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Market Reaction? 30 Year Just Hit 3.99% As Stock Selloff Accelerates, Gold At All Time Record, Swiss Franc Flash Smashes

Tyler Durden's picture


To see what the market thinks of the economic prospects for the economy look no farther than the 30 Year which just dropped below 4.00% and is trading at 3.99% right now. The market is effectively pricing in a major economic contraction, with long-end deflation now expected. Which means that Bernanke just got yet another carte blanche to proceed with the only thing  he know. And validating it is the equity market which at last check not only did not react favorably to the Senate vote, but has been fading all the news all day, and is now trading at the lows, with the S&P, Nasdaq and Dow all down more than 1% now and plunging. Next up, even as Obama prepares to talk, everyone is once again looking at an imploding Europe which will need its second bailout in a month (and third overall) shortly... or else.

The only chart that matters is, what else, gold:

Ok fine, one more chart: USDCHF, which also just took out record lows following today's latest flash crash.


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Tue, 08/02/2011 - 12:47 | 1517130 Ahmeexnal
Ahmeexnal's picture

only the sheeple think the "deal" was a good thing

Tue, 08/02/2011 - 12:54 | 1517190 the mad hatter
the mad hatter's picture

short the next bounce/retest of 200 and 50 DMAs of the major indices (SPX 1285, 1300). wall st wants QE3 and the only justification wiill be through holding 401ks hostage

Tue, 08/02/2011 - 13:35 | 1517407 slaughterer
slaughterer's picture

People are forgetting: tomorrow is the better-than-expected 200,000 ADP read.  (Remember last month). 

Tue, 08/02/2011 - 14:15 | 1517594 Xibalba
Xibalba's picture

if you were gonna go short the long bond, now looks like a good time to scale in.

Tue, 08/02/2011 - 21:04 | 1519181 max2205
max2205's picture

Prepare for increased and desperate fooling with the next few months of economic reports

Tue, 08/02/2011 - 14:10 | 1517540 BaBaBouy
BaBaBouy's picture


Gold just hit a new high in USD fiats, and also in most other major Fiats ...


GoldToTheMoon ...


Most ASIANS have been buying hand-and-fist for years, and are riding high.


Its too bad that most AMERICANS have not, having been Dumbed down by their mainstream media and WALL STREETERS...


Is USA now heading the way of SPAIN / ITALY / GREECE ???


Tue, 08/02/2011 - 12:58 | 1517211 InconvenientCou...
InconvenientCounterParty's picture


The "sheeple" are conditioned to force complex issues into a binary of (good/bad) and my favorite (us/them).

Let me save you the trouble of replying... I am obviously "bad" and one of "them"

Tue, 08/02/2011 - 13:31 | 1517384 Sudden Debt
Sudden Debt's picture

We don't label here remember?

Just like I a PM freak.

Some would say I'm betting against the system, BUT I DON'T!!! I'M JUST A SPECULATOR AND A COLLECTOR IF IT SUITS ME!

Tue, 08/02/2011 - 14:25 | 1517644 Leanin_Left
Leanin_Left's picture

Agreed.  Complex issues are easily retooled as good/bad binary when they are presented on an emotional playing field instead of a factual one.  We can see it on MSM every day

Tue, 08/02/2011 - 12:58 | 1517215 Sudden Debt
Sudden Debt's picture

I like to eat lambmeat. Especially on the grill with a lot of spicebutter H H HMMMMmmmm!

Tue, 08/02/2011 - 13:22 | 1517331 djsmps
djsmps's picture

Last night, I had lamb chops stuffed with garlic, marinated and then cooked in a red wine, yogurt sauce with basil and rosemary.  But I miss all the Casey Anthony news.

Tue, 08/02/2011 - 13:37 | 1517418 Yen Cross
Yen Cross's picture

  Thanks for the visual..  Yes I'm jealous...  I have 2 stumps and a bloody key board for proof...!

Tue, 08/02/2011 - 14:44 | 1517723 Sheba Poe
Sheba Poe's picture

Casey is at the Menninger clinic in Houston. Her parents are en route. Judge Strickland, who presided over her check fraud case, issued an order for her to serve one year of probation in Orlando. Her defense team is contesting it.

Now you're up to speed.

Tue, 08/02/2011 - 12:58 | 1517216 BaBaBouy
BaBaBouy's picture


Good For Gold ...


GoldToTheMoon ...

Tue, 08/02/2011 - 13:18 | 1517308 cara leaf
cara leaf's picture

More insurrection @  http://carolelieffthecuriouscapitalist.c

March, 2006. 

Bet he wishes no one found this one ...

