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Has Bernanke Become A Gold Bug's Best Friend?

Tyler Durden's picture


Below we present the indexed return of ES (or stocks) and of gold over the past 24 hours since the Bernanke announcement of virtually infinite ZIRP, and the latent threat of QE3 any time the Russell 2000 has a downtick. It is unnecessary to point out just when Bernanke made it all too clear that the Fed has nothing left up its sleeve, expect to directly compete with the ECB over "whose (balance sheet) is bigger," as it is quite obvious. What is not so obvious, is that for all intents and purposes, Bernanke may have unwillingly, become a gold bug's best friend, as gold (and implicitly silver) has benefited substantially more that general risk. Much more. So for the sake of all gold bugs out there, could the Fed perhaps add a few more FOMC statements and press conferences? At this rate gold should be at well over $2000 by the June 20 FOMC meeting.

And yet it is not smooth sailing: the time has come to watch out again for potential CME margin hikes (or rumors thereof) in gold at any given moment. After all, any increase in the price of protection against central planning stupidity is "irrational" and must be promptly punished by the keepers of the trillions in "stable derivative markets", who are too busy to police the MF Globals of the world and instead have a mandate of killing any PM price breakout.


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Thu, 01/26/2012 - 15:20 | 2100511 redpill
redpill's picture

You can always tell when PMs are on a tear because Robo is nowhere to be seen!

Thu, 01/26/2012 - 15:23 | 2100521 nope-1004
nope-1004's picture

Or Benocide just spoke publicly, jittering, shaking, convulsing, and lying.

Silver and Gold MUST be bought.  Right MDB?


Thu, 01/26/2012 - 15:25 | 2100530 fuu
fuu's picture

C'mon Ben, make it rain some more.

Thu, 01/26/2012 - 15:30 | 2100544 nope-1004
nope-1004's picture



Current fears of inflation are largely over stated.  I attribute rising food prices in developing nations a result of the people of those nations seeking more sophisticated diets.


- Benocide, 2011


Keep yapping Ben.  Silver and gold spike with every lie.


Thu, 01/26/2012 - 15:31 | 2100555 Everybodys All ...
Everybodys All American's picture

Translated : Shut up sheeple, I'm a Yale graduate magna cum laude. Perfect score on the SAT.

Thu, 01/26/2012 - 15:34 | 2100567 I think I need ...
I think I need to buy a gun's picture

i'm pretty sure that was an intentional prick to the dollar bubble yesterday

Thu, 01/26/2012 - 15:45 | 2100600 BaBaBouy
BaBaBouy's picture

Like I Keep Saying, GoldManip is on Bitchez ...

It's their top DeWalt "TOOL", to keep their "System" afloat, for now...


US fiat print limit is now $16.4 Trill, hehehe that otta last them a couple of months...


Evantual Manip will fail, and GOLD beyong $25K.

Thu, 01/26/2012 - 15:45 | 2100607 GetZeeGold
GetZeeGold's picture



A couple months.....let that actually sink in.



Thu, 01/26/2012 - 16:22 | 2100713 theXman
theXman's picture

BB has always been gold bug's best friend. He started in Fed in 2001. The gold bull market started in 2001 (more or less). That is not a coincidence.

Thu, 01/26/2012 - 18:02 | 2100988 AgShaman
AgShaman's picture

The "King of Sell-Outs" didn't set down the bag of golf clubs in the lightning storm on the 18th green and slither off to his European villa until 2006.

BB didn't leave his Ivy league "Cush" until 2002....then on the Syndicate's "Board" for a few years as an apprentice. He didn't get passed the baton until 2006.

The US Treasury and FED have been secretly suppressing original money for alot longer than 2001.

My guess is it took a few years for the effects of Billy and the Rube's de-regulation policies to get the snowball moving.

After's been a bubble building in everything the Central Bankers and their Investment Banking and Corporate Partners could get their parasite hooks locked into.

I bet it was real convenient to remove the "fractionals" from the Casino Construct....and build global command centers like the CME Groups "Derivative Deathstar". Short pig-tails with big cannon plugs hooked to algorithmic computers on site to manage all those beautiful digits flying thru the "interlinks"....churning profits.

2001 was just when alot more starting catching on to the ponzi. Like when you're trouncing thru the woods in the mountains and the hair stands up on the back of your if something was watching and stalking you. The perceptive will look around and often times spot the wolf or the cougar......most will continue onward like the sheep....flirting with a bad ending.

Thu, 01/26/2012 - 16:32 | 2100728 Caviar Emptor
Caviar Emptor's picture the tune of Diamonds Are A Girl's Best Friend: (apologies to Marilyn Monroe)


John William's words may be quite sentimental

But Bernanke is a Bug's Best Friend

Indian demand can be very monumental

But Bernanke is a Bug's Best Friend 


Analysts grow cold as a trend gets old but remember this to the end

Do yourself a favor and just smile to Marc Faber 'cause

Ben is just a Bug's Best Friend!


Thu, 01/26/2012 - 15:38 | 2100585 XitSam
XitSam's picture

Rising food prices in developing nations are not a problem. They can just switch to eating cheaper food than rice and wheat. Like dirt and sand.

Thu, 01/26/2012 - 15:46 | 2100611 blindfaith
blindfaith's picture

don't forget MUD, we need vitamins too.  Many Africans have already found it stops hunger pains.

