Feynman path integrals were going over all possible paths assuming unbounded speeds... we'are living in an age with no limits :)

Fri, 09/23/2011 - 10:33 | 1701064 HoardeBilly
HoardeBilly's picture

Dammit!  When did they deregulate Physics?  I musta missed it...

Thu, 09/22/2011 - 16:25 | 1698721 Smiddywesson
Smiddywesson's picture

Acknowledging that fiat currencies fail is not predicting the end of the world. 

Acknowledging that financial systems fail is not predicting the end of the world. 

Acknowledging that highly specialized and fragile civilization fail is just acknowledging history.

These things have happened to every fiat currency, financial system, and civilization in recorded history.  If you want to trivialize the discussion by saying it is alarmist, you will be proven wrong in the end, probably a whole lot sooner than you appear to believe.

Thu, 09/22/2011 - 14:56 | 1698218 Sophist Economicus
Sophist Economicus's picture

Sorry, this argument fails in 'real terms'. Bonds are subject to the same price shocks as any other investment if you don't hold them to maturity (as you suggest). Bonds mirror the dollar in investment brilliance- i.e., it sucked, sucks, and will suck. And unless you get on and out of these instruments with precision, you will be in no better position to buy things 'cheaper' than anybody else

Thu, 09/22/2011 - 15:00 | 1698242 fdisk
fdisk's picture

I dunno Kimberly Clark KMB down today 0.60%
I sold it when Market was higher and it's even higher today.
Nice div. too. Poor Silver, I'm loosing BIG today.. Few k
OZ and drop 4+$ making a large dent.

Thu, 09/22/2011 - 15:59 | 1698560 RockyRacoon
RockyRacoon's picture

That's odd.   The stack of American Silver Eagles here on my desk hasn't changed a bit.

Thu, 09/22/2011 - 16:26 | 1698729 Smiddywesson
Smiddywesson's picture

Absolutely Rocky, every time I get burned playing with paper, I just go home and count my physical.  Paper is for trading, physical is for the end game.

Thu, 09/22/2011 - 14:19 | 1698012 bgilliam83
bgilliam83's picture

No.  We are at the point major companies will go out of business soon. If supply of products goes down, that will obviously be inflationary for real goods.  That is your hyperinflationary depression right?

Thu, 09/22/2011 - 15:36 | 1698417 Uncle Remus
Uncle Remus's picture

Bring out your dead.

Thu, 09/22/2011 - 14:25 | 1698041 Sequitur
Sequitur's picture

I agree with you HP. This is deflation. Many posters here talk about "money printing." Well look at money supply, it's nothing compared to the credit markets and the dark derivative pools. It's credit that is getting crushed. You can see it in your neighboorhood, with home prices getting crushed.

Everything is going down in price, which is why king dollar may reign supreme for quite a while. For those with cash, we may have buying opportunities of a lifetime.

Thu, 09/22/2011 - 14:28 | 1698058 HpDeskjet
HpDeskjet's picture

Exactly, wait for dividend yields to reach 10% or Shiller P/E's below 8 and buy like a mad men. Same for HY, spreads might reach 12-14% again soon (now 8,5%) etc.

Thu, 09/22/2011 - 14:35 | 1698089 bgilliam83
bgilliam83's picture

The only mad men would be those in paper while the world keeps inching ever closer to the Minsky Moment.  Fail.  There will be no deflation on Ben Bernank's watch.  Think about what you just said!

Thu, 09/22/2011 - 14:43 | 1698150 HpDeskjet
HpDeskjet's picture

In what way does that statement conflict "my" idea? I also think we won't have years of deflation, but at periods we will. Now is such a period. Did you read the ZH-piece about imploding of the shadowbanking sector in Q2? In a world of positive (but not ultrahigh inflation) quality stocks and HY will be good buys soon.

Thu, 09/22/2011 - 15:37 | 1698349 Sophist Economicus
Sophist Economicus's picture

Yes Yes.   It will be an ideal time.   Those with GUARANTEED dollar streams -- welfare recipients, those on unemployment, social security, federal employees and those on those fat government pensions receiving FRNs are going to have a cashflow stream which will allow them to buy stuff on the cheap...They will inherit the earth...LOL

Thu, 09/22/2011 - 14:51 | 1698165 Smiddywesson
Smiddywesson's picture

If you still think gold isn't manipulated after seeing it plummet like a stone seconds before the SNB move, then you never will. 