“The fact that we are here today to debate raising America ’s debt limit is a sign of leadership failure. It is a sign that our government can’t pay its own bills...that we  depend on ongoing financial assistance from foreign countries to pay for our government’s reckless...policies.  Leadership means ‘the buck stops here.’  Instead our Congressmen and Senators shift an overwhelming burden of their bad choices onto the backs of our innocent children and grandchildren. Americans deserve better. I will oppose all efforts to increase America's debt limit.”

-Sen. Barack Obama, D-Ill.

Speech on Senate floor on his decision to vote against raising the debt ceiling during the Bush Administration.

Tue, 08/02/2011 - 13:25 | 1517348 dbach
dbach's picture

I don't know why that wasn't shoved in his face in this debate. Or if it was I missed it. Either way, it shows the relativist nature of our politicians.

Tue, 08/02/2011 - 13:50 | 1517479 pazmaker
pazmaker's picture

Marco Rubio read that qoute on the senate floor along with a few others.   It doesn't matter......Biden has said it as well as pelosi and a mile long list of republicans.


They are all snakes!!!



Tue, 08/02/2011 - 13:32 | 1517391 Spastica Rex
Spastica Rex's picture

My blood pressure hates you.

Tue, 08/02/2011 - 13:20 | 1517322 jus_lite_reading
jus_lite_reading's picture


Only the sheeple...

think the economy had a recovery

think the stock market is an indicator of the real economy

think Obamao is doing a good job

think everything will come back to normal eventually

think following their favorite celebrities is more important than doing DD

Tue, 08/02/2011 - 13:30 | 1517374 There is No Spoon
There is No Spoon's picture

the sheeple are being underestimated here. Who thinks obama's doing a good job? People know the economy is in the gutter, they don't care about the stock market, and don't have a "back to normal" outlook. The elites will be the ones caught blindsided this time since they still have a lot to lose. Everyone else is already broke.

Tue, 08/02/2011 - 14:14 | 1517585 William113
William113's picture

Down goes Frazier Down goes Frazier !!!!!!!!!!!!

Tue, 08/02/2011 - 12:48 | 1517136 zorba THE GREEK
zorba THE GREEK's picture

Dow just dipped below 12,000. No matter what Obama says, people have voiced their opinion already

Tue, 08/02/2011 - 13:19 | 1517312 UGrev
UGrev's picture

Well, there's only so many times you can scream "TANKS IN THE STREETS!!" before people give you the "What Ev's" and flip you off.. I would consider this the first of many FU's. :)

Tue, 08/02/2011 - 12:49 | 1517142 Zero Debt
Zero Debt's picture

Bernanke still thinks he can stop the deflation of nominal prices by deflating the purchasing power of the dollar.

Tue, 08/02/2011 - 13:05 | 1517241 Sancho Ponzi
Sancho Ponzi's picture

Yea, so much for the consumer led recovery. What an idiot...

Meanwhile, Timmay has a sh#tload of debt to sell, so it's time to scare everyone into bonds. 

Tue, 08/02/2011 - 13:35 | 1517411 Spastica Rex
Spastica Rex's picture

Isn't he supposed to quit now that the deal is done?

Quit Timmay, QUIT!

Tue, 08/02/2011 - 22:47 | 1519405 StychoKiller
StychoKiller's picture

Another political "promise" bites the dust! :>(

Tue, 08/02/2011 - 13:51 | 1517487 Smiddywesson
Smiddywesson's picture

No, they are not going to scare people into bonds.  That was yesterday's game.  They are going to legislate everyone into bonds. 

Tue, 08/02/2011 - 13:52 | 1517489 Smiddywesson
Smiddywesson's picture


Tue, 08/02/2011 - 12:49 | 1517143 drink or die
drink or die's picture

Dow below 12K.  Watching all these charts is more interesting right now than any movie.  Maybe I'm just a nerd though.

Tue, 08/02/2011 - 13:38 | 1517367 Dr. Richard Head
Dr. Richard Head's picture

Would rather be a nerd than to be a sheep.  Fucking idiots that follow "reality television" are missing the best reality TV debt can buy - the demise of the US.

If Joe Six Pack can't have the message of dollar debasement understood from a cheerleader shaking her ass at a football game, he doesn't want to hear it.  Let them bleed as far as I am concerned, along with the House of Wall Street Representative.

Tue, 08/02/2011 - 12:49 | 1517144 Cassandra Syndrome
Cassandra Syndrome's picture

But, But Jim Cramer said this morning that everything is AOK, say it aint so Tyler, sayu it aint so.....

Tue, 08/02/2011 - 13:04 | 1517232 Cortez
Cortez's picture

I'm gonna be rich listening to the advice of Cramerica. /sarc

Tue, 08/02/2011 - 13:26 | 1517354 wisefool
wisefool's picture


Cramer tries to help you make money.

