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Mike Krieger: China Will Blink And Gold Will Soar

Tyler Durden's picture




 

Submitted by Michael Kriger of A Lightning War On Liberty blog,

Republics are created by the virtue, public spirit, and intelligence of the citizens. They fall, when the wise are banished from the public councils, because they dare to be honest, and the profligate are rewarded, because they flatter the people, in order to betray them.

- Justice Joseph Story

When it becomes serious, you have to lie.

- Jean Claude Juncker, Luxembourg PM and Head Euro-Zone Finance Minister in 2011

The Game Continues
I have no idea why anyone is making a big deal about The Bernank’s testimony to Congress today.  There was no way he was going to come out with anything meaningful.  The only thing our favorite Keynesian sorcerer wants to do is get through the session in as painless a manner as possible.  It would be completely foolish to rock the boat in any way during such testimony, as it would just invite all sorts of aggressive questions and make the entire thing more of a spectacle than it already is.  It would also increase the likelihood of a verbal blunder, so there is just no need.  In fact, I am 100% certain that The Bernank merely wants to toe the line as carefully as possible and at the same time get some nice propaganda out there to the sheeple.  In that sense, I think he achieved his goal.

Mapping the Next Five Months
Everyone has an opinion and on days like today people really like to come out and spout theirs so I suppose I may as well join the club.  In a recent article, I wrote that The Big Print is Coming and in this piece I want to follow that one up with exactly how I think it all will manifest between now and the election.  Of course, no one can predict the future, but what I want to do is attempt to outline how I think Central Planner policy will unfold from now until the U.S. Presidential election in early November.

Ok so let’s start with the FOMC meetings.  Between now and election day there are four.  The first one as everyone know is June 20th, followed by August 1st, September 13th and then October 24th.  Many pundits claim that if the Fed is going to act they may as well do so well before the election so as not to appear to be “influencing the election.”  I’m not so sure about that.  Maybe in times past, when the power structure was a bit more reserved and less blatant about their corruption and manipulations.  They don’t hide that stuff anymore.  The “elites” in America today are simply gangsters.  We have already been officially christened as a Banana Republic.  The criminal behavior that now governs our political and economic system is now all out in the open for anyone with eyes to see.  They don’t care.

What I want to make clear in this piece is that just because I think a massive wave of liquidity is coming from the Central Planners, that doesn’t mean I expect it to happen in June.  There is no doubt that The Bernank is now doubting all of his academic theories of the past and is scared out of his mind to “do more.”  He is afraid it won’t work, he is afraid of the demand for physical gold and silver that it might spark, and he is also afraid to use the bullets now with asset prices where they are.  He wants to save it for when he needs it and he knows he will need it.

So the game continues.  Talk up the economy, talk down printing and pray.  The beige book and today’s testimony represented textbook Fed strategy in 2012.  Strategy that I have discussed many, many times in months prior.  They can talk all they want and give all the reassurances they want but talk from monetary magicians does not alter the reality on the ground.  As I have stated repeatedly in the last two weeks, I think the Fed is more behind the curve than at any point since 2008.  Back then, The Bernank assured us that there was no housing bubble and that subprime was contained.  Big bank CEOs were pimped out on CNBS to claim their solvency weeks before going under or needing a bailout.  The only strategy left was to lie.  Despite the fact that it didn’t work then doesn’t stop them from trying now.  Why?  They are insane.

Barring a market catastrophe in the next two weeks I do not expect the Fed to act at the June meeting.  With rates where they are and stocks where they are there is little upside to action; however, this lack of action is precisely what will set the stage for the massive action that must come later.  One of the main things that has allowed the Fed to kick the can down the road as long as it has is the fact that ever since 2008 they have acted aggressively on the first hint of weakness.  While the beige book pointed to relatively rosy conditions for the U.S. economy, I think that is because they were looking at data from early April through late May together.  If you look at the U.S. economic statistics, the data didn’t start turning for the worse in a serious manner until late in the second half of the month of May.  The Fed knows this but they are purposefully misleading the market.  In reading a Bloomberg article about the beige book the following quote stood out to me:  “’The Beige Book is clearly at odds with the hard data we’ve been seeing,’ said Millan Mulraine, senior U.S. strategist at TD Securities in New York. ‘We’ve seen a dramatic slowdown in economic growth momentum that you’d think would be reflected in a few, if not the majority, of districts.’”  Move along folks…nothing to see here.

As a result, if the market heads into the Fed meeting at current levels it runs the risk of being disappointed.  If this is combined with continued economic weakness then the real set up happens between the June meeting and the August one.  It is in that interim period that the market could throw another one of its hissy fits and beg for more liquidity.  Money supply growth is extremely sluggish right now all over the world.  The velocity never happened and the global economy is rolling over.  The Fed is already behind the curve and so when they are forced to act the infusion will have to be huge just to stem the momentum.  What will really be interesting is if they will be able to stem the momentum.  I have no idea but the longer they wait the less likely they will be able to.

 

China Will Blink and Gold Will Soar
To illustrate the point.  Take a look at China’s M2 Monthly year-over-year growth in the chart below.  Do you really think they are going to allow that trend to continue?  If they do what do you think the implications are for the world?  For the U.S.?  Want to bet on decoupling?  I don’t.

China’s M2 Monthly year-over-year growth


The big point is that China will act and in a meaningful way.  What I suggest people do is go back and look at different asset classes from the prior two lows in China’s M2 year-over-year growth rate.  The first one occurred in late 2004.  The M2 growth rate then accelerated until around mid 2006.  In that time period gold prices went up around 65% and the S&P 500 went up 20%.  In the second period of acceleration from late 2008 to late 2009 gold was up 65% and the S&P500 was up 15%.  We are at one of these inflection points and considering the DOW/Gold ratio is still holding gains from its countertrend rally from last August of almost 40%, this is probably one of the best entry points to buy gold and short the Dow of any time in the last decade.  Oh and if you want more juice, when China blinks silver does much, much better than gold...

 

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Thu, 06/07/2012 - 17:13 | 2505374 LULZBank
LULZBank's picture

this is probably one of the best entry points to buy gold and short the Dow of any time in the last decade.  Oh and if you want more juice, when China blinks silver does much, much better than gold...

Looks like someone needs some suckers badly...

P.S. FUCK!! The downticks! I meant in the short, near term!!!

Thu, 06/07/2012 - 17:50 | 2505478 gmrpeabody
gmrpeabody's picture

And let me guess..., you're wondering who the suckers might be...

Thu, 06/07/2012 - 18:02 | 2505506 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Mike, tell Keiser of the idea that was started on Zero Hedge to Buy silver - Crash JPM.  If  he likes the idea tell him to get a hold of me, and I will run it down for him.

-LH

Thu, 06/07/2012 - 18:12 | 2505525 strannick
strannick's picture

CFTC Charges South Carolina Company With Running $90 Million Silver Bullion Ponzi Scheme 07 June 2012, 9:44 a.m. By Kitco News http://www.kitco.com/ Editor's Note: Watch Kitco Video News at the IPMI (International Precious Metals Institute) Conference Direct From Las Vegas June 9-12, 2012 (Kitco News) - The Commodity Futures Trading Commission is charging a South Carolina-based firm with operating a $90 million Ponzi scheme, fraudulently offering contracts on silver sales, but never actually purchasing any metal, the agency said late Wednesday.

