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Market Snapshot: Gold & Silver Continue Slide As ES Drops 20pts From Highs
While Friday's dramatic skid lower in the precious metals was later blamed somewhat on a leaked margin hike (as well as the simultaneous and anti-empirical sell-off in 30Y), it seems the liquidations that were rumored (whether hedgie or central banker) are in play once again as both gold and silver (the latter very significantly!) are finding little support. After some early weakness (EUR strength), the China news we noted earlier and general lack of any actionable rescue plan or large-scale money-printing has markets in a decidedly risk-off mode for the last few hours as ES shifts into the red and very early credit runs show 2-3bps widening in the front-end of the European indices.
Its not only the precious metals but copper and oil are also dropping and the latest headline from Bloomberg is not helping:
*RUBBER IN TOKYO PLUMMETS 9.8% TO 308.8 YEN PER KILOGRAM
*CHINA'S SHANGHAI COMPOSITE INDEX FALLS 1.5%, EXTENDS DECLINE
UPDATE: Silver is now -16%!
Gold/Silver Ratio has smashed higher as Silver plummets (to Sep2010 highs) - is it too simple to see similar jarring patterns leading up to crises?
As Gold drops below $1600 for the first time since July and Silver is down a further 12% from Friday's close, it seems the relative under-performance of Gold and Silver suggest this is still liquidation (and margin-exaggerated). The dollar dipped out of the gate but has recovered and is back at last week's highs now with the EUR testing 1.34. Notably, JPY is rallying once again and while GBP is unch from Friday, JPY is stronger (vs USD) by around 0.5% as JPY crosses (carry pairs) all send a very risk-off signal.
TSYs are rallying modestly off the late Friday peaks in yields with 30Y -3bps as the whole curve flattens very slightly for now. Stocks are much more active than TSYs or FX for now having managed to get up to 1144.5 in early Sunday trading only to drop back into the red retracing 50% of the upswing from early Friday - hovering around Friday's closing VWAP level for now.
Charts: Bloomberg
Early credit index runs show modest 2-3bps decompression in CDS and in cash, we see flattening/inversion and higher yields across the board with IRE and ESP worst performers so far (though not all are open). PTE is 22bps wider vs Bunds in 2Y and 11bps wider in 10Y. UPDATE: XOver +16bps and Main +4bps - Senior FINLs +6bps
And finally, for some perspective, now all risk drivers are open we see ES pulling down towards its CONTEXT expected value:
Chart: Capital Context
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What. The. Fuck.
fundamentals. obviously.
ha funny
Blythe Masters better have a private island stipulated in her retirement plan (or bonus plan, which she probably just earned tonight). She is the face of JPM's fraudulent/corrupt silver conquest and will get shot in the head if seen in a public forum.
Double tap.
http://www.youtube.com/watch?v=pmZo5yVbVBU&t=9m08s
in addition, dear reader, to the awesome youtube clip you didnt click and watch, and are missing out on. Here's a reply of mine from down below for those ask what?
==========================
even with the latest rise, Gold's margin or leverage ratio is 20:1
For example, to buy one ounce of gold at 1750, would have cost 87.50. So, when Gold fell over 100 dollars (or more than 5%). Everyone who bought the top on margin lost all of their money, and some they didnt have....
We are in a massive deleveraging of margin buyers, and the more it falls, the more people's entry point gets wiped out.
These are the so called "weak hands"
In addition you have all the anti-gold noobs/tools who are shorting, or who did short and need to get out with a profit.
In addition dollar strength is working against it as well. Not because people want dollars, but because they have to get them/use them.
lemme guess...another silverbugz bagholder?
Wow, the Morgue trolls are out in force this morning.
This is the new America, how do you like it?? The courrption is more that I can stand anymore. This is not consolidation or a correction, this is outright fraud and manipulation because that is all this country can do to win at anything. Bet my life on it that the bald liar and tax cheat are behind this planned destruction of wealth.
Where else but this country can you clear a trade before it exists?