Kramer invests in gold for his charitable trust. you could probably get a job there, where they write off a healthy expsense account, company vehicle, nice office, admin, etc. All tax free. 10 weeks of vacation. When you are working, you would be taking the profits of his shrewd gold investments and giving them to some poor person which will make you feel good about yourself.

"wealth" is what the tax code tells you it is. and thats why his charitable trust makes a ton of money on gold.

Q.E.D. Ben, I am ready to take over. - wisefool PhD university of CNBC. Masters in Sociology, from other MSM outlets. 

Tue, 08/02/2011 - 13:39 | 1517425 optimator
optimator's picture

Don't forget hiring all your relatives at great salaries to "manage" the trust.  Money is like incest, it's best kept in the family.

Tue, 08/02/2011 - 13:47 | 1517462 Rodent Freikorps
Rodent Freikorps's picture

How is that different for nearly every other NGO?

They are all frauds. If they ever fixed any problems, they'd have to get a job.

Tue, 08/02/2011 - 12:49 | 1517149 fuu
fuu's picture


Tue, 08/02/2011 - 12:50 | 1517150 lubyanka
lubyanka's picture

What just happened to the CHF? Both against USD and EUR

Tue, 08/02/2011 - 13:03 | 1517229 Ahmeexnal
Ahmeexnal's picture

CHF to the moon?

Tue, 08/02/2011 - 13:08 | 1517251 swissaustrian
swissaustrian's picture


Fiat backed by 250 billion $ in fx reserves (USD + EUR). Who wants to own that?

Buy gold!

Tue, 08/02/2011 - 13:22 | 1517301 Hedgetard55
Hedgetard55's picture

Backed by Nestle's chocolate bars, better than gold.

Tue, 08/02/2011 - 12:50 | 1517151 tickertapeguide
tickertapeguide's picture

Time to roll outa equities and into T's and cash...

Tue, 08/02/2011 - 12:50 | 1517154 Debtless
Debtless's picture

and gold looks down on it all from a slightly higher view. 

Tue, 08/02/2011 - 12:51 | 1517158 mayhem_korner
mayhem_korner's picture

Products of colon, meet westinghouse blades.

Tue, 08/02/2011 - 13:52 | 1517492 Rodent Freikorps
Rodent Freikorps's picture

Just wait. Any minute congress will vote to give GE a trillion dollars to develop a shit cannon. A refuse railgun?

A continental fertilizer distribution delivery device. Or incontenent. We do have a lot of very old people. Win/win.

Tue, 08/02/2011 - 12:51 | 1517163 ZeroPower
ZeroPower's picture


Tue, 08/02/2011 - 13:04 | 1517234 Goatboy
Goatboy's picture

Specially if you have mortgage tied to it.

Tue, 08/02/2011 - 12:51 | 1517166 BORT
BORT's picture

Doesn't The Gov want people into Bonds right now to soak up the new supply?

Tue, 08/02/2011 - 12:52 | 1517169 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

""August Crisis in Italy and Spain""
"It is far from clear that the international order is more secure today than it was in the seemingly calm days of May 1931..."

OT: 2 minute hilarious video...

Tue, 08/02/2011 - 12:52 | 1517170 joemayo
joemayo's picture

Over and over again:

"If we don't do this [blank] then you will all be ruined."



"Okay, now that we got what we wanted...Surpise! You're still ruined!"


Tue, 08/02/2011 - 12:52 | 1517174 swissaustrian
swissaustrian's picture

PMs loving it.

Tue, 08/02/2011 - 12:52 | 1517175 Iriestx
Iriestx's picture

Obama has a fresh $2t to give to TBTF banks so they can purchase equities.  Buy the dip.

Tue, 08/02/2011 - 13:13 | 1517267 ATM
ATM's picture

Just wait until we get the next batch of QE disguised with some bullshit moniker. Market to the moon but PMs to infinity. Got to buy some of both.

Tue, 08/02/2011 - 13:19 | 1517314 Conchy Joe
Conchy Joe's picture

And the "satan sandwich" kicks the can just far enough for him to get back to his taxpayer supported fundraising tour.


Tue, 08/02/2011 - 12:54 | 1517185 Farmer Guy
Farmer Guy's picture

So the President's remarks will be postponed, then?

Tue, 08/02/2011 - 12:55 | 1517197 alien-IQ
alien-IQ's picture

Buy the rumor, sell the Armageddon?

Tue, 08/02/2011 - 12:55 | 1517200 Dr. Engali
Dr. Engali's picture

Who in the hell wants a 3.99% yeild for the next 30 years?

Tue, 08/02/2011 - 12:59 | 1517219 Iriestx
Iriestx's picture

Hold a bond for 30 years? I thought you just bought them so you can flip them to the Fed 2 weeks after they're issued for a cool 8%.