Judging by the CFTCs action/inaction against bullion banks silver manipulation on the COMEX, I assumed the CFTC existed to perpetuate and rationalize fraudulent silver ponzi schemes

To quote Will Farrel before he shot himself in the neck with a tranquilizer gun while a monkey looked on "Oh sweet irony!".

Thu, 06/07/2012 - 18:14 | 2505532 sampo
sampo's picture

Another 3+ years of investigation?

Thu, 06/07/2012 - 18:17 | 2505546 Al Gorerhythm
Al Gorerhythm's picture

There's an investigation?

Thu, 06/07/2012 - 18:30 | 2505573 toothpicker
toothpicker's picture

"investigation"

Thu, 06/07/2012 - 18:48 | 2505607 Al Gorerhythm
Al Gorerhythm's picture

DP

Thu, 06/07/2012 - 18:47 | 2505609 Al Gorerhythm
Al Gorerhythm's picture

Oh, yeah.  "-"

Thu, 06/07/2012 - 20:32 | 2505822 philipat
philipat's picture

No surprise there. This is the equivalent of the SEC going after Egan-Jones?

Thu, 06/07/2012 - 21:04 | 2505867 sablya
sablya's picture

I can't believe it wasn't obvious there wasn't going to be any QE announcement.  The Beige book already gave the score card and Bernanke said months ago that he didn't expect employment numbers to maintain the then-current pace.  So, the current situation simply doesn't warrant any more QE.  

But all the brightest minds on earth, the "markets", has the collective intelligence of a 3-year old who has been trained to get excited at the thought of getting a treat.  It is utterly pathetic to watch this market flop about like a fish on the deck.  Someone get a club and put the poor thing out of its misery.  It's the only humane thing to do at this point.  It needs to be beaten to death to break it out of its epic self-delusional condition.  It's already dead, like an uprooted tree, but thinks it's alive because it still has some green leaves.  

It's so painful to watch the slow motion death throes of this current economic configuration.  How long, O Lord, how long??

Thu, 06/07/2012 - 18:18 | 2505549 ootofthehoos
ootofthehoos's picture

This line is goofy:

"The Fed is already behind the curve"

because it sounds like the person endorses Fed policy, while we all bash Fed policy. Is he just cheerleading his favorite investment, like Soro did with his sophistry last week, saying Europe must grow out of its problems.

Thu, 06/07/2012 - 19:29 | 2505682 Alea Iactaest
Alea Iactaest's picture

It's quite idiotic, since the Fed has already embraced gold price manipulation. Fed Sec'y Burns put it in a letter to President Ford in June, 1975. Linked below, or you can Google it.

http://www.gata.org/files/FedArthurBurnsOnGold-6-03-1975.pdf

You almost can't make this shit up. (Especially the part about a secret US-German agreement regarding gold purchases.) The takeaway is that strong gold weakens the IMF, that free market price discovery would lead to inflation (huh?) and that there should be celings for the amount of gold each country can hold. It's straight out of a movie, only no one would believe the plot.

So how do you trade this? If the central bankers have their way then gold will never trade freely and the price will be manipulated from now on. In fact, if I was a central banker I would try to crush China and force them to liquidate their gold holdings. That would drive the price down long enough for some bullshit outer space rendezvous which will discover gold on an asteroid and render precious metals defunct for all time.

Of course if this is really the plan, why to central banks hold a barbarous relic on their balance sheets? Couldn't be because it actually is money, could it?

Thu, 06/07/2012 - 20:32 | 2505823 Quinvarius
Quinvarius's picture

Until the gold price rises to back all the dollars and credit by at least 40%, the economy will never recover.  No point going into detail if no one can figure it out after living it for the past 40 years.

Thu, 06/07/2012 - 20:36 | 2505831 ChrisFromMorningside
ChrisFromMorningside's picture

Only the small fries who aren't part of the cartel get busted.

It's similar to how only Golden Triangle heroin producers, who don't play ball with Western financiers or politicos, get busted. While Central Asian heroin producers get their product personally airlifted out of the nation by NATO and Latin American heroin producers are provided free weapons by Eric Holder and the CIA.

These guys in S.C. stepped on the big boy's toes so now they're facing the music.

Thu, 06/07/2012 - 18:03 | 2505513 Marginal Call
Marginal Call's picture

Suckers might be the ones running into paper gold on this pump.  Buy and hold phiz is another thing, but gold is pretty range bound and looks like it's getting set up for a squeeze for all the new long invetory that's gotten in during the last bump up.  They'll probably be able to run it back down to 1550-1560 on a liquidity hunt.

 

The gold play is around late August/September when we are running up on the debt ceiling.  Gold always breaks into a new range whith new debt ceiling hikes.  Gold goes into the 1900-2000 range and stays there, maybe higher on the move. 

Thu, 06/07/2012 - 19:54 | 2505733 mossme89
mossme89's picture

What about the miners? While I agree everyone should have physical, what about buying some physical and using other cash to buy miners? The thing I like about that is that it provides easy liquidity.

Thu, 06/07/2012 - 23:27 | 2506159 The Monkey
The Monkey's picture

If you have a big liquidity squeeze in front of you, you might just be best off holding those worthless paper dollars a while longer.

Thu, 06/07/2012 - 19:58 | 2505740 theTribster
theTribster's picture

Good point on the debt ceiling dilemma, that will be a fiasco which will drive up PMs.

Thu, 06/07/2012 - 18:43 | 2505599 KandiRaverHipster
KandiRaverHipster's picture

i gave you an up vote.  twas on point!

Thu, 06/07/2012 - 20:42 | 2505845 smb12321
smb12321's picture

You are right.  Just because gold will eventually skyrocket is no reason to assume it will do so every single day of the year like some ZHers.   Smart traders know when to sell and when to let go.  This drop has been seen before and it's hard to explain in classical terms.  I guess someone can claim yet another conspiracy behind the drop but let's face it - market components are subject to huge drops or rises on whim. 

Thu, 06/07/2012 - 21:17 | 2505892 sablya
sablya's picture

I think the previous comment about liquidity hunting is right on target.  The markets are in a debt-driven deflationary period during which cash is king.  These are like the last gasps of a dying man who has no energy to inhale.  He would naturally exhale his last breath as his lungs collapse.  But .... the machine ... keeps pumping up his lungs periodically, until it doesn't work any more.  

Thu, 06/07/2012 - 17:04 | 2505382 Ahmeexnal
Ahmeexnal's picture

Argentum!

Thu, 06/07/2012 - 17:06 | 2505388 whatsinaname
whatsinaname's picture

Aurum!

Thu, 06/07/2012 - 17:42 | 2505447 Al Gorerhythm
Al Gorerhythm's picture

Arrrrrr, rum!

Thu, 06/07/2012 - 18:08 | 2505522 CPL
CPL's picture

Abracadabra!

Thu, 06/07/2012 - 18:40 | 2505594 Big Corked Boots
Big Corked Boots's picture

Awww, fukitall.

Thu, 06/07/2012 - 19:27 | 2505674 q99x2
q99x2's picture

Oma soma thoma chroma wayo miti goo goo.

Thu, 06/07/2012 - 20:04 | 2505755 I only kill chi...
I only kill chickens and wheat's picture

That's it I'm selling all the PM's and investing in the white rock. 1 Lite, instant Hopium. Au/Ag is for suckers. It just doesn't burn good.

PS, cheers, DCRB, great posts, hope the blog is going well.

Thu, 06/07/2012 - 17:05 | 2505385 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Golden Laundry!

