Here Is Why The Dow Just Passed 13,000

Tyler Durden's picture

Wondering why the DJIA just passed 13K again? Wonder no more: as the chart below shows it is entirely due to the nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that. We would add that with the entire centrally planned ponzi scheme hell bent on preserving the illusion of nominal gains, global liquidity is now fungibly sloshing from one market to another with absolutely zero resistance whatsoever. At this rate, it should double again in 3 years, then 2, and so on. Will the Dow hit 52K in 5 years in that case? Why most certainly. Just ask any remaining citizens of the Weimar Republic. They know all too well about exponential stock market rises. They also know absolutely everything about the self-delusion that comes with chasing NOMINAL numbers. Oh, and before we forget, expressed in spot gold price, the central bank aggregate tally has moved from being the equivalent of 10 billion oz of gold, to just 8 billion. Guess what is 20% underpriced.

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bigdumbnugly's picture

 ok.  that'll get me to tune in.

but if she doesn't i'm holding you responsible for jack's bitter disappointment.

Shizzmoney's picture

I bet she gives great head with those lips.

I mean, how ELSE did she get that job?

victor82's picture

Can someone page Ron Jeremy?

longdong silver's picture

Based on the chart, Gold is horibly under priced..

but, we already knew that.

drink or die's picture

Anyone catch Cramer on GMA this morning?  Made me want to throw my dog through the TV.

NotApplicable's picture

Your dog would likely appreciate the interruption.

victor82's picture

Calm down, Governor Romney.

Trader47's picture

DJIA just passed 13K again? I think we been here before, same shit different day/month/year

Dow : Gold 1:1 soon


One Gold Coin a Day keeps the Bankers away

Seasmoke's picture

$1750 a day is not an easy thig to do........$34 a day however , very easy to do

NotApplicable's picture

Even more sickening is when you realize that all of this new money goes right to the banksters and the other crony-capitalists seeking rent, such as all of those "patriotic" defense contractors. Then they use it to claim title to all real property as the previous holders fail in maintaining enough liquidity to service the debt while paying for such luxuries as food.

Meanwhile, gas only went up a nickel today... so far.

dwdollar's picture


And let's not forget their enforcers in DC, the city which seems to be growing faster than any developing economy abroad...

BoNeSxxx's picture

DING... DING... DING... We have a winner.

The Cash Cow is stabled in DC.  The ponzi must be protected. As ZH pointed out yesterday, the finacial return on campaign contributions is OUTSTANDING.

And, see here:

10 of the nation's 15 wealthiest counties are outside DC.  Coincidence? /rhetorical

Zymurguy's picture

The first border fence we put up should be around DC, then we'll worry about Mexico!

Shizzmoney's picture

"Food as a luxury" lolz

I can see it now,

"Next week on 'Lifestyles of the Rich and Famous 2020', hosted by Ryan Seacrest: Ryan heads on over to his pal Kim Kardashian's house to check out her gold plated Water Cooler, and then sees Jaime Dimon eating "old school" with a delicious Cheeseburger!"

BTW, average incomes for VA/MD districts that surround DC - $103K.  Most are in the cybersecurity/counter intelligence business.

Yet they are laying off postal workers.

Yeah, the government's not corrupt.

Whoa Dammit's picture

So what are the central banks going to do with all of their stock? Nothing benign I am sure. Keep in mind that PBOC is the leader of the pack in this stock grab.

teaconomist's picture

Uncle Ben says inflation is under control. Check out all the freshly printed money chasing the dow (not to mention food and energy). Just sayin'...

citta vritti's picture

so, now we know: Uncle Ben's rise - it's what's for dinner

bobola's picture

Speaking of numbers, the Baltic Dry Index and the 1 year Greek bond yield are getting ever closer;  715 / 652

Intersection point may be just under 700.........


resurger's picture

Breaking News

The Sheeple hails Ronald Regan & Gordon Gekko

"Greed is Good"


Convolved Man's picture

All that glitters is babble-licious.

-The Bernank Chants (Barbaric Coda)

cameldojo's picture

Why do I feel like I'm watching the titanic on basic cable with all the commercials while strapped in my chair?

swanpoint's picture

That giant ripping sound is my Jan '13 SLV $50, GLD $200 call options.. my Candian Silver and Gold Maples are making no sound all inside my 700 lbs safe next to Mr Mossy his 100 bandoleired little friends.

squidward's picture

OPSEC? It keeps Mr. Mossy hidden in a vault no one knows about.

taniquetil's picture

Don't let the bears fool you, this market is extremely bullish right now. Dow will be at 100,000 by June.

