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Official Swiss Bank Denials Of SNB/Fed Dollar Swap Line Usage Sends Gold To New Record Just $120 Away From $2000

Tyler Durden's picture


When we first presented yesterday that the SNB had used $200 million in FX swaps with the New York Fed, we speculated that this "means that it is not some usual PIIGS suspect, but one of the two "big ones." Obviously by this we meant Credit Suisse or UBS. It took the banks about 12 hours to come out and deny officially that it had been either of them. Well, it simply it is someone else, and hence someone with far less in deposit-based capital buffers. And then, of course, you know what they say about official denials... Anyway, whoever it was, Europe is not waiting to find out: this morning most European bourses are down between 2 and 4%, Dax down 3.7%, CAC down 2.8% and the FTSE down 2.8% at last check, as the specter of a pan-European bank run is back. The net result: spam continues to be a drag in the gold-canned food pair trade, hitting a new old time high of $1878 in the spot market minutes ago, and just $122 away from $2000. Should the market rout persist, we may well see $2000 in the next 48 market hours.

From Reuters:

Switzerland's biggest bank UBS (UBSN.VX) (UBS.N) said on Friday it had not made use of the Federal Reserve's swap facility via the Swiss National Bank.


There had been speculation that a Swiss bank had accessed the U.S. liquidity facility via a $200 million repurchase transaction with the SNB the previous week.


"UBS has not made use of the Fed facility through the SNB," it said in a statement.


The Federal Reserve provided $200 million of liquidity to the Swiss National Bank in the latest week via its swap lines for foreign central banks, the New York Fed said on Thursday.


The SNB was the sole institution to tap the swap lines in the week ended August 17, swapping the full amount.


That was the first time the SNB has tapped the swap lines since they were reopened in May 2010.

And from the market:


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Fri, 08/19/2011 - 07:14 | 1576308 ArkansasAngie
ArkansasAngie's picture

Well ... it is Friday

Fri, 08/19/2011 - 07:21 | 1576324 pesamystik
pesamystik's picture

The WSJ story planted by the Fed (as noted by ZH yesterday) about the Fed's "concerns" about Euro banks is still hitting the Euro markets.

The Fed and the financial cabal are attempting to force the Eurobond issue, and score the coup of centralization they so deeply desire. Merkel is the last line of defence against the evil squid sucking every last bit from humanity. My guess is she is going to fold, just like she has time and again.

Fri, 08/19/2011 - 07:32 | 1576352 markmotive
markmotive's picture

If anyone doubts the long-term trend in gold I suggest listening to this interview with the dude from Ertse Group:

However, the short-term picture could be quite volatile.

Fri, 08/19/2011 - 07:15 | 1576309 HitTheFan
HitTheFan's picture

Whilst I like gold long-term, the jump from $1500 to nearly $1900 has been too fast, look out for a very quick sharp correction, just like we saw with silver. Hot money in, hot money back out I suspect.

Fri, 08/19/2011 - 07:21 | 1576327 DogSlime
DogSlime's picture

Maybe, but this is in response to other investments looking like shit.  Unless some confidence comes back to the markets (HAHAHAHA!), people are going to put their money in gold.

I'm not sure the gold situation is bullish in the normal sense.  If the "hot money" leaves, where can it go right now?

Surely confidence in the markets, sovreigns, banks etc.  needs to be restored before the trend in gold will reverse significantly?

Maybe an Obama speech or some reassurance from Bernanke will do the job?

Fri, 08/19/2011 - 07:38 | 1576371 MFL8240
MFL8240's picture

Where does a person go if they sell Gold?  Bonds, Stocks, Currencies, Real Estate???...they are all broken and confidence will not be back for years to come.  The US stimulus con game that ran the stock market higher on printed money is just another example of why the Federal Reserve needs to be abolished.  Real Estate, Bonds, Dollars, Stocks, you name it and they are all broken because of the insane policies of Greenspan and Bernanke.

Fri, 08/19/2011 - 07:22 | 1576328 GIANTKILR
GIANTKILR's picture

Dude, it's the end of the finacial world as we know it. You can't base your assumptions on past results. There has NEVER been anything like this in history! And stop comparing it to 2008, people!

Fri, 08/19/2011 - 07:31 | 1576346 scratch_and_sniff
scratch_and_sniff's picture

right you are kid. Keep buying...infact if you bought enough now you could become very rich, very quickly, not a moment to waste. (p.s. dont look at the monthly chart of gold, it will only mislead you)

Fri, 08/19/2011 - 07:26 | 1576336 iota
iota's picture

Be very surprised if we don't. Too much, too quick. Racing through $100 price changes like that screams 'bubble'.