Thu, 06/07/2012 - 17:08 | 2505390 gaoptimize
gaoptimize's picture

Don't agree on shorting DOW.  Look at the price of NYSE:DXD in those two periods.  I agree gold will do better than the DOW.

Thu, 06/07/2012 - 17:30 | 2505427 SilverIsKing
SilverIsKing's picture

"I agree gold will do better than the DOW."

That's the point.

Thu, 06/07/2012 - 18:20 | 2505552 jus_lite_reading
jus_lite_reading's picture

I agree mostly with Mike says except that you NEVER, NEVER EVER SHORT A PONZI... because that is what the entire stock market has become and the mad man at the wheel of this turd will print to infinity, savers be damned!!

 

Thu, 06/07/2012 - 20:38 | 2505838 ChrisFromMorningside
ChrisFromMorningside's picture

Savers? What savers? In the U.S.?

Arrest them!!

Thu, 06/07/2012 - 17:11 | 2505397 Seasmoke
Seasmoke's picture

everytime i am ready to buy 25 ounces of gold, i look at silver and it looks like the much better value.....so i always buy the silver

Thu, 06/07/2012 - 17:32 | 2505431 Ratscam
Ratscam's picture

everytime i look at paltinum, since october of last year, i want to buy it instead of gold. it is 15 times more rarer than gold put most of the time cheaper and mainly coming from S-Africa or Russia.

Thu, 06/07/2012 - 20:51 | 2505850 smb12321
smb12321's picture

I love gold but Jeez, do some research folks.   The platinum group - platinum, palladium, rhodium, iridium, osmium and ruthenium - are FAR more likely to surge than silver for many reasons (and I hold lots of silver).  This group is increasingly used for industrial uses and in fact about $300 of palladium is in each PC.   Not only is demand present but mining is much more difficult.  Iridium with its density and heat capacity aspects is especially vulnerable to huge price rises.

Fri, 06/08/2012 - 02:39 | 2506410 dogbreath
dogbreath's picture

300 worth of pallladium in each PC ,,,,,,,,,,,,,,,,,,you sure about that.    can't hardly give them away for scrap

Thu, 06/07/2012 - 17:19 | 2505410 Ookspay
Ookspay's picture

One of my schaudenfreude friends emailed me earlier and said "my" pm's were taking a beating... So I went into the bunker and checked, my stacks look as shiny and powerful as ever.

i will be at the coin shop tomorrow at 8am, bargain hunting before the sale ends.

Ookspay only pawn in game of life. But I can buy the dips when tptb play their manipulation games.

Thu, 06/07/2012 - 17:27 | 2505423 NotApplicable
NotApplicable's picture

Better go quick. My coin shop guy is about cleaned out with the recent sale, and even he is paying $1.50 over spot for Silver Eagles (normally offering spot for them).

Thu, 06/07/2012 - 17:36 | 2505437 Ookspay
Ookspay's picture

Where I live there are far more sellers than buyers, things are bad, it's a Union State. There is plenty to be had, for now.

Thu, 06/07/2012 - 20:58 | 2505857 Overfed
Overfed's picture

Just bought some silver eagles today, but my boat capsized on the way home.

Thu, 06/07/2012 - 21:55 | 2505957 MrSteve
MrSteve's picture

That is so unfortunate about your boat ride home. I hope you got to shore safely. I also hope you could convince anyone able to hold a job that your story was true. Perhaps this will help:

Around here, folks are always throwing solid gold Krugs and Eagles and sovereigns and napoleons and Buffaloes into Salvation Army kettles at Christmas.  Add several large silver coins too. Make sure that happens in your hometown and then just clip the local news reports. Year after year. When you have dumped "all" your meager coin collection into the kettles, its just a simple donation: no receipt, no transaction report, pure charity. So spot a coin in the kettle and create a viable backstory in the public record (legend as it is called in the intel biz) and there will never be any question as to where your gold went. When three or more folks in a town do this, everyone with  similar mindset is protected, so you story gains strength with numbers.

It all went to a good cause that keeps on giving and doing good. The Salvation Army is an exemplary charity, if anyone is interested in such reality.

I'm sure they would support your actions to help others and your family. It is written, it is more blessed to give than to receive. In this case, you give and receive which is extremely cool. This Christams season, start dropping off the heavy metal, everywhere!

 

 

 

Fri, 06/08/2012 - 03:15 | 2506436 putaipan
putaipan's picture

that's the spirit. never liked all these 'boaters'...selfish lot all. charity baby!

Thu, 06/07/2012 - 21:59 | 2505958 MrSteve
MrSteve's picture

That is so unfortunate about your boat ride home. I hope you got to shore safely. I also hope you could convince anyone able to hold a job that your story was true. Perhaps this will help:

Around here, folks are always throwing solid gold Krugs and Eagles and sovereigns and napoleons and Buffaloes into Salvation Army kettles at Christmas.  Add several large silver coins too. Make sure that happens in your hometown and then just clip the local news reports. Year after year. When you have dumped "all" your meager coin collection into the kettles, its just a simple donation: no receipt, no transaction report, pure charity. So spot a coin in the kettle and create a viable backstory in the public record (legend as it is called in the intel biz) and there will never be any question as to where your gold went. When three or more folks in a town do this, everyone with  similar mindset is protected, so your story gains strength with numbers. Imagine 20 people doing this!

It all goes to a good cause that keeps on giving and doing good. The Salvation Army is an exemplary charity, if anyone is interested in such reality.

I'm sure they would support your actions to help others and your family. It is written, it is more blessed to give than to receive. In this case, you give and receive which is extremely cool. This Christmas season, start dropping off the heavy metal, everywhere!

BOOYAH! Money in the kettle and goodwill to all!

Peace,

MrSteve

 

 

 

Thu, 06/07/2012 - 17:36 | 2505436 Ratscam
Ratscam's picture

just turned down a 7% net yield on a berlin condo building at prenzlauer berg. maybe i,m an idiot but i rather save my PM,s for better investment times.

Thu, 06/07/2012 - 17:20 | 2505411 Rynak
Rynak's picture

No it won't.

PM spot prices since 2011 have been in an iron grip of the banksters, engineering rapid pumps and dumps to create volatility and fear, and this way drive out strong hands..... but of course, ZH being the "please stay with your left foot in illusion, and lift your right foot into realization"-advocant it is, never points this out. It will continue to give people the impression, that there are any natural market forces left in the paper-PM market, going as far as when a giant millisecond pump happens to tell the ZH-sheeple, that "the market just suddenly remembered fundamentals, in a fraction of a second, and so everyone decided to buy" - while never mentioning that gold and silver since mid 2011 have basically overally been FLAT, and BOTH the rapid pumps and dumps glarigly obviously artificial. They have created a constant ceiling and a bottom, leaving the suckers to play paper games in the range in-between.

Here is what has/will happen:

Gold and silver won't go ANYWHERE close to inflation, while the TPTB are in control. All you as physical buyers get to choose from, is a slightly better or slightly worse point to load up more.

Then when one way or another shit hits the fan, the free official PM market will be abolished (yes, there will still be the illegal black market).

At that point, you will not be able to buy or sell for a prolonged time.... until sometime in the future, the quasi-bans will be lifted. And if you managed to go through this phase with your stash intact, you will be have managed to channel through some wealth (no one knows the prices after the ban is lifted), instead of getting -everything- stolen from you.

