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Global Dollar Liquidity Freeze Leads To Pervasive Sell Off
Just two charts confirming that we have entered a complete USD liquidity lock up, and that the global coordinated USD swap line rescue operation will be launched any minute: both the US FRA-OIS and the EUR Basis Swap are at multi year extremes. The entire dollar funding market is now at levels not seen since the Lehman collapse and is effectively frozen. Only this time it is much, much worse as never before has the global central bank cadre been assumed and implied to be backstopping the global liquidity cascade. Ex-out the implied backstop by the monetary authorities, and liquidity is now locked up more than ever in the history of capital markets. The liquidity crunch explains why everyone is liquidating the one asset that is performing best YTD to procure much needed dollars - gold.
FRA-OIS 3M:
FRA-OIS 3M - LT:
And the EUR Basis Swap:
Charts: Bloomberg
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The best strategy for anyone in a major city is: GET OUT OF THERE. NOW.
The s**t is about to hit the fan :-)
Something tells me you're actually serious. That's pure foolishness and how things start getting out of hand. Cool down young man, we've been through this before.
Sadly not, we have never been through this before, not ever. The global economy is now so interconnected, the financial system so large and complex, and IT and communications so pervasive and instant, that this will unravel with devastating and rapid impact on society.
I hope what follows is a whole lot fairer, more democratic and stable than the pile of s**t which has brought us to this. A lot of people deserve to hang for their role.
Ipods and texting they can live without. Disrupt the food and oil chain, shut down the ATM's, and then we're in for a rough time. But we're not close to that just yet as the money is still flowing. When you hear Cramer on primetime and every news station talking about global economics and freezing credit lines, then you can think about leaving the city.
It will be too late then. This will fall fast and suddenly, like a cliff going into the sea.
you mean get in there now! Blood on the streets is when you buy! And hot young protester pussy too! the city is where its at
Ask me if I give a flying fuck about the fiat price of gold, I fucking dare you.
What about the fiat price of gold...fish crackers? huh? got enough bling for those going into the collapse?
I just owned you bitch.
+1
Too bad, Venezuela's never getting their gold after this freeze.
still trading my fiat for metal, because the dealers keep taking it (suckers)~!
Just finished weighing my physical gold and silver this morning.
Yup, it still weighs the same as when I bought it.
Unfortunately, thanks to a boating accident this afternoon, it is now all at the bottom of the lake.
oops - double
Fucking weird how many people take their PM`s on small capsize-able boats these days!
Be prepared to pay windfall tax of 80% on your gold sales (if there is a record of a purchase with your dealer) as the derivative book on all those sovereigns that are about to blow up, is on the tax payers back via the BAC shuffle and somebody has to pay for it.
btw it matters not to the IRS where your gold sits, bottom of a lake, cat burglar etc. Pay up or show a sales receipt bitches lol
/sarc off or maybe not.
cue huge black market it gold, cue massive dollar sell off, cue everyone who can moving their gold out of the us (along with themelves), cue chinas gold reserves swelling
It`ll be taxed, and sure theyd like to do it at that kind of level, but Im not sure if they can
i'm pretty sure that he intends to hold onto his physical until we are through to the other side of what's coming and doesn't intend to sell his physicall in the midst of the chaos and dying dollar. just a guess though.
Every time I get a text from APMEX I know it is not a good thing. They always have a great sale right before a price drop, they seem to always know before the market dips. ?
FutureShock
they seem to always know before the market dips. ?
You think since their banker is JPM, MAY have something to do with it?.
QE3 is waiting in the wings.
Sandusky > Bernanke
Bernanke > Dead Man Walking
quick, sell everything...leveraged lemmings
QEIII bitchez!
libertarian86.blogspot.com
Great value for Silver : between 21 and 25 after going around 35-37 by the end of the year.
For gold : around 1600.
Who's trading the bat bullish on Silver?
Looks good to me though.
Okay, why do I suddenly get the feeling that this is "it"?
"It" being the point where everything suddenly goes fkin awol, collapses, panic stations, blaring sirens, infants start crying, men run around waving their hands until their heads explode, small woodland creatures start wearing hotpants and smoking cubans ... that sort of thing?
Why is it that I am getting that feeling?
I bet it is just a retest of the recent lows, not THE LOW of 2008.
I will probably go long risk when the market is down another five to ten percent.
LOL
really good weed?
Slewie; you slay me.
ever experienced a collapse? on WEED?
peyote
I've had that feeling since Bush announced the end of "capitalism."
http://www.youtube.com/watch?v=tCj3TXDSERg
The markets finally realized the germans mean what they say.