Thu, 01/26/2012 - 16:07 | 2100670 akak
akak's picture

Melamine, plastic rice and lead-coated infant trinkets work well too.

Thu, 01/26/2012 - 15:48 | 2100610 TruthInSunshine
TruthInSunshine's picture

With each instance of The Bernank's trembling lip, gold - me precious - finds a bid.


--Anonymous Poet

Thu, 01/26/2012 - 16:11 | 2100682 mick_richfield
mick_richfield's picture

( Spoken by Bendacious )

Now my charms are all o'erthrown,
What strength I have is only from the bucks
Whose virtue fades each time I run the press.
I must be now confined by you
Or sent, like Rodney Dangerfield, Back
To School!  That is my dukedom where
A mild deceiver like myself can still
Make good.

Thu, 01/26/2012 - 15:50 | 2100622 kito
kito's picture

@nope-sorry but bernanke is partially right. there are not enough farmers to keep up with the worlds growing appetite. many farmers are beginning to per jim rogers, the average age of a farmer is in his late 50s..couple that with chinas growing middle class looking to eat more than just rice and vegetables.....if an outright deflationary depression doesnt hit the world, food price increases, coupled with oil, would be most accurately reflective of true supply/demand issues............

Thu, 01/26/2012 - 16:12 | 2100667 dwdollar
dwdollar's picture

The average owner of the farm is in his 50's. His kids and grandkids can't afford their own farmland do to the fact that farmland is finite and people like Jim Rogers bid it to the stratosphere. They remain on the family farm and within System D.

Thu, 01/26/2012 - 16:58 | 2100814 kito
kito's picture

people like jim rogers bid it to the stratosphere??? are you for real? do you have a clue about commodities??????

Thu, 01/26/2012 - 17:47 | 2100921 dwdollar
dwdollar's picture

What part of Jim Roger's wealth >> average farmer's wealth don't you understand? The great Jim Rogers (and people like him)... The men who made a lot of money at the end of a debt super cycle Ponzi by trading paper to greater fools. Now they want to trade it all in for physical assets. Maybe that's smart, but it's hardly fair to those who spent their whole lives being infinitely more productive (while being shoved to the bottom for it by paper whores). Alas, life isn't fair. Anyways, we'll see how Jim Rogers (based halfway across the world) is able to keep his land when the game is over.

Thu, 01/26/2012 - 17:28 | 2100898 xela2200
xela2200's picture

Forget that. Monsanto is killing them all with their seed patents and its practices. Farmers who use Monsanto seeds are not even allowed to store any seeds from harvest for future planting. A practice that has been in place since farming began. Some are even genetically engineer to produce lower yield in second generation. If anybody wants to go into agribusiness, I would recommend some other country (Australians kind of speak English). Between Monsanto, Cargill, bleeding hearts and well intentioned bureaucrats you will be too busy for farming.

Thu, 01/26/2012 - 19:26 | 2101183 spdrdr
spdrdr's picture

"(Australians kind of speak English). "

Maybe so, but currently we are stuck with a Fabian Socialist Prime Minister (=President) and government, a doddering Opposition (supposedly "Conservative") who are unable to articulate any conservative policies in abject fear of offending the "new green" trend of their supposed electoral demographic of latte-sipping doctor's wives in wealthy urban suburbs.

Wait until we can clean out all of these full 'tard commies and fellow-travellers, the "green" watermelons, and all the other useless cunts who have overrun this once great country over the last 20 years.

Once you get the "all clear", by all means emigrate here.  You will be welcome, black, brindle or brown, whatever. Australia needs people who can farm.




Fri, 01/27/2012 - 00:28 | 2101688 xela2200
xela2200's picture

OK Mate, but hurry because the guy with all those aquaponic videos doesn't seam like is going to last until then.

Thu, 01/26/2012 - 16:13 | 2100690 Irelevant
Irelevant's picture

This chart explains why prices are soaring. It`s a exponential chart :), like the debt chart, like the growth paradigm, like the oil consumption chart. This is Beijing traffic today, this was Beijing traffic in 1990. You will never have resources that are finite in nature grow exponentially! So, at some point, something will have to give.

Thu, 01/26/2012 - 16:30 | 2100735 PhattyBuoy
PhattyBuoy's picture

"I attribute rising food prices in developing nations a result of the people of those nations seeking more sophisticated diets."

Has Benny stepped foot in a US grocery store recently?

Food price inflation through the roof !  30% to 40% in last 12 months ...

Costco large box of tide from $16.00 to $25.00 in last 6 months ...


Fri, 01/27/2012 - 03:54 | 2101876 Libertarian777
Libertarian777's picture

I guess take two iPads and call dr Ben in the morning? iPads are very sophisticated, every family should eat iPad.

Thu, 01/26/2012 - 15:28 | 2100545 WonderDawg
WonderDawg's picture

Didn't we play this same song over and over again last year?

Thu, 01/26/2012 - 15:55 | 2100640 SWRichmond
SWRichmond's picture

Patience, grasshopper

Thu, 01/26/2012 - 17:20 | 2100872 CompassionateFascist
CompassionateFascist's picture

Elemental Economics. Put a paper dollar on the the table. Suspend another paper dollar above it. Drop. The sound of silence. Put a silver eagle on the table. Drop another on top. Hear the difference? It's the sound of real money.