And if the above turns out to be true, there is only exactly one reason to load up on PMs: It is to conserve some SURPLUS wealth (meaning, wealth you will not need in the midterm) from now, to way after "recovery"... which's timespan may very well be 20 or more years. As some of you like to call it: "Generational wealth".

Everything in between.... every faked rise or fall of PMs in the meantime..... will mean nothing and go nowhere.

Thu, 06/07/2012 - 17:33 | 2505434 Bullionaire
Bullionaire's picture

Stopped reading after

"advocant"

Thu, 06/07/2012 - 17:45 | 2505461 Al Gorerhythm
Al Gorerhythm's picture

"overally" for me.

Thu, 06/07/2012 - 20:13 | 2505779 Rynak
Rynak's picture

Awesome! This at the time of this post means 12 downvotes just being grammar-nazis... which means that the current vote balance of that post - minus grammar nazis, is:

4 downvotes

16 upvotes

On a pro-PM community.

I can more than live with this, goldman sachs and JPM!

Bless the true "longs", and rape the short-term gamblers for the jackpot... isn't that what you are all about? :-)

Thu, 06/07/2012 - 17:37 | 2505439 Bay of Pigs
Bay of Pigs's picture

Where do you come up with half this shit?

And other pure speculation you care to share on the future?

Thu, 06/07/2012 - 17:42 | 2505450 Rynak
Rynak's picture

I come up with half of this shit, from being capable of reading spot price charts that go on a longer timespan than a week, you tool.

Open your favorite chart software, and let it display spotprices from early 2011 to now, notice the complete change of spotprice behaviour in mid-2011 (which by the way, is caused by a split between USA and asian exchanges, as has been reported by ZH itself multiple times before (but again, while never speaking out the obvious)).

I mean, heck, are you incapable of looking at a 2 year spotprice chart, or are you too affraid to face the facts?

Thu, 06/07/2012 - 17:47 | 2505469 Bay of Pigs
Bay of Pigs's picture

I said the "future" Rynak, not the past. I dont disagree with what you said there. I've been following the manipulation story since 1999. 

I was talking about bans, restrictions, trading of PM's. Why do you think the whole world will go along with that nonsense?

Thu, 06/07/2012 - 17:48 | 2505475 Rynak
Rynak's picture

Because i think that the global central banks, are collaborating, and the exchanges controlled by them.

Thu, 06/07/2012 - 17:57 | 2505491 Bay of Pigs
Bay of Pigs's picture

Fair enough. But that does not explain China urging their citizens to buy and hold physical gold and silver. Also doesnt explain how all exchanges will be shut down together, as if the Chinese, Arabs and Russians are all onbaord with that particular scenario. It appears to me they are not.

Good luck. I'm sure we'll all need it regardless.

Thu, 06/07/2012 - 18:11 | 2505521 Rynak
Rynak's picture

The "china urging citizens to own gold" certainly is a good argument and a wildcard. Agreed.

As for exchanges: Currencies - unless a country decides (and manages) to go full "national" with managing a currency, and backing it by PMs - absent this scenario, currencies are controlled by central banks. Exchanges too are controlled by them.

Now, imagine every ZHer's favorite scenario: PM backed currencies actually becoming the new trend around the globe! What will this mean for CB as well as gov interests? A PM-rush. You think they'll put their populations above this global competition for PMs?

As sceptic i may be about INDIVIDUAL hoarding of PMs, i actually expect the the PM-bugs dream scenario to be triggered - but i am not so sure, that it will play out as they hope, initially.

Thu, 06/07/2012 - 19:23 | 2505661 silverserfer
silverserfer's picture

What Rynak is oblivious of is WHY the westernized govnt's are doing what their doing now to pm prices. Why, because we import most of this bullion  into our countries and if we can manipulate the price down with our corrupt markets, and the miners still sell it at those cheap prices, we will continue to do so untill we cant. TPTB are in accumulation mode and will be for years to come. Most of the PM's are being currently mined from emerging markets and they still think our fiat is good. This also explains why mining stocks are always undervalued and will never pay the dividents that they should. 

Thu, 06/07/2012 - 19:43 | 2505705 Rynak
Rynak's picture

Yes, right.... MINERS.... who account for like 1% of PMs out there, bankster bitch. Riiight.

(To the miners out there: Not discrediting the job you do. Actually, you're treated like shit, and your work should be valued more. However, i'm sorry but you practically make no difference to the global availability of PMs, unless your corp also is involved in melting scrap (which IS significant)).

Thu, 06/07/2012 - 21:59 | 2505971 JackT
JackT's picture

Sadly, I don't know if the majority of the US population would even know what PMs are, and would likely think a Silver Eagle was a large Chuck E Cheeses game token if you handed them one.

When the meltdown occurs its possible the new form of money will simply be video game cartridges...as long as the electricity stays on.

About the confiscation/forbidden PMs theory. It would probably be easier to blame the PM speculators 'who are nothing more than "anarchists" trying to crash the system to their own gain' than it would be to explain what really happened.

Ultimately there are few safe choices to use as a vehicle to store your wealth, not even make a gain but rather just get it to the other side so you have something withwhich to barter with. This holds especially true for those in cities.

Of course all of this is completely relative to the level of disruption you believe will occur. No one really knows.

Hell as crazy as things are now I could easily see FRNs simply being replaced by a new Global Carbon based credit scheme. One in which you are given a particular amount based on your age. You are free to exchange them around the world but once you run out, you are terminated because you are no longer contributing to society.

Thu, 06/07/2012 - 22:14 | 2506003 Rynak
Rynak's picture

Completely agree, and do not disagree with "PMs as a longterm wealth storage"-theory at all. All i'm questioning, is the strategy of being PMs for a short- or midterm win..... basically, "trading": Buying something in the assumption that one can now or soon sell it for much higher.

As it is now - and until this "artificial framework" is abolished, non-longterm PM traders only get to play this "roulette" in a daily or perhaps weekly basis. Those currently controlling the prices, have decided that you get to only either possibly profit ultra-shortterm (which involves predicting their interventions), or ultra-longterm.... nothing in between.

Thu, 06/07/2012 - 22:32 | 2506036 JackT
JackT's picture

Agreed. Short to mid term..for those who play in metals then stick to metal paper it's priced in FRNs (not true dollars since dollars are a declaration of weight) - at least then one knows the "value" of said paper that is being traded.

For those in PMs, in my opinion, I realize you cannot eat metal but one hopes they can trade it for goods one expects to need in the future by trading it for the future currency, whatever it may be.

While in this vein. I find it interesting (and difficult) to determine the correct form of PM to retain. Old coins, new eagles or even bar. Each has it's own perceived value and use. There are those who say that 90% silver coin will lose up to 30% of the new market exchange value due to refinement costs. However there are those who say trade in pure bullion won't be trusted because much of the population wouldn't trust it and will fear getting ripped off for lack of recognizing it (the same could be said about counterfeit coins).

Thu, 06/07/2012 - 21:00 | 2505860 Papasmurf
Papasmurf's picture

China may tell citizens to buy gold as a means of controlling inflation. 

Thu, 06/07/2012 - 23:01 | 2506094 JackT
JackT's picture

Or to create it (inflation)

Thu, 06/07/2012 - 17:52 | 2505481 ArrestBobRubin
ArrestBobRubin's picture

Rynak eh?

You must be Karnak's <much> less talented relative.