"No money printing."
"If you have a problem go talk to the IMF"
IMF solutions are deflationary.
Take your medicine, bitchez.
Arbeit macht frei
I must not be arbeiting nearly enough then.
Ring ring ring ring. Yeah this is Ben. What do you mean France has no dollars? You have a $300 billion swap line open. Panic to repatriate back into the Dollar? Fine. I'll ask Tim how to work the printing machine.
Swap taps wide open.
Damn EPA flow restrictors.
Time to call the ECB.
This is what happens when all the hedge funds "chasing performance" ramp the market up and then try to lock in their gains for the morning by beating everyone else out the door.
"much needed dollars" youve got THAT right.
The 2008 charters will love this: looks like the beginning of the plunge into Nov. 2008 has started again in 2011. I wonder how many traders are leveraging up shorts right now to ride the ES down below 1000.
This is going to make 2008 look like a bull market.
Gold:Dow 1:1 @ 5,000
This is the Secret Formula.
Youve got to get yourself an avatar with a name like Snake Plissken.
Look! The ocean is receding! Let's go get some seashells! *turns and runs for the hills*
While no doubt we could be looking at some heavy pressure to the downside I would not be borrowing to get short anything. The S&P below 1,000 assumes a free market. In this era that is a big assumption. If things get really serious I expect to see a lot of "rule changes", "frozen markets" and just about anything the CBs can think of to stop the selling. We all know how manipulated it was on the gradual melt up. How about the panic driven freefall.
ECB and FED are going to need to act soon or this market is going to completely fall apart.
And even if the ECB and FED do 'act', big deal whats that going to do? Theyve already 'acted' hundreds of times already every day for a few years and here we are at this miserable point.
How can there be a liquidity problem when the central banks can create endless liquidity for each other?
Don't get me wrong, I would love for there to be some rational market, but.....the only explanation I can come up with is that the big boys are pushing markets down to encourage us to take short positions, then squeezing us to get more juice.
I wanted to buy some BAC while it was down today because I knew they would come in to rescue it...but I didn't have the balls.
This is not an oil thread and I won't turn it into one. But just a brief note that liquidity issues means exploration can't get funded. For more than anyone else, this hits Russia.
Their presently producing fields are falling (absent drilling) about 8%/yr of that 10 million bpd production rate. With drilling, 5%/yr. (New fields and drilling combined get them to 0%). If there is no lending liquidity, the drilling and exploration does not get funded and they lose 800K/yr of production, which no one else is going to make up.
In Russia-speak, this is "we can maintain our present oil extraction rate if we have $23 billion of **investment** over the next 10 years".
The supposedly giant Khazakstahn field is now 4+ years behind schedule and $15 billion over budget. Not 1 drop produced so far.
Yeah. My recall is RDS has that development contract and is balking heavily at pouring more money down those hyper deep holes they drilled.
Kashagan. Another one of those just around the corner sources of 1.5 mbpd that never flow a drop.
The oil industry has just about as much bullshit hype in it as finance.
Any panic will be, first, in things the big banks buy: meaning sovereign debt, IG debt, and all that inter-bank lending. Maybe also oil.
Stocks, gold, silver are way down the list.
Except, that somebody liquidated a big amount of silver today, looks oversold due to a lot of stops being triggered on the way down - not really surprising, silver has been fairly stable/upwards trending the last month so I'd guess a lot of people bought at $33-34 and set their stops a couple dollars lower.
SILVER DROPPING LIKE IT"S HAWT!
What is "HAWT"?
More candy or I tear this bedroom APART.
I mean it, Mom. I mean, Ben.
Paging No Mas....come in No Mas....youre call from this morning 'Zerohedge is all doom and gloom calling for a collapse and thats never going to happen' seems to need an update...
it pisses me off that ZH looks like it's some sort of fearmonger simply because they present FACTS that the markets refuse to believe until the very last second (as if it's possible to believe or not believe in reality).
As Ayn would say: "We can evade reality, but we cannot evade the consequences of evading reality"
"I like to watch"......Chance the Gardener
Disclosure: Long Ammo
OT:
Tyler's gotta bust out the Ice-9 metaphors again.
OWS protesters arrested for tossing vinegar at the cops
lol...assault with a deadly salad dressing.
or maybe the cops looked hungry...you know what they say, no good deed go unpunished.
Those fat asses dont need anymore food......
Wouldn't have been any arrested if they had thrown donuts or pizza at them.