Tue, 08/02/2011 - 13:04 | 1517235 Dr. Engali
Dr. Engali's picture

You make a good point if qe3 targets the long end so government can fund over 30 years.

Tue, 08/02/2011 - 13:15 | 1517289 youALREADYknow
youALREADYknow's picture

This is the very question I've been asking. Nothing adds up here... you can't convince me that there isn't some kind of outside force interfering in the treasury market right now. No QE, more debt, fewer revenues/receipts, and yet prices are higher on bonds?

Tue, 08/02/2011 - 12:56 | 1517201 papaswamp
papaswamp's picture

Only option left is to comes the end game.

Tue, 08/02/2011 - 12:56 | 1517202 CoolClo
CoolClo's picture

"The only chart that matters is, what else, gold"


And SPXU.........

Tue, 08/02/2011 - 12:57 | 1517206 mt paul
mt paul's picture

poor fed ex girl 

could hardly lift

todays delivery...



Tue, 08/02/2011 - 15:47 | 1517213 Strider52
Strider52's picture

The POG was only $3.70 from Jim Sinclair's vindication of $1650. Can we hit it today? Will Jim be opening the bottle he has been saving for 8 months? Did someone drop the rotating wind accelerator into the unflushed porcelain throne?


UPDATE: We did it! Cheers to Jim Sinclair! I'm going to his site right now to see what he's saying...

Tue, 08/02/2011 - 12:59 | 1517214 Yen Cross
Yen Cross's picture

   Did AUD do(A) reach around>>>?   I should have set my sights lower...  Oh well some interest on my longs in the low 1.08's is refreshing.

Tue, 08/02/2011 - 13:01 | 1517223 caerus
caerus's picture


Tue, 08/02/2011 - 13:02 | 1517226 monopoly
monopoly's picture

Anybody see Robot. :-)

Tue, 08/02/2011 - 13:15 | 1517278 karzai_luver
karzai_luver's picture

Robo ........COME DOWN OFF THE ROOF and buy damn you. BUY BUY BUY.


THIS is YOUR generational BUY right here.




Tue, 08/02/2011 - 13:05 | 1517238 narnia
narnia's picture

I'm expecting Bernanke to break out the fiscal stimulus lobbying hat and, at the same press conference, talk about the danger of fiscal deficits.  

It's time for the big contributors to dust off their wish lists.   

Tue, 08/02/2011 - 13:16 | 1517291 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

PLEASE TYLER...can we be told in advance on ZH when Bernanke is going to speak. I've been caught unawares the last two times.

We all want to go long PM's in the morning before he starts speaking!!!

Tue, 08/02/2011 - 13:16 | 1517239 slaughterer
slaughterer's picture

As long as S&P does not close below 1268, the technicals of the bull market are still in place.


Tue, 08/02/2011 - 14:02 | 1517535 Smiddywesson
Smiddywesson's picture

Technicals smechnicals, this market answers only to Ben, and HE DOES NOT SHARE POWER

Tue, 08/02/2011 - 14:13 | 1517575 Jonas Parker
Jonas Parker's picture

Technicals or testicals? Methinks this "bull" is a steer! Whole thing is "deja moo"! (Somewhere, I've heard this bull before!")

Tue, 08/02/2011 - 13:06 | 1517243 RobotTrader
RobotTrader's picture

<--I'm buying this dip

<--I'm scared, I'm out of all stocks


-1190 TICK

TRIN over 3.00

If the market reverses and closes over the 200-day, then the lows are in

Tue, 08/02/2011 - 13:15 | 1517273 Iriestx
Iriestx's picture

$2t in fresh money, stolen from future generations.  $2t that the President knows he needs to give to TBTF banks to buy equities to keep the boomers' 401Ks and IRAs afloat, as well as give handouts to welfare queens if he wants to be re-elected?


Buy the fucking dip.

Tue, 08/02/2011 - 13:35 | 1517402 viahj
viahj's picture

probably correct up until the election (if they can maintain the house of cards) but after that, equities will be sacrificed upon the alter of ponzi

Tue, 08/02/2011 - 14:00 | 1517524 Yardstick of Ci...
Yardstick of Civilization's picture

This dip or the one below 1,230 or 1,220 on SPX?

Tue, 08/02/2011 - 13:36 | 1517415 lieutenantjohnchard
lieutenantjohnchard's picture

so after telling the board repeatedly he was "itching to get short" (few thinkers believed him) below 1300 the 'tard tells us he in fact rode his widows and orphans all the way down and is now doubling down with some obscure paper trade he'll tell us about after it has gone up.

Tue, 08/02/2011 - 14:06 | 1517554 stormsailor
stormsailor's picture

you know your charts well amigo.  don't see many zh'ers that watch trin, know what i mean.


we've probably been some of the same places learning all these indicators.