 

Thu, 06/07/2012 - 18:00 | 2505504 Tao 4 the Show
Tao 4 the Show's picture

Relevant point: switch your chart to log scale, which reveals the relative size of this correction compared to past ones. What you will find is that the current correction is quite modest and ordinary. Nothing to get overly excited about.

Thu, 06/07/2012 - 19:47 | 2505718 DoChenRollingBearing
DoChenRollingBearing's picture

+ a big fat 1

This paper price down dip is nothing out of the ordinary.  

 

When it comes to gold: "Buy and Hold."

Fri, 06/08/2012 - 06:56 | 2506562 Sabremesh
Sabremesh's picture

Your assumption that TPTB can run the show indefinitely is naive. The USA is not a hermetically sealed economic system. China, Russia, India will see their opportunity to peg their currencies to gold, and seize it, killing the US dollar and leaving America and most of Europe flailing.

Thu, 06/07/2012 - 17:54 | 2505462 Tao 4 the Show
Tao 4 the Show's picture

Thanks. Plausible scenario, though I think there is much uncertainty in how it will play out. The current "iron grip" depends strongly on supply/demand. Nothing I have read gives me any sense that any public source knows what is going on in this regard.

Manipulation only works in the short term if demand is not strong. Who knows what supply they are working with and how large? Lacking supply, the only approach is to try and kill demand, which seems to be one of the primary goals as you point out.

Will the U.S. stop PM trading alone? Will Europe go along? Switzerland? Will Asia participate? Will the west look ridiculous restricting a tradition still operating in Asia?

The PM prices have been strongly managed for a year, and are now lagging. But this pattern has repeated for years now. A sudden up phase sometime in the next few months would continue the pattern and would not be surprising.

Thu, 06/07/2012 - 17:48 | 2505474 Waffen
Waffen's picture

I dont want this to be true, but this seems to be, the bankers win scenario. Nothing has shown me yet that TPTB wont get what they want.

however, if generational wealth is the worst i can get, well atleast its something

Thu, 06/07/2012 - 17:56 | 2505488 Rynak
Rynak's picture

As it is for me, and the reason for me owning PMs - to reject some of the global available wealth, from the bastards, and be able to use it when the dust settles. Basically, my longterm hedge and wealth storage..... but not a shortterm or midterm one.

You know, for some of the "PM-bugs" here proclaiming so much, that they "aren't selling" and are going for the long run, they sure as hell are reacting quite allergic to my scenario.... are they perhaps saying one thing, yet hope for the quick jackpot?

Thu, 06/07/2012 - 18:40 | 2505595 magpie
magpie's picture

Still, i would tend to believe that a prohibitive taxation scheme along the lines Karl Denninger used to write about should be more in line with TPTB than an unenforceable total gold trading ban.

Thu, 06/07/2012 - 18:55 | 2505626 Rynak
Rynak's picture

They don't need to do an outright ban. The reason for me phrasing it as a "pseudo-ban", was that i expect them to basically make buying of PMs nearl-illegal, yet selling of PMs legal... which would rapidly drive down "official" prices, and reward those who "panics first, panics best".

Thu, 06/07/2012 - 19:26 | 2505669 silverserfer
silverserfer's picture

So you must have blown your load already then huh? When did you get out, June 2011?

Thu, 06/07/2012 - 20:06 | 2505756 magpie
magpie's picture

That sounds like an one time effect.

What might be more interesting is your estimate at what price the official peg could be at. 

And in case you are wondering about some of the very strange people in this forum, I for instance, am only an Asian tourist in Europe.

Thu, 06/07/2012 - 20:26 | 2505798 Rynak
Rynak's picture

Yes, it is a one time effect.... but one possibly spanning a significant timespan.

Not a matter if you think cross-generation.

Heck, not a matter if you're still young, and want to cash out at the most when you're old.

But not compatible with "i want to strike it rich soon!".

Basically, all i'm saying is: The "true longs" will get their bet someway working out. As for the short/midterm gamblers...  the ones screaming for "gold/silver to the moon!" you're in for getting sober real hard.

P.S.: As for my estimate of a peg - i have no idea where it would be. Heck, i don't even have reliable estimates of the percentage of backing of such currencies, or even a trustworthy estimate about the gold out there. ETFs have ruined any trust in backing so much, that IMO the only ones knowing, are those in control.

Now, as for the question "where" they would peg - IMO they at least first would not peg at "fair value".... if they'd instantly peg at fair value, and then push people to cash out their PMs, gold and silver indeed would go to the moon - there is no reason for them to do this, if they can avoid it.

So, IMO at least initially, the peg will be way below fair value, yet at the same time punish those not selling instantly (of course, if one never sells during this timespan, the whole point is moot - you never lose anything until you sell).

Thu, 06/07/2012 - 20:37 | 2505813 magpie
magpie's picture

Gold, Silver and Platinum have the advantage of wealth preservation and adequate liquidity, nothing more and nothing less.

There are always other assets that could excel in one of those and/or provide an extra income, but that was a tradeoff i was always willing to take.

Almost sounds like a PM ultimatum there...bring us your gold by day x or you're a terrorist

 

Thu, 06/07/2012 - 22:01 | 2505975 sablya
sablya's picture

Gold and silver are stores of wealth in an _inflationary_ environment, contrary to fiat currencies.  But in a deflationary death spiral, you'd better watch out!!  A liquidity collapse will crush the PM markets as well as every other market.  Cash will be king in such a scenario.  It's just a matter of timing.  

Thu, 06/07/2012 - 20:11 | 2505772 Roandavid
Roandavid's picture

I for one, would enjoy a quick jackpot.

Thu, 06/07/2012 - 21:41 | 2505931 John_Coltrane
John_Coltrane's picture

Excellent points.  Guns, gold and RE are for wealth preservation and generational wealth transfer purposes-and I have significant amounts of all of them.  Many commenters are obviously talking their book-much like the author.  They protest what they see as "price supression" of gold and silver-even though its obvious the world is in a significant credit contraction economically.  Humans prefer instant gratification-they like to see how much their gold is worth in fiat.   They'd have a lot more fiat (to buy gold or anything else) if they had just shorted BAC, MS, C, ANR, EDMC, GRPN, JCP and FSLR using puts over the last six months.  At least three of these are going to zero, so its not too late for big returns.   Can you guess which three will be BK?   

Thu, 06/07/2012 - 18:34 | 2505586 toothpicker
toothpicker's picture

Elite bankstahs own gold too. It will go up when they have stolen enough of it

Thu, 06/07/2012 - 21:34 | 2505912 skank
skank's picture

,,,gold, the most stolen thing on the planet, bar none

Thu, 06/07/2012 - 21:16 | 2505889 Beam Me Up Scotty
Beam Me Up Scotty's picture

+1 for the post
+100 for the avatar!!

Thu, 06/07/2012 - 17:56 | 2505487 JohnKozac
JohnKozac's picture

MSM said 'they' had an 'iron grip' on PMs when the relic was $750.......see how that turned out?

Thu, 06/07/2012 - 18:04 | 2505511 BlackMagician
BlackMagician's picture

If the powers that be could succeed at the manipulation game of PM's into perpetuity they would...but eventually the market will DECIDE.

 

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.

~Abe Lincoln

Thu, 06/07/2012 - 18:04 | 2505515 magpie
magpie's picture

Well, i've learnt my lesson and stopped trying to trade it via options back in 2009/2010. Those several thousand euros could have been spent enhancing the stash but the lesson was valuable in itself.