The Silver and Gold Bubble has popped and the speculators are dumping their metals.
Over the rest of 2011 the prices will readjust back to fair value based on supply and demand,
$1047/oz for gold and $19.57/oz for silver by january 2012 are the targets
I hope you are right, a couple more monster boxes for boxing day!!
"the" targets lol, shouldnt you post the link to your blog that no one will read or click on, to go with that "mu"
Get upset all you want, but the gold/silver trade became grossly lop-sided and sentiment was, well, ebullient.
Chris Carolan marked the top as a Spiral Calendar anniversary, and Elliott Wave International accurately predicted the collapse in precious metal prices.
It's not a conspiracy. It's a matter of folk here failing to recognize that they got caught up in an extraordinary popular delusion and the madness of the crowd.
Bob Prechter is right IMHO, the primary force in the world economy and financial markets is DEFLATION. We are more likely heading into hyperdeflation than hyperinflation. Exactly how that manifests is where Prechter and I don't see eye to eye.
lol, Precter predicted 10,000 of the last two crashes, and anyone who invested a million dollars with that buffoon when he started offering his "service" has less than $400 to their name as of some 9 months ago.
so, in other words, his picks are about as good as yours?
Hmm, being right 95% of the time vs being wrong 99.5% of the time. I can see how that would confuse you.
Wow, the Morgue trolls are out in force this morning.
Jeezus Christ - another dolt that uses words he can't even define (hyperdeflation, hyperinflation).
Shut up kid, and leave the big words for the grownups.
Spirit of idiocy.
I've never understood the logic of ad hominem attacks, but I think it stems from an emotional incapacity to deal with the truth.
ad hominem, is attack the man.....
one guy pointed out the person you quoted has a terrible track record.
the other guy pointed out you used words incorrectly....like ad hominem
neither of which these were. now, they did wrap up the comments in some nice flowers for you
but i have never understood the peopel who post on zero hedge, and complain about other users comments.......it's zero hedge.
Also, you should be careful about making grand sweeping statements you cant back up on here. People will quote your owns words when they have been proven wrong, and you might have to make a new account.
The most emotional arguments come out of folk who are heavily invested at tops. Unfortunately, there are many PM bugs here at ZH who are clinging to their tulip bulbs outraged that anything could undermine the value of their precious flowers. But reality is what it is and spurious arguments and reasoning as well as spurning those who were spelling out the truth all along will not win one anything other than even worse realized losses.
bob prechter? you have to be kidding? where is gekko?
Your obviously an idiot who has no idea about metals, "fair value" or just value at all. Gold and Silver have INTRINSIC VALUE that cannot be calculated in USD (or other DEAD currencies for that matter). Don't believe me? What does silver trade for today in USSR roubles? How about Reichsmark issued during the Weimar Republic?
Now take a numerator and divide by ZERO and what do you get? Run and get your calculator.... hopefully you will figure it out!
Fonestar, That was beautiful and I believe so correct!!!
I think my calcualor is broken. It keeps telling me that it cannot divide by zero. WTF?! I tried shaking it, and beating it on the desk, but that didn't help.
Perhaps Excel is smarter. If not Excel, maybe my magic 8-Ball knows.
/sarcam -off
I called $1000/oz when it hit $1900. You and I ate in agreement.
Gold now down $106... 6%
-$120... Fuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuck
2008, bitchez!!
Looking back at this liquidation on Gold, you'll see this was clearly a buying opportunity. Buy low, but physcology makes you feel like running back to cash. DXY's goin 88cents, commodities are gonna get burried, Europe debt crisis will get fixed with more debt and QE will jack the market again and away we go again, Gold at $2500 next summer and you'll all wish you had the guts to pile in when things were scarry.
Weeeeeee hheeeeeeeeee
Almost NO BID
Amazing isnt it, a freefall in a time of global turbulance. The courrption is just fuckin mind blowing. 5000 years it was a safe haven but now its USD and confetti from an insolvent goverment. Hope China dumps our trearuries and inflicts unimaginable pain to the system.