Tue, 08/02/2011 - 14:30 | 1517666 ConfederateH
ConfederateH's picture

<-- Robo is an idiot who only lists options that hide his idiocy

<-- I don't have to be scared and I will sleep well tonight because I bought gold instead of listening to that idiot.

Tue, 08/02/2011 - 13:08 | 1517250 Grand Supercycle
Grand Supercycle's picture

The crash is getting close.
Check out stickied chart.

Tue, 08/02/2011 - 14:07 | 1517561 Smiddywesson
Smiddywesson's picture

LOL GS, the comment about plagarism at the bottom was hilarious.

Tue, 08/02/2011 - 14:30 | 1517668 Bolweevil
Bolweevil's picture

Please bring back the scary clown face.

Tue, 08/02/2011 - 13:14 | 1517282 RobotTrader
RobotTrader's picture

<--Obama for 2012

<--Obama down in flames


As predicted, here comes the Obama Stimulus Plan

  1. 01:13 Obama signals support for extra jobless benefits MarketWatch
  2. 01:13 Obama says economy needs more than spending cuts MarketWatch
  3. 01:13 Obama urges loans to contruction companies MarketWatch
  4. 01:13 Obama says Congress needs to turn to job creation MarketWatch
Tue, 08/02/2011 - 13:16 | 1517295 Iriestx
Iriestx's picture

More handouts to welfare queens.  More money for people that don't want to work.  More governement jobs laying red tape and pushing paper back and forth to other government offices. 


All he has to do now is give amnesty to the border jumpers and he's a lock in 2012.

Tue, 08/02/2011 - 13:20 | 1517319 jomama
jomama's picture

obama or another one of his puppet constituents will be (s)elected unless the country completely collapses or we have another false flag event, aka a dirty bomb, in which case, the election theater won't be necessary anyway.

Tue, 08/02/2011 - 13:30 | 1517375 kito
kito's picture

robo ive always admired your stock picking prowess. you and jim cramer, where would i be without you both? and now what? you abandon us, only to predict macro economic/political issues? how can this be? we all need you robo. please tell me the s&p will still be at 1500 come years end. PLEASE!!!!!!!!! I CANT SLEEP!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! DAMMIT ROBO-SPEAK--- SPEAK!!!!!!!!!!

Tue, 08/02/2011 - 13:31 | 1517379 YesWeKahn
YesWeKahn's picture

The definition of the perfect communism is to distribute wealth based need not on merit. This is effectively what's happening with Obama:

1) Give principle deduction to home owners who should never own a home based on their income.

2) Give 0 interest loans to banks, because otherwise they die

3) Build, rebuild, rebuild the same road again and again, otherwise the construction workers will turn into hooligans.

4) Give extensions to people out of work, because they need the money, not the job.

Obama, you just realized the dream of the old soviets. They couldn't do it, you did it, Bravo!

Tue, 08/02/2011 - 13:32 | 1517387 lieutenantjohnchard
lieutenantjohnchard's picture

so after repeatedly opining there would be no qe3 the 'tard tells us this morning word for word: "QE3 or massive McJobs bill is coming."

'tard: when you need to know what the dumb money is thinking.

Tue, 08/02/2011 - 14:10 | 1517572 Smiddywesson
Smiddywesson's picture

FDR did the same thing.  All of the government spending that was intended for stimulus really was spent on broadening his power base.  Fortunately, his power base is now deep in the broiling fires of Hell.

Tue, 08/02/2011 - 13:16 | 1517292 wang (not verified)
wang's picture

Obama just now "... that's how we're going to get past this recession..."


(I thought the official line was that the recession was over - thanks for acknowledging what we all know Mr. President)

Tue, 08/02/2011 - 13:17 | 1517299 slaughterer
slaughterer's picture


Tue, 08/02/2011 - 13:18 | 1517300 jomama
jomama's picture

isn't the term 'market reaction' a contradiction in itself these days?

Tue, 08/02/2011 - 13:18 | 1517302 marcusfenix
marcusfenix's picture

well, looks like a "historic compromise" and 2. whatever trillion in shiny new debt and the creation of a whole new way of circumventing that pesky constitution (super congress) just isn't lifting the mood today...

Tue, 08/02/2011 - 13:18 | 1517305 dropdeadfed
dropdeadfed's picture

CHF?  Heart failure?  One is better off going long on the ballpark frank...along with water, ammo and precious...

Tue, 08/02/2011 - 13:27 | 1517357 Yen Cross
Yen Cross's picture

That was funny... +1

Tue, 08/02/2011 - 13:19 | 1517315 stormsailor
stormsailor's picture

if the /es closes below 1261.50 on the daily it will confirm a down trend.  if it sits below 1251 on daily it should break a huge 3 year head and shoulders to the downside.