Fri, 08/19/2011 - 07:31 | 1576347 GIANTKILR
GIANTKILR's picture

Sometimes I feel like I am talking to a brick wall!

Fri, 08/19/2011 - 07:53 | 1576412 gtb
gtb's picture

Not a brick wall...just idiots.

Fri, 08/19/2011 - 08:15 | 1576492 Badabing
Badabing's picture

"Be very surprised if we don't. Too much, too quick. Racing through $100 price changes like that screams 'bubble'."

look at it like 5%

Fri, 08/19/2011 - 07:15 | 1576311 achmachat
achmachat's picture

honestly. Who is still in the market with their own capital?
the only thing I've been doing the last 2 months is to sit on the side and watch everything fall apart.

Fri, 08/19/2011 - 07:17 | 1576315 foofoojin
foofoojin's picture

Did silver just jump a dollar in one min?

Fri, 08/19/2011 - 07:20 | 1576323 jubispupper
jubispupper's picture

According to Kitco it would appear about right.

Fri, 08/19/2011 - 08:04 | 1576444 mayhem_korner
mayhem_korner's picture


I just heard a round of "thuds" on the street outside of the Morgue...probly some pm shorts takin' the ez way out.

Fri, 08/19/2011 - 08:20 | 1576509 Badabing
Badabing's picture

A ploy to move day traders out of gold and into silver?

Fri, 08/19/2011 - 10:18 | 1576977 cowdiddly
cowdiddly's picture

With the margin requirements as high as they are in silver, this is not daytraders  or short term speculators driving the price. Throw the stock chart mumbo jumbo away and get some phyzz while there is still some available to buy at any price. This crash is global, They wanted a global economy, but like the euro it all comes down together. Now they don't have enough money on the planet to bail the whole world out without killing all fiat currency. GBP/JPY, USD/EUR..? Totally useless, Its like comparing one steaming pile to another steaming pile and trying to decide which one dies first. Only tangible items are worthy going forward.

Fri, 08/19/2011 - 09:55 | 1576910 DosZap
DosZap's picture



The NADS was on yesterday, telling of a SMACKDOWN coming...............what a penis.

Fri, 08/19/2011 - 07:17 | 1576316 alexwest
alexwest's picture

hey bruce,

it so #UCKUING BULLISH FOR SWISS FRANK.. one of  biggst swiss bank basically was running out of $$$$

cant wait to buy more franks on leverage 1:1000



Fri, 08/19/2011 - 07:19 | 1576320 jubispupper
jubispupper's picture

Last weekend I picked up another 70 Gold Eagles and 4000 Silver Eagles to round up my allocation (about 40% of capital in PM -- started doing so in 2006).  I thought I overpaid at 1707 for the gold, and 41 gross for the silver.  Amazing movement.  Any thoughts if it's wise to allocate more money to PM?


Also any thoughts when the time will be right to sell large pieces of muni portfolio (i.e., probably when the 10-year is yielding around 1%? but before everyone freaks out about muni world again ....

Thanks for your thoughts.

Fri, 08/19/2011 - 07:23 | 1576332 alexwest
alexwest's picture

if its true, i'd NOT brag too much about buying physical on i-net.. kind of lame...


Fri, 08/19/2011 - 07:29 | 1576342 sudzee
sudzee's picture

If estimtes of paper pm' certificates writen against your physical are correct, you sir, could buy a country. Many thx for doing your part to bring the EE down. You are a true patriat.

Fri, 08/19/2011 - 07:47 | 1576402 Snidley Whipsnae
Snidley Whipsnae's picture

The only thing the Fed can do at this point to hurt PMs is to jack interest rates above inflation. What is the likelyhood of that happening, since such a move would destroy what is left of the US Economy? My guess is very unlikely.

The other moves available to the metals exchanges are margin hikes. I look for those soon... depending on how much the hikes would hurt the big shorts that are 'doing gods work'... But, this option is not going to slow central banks from accumulating physical PMs, nor for that matter, anyone from accumulating PMs.

Hiking margins to lower the price of PMs is counterproductive... since it does not effect those buying physical and buying it for a new lower price after the hikes...

Fri, 08/19/2011 - 09:19 | 1576699 RockyRacoon
RockyRacoon's picture

It's all about opportunity cost at this point.   When the realization that gold is money sinks in the real run on gold will begin.  Folks smarter than the average American have already made the moves -- like Indian and Chinese peasants.

Fri, 08/19/2011 - 09:56 | 1576918 DosZap
DosZap's picture


The Indians I Expect, Chinese peasants..................uh,not so much.