Paper market collapse, not a physical collapse.
Oh people are still buying their physical for $1923 per ounce?
Some are, though I can't imagine why, when it is available elsewhere for less.
http://www.ebay.com/sch/i.html?_from=R40&_trksid=p5197.m570.l1313&_nkw=A...
Anyone buying gold on ebay should rightfully suicide themselves
Get real
http://www.golddealer.com/about_bullion.html#AUUS
Funny how you continually insult people with the same opinon as yoruself. You are a real self-loather, aren't you?
Wow, the Morgue trolls are out in force this morning.
at this point, you have to consider paying your taxes and walking out.
Finally tipped your hand, eh? Why would I be stupid enough to run for cover when Au is 2x what I bought it for and, moreover, why I bought it (to have and to hold, 'til death do us part)?
You act like a weak hand.
Love the new avatar!
dooooood . theres a difference when you have gold in your house safe and when a bank has gold in its vault. the bank's gold is a tier 1 asset from which it can borrow 95% it's value from the fed.
there is no difference between the paper and gold markets except until soome sort of catastrophic loss of control over gold markets by tptb.
adn when that happens, you'll be happy you have your gold, but you won't be happy. spend your gold by donating it to the ron paul campaign and help bring about change for the better, instead of hoarding it and hoping for some sort of collapse..
it will, europe will by today, change the charter for eu to make a eurobond. gold will rise accordingly but eventually will fall in early 2012. because they will buy bonds the (ECB) banks will park their money back at the ecb or american banks increasing the reserves but not their capital, because there are no willing lenders to us peons. hell i would love to have that 50-60k credit line cuz i would not pay it back i would party that shit a way and have some fun and they know that lololololol
Now gold will only go up if and when the big players look at that digital number or peice of paper and say to themselves " I have to invest in something that keeps its value" real estate ?no,whose gonna want to buy house at over inflated prices even now. stocks? no, companies bottom line will be squeezed because there is no money in circulation(capital) just look at goldman expecting first losing quarter in 2years. hookers? yeah good value there
only safe haven is commodities only things being bought and sold with paper currency that has some intrinsic value is commodities (neccesaties, food, oil ,toilet paper, etc) when the big boys realize this its game over revolution
EuroBond? You do realize that only major players outside the EuroZone are asking for a EuroBond? The EuroBond would mean some kind of EuroTax, and this is really not that easy to ask from the peoples of the EU. Very unlikely.
they have no choice,,,,,, bank runs goin on right now is heating up real fast
how low can it go with out pulling the eurobond trigger loloololol
5000 years ago they didn't have computers.
Moron.
Barbaric relic. Remember that.
5,000 years ago they were smarter than trusting their hard-earned money to computers.
Where's your money when the power goes out, genius? Think about that.
I will bid.
All the way down and halfway up the other side.
Same.. bought at $35... bought at $30... wasted all my dry powder.
I hope this lasts til Friday and I'm going to dump whatever else I can afford in.
This is a short time period where opportunity knocks. I can't wait to see all the "targets" and "predictions" at the end of the year.
Hilarious how the vibe of ZH changes as prices of PMs go higher/lower. Lower: Everyone knew it was going to crash, Higher: Everyone knew it was going to go higher that's why they "had their calls in place months ago" when they themselves were admittedly "predicting" an absolute crash.
Only when the price drops 30%+ do you have jackasses come out of the wood work predicting another 30% loss. It's hilarious, even to the upside so to the downside. Nothing goes down forever, especially not a commodity like silver.
Buy while the buyin's good and it's still available for purchase. A lot of my vendors are completely out of stock.
AHHHHHHHH!!!
LMAO!
Looks like a commodity crash, that is really bad i.e China. Not looking good at all.
