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A Reminder Of The EURUSD's Response To The Historic Announcement At 2:00 PM On March 18, 2009
Zero Hedge has been lucky to have reported from the front lines on that historic day, March 18, 2009, when at precisely 2 pm the Fed formally expanded its LSAP program to include Treasuries, and more MBS, in what become formally known as Quantitative Easing (Episode 1). On that day, nearly three years ago (when gold was trading at $925) our commentary was the following: "Maybe one should really start buying stocks ahead of the uber-hyperinflation that will imminently ensue. We recommend wheelbarrow stocks.This is textbook back against the wall. But at least the stock market takes another crutch up." and of course: "Print, print, print... God help us." Needless to say it has been downhill ever since, and even though the global economy now is in the worst situation it has ever been precisely due to this unbridled printing, it is somehow conventional wisdom that all in Europe will be well... if the ECB does what the Fed did on that Wednesday in March nearly three years ago. The sheer idiocy of the logic is dumbfounding. Yet what we wanted to demonstrate is the intraday kneejerk response in the EURUSD which we caught just as it happened: the European currency moved by 400 pips from 1.31 to almost 1.35 in minutes. Which begs the question: in order to prevent a dollar spike, much as the situation of pre-QE March dictated, is the low 1.30s level the magical threshold where if the ECB does not, then the Fed will print? We make no forecast, and merely want to show that should the Euro proceed to tumble, the Fed has more than enough weapons, well, weapon, in its arsenal to reset the global devaluation game all over again. Because a soaring dollar will be the next inevitable step in the global liquidity collapse, which can and will be delayed (if only briefly) in only possible way: the "way" which will see gold doubling yet again over the next three years (if not far shorter).
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Gee, I don't know what to say.....GOLD, Bitchez!!
Or...SILVER BITCHEZ!
exponential functions bitchez
I will hypothecate your PMs and re-hypothecate the Benny-bux I get from them.
The true path to prosperity!
/s
Wonder if anyone has noticed that Hypothecate and Hypothetical have the same root.
I think that pretty much explains everything.
It's a hypo/hyper/hyppening world!
ORI
/the-plan/
We recommend wheelbarrow stocks LOL - priceless
..actually it's a step function. The exponential is what you get in the long run.
Judging by the price action of the last few months silver is gold x 2 in terms movement. So good upside if gold goes up, but more painful/shocking if gold moves down. If you have the stomach for the upcoming volatility, go with silver, but be ware of your tolerance to volatility. Gold is for old people. Silver for those who laugh at volatility.
Excellent!
Central bank liquidation continues. Check the charts from the past 30 minutes or so.
Actually, it looks like there might be some sort of news floating around out there which hasn't made it to headlines yet. Futures took a 30 point downswing about the same time gold plunged.
Zero-coupons bitches!
i buy gold and silver every chance i get
Yep..gold and silver...
Spot Gold now under $1,700
PigMen are now running the stops.
I guess I will stuff my stocking a little bit more. All you can do is laugh at those gap downs.
Correct: BTFD my dear. You know it, you just won't tell buddy. Put on some clothes, winter is here.
Pig men are running scared. Liquidating everything they can - collateral crunch. Maybe the same gold is re-hypothicated and sold a dozen times in London. That'll drive the price down...
Gold and commodities acting quite rationally to ben and the ecbs refusal to print. Cant say the same for equities.....
There is one important distinction here and that is oil.
March of 2009 oil was trading around $50 (so it doubled)
It'd be quite a shit show to see oil @200 this time around. Oil @ $200 would surely solve all of our problems.
Mid 40's to be exact ;-)
For every cent per barrel raised you are sucking $1billion of GDP out of the US economy. Oil fell to $30 barrel Dec 2008 and from March 2009 the stock market went on to one of the greatest commodity runs in history. Keep in perspective that when Bush junior came to power oil was $10 barrel.
So you take that and with the current price of Texas crude at approx $100 per barrel compared to Dec '08
So $70 difference per barrel at .01 per $billion GDP - sorry my calculator has only 8 digits
You take oil past $150 it's lights out for the entire world economy. QE III / IV or infiniate is not going to do a damn thing whilst oil trades at $100 barrel above....the more they print more oils going to go up.