Not good. Not good at all.
But I'm glad this post isn't about the European Union of Distrust...
OT:
Anybody have thoughts on which small cap oil exploration co's will best benefit from the higher WTI prices from the pipeline reversal?
FST? KOG? Thoughts? Have I already missed the boat on this?
SD.
the GMCR trade didn't work out today...
Get your dollars here!! Get your dollars here!...I will break the liquidity freeze and sell all my dollars to any comers for $1.25 each...
Somewhere in here lies the answer to today's market move...what did the Twitter reading HFT algos see????
Today's Twitter TrendCloud
#17nunipublica #1DListeningParty #1Dmath AL West Bada Boom Bang Bang Pow Pow BBC Breakfast Benetton #Benetton BrazilMovesLikeDemi Caio Jr. Congrats Malaysia Cy Young de la Liga Nacional Dame Edna Dia da Criatividade #doguscicekacti Drake and Big Sean Enrique Urquijo Facebook Reveals Fool In Love Gary Pinkel Go Diego Go Golden Globes GoodMorning Everybody GoodMorning Everyone Google Music #GoogleMusic Gordon Taylor Happy Centennial Hola Carlos #HookMeUp How to Market to Baby Boomers Online Ian Kennedy Indonesia 2-2 Vietnam Indonesia vs Vietnam #itsabeautifulworldbecause Jean-Luc Delarue Just Get Over It Love A Woman Marouane Fellaini Max Payne 3 Microsoft Surface 2 Goes Niall and Liam Nicla Vassallo No The Boys #nomeolvido Northern Rock #OccupyBandNames Omega Psi Phi Omega Psi Phi Fraternity Ong Kim Swee Pat Cummins #perspolitie Pica-Pau #PickMeEllen Question For My Crush Santos de Brasil Sepp Blatter #sexiestmanalive #SiCrepusculoFueraMexicano #SouFelizPorque Steel Bridge Sunny Leone The NANNY Things That Need To Stop #ThoseThreeWords Titanic 3D Tokyo Sexwale Tom Fletcher #UNHATE User-Tracking Secrets Van Gaal Virgin Money #welshfilmsI'm sure it was 'Tokyo Sexwale'.
selll sellllllllllllllllll gold nowwwww!!!!!
Once the middle east is done diversifying their OIL Dollars watch EUR/USD and GBP/USD together with all assets being dumped whatever is left. Telling you.
- $2 STFW.
If you're shitting your pants over that get a couple paper dollars and wipe your ass.
Then sell everything. Sure there's people who will be happy to buy it for a reduced price.
As long as paper money rules the world then forget gold. Simply an investment. Nothing more nothing less.
You going to eat your gold bars once shit hits the fan? I bet you that with money I can buy more things when chaos breaks out than you with your gold bars....
You're not very good at hiding your identity, Ben. Or is it Timmah?
Fear not, the daily late day ramp is just around the corner. With the dow moving higher, ;iquidity will be eased. Ben said so.
Enjoy your Thanksgiving turkeys gentlemen... It might be rack of rat this time next year.
Anybody who believes in paper DESERVES to lose their wealth.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
The Bernancle is tapped out. The FED is leveraged 60-1.
Since almost nobody is dumb enough to go into debt to chase prices down in an overindebted system that is drowning in overproduction and overcapacity what can they do at this point?
It is stunning to watch how ignorant people are, and how they believe in fiat money because some celebrity endorsed it. The whole thing is crazy. Gold and Silver shall rise again.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
The Annunaki are hungry for gold which will make goldbugs extremely rich when they arrive next month on the brown dwarf or alernatively behind comet Elenin. This argument has been bolstered recently by the fact that Planet Earth has indeed an export surplus with other heavenly bodies.
And I had oatmeal and anchovies for breakfast today. Deal with it.
Posts like this are so sparse of detail and thought, it's apparant Content Liquidity for ZeroHedge has "locked up". I doubt 5% of the readers can even see the gibberish behind the post of such irrelevant charts. Shame on you Tyler.
Nowadays inflation is a totally manufactured fraud.
There is a studendous overabundance of everything.
Prices are being manipulated all over the spectrum.
Commodities are being warehoused and systematically fed into the physical market for them. It´s a train wreck waiting to happen. In the long run it´s impossible to rig markets. They will always eventually revert to a mean due to physical market price discovery. The more and the longer you mess with this natural market mechanism the more severe corrections will result.
Yes, but no matter what, an ounce of gold will ALWAYS get you a truly world class "massage treatment". :^)
Okay, I get it, paper prices aren't true values.