Hong Kong is unhappy about somethinf, HangSen off over 3% early Monday. 3x down most other indices.
http://www.forexpros.com/indices/indices-cfds
Wouldn't be surprised if some hedge funds blew up and there's forced liquidations underway around the world. Heck....this all could have started with the SNB's move to peg their currency. We know at least one UBS trader was tagged for a cool $2 billion. Who knows what other implosions have occurred along the way as the dollar carry-trade speculative bubble has begun to unwind. Ultimately, Ben Bernanke is fundamentally to blame for the crash underway as this is all a consequence of the bubble in asset prices he and his idiotic Fed cohorts intentionally inflated under the grossly misled idea that somehow rising prices of risk assets means economic well-being and growth. Arrogant ignoranuses...
Snb put a floor in not a peg.
Big wtf moment now as silver is pretty much retracing all it's losses in a 2 hr period. Fucking Europe down, now up.
The true question to contemplate is: What is the half-life viability of USTs over an eight-month time span?
You are all internally asking the same question - don't deny it - as you view your balance sheets stock-full of king dollar.
The world is waiting and everyone wants to know...where does your liquidity go from here? And when exactly does your trigger get pulled ?
Please answer the question. ('cause everyone, worldwide, is truly dying to know the answer)
Game over.
Disagree. In transition.
Agree. Does anybody still not see gold over $2000? Buying opportunity.
...now we wait for the YUAN to be re-pegged to the USD. Bear signal from hell.
makes no sense to me, the dollar isnt even appreciating as fast as PM's are depreciating, makes no logical sense at all. but then again, everyone knows the market isnt a market but more over just one of the most organised hiests of global wealth of all time.
Sell off Pedobear, sell off. You sell what will sell to get $ to cover your losing bets you owe on.
whos the dealer whos offloading then?
Who needs cash right now?
Many off loaders with margin calls I would think, trying to recollateralize.
Folks who have to be able to fund CDS as the failures domino.
Hedge funds panicking, seeing the unload.
Maybe it is a HFT thing too, as has been pointed out, it's like it is dropping without a bid. Though I see some 1580 action (one support level I have seen talked about, tho I doubt it, this shit show is just begining).
I so need to let you know that I am in no way a trader, just someone who has been watching and afraid of this exact thing.
Good news? I think it will reflate, but it will at least be months before it does so.
even with the latest rise, Gold's margin or leverage ratio is 20:1
For example, to buy one ounce of gold at 1750, would have cost 87.50. So, when Gold fell over 100 dollars (or more than 5%). Everyone who bought the top on margin lost all of their money, and some they didnt have....
We are in a massive deleveraging of margin buyers, and the more it falls, the more people's entry point gets wiped out.
These are the so called "weak hands"
In addition you have all the anti-gold noobs/tools who are shorting, or who did short and need to get out with a profit.
In addition dollar strength is working against it as well. Not because people want dollars, but because they have to get them/use them.
Rigged!! Fraud!!! Get that?
PMs on sale. I bought some over the weekend but not too much. I was waiting for this. Buying another 100 oz bar in a bit. Plenty more bullets left. Bring it on!
I think it drops for a while longer. I am no pro, but back of the cocktail napkin says at least the mid 1300s before the brakes are applied to this thing. Maybe worse.
15 euro for silver is my target. I've got my funds ready to buy when it just touches it.
Just thinking that I was hoppeing on loading up more at maximum 33 euro :)
700 ounces instead of the planned 350 :)
It just doesn't get any better than this :)
Haven't seen prices like these in a looooong time. I'm never good at timing the market so I'm just going to keep adding as they fall the way I've been adding when they rose.
Cost averaging and long. Good luck.
Exactly.
(Buying) all the way down and halfway up the other side.
My trading account got cut in half last week.
Oh, well - it's only 2% of my net worth - better send another 2% (damn ... come to think about it, maybe i'll send THREE percent this time).
Drooling all over myself at these prices.
Meanwhile in Spain which according to the endless lies of one Elena Salgado has THE BEST banking sector in Europe if not the world, the said banks WANT MORE gubbermint tit. But but, i thought the banks were fine...