Fri, 01/27/2012 - 01:04 | 2101730 Hulk
Hulk's picture

Its the same old song, 4 tops @ $1900...

Thu, 01/26/2012 - 15:28 | 2100543 redpill
redpill's picture

My physical is stocked away safe and sound, but it's too hard to resist trading these knee jerk market moves..


30% bitches!

Thu, 01/26/2012 - 15:40 | 2100592 trav7777
trav7777's picture

bbbbut....bbbbut...DECOUPLING!!  Paper going to zero "imminently"!!!!1

Thu, 01/26/2012 - 16:19 | 2100680 akak
akak's picture

Dance, Bob Moriarty, dance like a good little troll clown.

Keep spewing your insane, spittle-flecked rage against silver, and make us laugh even more.

Thu, 01/26/2012 - 16:21 | 2100709 Long-John-Silver
Long-John-Silver's picture

Unlike Meth Man and Johnny Bravo we will forget you. You fail even at being an entertaining troll.

Thu, 01/26/2012 - 16:49 | 2100788 akak
akak's picture

He SHO do hate dem niggahs, doe!

Thu, 01/26/2012 - 16:52 | 2100798 tmosley
tmosley's picture

The Sword of Damocles hangs over your head Trav, but you are too stupid to move your fucking chair.  Or rather, you are too evil to allow others to move theirs.

Thu, 01/26/2012 - 17:15 | 2100828 akak
akak's picture

Not only too evil to advise others to move their chairs, but more than that, evil enough to berate and bully them to sit still and insist that they NOT move their chairs, meanwhile attempting to nail their chairs in place.

Thu, 01/26/2012 - 18:24 | 2101046 smiler03
smiler03's picture

tmosley and akak,

You two are like a pair of stuck records. Can't you change the bloody double act?

Thu, 01/26/2012 - 19:06 | 2101089 akak
akak's picture

Can't you stop bitching about posts of no apparent consequence or interest to you?

I respond to lies, dishonesty and disinformation of my own accord, and based on my own standards --- if tmosley happens to feel and respond similarly, that is his business and his alone.  Should I refrain from responding to Trav's bullshit anti-silver propaganda, or any other post, merely because tmosley might happen to have already responded to it as well, or vice versa?

Get a life.

Thu, 01/26/2012 - 18:56 | 2101114 tmosley
tmosley's picture

My apologies for being consistant.

If you want flip-flopping, perhaps you should visit the forums of any of the "top-teir" presidential candidates?

Thu, 01/26/2012 - 15:50 | 2100623 blindfaith
blindfaith's picture



I guess you don't realize that your PHYSICAl location is tracable thru your computers ID address.  Now they know you have some and it is safely stored until the boys show up one evening to collect...for the national good.

All you bragards need to tone it down, Ain't to smart.

Thu, 01/26/2012 - 15:53 | 2100633 redpill
redpill's picture

Child please, it ain't here.

Thu, 01/26/2012 - 15:55 | 2100641 Random_Robert
Random_Robert's picture

My computer doesn't have an ID address...

I guess I'm safe.



Thu, 01/26/2012 - 16:12 | 2100689 fuu
fuu's picture

I was just thinking it is a good thing my machines have IP addresses. These ID addresses sound dangerous.

Thu, 01/26/2012 - 21:58 | 2100797 Blank Reg
Blank Reg's picture

Quick! How do I get one of those IP addresses? Do they sell them at Walmart?

Fri, 01/27/2012 - 00:55 | 2101718 Non Passaran
Non Passaran's picture

They used to but because of people like Jim Rogers the world ran out of them (IPv4)

Thu, 01/26/2012 - 16:53 | 2100802 peekcrackers
peekcrackers's picture

I dont have address .. I must even safer

Thu, 01/26/2012 - 22:29 | 2101536 HungrySeagull
HungrySeagull's picture

Ain't no gold here. IP traces to a data center 2 counties over.

Thu, 01/26/2012 - 15:44 | 2100604 SheepDog-One
SheepDog-One's picture

Robo obviously was driven to utter madness when he called the gold top at $900 and sold. He now consider gold and anyone who likes gold his arch nemesis, like a Batman cartoon. I hope the guy can seek some professional help before its too late.

Thu, 01/26/2012 - 16:33 | 2100691 akak
akak's picture

Rumor has it that poor RobotTarder was last seen compulsively masturbating to his basement bedroom posters of the Bernankster and Jon Nadler, fervently repeating:   "I believe in paper!  I believe!  I BELIEVE!!"

Thu, 01/26/2012 - 16:51 | 2100796 WonderDawg
WonderDawg's picture

LOL You crack me up, akak. Overuse of adverbs usually gets on my nerves but you seem to pull it off most of the time.

Thu, 01/26/2012 - 16:56 | 2100809 akak
akak's picture

I does what I cans.


Thu, 01/26/2012 - 20:52 | 2101381 DosZap
DosZap's picture

I think we are VERY close to a time when CME upping margins is going to be like kissin your sister.

People are going to ignore it.

When paper price decouples from Physical OPENLY, turn off the lights on the HIKES doing the dirty.

Even traders will wake up to the fact that trading, and not holding is death.

Fri, 01/27/2012 - 03:12 | 2101861 Always Positive
Always Positive's picture

As a new-ish poster I'm not sure who Robo is - but I assume he thinks, as I do, that gold bugs are in for a VERY big surprise.