Unless the US can control Brent prices they are fucked. Bombs will start raining on Iran in 3...2...1....
Me too, Regular Buys, but we may be in a period of apparent pain while euro crashes and dollar spikes, will have to hold on tight and turn off the charts to calm the nerves...
Andy Xie: ‘The financial crisis in 2008 and the current fiscal crisis are merely symptoms of deep structural problems in American society. Only a popular awakening and strong leadership can solve these problems and prevent the United States from following calling the International Monetary Fund and asking for a bailout.’
A rising empire rewards people who contribute to its growth and investin its future. The empire’s decline begins when certain members of society are over-rewarded by means of privileges, and the empire’s money is wasted on outdated endeavors.
Today, America rewards the wrong people and spends disproportionately on projects of the past. Symptoms of the flawed incentive system in the U.S. economy include a massive fiscal budget deficit, high unemployment rate, crumbling infrastructure and a failing basic education system.
International competition isn’t threatening the United States, but internal problems are. And unless the United States tackles its wrong-way incentive system and spending spree soon, its gradual decline will continue until it eventually joins the likes of Latin America.
http://investmentwatchblog.com/andy-xie-the-financial-crisis-in-2008-and-the-current-fiscal-crisis-are-merely-symptoms-of-deep-structural-problems-in-american-society-only-a-popular-awakening-and-strong-leadership-can-solve-the/
Robojackoff, you will be wiping your puckered anus with your worthless NFLX, LULU, PCLN and US Treasuries soon enough. I hope you have plenty of butt lube too...
The Fed cannot print anymore. It would blow up Japan. There are huge geo-political implications to more printing.
The Fed barks, and the market rallies. As long as the street believes a bark is the same as a bite, the Fed will not need to print.
Bernanke is following the Japanese play book after its property collapse, but the Yen was never a world reserve currency, so the Fed can go only so far, and no more, unless they become reckless, print, and implode the economies of some allies.
scenarios: Japan implodes, how will China take advantage of South East Asia as their regional adversary is neutered.
scenario: INdia falters because of hyperinflation, brought about by USD printing. How will Pakistan maneuver to take advantage.
scenario: spike in oil. Petro-terrorist states have more funding for madrasas, Hamas, and Hezbollah. Another US terrorist attack. Iraq destabilizes. Iran takes greater control. Kurd-Turkey war. Iran-Israel War. India-Pakistan War. Russian Bear rises.
More USD & Euro printing could destabilize world power dynamics as commodity/resource conflict rise.
Agree, except if Japan goes, it take the region with it.
Only holders of real assets win.
what do you mean the fed won't print? that is what they do, and with low interest rates they print/loan more. get it?
I was not aware that the fed had stopped printing. Did I miss the memo?
Come on baby, let's do the twist
KING DOLLAR
you've been saying that as long as i can remember
The Fed has been creating money all along and hasn't stopped. Look at the current M1, M2 and M3 monetary base figures. The fuckers just keep going up and up and Uncle Bennie has run out of rabbits to pull out of his top hat...
But what can he pull out of the shoe, the car and the thimble?
One up from me for being clever!
Ummm...
I think the 'wheelbarrow' & the 'battleship' would be more appropriate references considering the topic...
Don't spend all your powder on gold & silver yet. Remember, during the great delveraging, all leveraged vehicles (think Paulson) will have to sell their assets to meet margin calls. Additionally, the commodity exchange cronies, along with JPM and the rest of the criminal banks, will exploit margin requirement hikes, etc. to beat metals down again. That silver only dropped from $50/oz to the $30 neighborhood after the unprecedented margin-requirement hike 5 times in 8 trading days, is testament to its intrinsic value. Buy your insurance holdings now, but save some powder (or get your HELOC ready) so you can back up the truck when the hijinx next appear. To think metals will skyrocket without TPTB fighting for their lives with all dirty tricks, will put you in the potentially anxious position of considering selling when the buying will be best. Have some powder ready.