Tue, 08/02/2011 - 14:05 | 1517546 alien-IQ
alien-IQ's picture

Yep. those are exactly the levels I'm looking at.

So far so good. I'd love to see the /ES in triple digit territory again soon.

Tue, 08/02/2011 - 14:10 | 1517573 stormsailor
stormsailor's picture

well it keeps on trending down.  wonder if the plunge protection team will show up?

Tue, 08/02/2011 - 14:22 | 1517630 alien-IQ
alien-IQ's picture

We have auto sales numbers today at 3PM. they should suck. Pushing market further down.

Then the NFP massacre on Friday should push this pig off the cliff.

Tue, 08/02/2011 - 13:21 | 1517321 Debtless
Debtless's picture

Now put the big FAS on and rake up the coins.

Tue, 08/02/2011 - 13:21 | 1517324 Caviar Emptor
Caviar Emptor's picture

Is the Bernanke put still on? Big question going forward. Without that. it's risk off all the way back to the 09 lows. 

Meanwhile gold is not just reflecting risk off.  It's reflecting a whole network of intertwined global problems that say protect your wealth or whatever you got left. 




Tue, 08/02/2011 - 13:48 | 1517469 Captain Kink
Captain Kink's picture

QE never ended.  Negative Real interest rates means gold up. Think about it.  Free money.  Debased money.  Even "official" inflation rates (core cpi) are much higher than the 5 year note yield.  If i wasn't so scared of further housing collapse, I would be mortgaging myself to the limit to take advantage of the massive inflation that will eventually result.  Further future QE (probably by some other name) will really juice gold and especially silver.

Tue, 08/02/2011 - 13:55 | 1517505 Caviar Emptor
Caviar Emptor's picture

Negative real rates (and nominal TIPS) is one issue. Of many supporting gold right now. There are fundamental financial issues but the rabbit hole runs way deeper than that. There are problems mushrooming all over that all point to gold as the only solution. But without a Bernanke put the stock market is one huge landmine. Another issue.

Tue, 08/02/2011 - 13:23 | 1517333 spartan117
spartan117's picture

I thought deflation was suppose to mean a strong dollar?  Where are all the deflationist to 'splain this?

Tue, 08/02/2011 - 14:14 | 1517587 Yardstick of Ci...
Yardstick of Civilization's picture

GREAT QUESTION.  I'm beginning to think that people just equate low interest rates with a threat of deflation.  What is seems has become important, however, is to prop up the stock market.  Loose money does that.

In terms of real deflation, there seems to be none.  Everything just gets more and more expensive all the time from groceries to durable goods with no end in sight.  The only things that are cheaper are (1) real estate, and (2) the cost of labor employed by the uber wealthy, since wages don't rise but inflation makes those wages less valuable.  In other words, it's only deflationary for the uber wealthy.

But even real estate in my little pocket of Florida seems to be doing well.  Realtors are reporting retail sales records that are off the charts, but this is not typical Florida.  If the real estate bust is still driving deflationary fears and the gov keeps printing money, we are screwed.  We'll all be able to afford a house but not be able to afford food.

The correlation between deflation and interest rates seems to be broken.

Tue, 08/02/2011 - 15:58 | 1518121 Burnbright
Burnbright's picture

The correlation between deflation and interest rates seems to be broken.

That is because econimic principles of supply and demand break down under a fiat currency. But more importantly I think the assumption that higher yields = inflation and lower yields = deflation is flat out wrong. It may be the case that is how yields work under a hard currency but I doubt it as it makes sense that when yields are low it means people are not as hard pressed to hold on to their own cash and thus loan it out at low rates. Where as if you were hard pressed for cash you would look for loaning it out at a higher yield because you need some incentive to offset the risk of not holding your cash. People I think make the assumption that everyone would look for a higher rate of return if inflation was higher than yields, which makes sense because other wise you are giving your money away. However given that we have a central bank that artifically sets interest rates, by loaning money out at those rates, it destroys that function as it floods the market with cheap money.

Tue, 08/02/2011 - 14:21 | 1517623 Smiddywesson
Smiddywesson's picture

LOL, "Prechtoor, you got some splainin' to do!!!"

Tue, 08/02/2011 - 13:26 | 1517350 YesWeKahn
YesWeKahn's picture

"Bernanke will do the only thing he knows": I thought he also knows to lie.

Tue, 08/02/2011 - 13:27 | 1517359 Jim in MN
Jim in MN's picture

I want my.....

I want my QE3.....

Lemme tell ya, them guys ain't dumb

Tue, 08/02/2011 - 13:37 | 1517419 viahj
viahj's picture

money for 'nuthin and chicks for free

Tue, 08/02/2011 - 13:49 | 1517475 caerus
caerus's picture

i like...