That surprise will be gold at $1000 or quite a bit less - but let's stay on the conservative side at $1000 (I'm actually thinking $8-7-600 ish

Trouble is, you gold bug guys only see the ocean, not the tsunami, the dark shape towering on the horizon. Too busy with your plastic buckets & paddles, having fun, showing how strong & clever you are.

The tsunami  is DEFLATION. Coming to a beach/town/city near you. The smaller, initial waves are already here but you've been spun by the spin and can't see them swirling around your ankles. Blind.

That's the way it works. To suck in the majority of suckers. Big wave comes. 'No, it can't's a cloud, it's a.... CRASH!'

Of course, gold is the ONLY real money. Always has been, always will be. Eventually.

But the TPTB (who know much more, and are more powerful & manipulative than you think) as well as history & cycles are not on the gold bugs' side. You'll be taken down, big time. Sad but inevitable.

When the panic starts, the REAL panic, you'll want to unload your pm's.

And I'll be here. Because I'm always ready, always waiting, always positive.











Thu, 01/26/2012 - 15:23 | 2100515 TruthInSunshine
TruthInSunshine's picture

Barbaric relic!


[gnom, gnom, gnom - eating Canada's new plastic $100 bill]

Fri, 01/27/2012 - 01:59 | 2101802 ruffles
ruffles's picture

Where Im from, most people think its more real than the old $100 bill

Fri, 01/27/2012 - 02:02 | 2101806 StychoKiller
StychoKiller's picture

Hmm, Au only comes in one color (excluding Black Hills Au... and white Au...okay, it only comes in 3 colors, then!)

Thu, 01/26/2012 - 15:22 | 2100517 THECOMINGDEPRESSION

Gold to $25,000.... Ok $2500.

Thu, 01/26/2012 - 15:22 | 2100518 redpill
redpill's picture

The downside to gold is you can't burn it for warmth like you can worthless fiat.

Thu, 01/26/2012 - 15:33 | 2100562 sabra1
sabra1's picture

melting point of gold is 1947 degrees F. it'll keep you warm, and it goes down real smooth! the plus is, you can crap it out, and remelt it again!

Thu, 01/26/2012 - 15:23 | 2100522 ehmjaysee
ehmjaysee's picture

Gold bug's best friend?  Not really.  Holders of gold are not making gains so much as they are just keepinp up with inflation.

Thu, 01/26/2012 - 15:26 | 2100538 bob_dabolina
bob_dabolina's picture

Depends on what metric you are using to gauge inflation. Typically for an average family your home is the piggy bank with the goal of owning it outright over whatever period your mortgage is for. So we have inflation in some areas like in consumer goods but not in housing. If one said I'm buying $100,000 in gold vs. buying a new home then I'm sure they are much happier at least from a wealth perspective.

Thu, 01/26/2012 - 15:32 | 2100560 trav7777
trav7777's picture

the way people look at it is effed up.  A home is an "investment"...metals are just something you buy and spend money on.

Took this chick to a coin store and some guy bought a halves bag.  The girl talked derisively about "how much he spent" as if this was like buying jeans or something.  I peeked at his invoice...was like $4400 back then IIRC.  Yeah, I had to dump that bitch.

Thu, 01/26/2012 - 15:42 | 2100573 bob_dabolina
bob_dabolina's picture


You have to look at it as a ratio: 

In 2007 the median nominal house price was just about $250,000 and gold was trading at about $650. So in 2007 384 ounce of gold were needed to buy a home. 

The nominal home price is now about $155,000 and gold is trading @ $1,700 per troy ounce. So now it takes 91 ounces to buy a home. 

If you bought 384 ounces of gold instead of a home in 2007 you could buy 4 homes today and have some $ leftover to buy your date a nice diamond necklace.


Thu, 01/26/2012 - 15:54 | 2100636 Hippocratic Oaf
Hippocratic Oaf's picture

How 'bout a pearl necklace?

Thu, 01/26/2012 - 15:58 | 2100645 bob_dabolina
bob_dabolina's picture

I'll pass but thanks for asking.

Thu, 01/26/2012 - 23:34 | 2101614 AmazingLarry
AmazingLarry's picture

That's just silly talk. And by silly, I mean awesome. 

It's like a buddy whom I've gotten into PM's said after the $1900 to $1500's move: gold lost $400! What do I do?

A: nothing. The dollar just got a little boner and the Viagra's about to run out. So down goes the boner and down goes the number of oz you get for your dollar. Again. Same story as before. Sorry to tell you nothing has changed.



Thu, 01/26/2012 - 15:38 | 2100584 kito
kito's picture

@trav---youre so romantic....a coin shop date....and i always thought diamonds were a girls best friend.......

Thu, 01/26/2012 - 16:23 | 2100718 akak
akak's picture

Yeah, and he took her to Burger King afterward too --- oh so debonaire, that trav.

But he inexplicably flew into a rage when the BK employee handed him a hamburger wrapped in silver-colored foil.  So much for that date --- back to Craigslist.

Thu, 01/26/2012 - 17:04 | 2100834 MarcusLCrassus
MarcusLCrassus's picture

The all-important Thanksgiving inflation index was up 13% in 2011 over 2010.  I.e. Thanksgiving cost 13% more in 2011 than it did in 2010.   