Bingo.
Prepare a buying plan in advance.....to minimize the effects of panic/anxiety which will certainly hit you if prices get slammed down (as I believe the will be).
Personally, I've carefully written down how much I will buy at specific decrements. The more prices fall, the more ounces I will buy. In fact, I've even submitted GTC orders with my dealer; if prices crash---even momentarily, in the middle of the night---I will be filled.
I'll be there with you Beantown
I think you are spot on. There will or can be a serious deleveraging or deflationary phase before an inflationary one. I have read arguments for both the last few years and I tilt toward deflation first. The two great forces are the endless printing and virtual monetization of debt, particularly by the Fed against the ability of the welfare state to wreck economies and destroy wealth and money.
It seems to me that although the Fed has essentially printed record amounts of money it is not flowing into the economy and the hands of the public. It sits in bank vaults and financial houses. Without circulating it is hard to get the inflationary effect the Fed and all the central banks desire to some degree. I wonder if we might see something new. Commodity inflation without corresponding wage or employment inflation. Could be the absolute worst of both worlds for the general public. I can only hope that the concept of central planning by geniuses and the welfare state go the way of the dodo bird.
As you state, Clockwork, it may be a rough ride. The State will employ every trick in the book to keep itself going.
that already happened in '08 this is a new game
you just think you have all the answers, don't you?
I agree and will follow your advice, but be aware of their LAST trick: to doom PM stackers as 'greedy speculators' in front of the still clueless public and to release a set of laws which forces us to bury the stuff in the woods and lie to the authorities.
Maybe the Fed will not print so soon. A strong dollar and the strength of US treasuries will be good for the huge fiscal deficits. US didn't have such large deficits back in March 2008. The Fed perhaps will print once the safe haven demand dries up and nobody wants US treasuries.
And exactly where is this demand for your so-called "safe haven" coming from? Wait for it............the printing press.
People who don't want assets in Europe. I think the Fed may want to keep some ammunition for now and print later.
do you understand what keeps rates low? demand is marginal without the direct and Primary Dealers. They print dollars all day long and they won't stop
You are right about the current demand for treasuries. However, things can change very fast. At the beginning of 2008, the dollar was despicable but at the end, everybody wanted the dollar.
given the environment dxy 88 was nothing and it didn't last. usts are a horrible investment and everyone knows it
"You know it" doesn't mean "everybody knows it". "Gold is a wonderful investment" but gold ownership is still insignificant among the general public.
There is one observation that needs to be made. The Fed Res has been doing all these "emergency" money printing and increasing "liquidity", but they have been doing it continously for three years, and now Europe is starting.
So, if this is working, why are we still using Central Bank Liquidity programs for "Emergencies", when it is not "everyday" banking protocol"?
What will we do inf there is another "emergency" as were are already liquifying at Defcon 1?
inbcrease the amount of the swaps
Not sure how many liquor stores you know have a scale for your PM's .or any other place where you want to purchase food.I bought gold eagles back in 2001 for roughly $400. not for the coming death of the currency but because it was the same price as an ounce of buds..that I was burnin through in 2weeks. I would recommend that you have at least one months cash in your your home , or more. The banks are going to blow out way before the currency does. keep your gold, silver, and whatever other man created mineral thoughts of wealth. But also have food, and US currency. thats my humbled up opinion.
Have you noticed that a lot of people who were saying to have one months cash reserve on hand have now moved to three months?
and the nice thing about storing paper cash: the amount can no longer be multiplied for the bank's pleasure... it is - in my case a tiny one - but it is still an arrow in the heart of the system.
So the value of your favorite money went up 4x, and the price of your favorite commodity went down 4x.
Throw a party.
Oversupply + overindebtness + demand failure obviously has resulted in the price of money (debt) being just shy of a 100-year high. The prices of stuff will most likely fall for the next 5-10 years at least.
On single malt too? Oh joy.......!