This crisis has not produced false evidence of price manipulation.  This is business as usual on a larger scale.  The crisis has made the manipulators desperate, and it thereby revealed price manipulation that occurs on all time frames, all of the time. 

A falling tide uncovers the rocks, including the ponzi schemes, corporate fraud, and price manipulation.

Thu, 09/22/2011 - 14:15 | 1697977 Hugh G Rection
Hugh G Rection's picture

BAC down to 6.03, Moynihan BAC (blood alcohol content) to surpass stock, give it 2 months.

Thu, 09/22/2011 - 14:17 | 1698001 Spastica Rex
Spastica Rex's picture


Thu, 09/22/2011 - 14:12 | 1697978 vegas
vegas's picture

I like what is written, but I have been around too long to accept the premise that "they" can only win battles and not the war. BS. Sounds like you are talking your position.

A famous moron once said., "in the long run we are all dead". In one respect he was right. After I'm gone, what do I care about what happens? I care about the next trade.

Since the modern financial era [circa 1980] every time somebody says "this time it's different", they always end up eating short positions that are disastrous.

Maybe this time it is different, but betting on the end of the world is a wrong way bet. Remember, it can only happen once. Then what?

Thu, 09/22/2011 - 14:25 | 1698047 Yardstick of Ci...
Yardstick of Civilization's picture

Agreed in all respects.  If you bet on the end of the world and win, you lose along with everyone else.

"On a long enough timeline, the survival rate for everyone drops to zero."

Thu, 09/22/2011 - 14:52 | 1698190 narapoiddyslexia
narapoiddyslexia's picture

Betting on gold isn't necessarily betting on the end of the world. Some may buy gold with that in mind. More rational, however, is the bet against the fiat money system. Fiat systems have always failed in the past. Every time.

Turning your assertion around, then, makes sense. Why should this time be different for fiat money systems? Why will this fiat money system survive when all others have failed? 

In this sense, betting on gold isn't betting on the end of the world. To the contrary, its a bet that the world will survive the fiat money system.

Thu, 09/22/2011 - 15:10 | 1698287 Smiddywesson
Smiddywesson's picture

Nara's right too.  If you are a trader, then trade.  In such a case, you really don't care if you are making money off of treasuries, LULU, or gold.  Even if all currencies are being debased, you are racing ahead of the devaluation (if you win).

However, when a fiat currency fails, you darned well better be in a safe position.  Usually that means another fiat currency.  However, ALL fiat currencies are failing now.  Fiat always fails.  I think the average life span is something like 27 years.  Nobody knows what will happen when they all fail together.  Logic tells me that the more intertwined the system is, the larger the collapse and the less warning we will have.  This makes preservation of wealth a risky proposition if one is 100% a trader.

Your positions are not inconsistent, so you can stop calling each other names.  For maximum safety one must sit in PMs.  For maximum return, one must trade.  Eventually that will flip flop, and maximum returns will go to the holder of PMs, but not until the system comes to an end.  That end is ensured, and it looks like it accelerating towards us.  No, it's not the end of the world, but it certainly will be the end of the line for those who don't study history and say it can't happen, or rationalize and say the end of the financial system would wipe everyone out anyway so you go full retard into Netflix or LULU.  If you choose not to hold PMs, that's your choice. 

Thu, 09/22/2011 - 15:55 | 1698536 AustriAnnie
AustriAnnie's picture

Agree w/Smiddy.  "positions are not inconsistent" Perhaps we should look at "the end of the world" to mean "the end of this empire and its fiat currency".  I think then the two above arguments would agree. It isn't the end of the world, but it sure as hell is not a continuation of life as we know it.

Furthermore, it doesn't matter if the Fed wins some battles before it loses the war. We are the ones in the trenches anyway, so we try to avoid being cannon fodder. In a war the goal is to survive minute by minute, and try to stand in a spot where fewer bullets are flying, not to bet wholly on the outcome of the entire battle/war.