Now, I'm not saying that inflation across the whole economy was 13%, but it certainly wasn't the ~2% or so the government vave us.  Probably somewhere in the range of 5-10%.  And with that kind of inflation, if you haven't hedged yourself you are a fool.  

Thu, 01/26/2012 - 15:29 | 2100549 SolidSnake961
SolidSnake961's picture

Inflation? Short term commodity price moves in food and energy is not real inflation. How can the purchasing power be destroyed by each percent rise in gold if the prices for everything is staying the same or getting cheaper? Gold is merely acting as a safe-haven for "expected" inflation as well as safety from US Treasurys and a volatile stock market plus don't forget the massive gold short covering by banks.

Thu, 01/26/2012 - 15:31 | 2100554 mayhem_korner
mayhem_korner's picture

Holders of gold are not making gains so much as they are just keepinp up with inflation.


So by extension of your logic, equity holders are losing ground to inflation, and have been for years.  The more people realize this, the more fiat will flow from equities to PMs.  And then maybe gold and silver will begin to exhibit their true value.

The significance here is that with QE1 and QE2, stocks rose also.  If this decoupled response keeps up, then we are closer than I thought to GAME OVER, INSERT QUARTER TO PLAY.

Thu, 01/26/2012 - 15:34 | 2100569 trav7777
trav7777's picture

Tyler should run a dividend payer look.  The SP as a whole is not a good buy.  If you can generate some alpha, you'll have kept up with gold.

For example, a reliable payer like KMP has done very well.

Thu, 01/26/2012 - 15:48 | 2100616 SheepDog-One
SheepDog-One's picture

That would have to be his logical conclusion, if gold is 'only keeping up with inflation' with its 5X performance gains over the last decade, then stock holders are plunging down losing in all areas not keeping up with inflation at all! Stock indexes being still around 2000 levels.

Thu, 01/26/2012 - 15:24 | 2100525 DaddabhaJataka
DaddabhaJataka's picture

Gold's inverse correlation with stocks does not bode well for risk assets.

Thu, 01/26/2012 - 16:03 | 2100658 Random_Robert
Random_Robert's picture

That comment earns you the "DUH" of the century....

Thu, 01/26/2012 - 16:24 | 2100721 akak
akak's picture

Define "risk".

Thu, 01/26/2012 - 17:44 | 2100946 mayhem_korner
mayhem_korner's picture



While yer addit, define "asset," too...

Thu, 01/26/2012 - 15:27 | 2100533 Mercury
Mercury's picture

Yeah it's only paper but its OK to strut if you bought GLD calls:

Thu, 01/26/2012 - 15:26 | 2100534 Newsboy
Newsboy's picture

Gold is so 2008.

It's off grid solar, at this point.

Staging of investments is important. Plant those avacado trees now.

Thu, 01/26/2012 - 15:28 | 2100542 Vint Slugs
Vint Slugs's picture

There's nothing wrong with CME, or other exchanges, margin hikes.  Increased initial and maintenance margin levels have been part of futures exchange policies for a hundred years, if not from commodities futures' inception.  Margin hikes have little or nothing to do with "any increase in the price of protection against central planning stupidity".  Think of it this way:  if the initial margin on a $100 face value commodity is 5% then the trader antes up $5.  If the face value then goes to $120, then to keep the 5% rule valid, the exchange requires the trader to pony up an additional $1 (.05 x 120 = 6).  What don't you get about that?

Thu, 01/26/2012 - 15:35 | 2100574 nope-1004
nope-1004's picture

5 hikes in 9 days is normal?  It would be, only if the seller of the contract DIDN'T ACTUALLY HAVE the commodity.


CME / COMEX are covering up one massive fraud.


Thu, 01/26/2012 - 15:40 | 2100591 Bay of Pigs
Bay of Pigs's picture

But Trav says it was a bubble?


Thu, 01/26/2012 - 15:50 | 2100624 SheepDog-One
SheepDog-One's picture

Sure gold is a bubble, but certainly not stocks! Oh no, theyre of course only getting warmed up for further ramping back to R.E. bubble highs.

Thu, 01/26/2012 - 15:54 | 2100638 AL_SWEARENGEN

Did those cocksuckers over at the CME ever LOWER margin requirement for Gold or Silver since both prices are well off their highs?

Thu, 01/26/2012 - 15:38 | 2100581 mayhem_korner
mayhem_korner's picture



Yes, we can all do the math.  But your example isn't a margin hike - it's enforcement of a static margin %.  The manipulation that has been going on is that the % is hiked, at moments uncorrelated with volatility expansion, in order to create a cascading liquidation.  Usually this happens when Au starts to break away from equities.  And so while liquidity is needed to shore up margin accounts on equities, the CME (or some other exchange) cracks the whip on gold, which precipitates an even larger margin requirement.  And since gold is the most readily liquidated thing in so many portfolios, a manufactured sell-off ensues, which is self-reinforcing until the base of unshake-able hands is reached.

This isn't about the exchange's policies, it's about the CBs and ultra-short TBTFs manipulating real money.

Thu, 01/26/2012 - 15:59 | 2100647 Vint Slugs
Vint Slugs's picture

Bullshit on your enforcement of a static margin %.  It's a hike to $6 (in the example) if you already hold the position and it's $6 if you're a new player.  "...while liquidity is needed to shore up margin accounts on equities"--- like there's a mob out there trading ES with Reg T requirements at 50% that's getting called -- what crap. 