The secular bull market for gold is in tact. Regardless, if the ECB or the Fed launch more easing (which is overwhelmingly bullish for gold), the value of the euro and the dollar will fall as countires in the eurozone continue to pile on debt and the U.S. follows the same debt stricken path it is already on. Two of the worlds biggest reserve currencies will be pinned to countries who are on a path towards insolvency. It seems logical that money will flow into safer currencies or hard assets (i.e. gold). Given everything in the current financial landscape, gold is well positioned to continue its outperformance. Eventually, this outperformance will give way to underperformance as is the nature of asset classes. Invest prudently.
Investing prudently, humm: One hundred 22 rifles at 120 bucks a piece and 1000 rounds for each at $$ comes too ... Crap --- a visit from the ATF. Crap crap and double crap.
Everyman: "What will we do inf there is another "emergency" as were are already liquifying at Defcon 1?"
The Algo's will stop bidding on any equity, prices will flash crash and all you dumb bastards that constantly bash gold and silver will realize your ignorance as your paper-based wealth goes to zero in an unprecedently short period of time...
Well, it is hoped that they are treating the "paper" like their poker bankroll: It's there for the opportunity, would hate to loose it, but it ain't gonna cripple them if they do. And if they do well, "That's poker."
It's interesting to click on the link and go back and see the old zero hedge page. That article had a total of 21 comments on the announcement of QE. Imagine how many comments will be on the QE3 announcement article Tyler posts. How things have changed.
Sorry, clicked the wrong button on my iPhone. That -1 is actually a +1. Damn fat fingers!
some 'Ben' from Princeton can understand that well, he pushed the wrong button two times and oooops, maybe a third time.
With the hyperinflate trade black gold, oil, just keeps going on up. A pause here til we break the highs once the Fed steps in.
http://heavenbounf.blogspot.com/2011/12/americans-24-trillion-poorer-aft...
Americans are quickly getting poorer as the much-touted economic “recovery” remains elusive. Household wealth plummeted by more than four percent from July to September according to a report released last week by the Federal Reserve, marking the steepest drop since 2008 and the second quarterly decline in a row. That represents an average loss of about $21,000 per household in just three months.
As Tyler has been predicting all along each QE is making things worse and having a more adverse effect...
The banks will blow up one by one but immediately be replaced or not (it doesnt matter) as there are PLENTY of credit Unions. We just need one bad bank that charges for accounts or some other nonsense that the CU's can say 'We are not like them'.
MMMM-hmmmm look at gold go!!!
...
Your forgot to mention DEFLATION.
Equities UP = Gold UP
Equiteis DOWN = GOLD DOWN
it doesn't work like that
I challege anyone to prove me wrong on the correlation of Gold and Silver with equites in direction (not scale) since 2009........prove me wrong that they are not in sync in direction!!!!!
AUGUST 2011
MMMMMMMMMM I made more money TONIGHT trading gold futures than ANY OF YOU have made if you bought physical gold in the last 6 months
Any and all paper assests will collapse in the near future so who gives a shit unless you have precious metals in your possesion.
Greetings bill1102 You are a piece of shit. And I hope someone adds to you by shiting on your face.
Fuck off.
Sure you did.
mega - is that you?
why hate on gold bro?
Seeing as the USD is put out by the fed (which is made up of a small group of financial interests / institutions); could a crash in their investment exposure be what kills the USD?
The Federal Reserve has a 3 trillion dollar balance sheet with 60 billion in cash so the are leveraged over 50:1. Nice to know that a 5% drop in their portfolio pretty much wipes them out and the printers get turned on to TURBO...
Actually no. According to an accounting change they adopted last January (covered of course by the Tylers at the time) any trading losses by FED banks can simply be booked as liabilities to the Treasury.
What the fuck just happened to gold....????? Check kitcos gold chart. Picture of a crime scene.
Down like $25 bucks in minutes.
buy the dip..
asia is
This work suggests that the panics that lead to crashes come from increased mimicry (correlation) in the market. A dramatic increase in market mimicry occurred during the whole year before each market crash of the past 25 years, including the recent financial crisis. When investors closely follow each other’s cues, it is easier for panic to take hold and affect the market.
Predicting economic market crises using measures of collective panichttp://arxiv.org/abs/1102.2620
Cheers on the proper usage of 'affect'.