Fri, 06/08/2012 - 00:35 | 2506275 FullFaithAndCretin
FullFaithAndCretin's picture

Haha Magpie it sounds like you and me could swap a few schoolyard stories over a rueful glass or two. Hard lessons but like you I learned them well.

Thu, 06/07/2012 - 18:12 | 2505530 CPL
CPL's picture

Rant on brother...you are getting close to the center of it.  your pain must be recent.

 

Grab a seat, drinks are in fridge, let's sit and watch the world burn so it's remembered for future generations as an example of how retarded it got.

Thu, 06/07/2012 - 18:51 | 2505617 Rynak
Rynak's picture

Since i probably won't be posting here for much longer, and me noticing you for quite a while, here's my question:

Who are you? You previously have made it apparent, that you are possibly part of anon, yet considering just how ressourceful you are, it feels a bit weird for you to be "just that".

If you don't wish to discuss this in public, then i am open to you establishing an anonymous and encrypted comm channel between you and me, possibly involving torchat or any other method ensuring the same privacy and security, and authenticity.

Fri, 06/08/2012 - 00:42 | 2506284 CIABS
CIABS's picture

I don't know who's who, but we definitely have some spooks on these boards.

Thu, 06/07/2012 - 18:30 | 2505575 KandiRaverHipster
KandiRaverHipster's picture

man's got a point.  reeeespekt~!~

http://www.kitco.com/LFgif/au0365nyb.gif

Thu, 06/07/2012 - 18:42 | 2505597 eclectic syncretist
eclectic syncretist's picture

Is that just a long-winded way of saying that since there is a two-tier market (physical gold and paper gold pretending to be one and the same) that there is some elasticity in the price because paper shares can be used to manipulate the price?

At some point gold will take off and never look back.  Just don't know when

Thu, 06/07/2012 - 19:05 | 2505641 centerline
centerline's picture

Very plausible scenerio.  Nicely put.  I tend to agree.  The only thing I would comment on is not to discount the formation of alternative markets during the coming transitional period where tangible means of exchange can really make the difference between life and death.  Some investments are not necessarily for the other side - they may be tokens just to get there in one piece.  

Thu, 06/07/2012 - 19:13 | 2505651 _underscore
_underscore's picture

Do you really think there could ever be such  cohesively acting states (countries) that could enforce any action like that? If enough people decide to jay-walk the police can't even enforce that 'law'. Why do you think (magically) that some law or enforcement regime can just stop all the other countries of the world (which is what it would have to be..) acting in their own interests?

Perhaps you've read too many V for Vendetta & 1984 summaries & really think that we'll all be walking about in neatly tailored collar-less tunics not daring to even look as the 'raving lunatics' & 'terrorists'(as B-B tells us) are carted off for fear of being carted off ourselves. I don't think that would work in my balliwick .

Thu, 06/07/2012 - 19:26 | 2505670 Rynak
Rynak's picture

The "upper level" of the global power scheme, is completely disconnected from "the people"... yet indirectly affects them.

Basically, what you are dealing with today, is not on THE SAME LEVEL, having providers and customers.... what you are dealing with, is on the high levels, the "providers" just selling to "sub-providers" (owned by the same powers).... only way down in the hierachy, do "the people" come into play.

For example, consider a propaganda order from the top of the pyramid, going through megacorps (owned by them) subsidiaries (owned obviously), local corps (having little choice but to go with the stream) and THEN the people as the consumers.

In this case, the consumers are bombarded on all channels, and any supposed "supply/demand based market" no longer exists, BECAUSE THERE ARE NO ALTERNATIVES. There is no competition!

The same is the case for financials.

This isn't democracy or a free market. It is a global dictatorship. The only "voice" "the people" have left, is outright revolt, and only if such a revolt spreads and resists hijacking, does it make a difference.

Thu, 06/07/2012 - 19:36 | 2505699 centerline
centerline's picture

Agreed.  The upper level though is not unified.  There are many competing interests and wildcards as well.  It will be from this instability that the current system as we know it will fail.  But, the system is in fact more unified (and polarized) than ever before... only maybe the Roman Empire coming in a very distant second place.

Thu, 06/07/2012 - 19:30 | 2505687 centerline
centerline's picture

This is not about shutting down all countries and markets - just a few, including yours.  And that is all that matters when you are contained within said system.  The chips will fall how they may from there and a new system will eventually evolve.

But, to answer your question of "Do you really think there could ever be such cohesively acting states (countries) that could enforce any action like that?"...

Umm, yes.  This is pretty much what we have witnessed to date.  The global hot potato game is not just chance.  it is inevtibale and mutually assured financial destruction playing out as fate would have it.

 

Thu, 06/07/2012 - 20:26 | 2505811 _underscore
_underscore's picture

I've never believed the conspiracy / elites / illuminati - type ideas for the simple human reason that everyone I've ever seen, spoken to, read about etc etc was, essentially, frightened shitless all the time. I've never met anyone that I thought was stronger than a broken reed, deep down. What the global elite / conspiracists would have us believe is that there really are a breed of super-beings to whom the normal human weaknesses & frailties don't apply - if/when I see someone stronger than me, I might change my view.

For the aforementioned super-conspriacies to work you would need those sort of people, lots of them, throughout history, all seamlessly passing on their power structures & wealth to their similarly endowed heirs. I've seen people in power, close-up - believe me, they smell their own bed farts & pick their noses like all of us.  They're also very frightened, all of the time - that's probably what  makes them 'successful' - if you're frightened all of the time, working to become powerful isn't really work, it's essential, existentially at the brain stem psychological level. Now I would agree that most politicos/business leaders were psychopathic on some/ many/ all scales, to varying degrees & wouldn't argue that they could rationalise others' demise for their own good. I just don't think those types can sustain their dynasties or evil empires more than 2-3 generations before the whole edifice falls under the weight of its stinking corrupt corpus. Yeah sure, another stinking elite will arise, but that will cycle too.

 

Thu, 06/07/2012 - 21:43 | 2505929 Rynak
Rynak's picture

That's a good argument, and the reason why i not believe much in an individual-based global conspiracy - at least not on a very long timespan - which apperently is kinda popular, because it is something one can intuitively imagine regarding one's own personal life. After all, it is easy to imagine a bunch of people conspiring, right?

What it magically ignores, is conspiracy of a kind, that is not based on a few individuals conspiring across generations... but instead a society structure and model, that rewards certain behaviour.... and promotes large groups/aggregates to form cartel-like relationships.

To phrase it in laymans terms: You don't need individuals to conspire across generations.... for power structures across generatiosn to regognize "mutual interests" against the bottom of the pyramid.

Or even shorter: PONZI

Thu, 06/07/2012 - 17:20 | 2505412 kito
kito's picture

Pure madness to short the dow. It takes one false promise by ben to lift the market 500 points. The dow is the last stronghold for ben. He has abandoned housing and needs the dow for his wealth effect. He won't give it up easily.

Thu, 06/07/2012 - 17:31 | 2505430 WhiteNight123129
WhiteNight123129's picture

Not if you are long Silver. What happens if he you have a debt saturation and no buyer shows up to buy treasuries?, will he print for sure, will the politicians let him print to oblivion?, will there be a final turn toward a refusal to engage into hyperinflation?

What you are saying kito is that hyperinflation is guaranteed. Hyperinflation is not guaranteed, maybe at some point someone will stop Bernank if the foreigners dump the dollar (yeah it will never happen, right, there are plenty of good books on that topic...).