Thu, 01/26/2012 - 16:37 | 2100755 akak
akak's picture

I find it comical in the extreme that anybody here on ZeroHedge would even dare try to defend the egregiously manipulative machinations of the CME in regards to gold and silver margin hikes, particularly when the timing and pattern of said hikes were utterly UNLIKE those of any other commodity.

Jeffrey Christian, is that you?

(PS: You looked less like a total wimp when you had the goatee.)

Fri, 01/27/2012 - 01:00 | 2101724 trav7777
trav7777's picture

you stupid fucks LOVED the paper games when silver was rising.

Had no problem with people levering to the moon...shamelessly pumped and cheerled the whole fuckin way.

Fri, 01/27/2012 - 01:42 | 2101777 akak
akak's picture

It's endlessly amusing how you don't even try to tell plausible lies anymore.  I have NEVER participated in the paper PM markets, nor even suggested that anybody else do so, EVER, nor have I ever defended them --- on the contrary, to the extent that I have made any comments regarding the paper PM markets at all, it is was to advise caution in even approaching them, with the thought that they will almost certainly collapse or fail (as they have begun to do with the MFG debacle already) sometime in the not-too-distant future.

Try again, Bob --- your dishonesty and rabid anti-silver rage is showing again.

Please go back to your 321gold website and pump some more marginal gold junior stocks.

Thu, 01/26/2012 - 17:43 | 2100942 mayhem_korner
mayhem_korner's picture

It's a hike to $6 (in the example) if you already hold the position and it's $6 if you're a new player.


Mr. Dimon, Sir, I believe the following exemplifies the associative property: 6/120 = 5/100= 5%

I have a feeling you got stuck at '3' filling out the hopscotch squares when you were a youngin'...

Thu, 01/26/2012 - 15:31 | 2100556 Dr. Engali
Dr. Engali's picture

I'd say thank you Ben I love you....but I won't. The sooner you and your cabal are out of power the better off this nation will be. 

Thu, 01/26/2012 - 15:31 | 2100557 walküre
walküre's picture

... so anywayzzzzzzzzzz y'all heard that Obama was re-elected for 2nd term yesterday?

Thu, 01/26/2012 - 15:34 | 2100570 Dr. Engali
Dr. Engali's picture

Go ahead CME hit us with those margin hikes. The sooner gold becomes non marginal product the better we will be.

Thu, 01/26/2012 - 15:35 | 2100571 earleflorida
earleflorida's picture

QE destroys SME's, personal wealth - enhances multi-nat'l pocketbooks, and banks bottom line, while destroying the foundation of the bond maket - what we have here is a remedy to destroy a nation in Qtime - nice!  

Thu, 01/26/2012 - 15:38 | 2100587 carbonmutant
carbonmutant's picture

Is raising the price of gold part of the plan...?

Thu, 01/26/2012 - 15:38 | 2100588 Jason T
Thu, 01/26/2012 - 17:09 | 2100846 ParkAveFlasher
ParkAveFlasher's picture

Now where would TPTF be without coke and fiat?

Thu, 01/26/2012 - 18:18 | 2101030 mayhem_korner
mayhem_korner's picture



Hey PAF - excellent avatar!  

Two outs per inning, one strike per batter, foul ball off the house is an out, and you can hit the runner with the ball for an out.  2 on 2 Wiffle Ball was king.

Thu, 01/26/2012 - 15:48 | 2100596 Quinvarius
Quinvarius's picture

I think that as long as they have stable or climbing inventory, they will not raise margins.  Meaning, they are not short this time. You have to remember what the experienced Jim Sinclairs of the world have been saying.  It will be the same bankers who have been shorting PM that will go long and make the most money in the end.

Thu, 01/26/2012 - 15:42 | 2100597 kito
kito's picture

is it just me, or does the dow look really worn its been climbing a mountain pass, trying to get home, but.....just....can'

Thu, 01/26/2012 - 15:42 | 2100598 Everybodys All ...
Everybodys All American's picture

Bernanke has become the enemy of the rational. The saver, the elderly, and the lower income. Make no mistake his policy will destroy our standard of living and the poor will be hurt the most by it.

Thu, 01/26/2012 - 15:46 | 2100608 Richard Head
Richard Head's picture

Please smack it down again, Bernank. I got cash to burn!

Thu, 01/26/2012 - 15:52 | 2100630 Dr.Vannostrand
Dr.Vannostrand's picture

+1 Need to DCA down a little.

Off Topic - For any SoCal ZHers, there is a gun show @ the OC Fairgrounds this weekend. Will be there Sunday with the GF. Maybe I will get tanked after and TP (treasury paper) the Casa de Gross a couple of miles away in Newport. Gotta start Project Mayhem somewhere. Conrad Murray, you reading?

Thu, 01/26/2012 - 15:48 | 2100615 bankonzhongguo
bankonzhongguo's picture

In every war zone I've been in, toilet paper has '... a price above rubies.'

Sorry ladies.

I would say you might use the dollar as toilet paper, but the possession of actual cash will designate you a criminal terrorist.

Which begs the growing real perception of the USD in these "trillion dollar days."

The dollar is now really only an electronic (ethereal) form of a fiat promise.