By Manuel Baigorri
Sept. 26 (Bloomberg) -- Spanish banks and savings banks
have asked the government for an extension of government-backed
bond issues for at least six months more after the current
December deadline, El Pais reported, without citing anyone.
Spanish lenders, which hold 61.6 billion euros ($82.6
billion) of bonds issued, are having difficulties to access
financing on their own and would issue 70 billion euros of
government-backed bonds more, the newspaper said.
Both lenders and savings banks may have requested Spain’s
deputy finance minister Jose Manuel Campa for the extension
through their lobby groups, El Pais said.
Hmm paper markets collapsing?
This is something bigger than just metals falling...
You get it. This may be confiscation we are watching.
if its not, then i think this has just forced me to abandon silver miners for good. anything that can take what could be a 50% dump in 5 trading days, absent an epic overall market collapse, is not a game i want to play anymore.
Why do you think today an epic overall market collapse is not going on?
because this could easily just be a fund (or CB) liquidating their PMs (in a larger replay of Jan 2011) -- god knows what redemptions are looming. if we get another day like friday where the S&P finishes up close to 1% but silver pukes another 15% then i have no idea what to think.
and to think that just three short hours ago i was looking forward to falling asleep....
Agreed. At first I was thinking that commodities had priced in QE3, and now it is being de-priced in. But this drop is unprecedented... there must be something else at play here, and not just with metals/commodities.
The FT is showing Gold at 1659 as of 1:53 AM, with Gold rising - what is the disconnect I wonder?
FUCK IT!
Want to know when to buy? When John Paulson says precious metals are finished. That's your buy signal.
Yippee ki yay motherfucker!
LOL at silver.
There has to be selling exhaustion at some point. Will I be the one catching the knife? No.
I will.
Every time silver goes down 5% I convert 1% more of my net worth to silver.
All the way down and halfway up the other side.
Ditto. Since I only ever invest money I don't need and family doesn't knows I have, dips like this make me very happy. Think I'm gonna have to get a bigger vault, though.
Copper is off more than gold in percentage terms.
Big sell offs
Bob, you are this generation's (this quarter's) Mathman. The much hated guy with a pile of cash. Nice work. Please invite me to your private island's opening ceremony. Will bring Tequila.
Given the size of this decline in silver I'd guess an over shoot to the downside is probable and silver has a ways to go just to get back in line with it's historic ratio to copper.
Ahah. That rings a bell. 2008 playbook redux: commodities indexes. And their derivatives. They include gold. Hedge funds bailing on commodities index plays caused a good bit of the gold liquidation IIRC - it wasn't gold per se, it was just levered longs needing to get out of basket positions.
Gold got dragged down quite a ways then.
oh well, in for a penny, in for a pound
i guess 'this is time that tries mens souls'.
get out the BIGBOYS PANTS.
and as i said before...
im scared, but buying this this silver on the way down
and ill see ya' guys on the beach...
BTFD......BITCHEZ!
maybe give the dimes a break?
if the "price" dips, again, 10 silver eagles = $300?
or trade for dimes. even...w/ silver price low, not too many dimes for eagles? L0L!!! that is a fallacy
w/ a dime = .07 oz silver, abt 150 dimes (150 X .07) = 10.5 0z and this ain't gonna change!
silver is the most volatile gamblin-ramblin play on the board, at least!
I saw silver in total freefall get down to $26.11. Wow! We are all saved... it's back up to $26.64!! [Sarc]
Volume in gold futures almost as high as normal trading hours.
bc mfers is gettin SMOKED.
Wow, the Morgue trolls are out in force this morning.
Drops like that will put the fear in ya.
It totally blew my weekend. And my wife constantly saying "what's the matter honey"...
But this is a oppurtunity. they'll print more a this drop will kill the silver supply.
SD,
Over the weekend of angst, the US accumulated $11 Billion in new, unrepayable debt. The PIIGS (and Cyprus) are all just as bad. Keep in mind the most basic underlying driver of what's going on. :D
The Asians are going to buy the hell out of this dip, and come out smelling like jasmine incense by the new year after QE to infinity is announced.