Thu, 09/22/2011 - 14:57 | 1698213 Crisismode
Crisismode's picture

Yes. the actual end of the world will happen only once.


But then again, there have been many, many societies, empires, and civilizations that have crashed and burned over time, with hundreds of millions of people suffering starvation, disease, and an agonizing death.

But you are saying this time it is different and can never happen again.

I'm taking the other side of that trade.

Thu, 09/22/2011 - 15:17 | 1698318 Smiddywesson
Smiddywesson's picture

The number of examples in history of holders of PMs being numbered among the survivors of all sorts of mayhem invalidates the argument that a crisis, esp. a financial crisis, takes everyone out.  That stupid argument is like saying you shouldn't wear your seatbelt because you might get killed anyway while wearing it.  This time is not different.  If the system melts down, holders of gold and silver win.  It's that simple.  Yes they will have missed out on some great and risky trades, but so what?  There is always another trade out there after the inevitable blow up.  You don't have to fish in a hurricane. 

Thu, 09/22/2011 - 14:14 | 1697981 Dr. Engali
Dr. Engali's picture

Does anybody else feel like we are living the seventies again? Rapid inflation, depreciating dollar ,gold and silver soaring, nuclear accidents(fukashima/ 3 mile island), space debris falling on us (skylab) and one shitty ass president. All we need now is some really bad hair , bad music and fucked up clothes.  Check ,check ,and check.

Thu, 09/22/2011 - 14:17 | 1698003 Comay Mierda
Comay Mierda's picture

get me some acid and hookers with hairy bushes

Thu, 09/22/2011 - 14:26 | 1698048 Dr. Engali
Dr. Engali's picture

I prefer the smooth cut golf greens over the gnarly hairy bushes.

Thu, 09/22/2011 - 14:42 | 1698145 phyuckyiu
phyuckyiu's picture

That was the dog you were fucking but you were on so many micrograms I figured it was best not to bring it up.

Thu, 09/22/2011 - 14:37 | 1698110 IQ 145
IQ 145's picture

It's not the seventies. Bad music? you want to research that again? nuclear accidents=media events; there are always media events; as for the shitty ass President; this one is in a world of his own.

Thu, 09/22/2011 - 15:22 | 1698344 Smiddywesson
Smiddywesson's picture


Does anybody else feel like we are living the seventies again? ...All we need now is some really bad hair , bad music and fucked up clothes.  Check ,check ,and check.

Bad hair? At this point I'd I settle for ANY hair.

Bring back disco....Whew!!!

Thu, 09/22/2011 - 16:55 | 1698850 hallofthemounta...
hallofthemountaingrill's picture

Bad music in the 70s ??? 

Thu, 09/22/2011 - 19:50 | 1699334 ToddANON
ToddANON's picture

hipsters, hipsters and hipsters

Thu, 09/22/2011 - 14:14 | 1697985 monopoly
monopoly's picture

Now, does anyone Not understand that you never do any margin. Even miners, you get blown away and out of the game that way. Game, set, Match. Am down a bunch today but all cash positions. I can find that port in the storm.

And they are all talking about gold on the idiot channel and do not have a clue what they are talking about. Hang in there, this is far from over. Glad no one here owns a bank. :)

Thu, 09/22/2011 - 14:15 | 1697992 rambler6421
rambler6421's picture

Time to buy with both hands.

Thu, 09/22/2011 - 15:27 | 1698353 Smiddywesson
Smiddywesson's picture

Maybe yes, maybe no. I didn't like the price action on gold in the afternoon session.  Do you think they won't attack it when it is down in the low volume overnight session?

Reverse logic rules right now.  Gold should recover quickly, therefore, it won't.  I say they kick it around for a day or so.

The central banks cannot allow it to be the safety trade and will set an example right now.

Thu, 09/22/2011 - 14:16 | 1697993 bgilliam83
bgilliam83's picture

glad I bought spam

Thu, 09/22/2011 - 14:21 | 1698022 mt paul
mt paul's picture

you and me both brother..

wish they sold walrus in the can ..

till then ..spam will have to do

Thu, 09/22/2011 - 14:16 | 1697994 Let them eat iPads
Let them eat iPads's picture

If you experience an erection lasting longer than 4 hours, please stop watching your FAZ shares immediately.