If too much printing is required to pump the market, he might pump just enough to avoid a total collapse of the system but not enough to prevent a serious recession on top of a depression. So a collapse of the market first and then horrendous stagflation.

 

Thu, 06/07/2012 - 17:38 | 2505440 Rainman
Rainman's picture

Eggsacly ! ....Ben knows he'll be gone with Barry and Timmay in '13. In the meantime, there are public pension funds that will implode without the pump....so he'll leave the conclusion of this mess for the Chairsatan -to- be.

Thu, 06/07/2012 - 18:04 | 2505514 Dr. Engali
Dr. Engali's picture

I agree. There is no way you can short this market. Ben has made it clear that the market is high on his list of prioritieds. I'd love to short it but I also don't want to get my face ripped off. Buying on the dips and getting out on the rips is the only thing that works right now.

Thu, 06/07/2012 - 17:25 | 2505419 NotApplicable
NotApplicable's picture

Why does Mr. Krieger pretend this storyline is real?

"There is no doubt that The Bernank is now doubting all of his academic theories of the past and is scared out of his mind to “do more.”  He is afraid it won’t work, he is afraid of the demand for physical gold and silver that it might spark, and he is also afraid to use the bullets now with asset prices where they are.  He wants to save it for when he needs it and he knows he will need it."

Riiiiiiiiiiight. And Pinocchio was a real boy, too.

If he had any fear about anything policy-wise, he'd never gotten the job, as he'd be seen as wholly unqualified. He only knows to do one thing (what he's told). The only time fear enters into the equation is the few times he has to try and explain it while sitting in front of Dr. Paul.

Just the idea that an academic of such "high-esteem" doubts his theories is ludicrous. Nobody can survive that level of cognitive dissonance. No fucking way. Instead, they wall off every nasty bit of reality that gets in the way, while ridiculing/attacking the messenger.

Thu, 06/07/2012 - 17:51 | 2505480 Al Gorerhythm
Al Gorerhythm's picture

Well, if the Bernank isn't concerned, then his puppetmiester is. You are correct in your statement that no one can survive that level of CD. The Bernank is a true believer but I'm sure he has his moments. As with most sociopaths, he will shrug off any thoughts of morality and eventually do as instructed; Cntrl P.

Thu, 06/07/2012 - 18:27 | 2505566 NotApplicable
NotApplicable's picture

I'm assuming his masters are engineering the collapse to their liking. It doesn't take a genius to understand the concept of the unsustainability of the current system.

So, if you're in "the club" what's to be done except to collude with the rest of the boys who have their puppets firmly grasping the levers of power and have them Stuxnet the whole thing by issuing precise destructive commands?

Thu, 06/07/2012 - 17:30 | 2505420 skepticCarl
skepticCarl's picture

What a bunch of unrelated data.  China blinks?  Bernanke says little?  Sure, gold may resume its bull market, but the author has hardly convinced me that he has identified an important trigger.

Thu, 06/07/2012 - 18:03 | 2505489 Al Gorerhythm
Al Gorerhythm's picture

Extrapolate a little. Actions speak louder than words and that chart is used to support the thesis that when China printed, gold moved. Krieger may have intimated that China could have had some influence over the price of gold via its M2 issuance but what he fails to convey is the mathematical impossibility of China having enough money to solve the world's looming debt margin call. In the event of a flood, it will be all CB's manning the pumps.

Whither gold? http://www.zerohedge.com/news/whither-gold

Thu, 06/07/2012 - 17:27 | 2505421 WhiteNight123129
WhiteNight123129's picture

Gold, Silver, tobacco, plantations, and some Chateau Margaux.

Thu, 06/07/2012 - 17:30 | 2505426 suckerfishzilla
suckerfishzilla's picture

Buy Silver and take a pass on the DOW either way. 

Thu, 06/07/2012 - 17:33 | 2505433 Dinho360
Dinho360's picture

No QE raised dollar/sank gold. However, ball is now in EU's court. We know ECB won't print, so the next move is sure to be a euro unification plan of some sort. That will raise euro and sink dollar/raise gold short term.

Thu, 06/07/2012 - 18:07 | 2505518 Rip van Wrinkle
Rip van Wrinkle's picture

ECB won't print? We'll see.

 

And euro unification? Have you got any idea how long that would take and just what the chances are of it happening?

Thu, 06/07/2012 - 18:30 | 2505574 NotApplicable
NotApplicable's picture

All it takes is one war. Chances? 100% guaranteed.

Timing? What do I look like, a numerologist?

Thu, 06/07/2012 - 17:41 | 2505448 devo
devo's picture

Article is pretty much spot on, but the Fed won't act until August. June is a slow month so they can blame it on that and buy a little more time.

Thu, 06/07/2012 - 17:43 | 2505452 ArrestBobRubin
ArrestBobRubin's picture

A liitle bit from today's Le Metropole Cafe update from GATA's Bill Murphy:

"This is a bit self-serving, but nothing makes much sense as far as gold and silver are concerned unless their action is viewed from a GATA perspective. Yesterday’s two stage takedowns, the second a waterfall one, was all about The Gold Cartel going into action. Reading why gold supposedly acted the way it did from most of the gold pundit group was beyond laughable.

The Gold Cartel had to be stunned by what happened last Friday and must have spent the weekend figuring out their game plan on the manner in which to calm things down. And that is what they have done. Step one yesterday was to take gold down going into the Comex close. Step two was to bomb the price in the Access Market with a PLAN C attack where market conditions are thinner. Step three was to come back in today and halt all rallies no matter what related financial markets were doing … and then really step up to the plate to show who was boss..."

Thu, 06/07/2012 - 18:32 | 2505580 NotApplicable
NotApplicable's picture

So... what was the play-by-play for last Friday's jump again? China? Russia? India?

Thu, 06/07/2012 - 17:54 | 2505485 edwardo1
edwardo1's picture

Rynak, take it over to FOFOA, if you dare.

Thu, 06/07/2012 - 18:58 | 2505635 essence
essence's picture

FOFOA does masterful work from a theoretical perspective, but have you noted how he doesn't delve much into the on the ground political situation and how it impacts his ideas.

As an adjunct to their current manipulations, I believe TPTB are angling for 100% digital money.
PMs would lose a great deal of their liquidity under that scenario and of course, it's a NWOers wet dream for its control purposes.

The wildcard here is the BRICs and a possible new currency/alternate SWIFT system that is Gold backed in part. That could change this stalemate rather quickly.

 

 

Thu, 06/07/2012 - 19:54 | 2505728 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

I wonder if the Koreans would take gold for bearings going to Peru...

Thu, 06/07/2012 - 21:48 | 2505945 Beam Me Up Scotty
Beam Me Up Scotty's picture

You are spot on. Digital money is nothing more than a control mechanism. I use my credit card so little now. Screw the airline miles. I use cash for everything and so should everyone else.

Thu, 06/07/2012 - 17:57 | 2505490 Debugas
Debugas's picture

what bothers me alot is that market is completely in the mercy of central bankers injecting (or withholding) new money. Total domination of manipulation. No real projections possible based on fundamentals :(

This is so disturbing that i simply refuse to play this casino game

Thu, 06/07/2012 - 18:35 | 2505587 NotApplicable
NotApplicable's picture

One might call it the murder of capitalism. Of course, there's always that incoherent, alternate storyline that Marx wrote...

Either way, the outcome is the same. Economic planning becomes impossible, and most all of humanity will suffer because of it.