The true value is in your minds. And some day the true value and your mind might intersect.
Meanwhile, if you need to sell any of your PM's, no one will give you what you think the true value is.
Furthermore, the thieves who make these prices are buying private jets on our backs, whereas they should be going to jail.
Unlike the OWS protesters, I'm all for private jets if the money has been earned honestly. But this thievery by insiders needs to be stopped.
Prices are falling so obviously it makes no sense at all to buy overpriced stuff. Buying that stuff on credit is madness. Bidding up mostly useless metals at 5X what costs to extract them is totally pointless in this environment. The way it works is you conserve cash and wait for prices to fall. It´s elementary. In case you haven´t been paying attention, bond yields are about a 100-year low.
So, apparently, are the already-low IQs of certain posters.
wish i understood how to read those charts...anyone care to explain?
WHAT? Sending 2,500 Marines to Australia DOESN'T stop market meltdowns? :^)
Or... did that initiative spook the Chinese into locking their greenbacks up in some Fort Wu-Tang-Knox they have, resulting in a "global liquidity crisis"? ;^)
Because Marines in Australia might negatively affect Feng Shui, and therefore one must stop and take time to carefully consider before making one's next move, in playing Global ThermoLiquidity War. :^)
Yeah, what is that about, the Marines to AUS? Makey no sensey.
Better than Diego Garcia I suppose. Where are they supposed to be posted? Perth or Darwin? Hear are some possibles:
Perth:
Forward for Crisis in Iran, Saudi Arabia, Pakistan.
Forward for crisis in Thailand.
Forward for crisis in Indonesia/Singapore.
Forward for rapid evacuation in Afghan.
Darwin:
Forward for crisis in Taiwan. O'man screwed the pooch when NYT floated the trial balloon of a trillion in Chinese owned US debt for Taiwan. Really good idea.
Forward for crisis in Phillippines.
Forward for crisis in Korea.
Forward for crisis with Viet and Phil in SCS
The only thing that makes sense is the last one.
Is this happening because the Australians are too smart to get sucked into the "always the military solution" mentality?
I've held silver for a year. Meh. I'm trading out for Pb and some Au.
The system of chasing falling prices with increasing credit finally ran into a brick wall in 2009 in the US. Since then the ratio of total credit market debt to GDP has fallen from 350% to 340% in spite of a 40% increase in govt. debt over the period. So, the private sector has been deleveraging quite aggressively. This correction is likely to last at least 1-2 decades until it reaches sustainable levels.
The FED tried to interfere with this correction by QE1 and 2 and the Twist. As a result the FED is practically bankrupt. It´s leveraged 60-1 against its capital and can´t do jackshit except maybe drop cash out of black helicopters. But I guess when you´re faced with a demand failure for overpriced physical stuff in an overindebted system it doesn´t make a lot of sense to print more dollars. On the other hand you have Uncle Sam with its chronic trillion dollar deficits as long as the eye can see. Gotta fund that until you´re leveraged 200-1 ?
Goldman Sachs runs the government. I don´t think anybody can be in any doubt of this. It has regularily flushed its refuse right into Washington DC to the Treasury Department. The latest turd there is from the NY FED but it´s really the same.
Goldman Sachs runs a huge warehousing business where they manipulate commodities and create false inflation. This works with their buddies in the FED and govt. which have desperately been trying to create more credit to chase falling prices and debt liquidation.
I seriously doubt that this hopeless scam will end well. Most likely GS will go belly up in the next 2-3 years or sooner. The govt. will just raise taxes and or start WW3.
Pulled out of commodity closed end funds, that could/should have been possibly (in time or the twight zone) might have been worth something. Good ideas, in a still functioning economy...which we presently do not have. Lost around 20% of invested funds...figure that is enough sacriface to Moloch.
But the rest is going to just add to my physical silver...and minor gold physical holdings. Physical is the one investment that has paid off (started at $4 oz,my first 100z bar)...and the further (silver particularly) drops...the more I will buy.
Here's hoping for a near term silver collapse...the resserection into infinity can follow....anytime.
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Short crude oil. The world is swiming in oil as everything else. Its elevated price is just a scam. The probability of war is zero. Uncle Sam can´t go to war against Iran because both its flanks are insecure. The left flank goes to the Straits of Hormuz and if that is closed this means crude price $300 and Stalingrad for US forces in Iraq and other US vassal states in the gulf. As for the right flank that supply line goes through Pakistan. It´s shaky enough as it is.