Tue, 08/02/2011 - 13:27 | 1517361 Piranhanoia
Piranhanoia's picture

CHF is better paper than USD paper.  But really, think about it for a minute. That's enough. All the investments held by someone else for you, (elsewhere of course) are a little better than paper, but if you think you are getting them back when the fire starts, might as well have paper.  Society was just voted down. The social contract was just cut down to 2011 standards. Some will believe hard enough and go long old jesus is going to come back to fix it all up.  The television told you not to worry.  If old dead jesus and the television say things are fine, what are you worried about?  If the poor guy opened his mouth in 99% of the world, he'd get shot before he could get a thought out of his mouth.   Got community?  You'll need it.


Tue, 08/02/2011 - 13:27 | 1517363 Johnny Lawrence
Johnny Lawrence's picture

Obama just came out and said the deal "is an important first step for ensuring that as a nation we don't live beyond our means."

What a fucking liar.  I can't believe he is allowed to lie to us like this.

Tue, 08/02/2011 - 13:28 | 1517365 RobotTrader
RobotTrader's picture



More O'Bummer pronouncements:


Extra jobless benefits

Payroll-tax extension

Tue, 08/02/2011 - 13:31 | 1517382 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I love your tits.

Tue, 08/02/2011 - 13:36 | 1517405 Sophist Economicus
Sophist Economicus's picture

This is why the deflationist theories will always be wrong in the end.    These guys cannot help themselves - torches and pitch forks scare the bee-geesus out of them


If the deflationists were right, the best place to be would be newly unemployed or on Social security or a government pension and watch the purchasing power of your green backs grow -- ha!

Tue, 08/02/2011 - 13:39 | 1517426 Johnny Lawrence
Johnny Lawrence's picture

Have you seen oil prices?

Tue, 08/02/2011 - 13:53 | 1517497 Sophist Economicus
Sophist Economicus's picture

Yes, at 94/barrel from $40 18 months ago

Tue, 08/02/2011 - 15:20 | 1517861 Johnny Lawrence
Johnny Lawrence's picture

From $140 3 years ago.

Tue, 08/02/2011 - 16:01 | 1518143 Burnbright
Burnbright's picture

Yep lets keep changing the goal posts shall we? Where was oil 5 years ago? Just admit that deflation is a dead arguement. It's over, deflationists have lost.

Tue, 08/02/2011 - 13:44 | 1517445 lieutenantjohnchard
lieutenantjohnchard's picture

poor 'tard took his victory lap sunday night around the track, a lulu lemon pair of yoga tights draped around his shoulders for a usa flag, only to learn his longs were crushed.

at least he has gentleman jim sinclair's sympathy from gold street $1645.

Tue, 08/02/2011 - 14:29 | 1517661 jomama
jomama's picture

you take robo way too fucking literally - for the 100th time.

Tue, 08/02/2011 - 14:56 | 1517765 lieutenantjohnchard
lieutenantjohnchard's picture

oh, but i do take him literally. he means everything he says - at that moment in time. i simply point out how ridiculous he is. certainly, you've seen the posters that run to his defense, so there are those that think he offers value. he is an insidious poster and prodigious liar. sorry if my pointing this out gives you concern.

Tue, 08/02/2011 - 15:35 | 1517964 jomama
jomama's picture

it's not a lie.  it's a joke.  again for the 101st time.

Tue, 08/02/2011 - 15:39 | 1517992 lieutenantjohnchard
lieutenantjohnchard's picture

you win. regards.

Tue, 08/02/2011 - 13:59 | 1517520 Internet Tough Guy
Internet Tough Guy's picture

Momo, you pansy, where is your apology to General Jim? You must be puking up blood. LOL

Tue, 08/02/2011 - 14:02 | 1517534 lieutenantjohnchard
lieutenantjohnchard's picture

from yesterday the wise 'tard gave us this:

"What happened to gold and silver today?

What is going to be the excuse of the day from General Jim and all the "experts" at KWN after this selloff?

Is Abercrombie and Fitch's market cap now bigger than Newmont Mining?"

anf was $75.50. now $70

nem was $55 now $56.60

gold was $1620 now $1645

Tue, 08/02/2011 - 14:03 | 1517538 Infinite QE
Infinite QE's picture

Hilarious! So much for spending restraint!

Tue, 08/02/2011 - 14:10 | 1517571 alien-IQ
alien-IQ's picture

What? Not screaming about how the "Bears" are getting destroyed? Isn't that your usual meme?

Damn. You must be puking losses right now. I would say I feel bad for you...but I'd be lying.