Thu, 01/26/2012 - 15:57 | 2100618 Irelevant
Irelevant's picture

ZIRT 4ever. Actually in 2014 ZIRP will no longer be enoght, we will have N(negative)IRP under wich probably you will be given money for free. At this point it is impossible to EVER return to positive interest rates, a rise to 2-3% would crush the IOU freak show. And, compared with real inflation, we are all ready under NIRP. So gold is a no brainer. Remember folks, DOW 30.000, soon in a town near you.

What has been put in motion, at this point, is impossible to stop, they 100% know that, at some point, the dollar will become worthless, they are just pushing the depreciation curve further down the line, this however, like the debt scenario, is a exponential one. You will need exponential growth in debt in order to keep the ponzi going. At some point it will brake. We just have to wait and see, I do believe it will be interesting at that point.

If you look at this graph it speaks volumes. In 5 months the mark went from 150 to us$ to per us$. So its a matter of confidence, as long as China and MENA are provided with cheap gold, in exchange for dollars and euros, they will accept currency and promptly exchange it for cheap PMS. We are paying for oil with gold, just not officially, the fact that the price of gold is suppressed is a clear validation of that fact, MENA gives us oil for dollars, which are promptly exchanged for cheap gold. When there will be no more gold to be had on the cheap, you will also get no oil from MENA. Except if you maybe bomb them, or arrange for some civil war while we take out the oil. At some point this also will stop. At that point we are fucked.

And finally, from Harvey Organ: "If we were to add the December delivery month to the two non delivery months of January and November  we have a total of 74.207 tonnes of gold notices against a total inventory of 73.98 tonnes or 100.30% of available registered (dealer) inventory.". So the COMEX is bust at this point.

Thu, 01/26/2012 - 16:06 | 2100661 walküre
walküre's picture

at some point, the dollar will become worthless

At some point? Where have you been? People can't make a living on peanut min. wages for a reason. It takes a family (whatever that is nowadays) a min. of two incomes (or 3 or 4 depending) to afford basic necessities. I'm talking the real stuff, not the stuff that's laden with chemicals and pumped with fillers.

The "American Dream" has long ended because it is no longer attainable for the VAST majority (not quite 99%) of Americans. All 100% courtesy of failed Fed policies, banking greed and subsequent currency debasement.

But look at the bright side, America is home to alot of paper millionaires.

But I agree with your general sentiment. We're at the point of no return and this Ponzi will end as all Ponzis before her in a final collapse.

Thu, 01/26/2012 - 15:49 | 2100621 Thomas Jefferson
Thomas Jefferson's picture


Thu, 01/26/2012 - 15:51 | 2100627 SheepDog-One
SheepDog-One's picture

Bernank may be a gold bugs best friend, but not because he wants to be.

Thu, 01/26/2012 - 16:41 | 2100770 ozziindaus
ozziindaus's picture

Maybe he is. Explains why we invade defenseless nations with plenty of Gold. Maybe the US's depleted gold stock is being covertly replenished. Funny how every invasion results in a gold price hike. Has anyone tried to plot US invasions (Iraq, Afghanistan, Libya) v. Gold Price v. USD?

Thu, 01/26/2012 - 15:54 | 2100639 Gief Gold Plox
Gief Gold Plox's picture

I really could use a nice big margin hike, a coordinated one if it's not too much trouble. Every little discount's welcome.

Thu, 01/26/2012 - 16:01 | 2100654 Bam_Man
Bam_Man's picture

I am hoping that in the name of "greater Fed transparency" (LOL) one of the major broadcast networks will give Bernanke his own TV show.

Because every time this man opens his mouth in front of a microphone, my gold bullion increases in value by at least 3%.

Thu, 01/26/2012 - 16:04 | 2100665 Ned Zeppelin
Ned Zeppelin's picture

". . . have a mandate of killing any PM price breakout."  More than a mandate, a survival requirement.  A runaway breakout on gold could/would trigger a currency crisis, and most gold bugs bet it will occur.  I predict that if ever the behind the scene tactics look like they are failing, more forcefull measures will be employed to kill PMs as a monetary rival to fiat currency, which cannot be tolerated in our system.  Confiscation, criminalization, etc. No problem for the Regime.

The Regime, by the way, once again has things frmly under control, Greece is not and the PIIGS collcetivley are not a threat (the ECB will print like mad) and the Fed has now  seen that hand and raised it, by signaling it will do so as well. I think it may be March 2009 all over again.  Hate to sound like Robotrader, but I think that's where we are.  And yes, buy gold to profit handsomely from its "permitted" level of appreciation, but make no mistake the holders of gold will never be allowed to "win the game."  Gold vs. Lead? Gold loses. 

Thu, 01/26/2012 - 17:34 | 2100910 CompassionateFascist
CompassionateFascist's picture

So invest in lead. Now. While you still can.

Thu, 01/26/2012 - 16:09 | 2100676 e_goldstein
e_goldstein's picture

I <3 the Chairsatan?

Sometimes it's really fucked up living in Bizarro World.


Thu, 01/26/2012 - 16:11 | 2100684 BobPaulson
BobPaulson's picture

Crimex margin hikes are already showing diminishing return behaviour. Hold enough cash to buy gold after every hike.