BlackSea's picture

At least. And bread $500/loaf

BlackSea's picture

[ ] with clowns

[ ] with monkeys

[ ] contortionists only

Papasmurf's picture

Jim Cramer is all three rolled into one.

Shizzmoney's picture

Awesome news!  When are we going to get a raise?

Wait, my taxes got raised.


BlackSea's picture

You get a 5% raise for every 50% debasement in the purchasing power of the dollar. Ok?

KnowIDontKnow's picture

Can someone explain how this means gold is 20% underpriced?  If the aggregate CB balance sheets used to be equivalent to 10 billion ounces of gold and now are equivalent to just 8 billion ounces of gold... doesn't that imply that gold is overpriced by 25%?

For the record, I'm not saying gold is in fact overpriced - I'm just not following the argument presented here.

BlackSea's picture

Don't let math and logic get in the way of a good story.

ParkAveFlasher's picture

Don't let an equal sign deter either of you from understanding that the price of gold per oz is a metric for valuing all other assets, for leasing and loaning, that's the implicit assumption Tyler makes.  Gold does not float on paper.  Repeat.  Gold does not float on paper.   

BlackSea's picture

Easy there tiger. Your gold price today has nothing to do with physical. Neither has the man's question affected gold's dignity. It was just nit-picking for God's sake. Relax!

ParkAveFlasher's picture

It's not a nit pick.  I somewhat agree in that the fizz and the spot price have 500,000 invisible flywheels operating along the belts that join them.

I say it's not a nit pick because gold is not an asset that anyone could write down the price of on a balance sheet without very conspicuously admitting market manipulation, which is what CBs have been loathe to do.  CFTC "investigation" into silver in its fourth year.  THey will not even whiff of a suggestion of admission until they are ready to ignite the solid fuel boosters on the price, and that's only after they've sucked the inflation teets dry. 

ParkAveFlasher's picture

And, you relax yourself TIGER CUB.  There's a beaver by a lake who adorns his lodge with the ingots I fumbled into said lake years ago.  It's very important to the beaver, that the beaver understands which way the price will go and precisely why.  Whole generations of beavers - and by reading this blog, there are many beavers finding many shiny objects on lake bottoms around this great land - depend on correctly appraising the situation. 

+25% vs -25% is hardly a nit pick.  If the man stands behind his math maybe he should defend it.

KnowIDontKnow's picture

If we are pricing things in gold and not dollars/fiat currencies, then the implication is that central banks have in fact contracted their balance sheets by 20% (priced in gold) since 1999, and need to expand them by another 25% to keep up.

But wouldn't a further expansion of the balance sheet just lead to an increase in the fiat price of gold (or, if you insist, a decrease in the value of fiat currency measured in gold), meaning that even more balance sheet expansion would be necessary to maintain balance sheets steady relative to 1999?

Which brings up another question - why is 1999 the reference year?  The economy was hardly stable or healthy then, either.

Just sayin.

malek's picture

If you assume the balance sheet quality to be unchanged, that would be correct.

user2011's picture

Wait... I don't get it.   It's been all along saying HFT pushing the market up and squeeze the shit out of the shorts.  Now, it is saying CB buying the market up.  What is the real deal ?  

Is the market volume getting thinner and thinner ?   If so, CB's are  still buying ?   I thought no one is buying, it is only the robot working hard right now.



BlackSea's picture

How about CB providing copious "almost-free" money fueling the overnight lending needed for leverage so HFT can do their best. Does that make sense to you?

silverbullion's picture

LOL We don't talk much... so I suppose it will remain a mystery.

BlackSea's picture

I hope you're not thinking of kidnapping and hiding silver in a dark spot either, right? Or worse, buying and enslaving silver?

silverbullion's picture

LOL I don't have a black heart BlackSea.

BlackSea's picture

Touche monsieur. Although it's Sea not Heart and it should be gold not black.

Trader47's picture

OK --1750 A MONTH, 34 a day,, agreed

Bought Gold $ 300 in  2004, Silver $5, not long to go before I retire to Punta Del Este, or Algarve,( when they bring Escudos Back)

whoisjohngalt11's picture

so why am i being cesnsored on here ???

silverbullion's picture

I believe you are censoring yourself.