Thanks Ben! I am sure the Asians appreciate the free money!
I read a news article that said China was zero GDP growth. If that's the case, then they really were selling US Treasuries in the early part of this year to do a TARP themselves. Now, they've run out of money themselves. What do they turn to raise money to sustain their growth rate? Sell Gold. If not China - then who? Its got to be someone big and now Drudge has a headline that the IMF needs a bailout - ok, never mind about china - look to the IMF and all the central bankers selling - but China will need to sell treasuries to convert to cash to pick up the gold. I don't see the spreads in the bonds yet to support this idea.
Hold on to that dream. That is all it is, however, a dream.
I'm out here in "Asia". Asians are getting their butts kicked in copper. They are getting their butts kicked in equities. They are getting their butts kicked in PMs. They will be getting their butts kicked in RE. If they are going to be buying anything right now, it is booze.
I've written about this before, and admittedly it is anecdotal, but it is what I see. This weekend at the gold shops there was plenty of stock, priced as usual at 1% above spot. Yes, SPOT. The shops were empty. Whatever you may have been led to believe, Asians like bull markets. Gold and silver no longer look like bull markets. They would rather go to the racetrack or Macau.
At the beginning of August, the economy where I am---which is virtually 100% funded by China---absolutely fell off a cliff. Like a light switch. The flow of Chinese money stopped on a dime, and a Roosevelt dime at that, not a Mercury head. It suggested to me that an ill wind was blowing through the "World's Savior". Could be coincidence, but it sure makes sense.
If you really want to "back up the truck", make a trip to Asia to do it. What you save in premiums will pay for the trip. There is plenty of Au and Ag out here.
By the way, Asians were waiting in line on Saturday. At the new Apple Store in Hong Kong.
What of the central bank, which is the entity that robs the people of much of their earnings abroad via maintenence of their dollar peg?
prob just really hungry
they don't mind if they miss the bottom, but they want to try to approach it, and not buy all the way down; most retail buyers do the same; and would rather buy on the way up.
and they're very patient?
the rising dollar is making PMs tough right now!
paper wealth is going up in flames by the trillions due to deflation recently as "capitalism" exhales
do not re-finance & capitalize the failed banks. anywhere. this is ridiculous!
The Asians are going to buy the hell out of this dip ...
Me too.
All the way down and halfway up the other side.
I'm waiting, with my cash in USD, for silver to settle for a few days in the range of 12-16, they I am a buyer. Last time I bought silver at 9 USD.
It will get back to 50 in a year or two, I can wait...
12 to 16 ?! Well my stash @ $30 is already in big trouble. I'll wait with you but I don't think I will be waiting that long... a bit over $20 and I will commence my build up of physical. Even so, this fall off the cliff hurts for all us stackers, whether newbies or old hands. :-((
I'm out of silver since some time now - I'm in gold/physical. My guess is we will get to the 70-75/1 ratio again, so I will exchage the gold in silver.
As for the bottom - this is not a down spike. When it hits the bottom, it will stay there for a week or more, so we will know it has bottomed. Dont buy this dip, wait util it settles. Patience is always the key to good investing.
Hope you bought physical, cause the big online retailers are running out fast.
Spot price and OI have completely detached from demand for physical. Expecting a public COMEX event within two months, possibly in the coming week.
COMEX event or not, if dealers will not sell at these prices then these prices are irrelevant.
Bingo.
The scary part is when you realize that a lot of industrial users hedge on the COMEX. Once it no longer reflects real prices, they will be forced to buy off the open market, and will do so all at once (as there are no reliable futures markets that allow for delivery after if the COMEX is no longer viable).
This is what I think is going to drive silver to parity with gold.
When you realize, after being in denial for quite a while, that COMEX is not good enough for you - you'll be out of business with your dreams about gold.
That happens again and again and nothing can't be done - because people like to dream.
Every gold exchange that has ever been formed in the history of the planet has gone under due to fraud.
What if they are scared and won't buy?
lol, I don't think that will be a problem.