Thu, 09/22/2011 - 14:26 | 1698049 vast-dom
vast-dom's picture



FAZ rulez biyatches!

Thu, 09/22/2011 - 14:18 | 1698004 Yardstick of Ci...
Yardstick of Civilization's picture

Of course the Fed was (is) trying to kill gold.  And they won't run out ammo any time soon.  I agree that the Fed can win battles, but they can also win the war.  That's part of knowing your enemy.  If they break gold's back here and kill confidence in PMs, they've bought time . . . and that's all it takes.  If the Fed can repeatedly buy time into infinity, it wins, because we will always be playing under this system.

Thu, 09/22/2011 - 14:54 | 1698205 junkyardjack
junkyardjack's picture

Agreed, the fed will have to take down commodities including PMs before they can start their next phase of QE.  The easy way to do that is to let stocks collapse and people will start selling their gold for margin calls.  Gold's been looking weak at these levels for a while, volume causes it to collapse.  It won't take much before people lose hope in it and it falls through the floor.  Wait for it to stabilize and then restablish a position.

Thu, 09/22/2011 - 16:41 | 1698789 privatebanker55
privatebanker55's picture

The PM's will continue to be the investment du jour for those who are going long for keeps....take the physical and sit on it. The toppy part of the pricing is always out to those in the futures markets....from my vantage, the smart money has been accumulating, coins, wafers, bars and bullion for the past three years and todays action is a foreseeable event. Mass hysteria.

Thu, 09/22/2011 - 14:56 | 1698219 Snidley Whipsnae
Snidley Whipsnae's picture

Yardstick... The Fed isn't fighting the Western gold buyers which are a small % of those buying gold.

The Fed is up against the East... which has a long history of PM accumulation and hundreds of fiat currency failures in it's history.

The East has planned well and has every intention of winning this war.

Average life span of a fiat currency = 40 yrs

PMs have been money for 5,000 yrs

Thu, 09/22/2011 - 15:36 | 1698416 Smiddywesson
Smiddywesson's picture

Yardstick had one thing right, it's all about kicking the can so they can execute their long range plan.

The Fed is up against the East... which has a long history of PM accumulation and hundreds of fiat currency failures in it's history.

Yup, Snidley, 600 years of failed fiat currencies in China.  China knows what is coming.  The Fed and the ECB do not intend to let China take over the action and are kicking the can and buying gold on suppressed prices.  China is trying to stick their thumb in their eyes by buying up all the gold they can and upsetting the suppression mechanism.  My money is on the combined powers of the Fed and the ECB, but it may be a Phyrric victory because they are impoverishing our collective populations.  Maybe that's intentional.  Maybe they want our std of living down (and China's up) when they push the reset button.

Thu, 09/22/2011 - 16:58 | 1698865 Incubus
Incubus's picture

Normalization of societies must happen in a global economy. 


You can't have one end living it up on a permanent basis: "luxury" is cyclical.  IF your standard of living outpaces the rest of the world, then you get knocked down a few notches, because they can find any one of the other 7 billion people on the planet to do your job for less, so long as they've been starving long enough. 


Americans will "recover" in a globalist model--but that recovery won't be to a pre-globalized American standard.  It'll be to a standard that's controllable by the international corporations.  And don't expect that recovery until we've been starved for a few decades. 

When we're willing to work for a fifth of what a chinaman does, we'll see the jobs come flooding back in; lather, rinse, repeat.

Thu, 09/22/2011 - 14:19 | 1698008 I am a Man I am...
I am a Man I am Forty's picture

municipal bonds still kicking ass like i said they would, touchdown dance, when is ZH gonna come out and say that they were wrong and that Meredith Whitney doesn't know what she is talking about

Thu, 09/22/2011 - 15:15 | 1698303 DCFusor
DCFusor's picture

Never.  If anything, they'll wait till they aren't kicking ass, then say you were wrong.  Or just know, like rosie saying the other day that the fed was sure to shock and awe?  Or that a huge pullback in gold is "nothing".  They don't believe in timing and scaliping, it seems.  I can't make enough money without doing it myself.  Sell high, buy *more* when it's low.  Not just hold forever.