When your bested by them, you know your SHEEPLE.

Fri, 08/19/2011 - 11:41 | 1577550 RockyRacoon
RockyRacoon's picture

I'll agree, and narrow that China range to the fact that you can walk into many Chinese banks and buy gold.   Try that in the U. S.!  We are indoctrinated not to think about gold -- at all -- period.

Fri, 08/19/2011 - 07:57 | 1576421 Pegasus Muse
Pegasus Muse's picture

I use the Eric Sprott asset allocation philosophy.  To hell with diversification.  If you have thoroughly researched and believe in an asset class, go for it.  He has 90% of his personal wealth invested in gold bullion, silver bullion, and gold and silver miners.  That seems about right to me.   

Fri, 08/19/2011 - 08:44 | 1576593 snowball777
snowball777's picture

Sure you did, Glenn. At Goldline, right? LOL

If you were going to throw down over a quarter mil on physical, why didn't you just buy a handful of kilo and 1k oz bars?

Fri, 08/19/2011 - 10:21 | 1576955 DosZap
DosZap's picture


Want an opinon HERE, forfukingetIT.....................

People do not give advice.Other than Buy Gold & Silver Bitchez.

40% (if you started in '06, should have you set.............esp if you just added another 70/4000-IMHO

Ben Davies of Hinde Capital thinks the .Gub, is going to Scr@* us over at $2,100.00.

Fri, 08/19/2011 - 07:19 | 1576321 Freebird
Freebird's picture

Who would have thunk it?

Fri, 08/19/2011 - 07:20 | 1576322 legal eagle
legal eagle's picture

Something has to break

Fri, 08/19/2011 - 07:31 | 1576351 Freebird
Freebird's picture

Much will break no

Fri, 08/19/2011 - 07:21 | 1576325 ZeroPower
ZeroPower's picture

One last swift move higher (maybe nice gap open over a weekend close in Sept with a $100+ gap) and we are ready for the downturn to start. A la silver on May 1.

Fri, 08/19/2011 - 07:29 | 1576345 slaughterer
slaughterer's picture

The suspicion is great that Gold will hit $2000 on Sunday in Asian markets, and then be taken down by 8 successive margin hikes and 1,000s of short contracts next week.  However, it would provide a great entry for what is to come at Jackson Hole.

Fri, 08/19/2011 - 07:31 | 1576348 ZeroPower
ZeroPower's picture

Not hearing anything, but the action literally seconds ago definitely says something is brewing. $1876 to $1851 in a blink, with spreads 2x as large currently (from $0.90 to ~$2)

Fri, 08/19/2011 - 07:56 | 1576420 dollarmite
dollarmite's picture

What happens when the day comes when everyone is all in and nobody is on margin? 

Fri, 08/19/2011 - 07:26 | 1576337 A Man without Q...
A Man without Qualities's picture

Having thought further, I wonder if it was done to provide liquidity to a bank which is a collateral counterparty to one of the Swiss banks?  Those cross currency swaps must be hurting...

Fri, 08/19/2011 - 07:45 | 1576394 slaughterer
slaughterer's picture

My early morning suspicion wasit was done to destroy confidence in the CHF--in a minor, measured way--and allow the currency to correct a little.  

Fri, 08/19/2011 - 07:28 | 1576339 topcallingtroll
topcallingtroll's picture

Shit is starting to get crazy again.

Fri, 08/19/2011 - 08:45 | 1576562 Badabing
Badabing's picture

$36 drop from this mornings high with no margin hike looks like the big guys hammer.

expect GLD to take a shit and then buy your ass off

Fri, 08/19/2011 - 07:29 | 1576343 Version 7
Version 7's picture

Regardless ups and downs, imho when it comes to gold, there's a certain time after which its future can only be parabolic.

Fri, 08/19/2011 - 07:32 | 1576353 scratch_and_sniff
scratch_and_sniff's picture

ha ha, good one.

Fri, 08/19/2011 - 07:37 | 1576368 disabledvet
disabledvet's picture

Have no fear Inspector Clouseau is on the case as i you tubed earlier.

Fri, 08/19/2011 - 07:40 | 1576375 Imminent Collapse
Imminent Collapse's picture

Ladies and Gentlemen, we are nearing the abyss.  Please secure all personal property, place your seats in the upright locked position and prepare for a rough landing.

Fri, 08/19/2011 - 07:45 | 1576395 Sudden Debt
Sudden Debt's picture




 now I'll never know how it ends...


Fri, 08/19/2011 - 07:50 | 1576388 Sudden Debt
Sudden Debt's picture






Oh..... looks like somebody wanted to put his feet up.....