Thu, 06/07/2012 - 18:00 | 2505503 web bot
web bot's picture

I will give Bernanke this - he's starting to put the pressure back on the politicians to come up with a solution. He knows that Ctrl-P is starting to lose its effect. I know the Chairsatan is not popular, but he is due this credit - same as to what Draghi did on Monday. 

We're still @#$@ed regardless what happens.

Thu, 06/07/2012 - 18:37 | 2505589 NotApplicable
NotApplicable's picture

Pure rhetoric, no more meaningful than the feuds amongst "professional wrestlers." It's all about keeping the facade of integrity all shiny and clean, while attracting attention.

Thu, 06/07/2012 - 18:14 | 2505523 Bansters-in-my-...
Bansters-in-my- feces's picture

 O.T   ...Am I the only one getting sprayed by Chemtrails daily or what...???

FUCK OFF U.S Mililtary....

 

Thu, 06/07/2012 - 19:37 | 2505702 Ookspay
Ookspay's picture

ON TOPIC   ... You are a tool, and your avatar is gay! God Bless the American Soldier! (May God curse their civilian bosses).

Fri, 06/08/2012 - 18:20 | 2508970 Ookspay
Ookspay's picture

Dear Lord please forgive me for my thoughtless and hurtful words and bless the poor crippled midget children of New Guinea.

I just have no tolerance for little pussies who disrespect the military. Gay dudes? No problem at all, more snatch for me...

Thu, 06/07/2012 - 18:15 | 2505539 robertocarlos
robertocarlos's picture

It's not a bad idea to own one two ounces of physical gold and a few dozen ounces of silver. Just don't put all your eggs in one basket.

Thu, 06/07/2012 - 18:29 | 2505569 Al Gorerhythm
Al Gorerhythm's picture

Now, where have I heard that sage advice before? Oh, yeah, financial advisers. Hmmmmm.

Thu, 06/07/2012 - 18:47 | 2505610 robertocarlos
robertocarlos's picture

The best part is we financial advisors don't even need any credentials.

Thu, 06/07/2012 - 19:18 | 2505660 Al Gorerhythm
Al Gorerhythm's picture

Just a pin-striped suit and a gold tooth.

Thu, 06/07/2012 - 19:08 | 2505642 essence
essence's picture

Yeah, wise advice about "not putting all your eggs in one basket".

Especially with all the wonderful alternatives out there.

Thu, 06/07/2012 - 21:51 | 2505953 Beam Me Up Scotty
Beam Me Up Scotty's picture

I didn't put all my eggs in one basket. I put them in Enron and Aol and Dell. I did this in 1995. Am I ok today?

Thu, 06/07/2012 - 18:17 | 2505543 Money 4 Nothing
Money 4 Nothing's picture

"China Will Blink And Gold Will Soar"

How? it's called a Global shut down. There is a bigger picture that is not advertised yet, Get that term through your heads. 

Thu, 06/07/2012 - 18:33 | 2505585 crawldaddy
crawldaddy's picture

What a load of shit, Gold will take off one day, but it will collapse first.  Like a tsunami, the tide will go way way out, then the giant wave comes.

When will gold go nuts, after it bottoms, as that will be the last gasp of the fiat, then all hell breaks loose.

Thu, 06/07/2012 - 18:38 | 2505592 NotApplicable
NotApplicable's picture

Do the nukes come before, or after Hell on Earth?

Thu, 06/07/2012 - 19:24 | 2505665 essence
essence's picture

How prescient considering Prometheus (the prequel to Alien) opened today.

I recall a line in one of the Alien movies where they discover they're headed back to Earth.
The remark then is "Earth, that shithole"

Now we have an idea how that came to be.
The banksters won.

 

 

Thu, 06/07/2012 - 20:33 | 2505825 Kayman
Kayman's picture

And I remember Chinatown where Ben Bernanke (played by Roman Polanski) warms Jack Nicholson's leg (working America).

Thu, 06/07/2012 - 18:40 | 2505593 Silver Garbage Man
Silver Garbage Man's picture

Right now 10 grams of Gold equals 1 slice of apple.
But Dick Bove told me to buy the banks . What should I do???

Thu, 06/07/2012 - 19:30 | 2505684 chump666
chump666's picture

Mike, you should be watching Asia.  In fact every trader on the planet should be.  They will 100% be buying the USD on dips, have been for months.  In fact you could argue that the correction started in Asia via major USD buy ups, bond outflows, FX outflows.  The creditor to the US is in big trouble (in-not-so-little China).

Two trades, once equities hit their tops, which looks like about now, will be USD and gold buying.    I suspect that the Asians will also sell the front of the curve (en masse), namely the 10UST.  It will stop any bull market rally in equities in seconds.  Any big print job from China will just encourage the Chinese to covert to more USDs.

The end game is on and countdown to total market reset has begun. 

 

Thu, 06/07/2012 - 19:38 | 2505695 deflator
deflator's picture

 Yup, China is getting dry powder to buy up commodities futures when they inevitably tank(re-run of '08) as the Bernank can't pull out the bazookas until then. This shit has to be close to an all out collapse--it's too fuckin' predictable.

Thu, 06/07/2012 - 19:49 | 2505722 Westcoastliberal
Westcoastliberal's picture

Bulletin: Looks like things may be heating up in the sandbox; Russians test-fired a missile and flaming parts are landing all over Lebanon, maybe Israel. 

http://www.huffingtonpost.com/2012/06/07/middle-east-ufo-video_n_1579251...

http://www.ynetnews.com/articles/0,7340,L-4239796,00.html

Good idea to keep alert tonight!

Thu, 06/07/2012 - 19:56 | 2505735 Jim in MN
Jim in MN's picture

Dow:Gold 1:1 @ 5,000

I am nothing if not consistent. 

Thu, 06/07/2012 - 20:12 | 2505778 francis_sawyer
francis_sawyer's picture

Nickles bitchez!

Thu, 06/07/2012 - 20:33 | 2505826 newengland
newengland's picture

Slave nation China and its Politburo need gold and silver to soar to meet its obligations to the globalist international central bank cartel.

The Bernanke is a very silly boy, not the messiah, and nor is Obomaney, all pets of the Internationale.

There will be two sides standing after this conflagration of the latest experiment in paper money: the US/UK and Gold/Silver alliance, along with those who defend this.

Thu, 06/07/2012 - 20:34 | 2505829 silverdragon
silverdragon's picture

Go Silver

Thu, 06/07/2012 - 20:46 | 2505847 RobotTrader
RobotTrader's picture

ES, gold, euro all just crashed.

 

Joined at the hip

Thu, 06/07/2012 - 20:58 | 2505856 chump666
chump666's picture

Correct.  As the USD went bid.  American/European-centric traders will be killed. It is Asia and only Asia, check your 10yr chart and USD bids.

Looks like the market correction is back on till the Fed/Bernanke FX swap from hell with the ECB.  Gonna be a big one...that will be your QE3

rally? market is capped for the year and primed for an all out crash. 

Thu, 06/07/2012 - 21:11 | 2505878 chump666
chump666's picture

"American/European-centric traders will be killed"

Which is essentially aimed at Marketwatch.  F*cking dumb-ass reporters

:)

Thu, 06/07/2012 - 21:02 | 2505866 devo
devo's picture

But Warren Buffet said...

Thu, 06/07/2012 - 22:32 | 2506034 Freddie
Freddie's picture

What about Charlie Mung-man who thinks gold is a barbaric relic.

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