Thu, 09/22/2011 - 15:52 | 1698500 I Got Worms
I Got Worms's picture

FYI - Aggies gonna kick dat Cowboy ass on Saturday...

Thu, 09/22/2011 - 14:19 | 1698009 Conax
Conax's picture

Might be time to truck the stack to Mexico. I hear the weather is pretty decent in the winter.

Thu, 09/22/2011 - 14:58 | 1698229 Snidley Whipsnae
Snidley Whipsnae's picture

Read this first... From someone who has lived there a long time.

Thu, 09/22/2011 - 15:50 | 1698493 Uncle Remus
Uncle Remus's picture

Even Fred has been sounding gloomy lately.

Thu, 09/22/2011 - 14:19 | 1698010 Little John
Little John's picture

Any body wanna buy one? ....anybody?...anybody at all?

              Brian M

Thu, 09/22/2011 - 14:19 | 1698014 GottaBKiddn
GottaBKiddn's picture

Great article, Mike. The graphs say it all.

Thu, 09/22/2011 - 14:20 | 1698019 TheSilverJournal
TheSilverJournal's picture

When does the Fed announce QE4?..Dow 9,000? So in 3 weeks?

Thu, 09/22/2011 - 14:24 | 1698031 Edward Fiatski
Edward Fiatski's picture

Could be October after a big sell off. Unless, of course, there are more plans for the strong DXY to be used abroad, March 2011-Libyan-Egyptian style.

Thu, 09/22/2011 - 14:21 | 1698023 Cliff Claven Cheers
Cliff Claven Cheers's picture

Thanks for shedding some light.

Thu, 09/22/2011 - 14:22 | 1698026 hustler etiquette
hustler etiquette's picture

Thank you

Thu, 09/22/2011 - 14:24 | 1698036 dick cheneys ghost
dick cheneys ghost's picture

A Recession within a Depression.......... brilliant!!

Thu, 09/22/2011 - 14:25 | 1698039 fiddler_on_the_roof
fiddler_on_the_roof's picture

I think I made a small mistake in Gold. I never thought Gold could be brought down since this is Indian buying season. What paper masters have done is instead raise the dollar so that the Price of Gold in Indian Rupees is still at the high... Let see how this goes. US$ rose from Rs.44/dollar to Rs.49/dollar in just 2 weeks - astonishing.

Thu, 09/22/2011 - 14:50 | 1698185 Citxmech
Citxmech's picture

No worries here.  Bringing down the paper gold market is providing us with a great opportunity to trade FRNs for physical.  If my stack is worth a little less because of foreign currancy devaluation - I'll just buy my physical preps at a discount on this DXY bounce.  Win win for me either way.  No way I'd unload one oz of physical for at least a year or more (and only then to trade for property).

We are no where near the end-game here IMHO.  This it just the transition from the first to second quarter.  Half-time show is going to be a doozy I hear.  Make sure you're ready. . .

Thu, 09/22/2011 - 14:26 | 1698052 ArkansasAngie
ArkansasAngie's picture

That's all we are to the Fed ... Statistics and collateral damage.

Cannon fodder?

How about those Repugs initiate an audit the Fed push instead of writing little ditties with no rhyme or reason.  Dear Ben ... isn't going to cut it.

Thu, 09/22/2011 - 14:26 | 1698053 vegas
vegas's picture

How many Euro short positions just got blown up in the last 5 minute FUBAR candlestick? I rest my case.

Thu, 09/22/2011 - 14:29 | 1698062 Sequitur
Sequitur's picture

Bitch is coming back off the lows . . . .

Thu, 09/22/2011 - 14:30 | 1698067 Dick Darlington
Dick Darlington's picture

Thanks again Mike for your words of wisdom. Much appreciated!

Thu, 09/22/2011 - 14:30 | 1698068 FreudianSlip
FreudianSlip's picture

By way of deception thou shalt do war.