Tue, 08/02/2011 - 13:29 | 1517373 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Now that the debt has been razed, the Major Banking Houses, the Proxies of the Fed, have a blank check, so, they short first, and ask questions later.

But in the end, with easy monetary policey, a fiat ponzi, and finite resources, we all know prices are going up.

Tue, 08/02/2011 - 13:32 | 1517386 FoieGras
FoieGras's picture

10y and 30y wax saying one thing over the last couple months: No high inflation in the next couple years. Bond market had it right once again.

Tue, 08/02/2011 - 13:36 | 1517390 cranky-old-geezer
cranky-old-geezer's picture

"Bla bla bla bla bla ..."

Translation: Free money for people supporting me. Fuck eveybody not supporting me.

Tue, 08/02/2011 - 13:35 | 1517408 sharkbait
sharkbait's picture

The market and stay irrational longer than I can stay solvent.  Rates are going much much much higher.  But the TBTF banks and PD's have access to unlimited liquidity and it appears they can keep bonds at these levels for.... a long time.

If the bond market doesn't crack soon, I will concede on my view (and modest TLT put position).

Tue, 08/02/2011 - 13:37 | 1517421 Sophist Economicus
Sophist Economicus's picture

Close it now.   When the bond market finally implodes, you'll know, and there will be lots of time to get on board and make a killing...

Tue, 08/02/2011 - 13:40 | 1517432 Johnny Lawrence
Johnny Lawrence's picture

How did that work out in Japan?

Tue, 08/02/2011 - 13:51 | 1517485 Sophist Economicus
Sophist Economicus's picture

If you shorted the JPG you would have had your clocked cleaned, so my advice would have worked swimmingly.   Especially trying to predict the bond turn.   Hence, close bond shorts now and WAIT.   You'll know when its time

Tue, 08/02/2011 - 14:30 | 1517667 Smiddywesson
Smiddywesson's picture

Classic Livermore advice, which cost Livermore a lot of money to realize, don't try to predict the turn, wait for the turn to happen.

Tue, 08/02/2011 - 13:42 | 1517444 buzzsaw99
buzzsaw99's picture

zirp 4 evah

qe 4 evah

Tue, 08/02/2011 - 13:44 | 1517450 Mongrel
Mongrel's picture

From Franklin Sanders's The Moneychanger:


"Here's why the debt ceiling deal did nothing:  it  made no structural changes.  US economic woe arises from government spending contributing over 50% of income.  Get it?  Government is 50% of the economy. Until that is reduced, no change has taken place. No solution, only more play-acting." 

Tue, 08/02/2011 - 13:51 | 1517467 MoneyWise
MoneyWise's picture

I like that USDCHF chart, let those b..chez buy

another paper ( swissy ) like it's any better

than the rest of it? EURCHF at 1.08...

I think Market will rally soon, have little stretch

down to do 11750 on DJI My calculation..

Not scared at all.. If there is really "Recession"

Then Silver will drop below $20 like a rock.

There is enough liquidity in the Market..

Sell, sell ,sell :) Looking for greed to activate soon.

Tue, 08/02/2011 - 14:32 | 1517675 ConfederateH
ConfederateH's picture

Time to sell CHF and buy gold

Tue, 08/02/2011 - 13:52 | 1517491 gaoptimize
gaoptimize's picture

Cue the PPT.  DOW must close above 12,000.

Tue, 08/02/2011 - 13:55 | 1517503 monkeyfaction
monkeyfaction's picture

The 30y is going fucking nuts.

All smells a bit flash crashy today.

Tue, 08/02/2011 - 13:56 | 1517508 Rodent Freikorps
Rodent Freikorps's picture

Isn't is amazing that the Left thinks just renaming something will change its essential nature?

Or maybe they just think we are all stupid.

Tue, 08/02/2011 - 13:57 | 1517510 Klazy Plick
Klazy Plick's picture

They can't stop spending until they finish the prison.  Prison or Utopia.  Then they can declare the debt nll and void.

Tue, 08/02/2011 - 14:02 | 1517536 MoneyWise
MoneyWise's picture

Who are they??? US has lower Debt to GDP than Japan

for example, for now at least.. Is Europe in the better shape?


I'm waiting for Bernank to react aggressively..

There is no reason to have QE 1-2 and now just let it go..

Benny watching this closely.. :)

Tue, 08/02/2011 - 13:58 | 1517513 stormsailor
stormsailor's picture

/es has broken below support.  if 1251 doesn't stop it, the jaws of hell beckon.

Tue, 08/02/2011 - 13:59 | 1517519 Sophist Economicus
Sophist Economicus's picture

Quick, break out the dental floss

Tue, 08/02/2011 - 14:26 | 1517647 gaoptimize
gaoptimize's picture

I'm moving to Montana soon.

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