Thu, 01/26/2012 - 16:27 | 2100727 laserjock
laserjock's picture

Someone please explain why gold is supposedly one of the most easily liquidated parts of a portfolio.  Are we talking about physical?  Futures?  GLD shares?  Why is gold in that form any more fungible or easily redeemed for cash than equity shares?

Thu, 01/26/2012 - 16:57 | 2100812 Al Gorerhythm
Al Gorerhythm's picture

With gold, you know what you're buying.

Thu, 01/26/2012 - 17:06 | 2100816 akak
akak's picture

Good point!  Something about that oft-repeated and flippant statement has always bothered me too, but you just put your finger on it.

Thu, 01/26/2012 - 17:03 | 2100832 ozziindaus
ozziindaus's picture

No easier to liquidate than equities, bonds or even dildos. Everything has an instantaneous ASK/BID price.

Thu, 01/26/2012 - 17:26 | 2100894 ParkAveFlasher
ParkAveFlasher's picture

That's funny because I brought a used dildo to the local coin shop, and they wouldn't exchange it for cash at any price.  Go figure. 

Thu, 01/26/2012 - 17:55 | 2100976 BobPaulson
BobPaulson's picture

You have to wash the shit off.

Thu, 01/26/2012 - 18:23 | 2101044 ParkAveFlasher
ParkAveFlasher's picture

The only shit that needs to be washed is stuff you fling onto the plexi in your cage between banana feedings.  Better yet, just have the zookeeper do it....


Thu, 01/26/2012 - 17:37 | 2100916 Dumpster Fire
Dumpster Fire's picture

Long dildos it is.  Or is it dildoes?

Thu, 01/26/2012 - 16:29 | 2100732 non_anon
non_anon's picture

unintended consequences

Thu, 01/26/2012 - 17:07 | 2100838 poor fella
poor fella's picture

NO!!! He is NOT!

If he were my friend - he would talk down QEIII, crash the value of gold, and try to force EVERYONE into the 'economy' (equities). Being a globalist-fiat-puppet-stooge, you know he's trying his best, just a failure at it. I would then be able to put my inner patience to work, and buy on a gold collapse. Most people on ZH, I'd bet, are 'stronger hands', and we would LOVE to pick up some yellow bricks from central banker butt-nuggets.

Go on Bernank - Try it! Are you feeling lucky?!?!

F-------------CK YOU!!!

Thu, 01/26/2012 - 17:14 | 2100862 mr_T
mr_T's picture

How much for 1 RIB ?

Thu, 01/26/2012 - 17:18 | 2100870 xela2200
xela2200's picture

I wonder how much damage they can really do with hikes. There are a lot of strong hands in the market already. They might do it to consolidate and allow the short to bail. Last may we had 40k contracts on the short side and now there are 15k in the silver market.


I don't feel like Bernake is on our side. I just extend my net and hope that I can preserve what I worked for. All of which is stolen from savers who don't know any better. He will be worst off and that sucks, but I am not here to judge the game.

Thu, 01/26/2012 - 17:21 | 2100882 847328_3527
847328_3527's picture

As long as Timmy continues his "strong dollar policy", who cares?

Thu, 01/26/2012 - 17:39 | 2100928 bbq on whitehou...
bbq on whitehouse lawn's picture

I think it has somthing to do with billions of dollars in business that can no longer be conducted in US dollars and soon Euros.

All you need for business to be conducted is an agreement on price, if US dollars or euros can no longer be the benchmark for business then its a free for all. Gold is just as stable as any other and maybe more so then local currencies.

Businesses are stupid and never change their practices unless forced to do so. Obama forced many businesses to conduct business in other currencies. Gold is just one of them.

Thu, 01/26/2012 - 21:03 | 2101397 Spigot
Spigot's picture

Gold on the 1 year chart just broke to the up side of mildly ascending wedge, and on the 6 month chart broke to the upside of a strong down channel.

We have resistance at 1750 and 1800, then at 1900. After which we find out where resistance comes in again.

On the 5 year chart the exceptionally strong upchannel is divided into a larger, wider up channel with a narrower upchannel within it where the price never goes up more than the middle of the larger channel.

The middle of that larger up channel is at about 1800 right now, the upper line is hitting about 2000. Out a ways from this are slightly higher.

The first phase (slowly ascending rate of change) could be said to run from 2001 till 2009. At that point (2009) a new channel (with a steeper slope) started which culminated in the recent August 2011 blow off and subsequent consolidation.

This period corresponds to the "unpleasantness" of contagion spreading within the USA, then crossing to Britian and Europe. The latest blow off resulting from panic over Europe's stupidities.

IMO to watch is the stability of the US$ reserve currency regime, European sovereign debt crisis and derivatives related triggers (defaults, interest rates, FX swaps). Should these begin to disintegrate, then the rate of change for gold will indeed up more than a few notchs and we could easily see very fast movestoward 2500 and beyond.

2012 will indeed be remembered.

Thu, 01/26/2012 - 21:21 | 2101422 vegas
vegas's picture

You would think that the main purpose of a commodity exchange would be to 1) insure fair play among buyers and sellers, and 2) make sure customers money is safe. So, somebody please tell me how anybody does business at the CME any more? Why the hell would you enable this criminal enterprise by giving it business? You're going to seriously tell me the CME doesn't do the governments bidding in PM price suppression?

Yes, tell me again how "safe" it is to do biz in Amerika. Please, anybody.



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