Put the deception in the world media and then retribution within 48 hours.


Effective, while most never comprehend.

Thu, 09/22/2011 - 15:39 | 1698433 Old. No. 7
Old. No. 7's picture

Shake that moneymaker.

Thu, 09/22/2011 - 14:31 | 1698069 Manthong
Manthong's picture

I'll bet there are an awful lot of Asians that are going to wake up tonight and feel like it's Christmas.

Thu, 09/22/2011 - 14:33 | 1698076 King_of_simpletons
King_of_simpletons's picture

Absolutely priceless !!

and this is brilliant !!!!!!!!!!!!!!!!!!!!!!!!


Geithner seems to abhor austerity and sacrifice, preferring any strategy which keeps debt growing to fund the investment banking, security, prisons and war industries on which the American economy now depends for so much of its GDP.
- From “London Banker” Blog, link to full piece is here


It takes a PhD in economics not to be able to understand the obvious.
- Irving Kristol

Thu, 09/22/2011 - 15:09 | 1698277 Cpl Hicks
Cpl Hicks's picture

Priceless- yes, Brilliant- yes.

But isn't it really just plain obvious?

Thu, 09/22/2011 - 15:48 | 1698482 King_of_simpletons
King_of_simpletons's picture

Yes. It is.

In the land where they speak many falsities, plain speak is refreshing for a change.

Thu, 09/22/2011 - 14:32 | 1698080 gatorontheloose
gatorontheloose's picture

get off the lows, and on your knees.  bitchez.

Thu, 09/22/2011 - 14:33 | 1698085 stormsailor
stormsailor's picture

AT 1422 HRS AND 1423 HRS the /es spiked up more than 14 points.  you want to see manipulation, there it is in real time. 

Thu, 09/22/2011 - 14:40 | 1698133 IQ 145
IQ 145's picture

It's called a market; dude; it runs on bids; just get over it.

Thu, 09/22/2011 - 15:03 | 1698256 erik
erik's picture

ahh yes, the patron(izing) saint returns.  please brag some more about how you need to go to confessional because you're the greatest trader on earth, and how the IQ scale doesn't go high enough to fit you in.

Thu, 09/22/2011 - 14:35 | 1698100 economicfreefall
economicfreefall's picture

It seemed like investors initially looked for the safe haven that gold and silver have shown to be since summer. But as soon as the huge attack was coordinated on gold yesterday - yes, I believe it was a deliberate take down in an attempt to smother gold's safe haven bids and make the news from the Fed look "bad for gold" - the algorithms did what they do best: brain-dead herd trading.

I got some charts which I would like to share, but it doesn't seem like ZH allows pictures in the comments :S.

The analyses have been pretty accurate in the past on gold bottoms, so you can check it out if u want:P





Thu, 09/22/2011 - 14:36 | 1698108 PaperBear
PaperBear's picture

On the comex the total registered silver lowers to 31.04 million oz.

With silver down to $36/oz today someone could fully buy this market with only $1.11 billion – a ridiculously small amount of currency when you compare it with $200 trillion of value in the money markets – 0.000005%. No bubble in silver.

Weeks without silver leaving the dealer and now we have two consecutive days of big withdrawals – 600,000 on Tuesday.

Thu, 09/22/2011 - 14:37 | 1698111 Lazane
Lazane's picture

The final financial and economic onslaught will feature the dollar as the last dog standing and 

unless you fight these battles like you are already a deadman, you can never win this war.

Thu, 09/22/2011 - 14:40 | 1698126 Bansters-in-my-...
Bansters-in-my- feces's picture

Central Banks?Govt......

Your enemy...????

You bet your A$$.

Thu, 09/22/2011 - 14:42 | 1698129 DaveyJones
DaveyJones's picture

You mean Goldman Sachs and the US dollar are not the only way to define and measure reality? Shit

You can only export lies for so long. We will lose this war

Thu, 09/22/2011 - 14:41 | 1698134 stateside
stateside's picture

Obama speaking live now in Cincinnati near the Brent Spence Bridge - I can see him from my office window.  He looks happy.  All the frickin roads are shut down so there goes frickin rush hour.  Why me?


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