Fri, 08/19/2011 - 07:52 | 1576409 RemiG2010
RemiG2010's picture

What if I am fat and I need 2 seats? Do I still qualify?!

Fri, 08/19/2011 - 08:02 | 1576441 RemiG2010
RemiG2010's picture

+1 Thank you. You've made me smile. ;)

Fri, 08/19/2011 - 08:26 | 1576532 Sudden Debt
Sudden Debt's picture

what can I say? Kids are perfect swimmers and we can always make more of them.

that should create some free space.

Fri, 08/19/2011 - 08:42 | 1576585 Badabing
Badabing's picture

Only if your a banker

Fri, 08/19/2011 - 08:47 | 1576592 Badabing
Badabing's picture

i'm doin dobble posts like BB prints FRNs

Fri, 08/19/2011 - 07:45 | 1576397 digalert
digalert's picture

So $200mil in US taxpayer dollars flies across the pond and disappears?

Is there something new that I missed?


Fri, 08/19/2011 - 07:54 | 1576413 laomei
laomei's picture

anyone wanna bet on that being caused by a massive dump of gold at 1850?

Fri, 08/19/2011 - 08:54 | 1576608 Badabing
Badabing's picture

How much can a $200M short move the market?

Fri, 08/19/2011 - 07:55 | 1576417 Fix It Again Timmy
Fix It Again Timmy's picture

The actions of the last few days should put to rest the notion that TPTB know exactly what they are doing and everything is going along swimmingly for their master plan.  If they were at the top of their game, their strategies and moves would be nearly imperceptible - that's not quite what is happening, it's more like they're shitting in their pants and puking their guts out...

Fri, 08/19/2011 - 07:58 | 1576426 Dr. Gonzo
Dr. Gonzo's picture

So glad I didn't try to get cute and sell. Not being long in gold right now would be heartbreaking. Being short would be suicide. 

Fri, 08/19/2011 - 08:01 | 1576437 Dr. Gonzo
Dr. Gonzo's picture

George Soros called a bubble $500 ago. Glad he's looking out for us again. I'm sure he'll have a good excuse on why 'things changed' and why he was really long all along and forgot to tell us.

Fri, 08/19/2011 - 11:13 | 1577382 DosZap
DosZap's picture


gald you didn;t either, with SORRY SORO's......

only one thing anyone in the USA should remember about the slimy BStd, Whatever he say's, Do thje Opposite.

He HATES AMERICA,he is the NWO Incarnate, and he is EVIL.....................................he's a frigging Commie bstd.

Don't know how to put it any other way.

Fri, 08/19/2011 - 08:06 | 1576450 Ignorance is bliss
Ignorance is bliss's picture

I don't see how our Orwellian over-Lords can fix this. If they announce stimulus the rush into PMs will be even greater still. If they increase margin hikes on the Comex, then the hordes of hoarders will rush out for delivery. This is it...we are seeing the first panic of a hyper inflationary collapse.

Fri, 08/19/2011 - 08:16 | 1576493 beachbumsix
beachbumsix's picture

Have you seen the little piggies 
Crawling in the dirt
And for all the little piggies
Life is getting worse
Always having dirt to play around in.

Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to play around in.

In their sties with all their backing
They don't care what goes on around
In their eyes there's something lacking
What they need's a damn good whacking.

Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner 
With their piggy wives
Clutching forks and knives to eat their bacon.

Fri, 08/19/2011 - 08:16 | 1576495 beachbumsix
beachbumsix's picture

Have you seen the little piggies 
Crawling in the dirt
And for all the little piggies
Life is getting worse
Always having dirt to play around in.

Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to play around in.

In their sties with all their backing
They don't care what goes on around
In their eyes there's something lacking
What they need's a damn good whacking.

Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner 
With their piggy wives
Clutching forks and knives to eat their bacon.

Fri, 08/19/2011 - 09:02 | 1576659 gwar5
gwar5's picture

“If you don't trust gold, do you trust the logic of taking a pine tree, worth $4,000-$5,000, cutting
it up, turning it into pulp, putting some ink on it and then calling it one billion dollars?"

--Kenneth J. Gerbino


Fri, 08/19/2011 - 10:00 | 1576934 DosZap
DosZap's picture

How many fiat dollars have you Lost since the opening this a.m.?.

They have taken Gold & Silver down,esp Gold, at least $11.00 from open.

Plat is going Moonshit..................

Why is Pal,staying at $750??................shit ought to be $700.00

Fri, 08/19/2011 - 10:18 | 1576999 slackrabbit
slackrabbit's picture

Oh happy gold 'n silver' day

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