If nothing else, APMEX is now paying above spot for genergic silver rounds.
can find you a dealer within 10 seconds who will. Stop listening to this idiot mosely-claven
ROTFL...just like the dozen or so you were "expecting" in the past year?
You've been bleating about this shit all the way up and now again all the way back down?
buy now or be priced out forever!!!!! wtf, you sound like a RE shill
I said in February to expect increasing volatility with a downward bias. I reiterated this before the early May slaughter (you and other trolls like to cherry pick my exasperated comment about rising prices, which I HATED, because rising prices save the COMEX while ignoring the fact that I was calling for exactly this sort of thing to happen).
In case you forgot, "volatility" means the price goes UP AND DOWN. You don't seem to understand this. Understandable, as you ARE demented.
You telling us you don't own physical silver anymore? You think I forgot about that? You bleat on and on about how you hate silver while you own it yourself. You are actively trying to cause people to lose money because you think they are "unworthy" and you want them to die because you are a miserable selfish old man who has alienated everyone and everything precious to him.
Why don't you go down to the ghetto and offer them some cash for sterilization? You'd get what you so richly deserve.
Lot of gold and silver holders sounding like speculators. I own some phys too, but it was increasingly clear a deflationary spiral is now upon us.
Looks like the metals simply are not good deflationary hedges, even though there is some research out there to the contrary. The inflationary case is looking weaker by the day, deflation is here, and I think PMs will continue to get clobbered.
I bet you thought that in 2008, yet here we are.
Deflation in fiat currencies is a historical abberation. It is not sustainable at all. More likely is that this is merely a ploy to force the politicians to come begging for more QE.
I further suspect that someone knows there is something about to go terribly wrong in the metals markets, and is getting out.
It's not deflation in currencies. It's deflation in credit/debt. Banks have many tens of trillions in outstanding credit, that is what is getting crushed. Money supply is but a fraction of the credit/debit/notional derivatives value.
Also, I do not see QE in the immediate future.
You think no fiat system has ever been built up on credit/debt before?
They were ALL built that way! At least, all the ones controlled by central banks.
The fact is that this is NOT natural behavior, no matter how you look at it.
Deflation in credit/debt is the same thing as deflation in currency. (In our version of fiat currency anyway.)
No sir. What you see is deleveraging. With fiat currency underneath it all we would have deflation. Instead we have Bernanke and he is up at this our with the rest of us chewing his fingernails off.
We'll get a stop-all-deflation announcement from him and it'll bounce hard off the bottom.
Don't try to catch the bottom. Just keep averaging in.
Exactly.
Every day silver goes down 5% just convert another 1% of your net worth into silver.
Such a simple equation.
All the way down and halfway up the other side.
Deflation will be a short-term event in the US. I would agree that deflationary forces are taking hold but deflation rewards savers and punishers debtors. And the largest debtor in the world, the USA. If deflation does take hold, the tax basis will be destroyed, receipts plummett, and servicing the US debt made impossible. Even printing by Big Ben won't solve this problem as in the end, just like an over extende consumer with too many credit cards, the US will be forced to default. With this, game over as confidence in the UST's and the USD will fail. When this happens, welcome to hyperinflation as the rebalancing of the wealth around the world will occur forcing the US to produce more, consume less, and watch their standard of living decrease. So for everyone who's on the deflation bandwagon, you may be right but be careful for what you wish for as you may get it which will enable you to pat yourself on the back and say "I told you so" but if you hold your USDs and USTs too long, watch your wealth vanish like a "Fart in the Wind"
Thats it in a nutshell. Tonights events all but guarantee a new round of QE will be announced in the coming weeks.
HOLD ON!
Um, thank you federal reserve!
I agree--we deflate and it will be a quicker death than inflation. Our casualty rate is going to go into the history books.
@ sequitur Looks like the metals simply are not good deflationary hedges, even though there is some research out there to the contrary.
you're taliking, right now, of less than 3 days of admittedly, almost straight down volatility
GSR = 55: 1985 Sammy Hagar "I Can't Drive 55" (Farm Aid) - YouTube
Something is rotten in silver. I just added a little more at this level and suggest others do the same.
"I just died in your arms tonight... it must have been some kind of debt"
Snakes and ladders, without the latter.
What a ride. Let's face it, if you don't like volatility then you should never be in the PM space to begin with. No doubt the paper market is imploding as everyone is looking to sell whatever they have left that has a market to raise cash and become "liquid". But in what? The USD is today's soup du jour but its clear now that money has nowhere to go but move around the globe, looking for the latest trade, ride the wave, and hope to dear god that you don't get left holding the bag.
Each crisis is becoming more and more acute with the leveraged positions needing more and more volatility to generate gains. Keep moving from the Yen to the Euro to the USD from emerging markets to whatever is left standing. Reminds me of the final gamblers in Vegas in each working the tables in one last attempt to salvage the night. In the end, the house gets everything but the sense of urgency and panic becomes more acute.
I was always wondering when the final wave would hit and panic would become so wide spread that paper money and wealth would begin to "turnover" so fast (within different financial assets), chasing whatever was left, that it would cause the system to finally collapse. Any thoughts on whether this is the Ah Ha moment would be appreciated.
In my book the only thing that really matters is what is real. If you can buy physical assets at these prices then in the infamous words of David Starsky from Starksy and Hutch "Do It!". As for the paper markets, prepared to be cleaned out by the insiders as the fraud has become so blatent (e.g., last Friday's action in PMs with the inside group already knowing margins were going to be raised) and rampant that anyone that still believes the markets are freely functioning and operating in a fashion to deploy capital in the most efficient manner possible, please raise your hand. If nothing else, the CEO/CFO of the BK solar company taking the fifth last week should have put the final nail in the coffin.
As for my final statement (I'm sure to be censored by Big Ben and the Fed), I would like to note that I've never been prouder to be an American (based on the founding principals of this country) but never more embarrassed or humiliated to be a United States Citizen.
Well it's clear that sell off was triggered by "NO IMMIDIATE PRINTING" announcment, is there anything coming this week that might change the course? Just trying to time the bottom.
Two options:
1) JPM liquidating Greece
2) JPM liquidating JP
3 ) France liquidating JPM
Here is what October Put Options that Bet Against the S&P 500 look like for October, 2011:
Open Interest: Strike Price:
12,467 500 17,893 650 67,816 750 116,406 800 51,789 850 27,742 875 64,123 900 20,392 925 52,737 950 26,701 975 90,031 1,000 117,902 1,100 127,798 1,150 127,036 1,200
Obviously this predicts a major crash.
Wet Willie - Keep On Smiling
http://www.youtube.com/watch?v=tg0BNTebcbY
Basanov song was great, got 4 of his title downloads alrdy
Deflation, bitches. Shit just got real.
This is likely a coordinated central bank attack on PM's to flush out investors from PM's back into either cash (T-Bills) or stocks. Monetary stimulus doesn't work so well when people put their wealth in the alternative non-national currencies (PM's). It may be seen as a pre-requisite for QE3.
Oh how the mighty has fallen. Excuses, excuses, excuses
Going back down to $25, gold is @ $1549!
Sorry about the formatting.
There are 900,000 October Put Options Contracts against the S&P 500.
The buyers are banks and hedge funds (probability of loss approximately zero). The sellers are mutual funds with holdings indexed to the S&P 500 (probability of loss approximately 100%).
This is a no brainer, GREECE DEFAULT = MARKET crash, where is the story?
I've been trying to buy from kitco since $26.50, but have not been able to get through for about 45 minutes now. The time to stack is now, not today. I have a feeling the local coin shops will be worthless for getting much of anything from in the morning, i hope im wrong.
APMEX stil has lots of inventory if you are willing to buy the less popular products. The popular stuff is already all gone.
gainesvillecoins.com
site is down completely............
So is Kitco.com
Something SMELLS !