Banks pay ~0% on deposits and are a counterparty risk.
Fiat currencies are losing value.
Seems to me the move to saving your past production in stores of true value (hard assets) is a no brainer.
Engage automatic pilot until something breaks the status quo's trend.
The printing will continue until the numbers improve!
This keeper from Aug 6 2011 Chart of DJI EUR/USD tango following announcement of a ECB/Italy Bail Rumors is a textbook example (GIF Yahoo Chart) on running a classic grif: insider baiting of reluctant outsider carry bull wanna bees with yet another rumored ECB "pig in a poke".
http://www.bloomberg.com/news/2011-12-11/no-one-says-who-took-586-billio...
ppfft the market isn't rigged...
No One Says Who Took $586B in Fed Swapswell, i think if/as the EUR/$ approaches 1.30, the swiss will print
isnt that their support point? benZelbub will (continue to) back them
if things continue to look grim & grimmer for the EUR...
...the europeon leadership will then complete the trifecta:
what could possibly go wrong?
and remember, you heard it here first, BiCheZ!
http://wissen.spiegel.de/wissen/titel/SP/2011/50/300/titel.jpg
Is there an announcement scheduled for tomorrow?
That was the date that the Fed announced that I had become the man for the age.
Who knows. In the long run, the dollar could be the greatest investment made in human history. Things could change fast and what you think will most likely happen might not actually happen bitches...
For any confidence game diminishing confidence is obviously a pretty big problem. At this point almost nobody will deny the fact that there is no law enforcement at all in the market. There is a fully mob owned so called "police" but its only purpose has been to lull investors into complacency, a false sense of security.
The mob will steal at will. MF was just a tiny trial run for the gigantic heists ahead. They´ll probably be in a big hurry as confidence is tumbling fast.
Yup, and BMadoff could be the greatest investor in human history. Ubetcha.
Does this mean ZH bullish on equities right now?
Double in three years? I think we are going there much faster, forget about past crisis, the robots and following panics will be 100times faster. Everything is done, no analysis needed anymore.
Bloomberg's bipolar morning headlines
> EU summit result - bullish spin:
> EU summit result - bearish spin:
And that's how you hedge hope with reality.
Gold prices will be manipulated. That is a certainty. The printing machine will print; the FED has set the global direction to debt debasement over the next two decades via fiat devaluation in Eurozone and USA. The middle class gets burnt and the Oligarchs shift debt to government ledger socialising it to ensure they can cherry pick world wide. Nation states don't count.
That is the global plan. So as long as these people control the political levers of power in USA/EU it will never change. Unless their own infighting brings it down like it did in 1914 for the Euro imperial crowd. If now the Euro burns big time it brings the whole house down. That is the explosive paradox today. Some of the Oligarchs want to take short cuts that could bring the shooting match of the uber alles ponzi to an end. Drama, drama, cauldron bubble, toil and trouble; as we watch the crazy scenario play itself out. ZH, you are heretics to them. So you may think you are ahead of the curve, but they continue to think they define it and financial Karma is pipe dream. PM will be manipulated in global game.
To me- it's so clear.
When the Euro Busts, the dollar follows. No way the dollar can survive for long after the Euro fails. The US Banks will go under and so will the US Fed which has loaned/swapped currencies with it.
Games are being played now to use the useless dollar for accquiring assets by driving down the Euro.
People in the know are aware that debt is NOT going to be paid back. They are trying to accquire more money by way of bailouts from the tax payers for their own use .
The tax payer , which means virtually everyone who buys anything, is the fall guy.
There is NO solution to this financial problem. The system has to bust . WHEN is the question!
Better NOW before the thieves, robbers and thugs steal more and appropriate more
And then there's this:
Reports from foreign journalists say that US troops have been spotted amassing in Jordan along the Syrian border.
There is an will be a huge western media blackout on this development. I read/heard it at: boilingfrogspost.com.
Also, the Russian election "protests" are, surprise surprise, being fomented and orchestrated by US State Dept supported NGO's, Ford Foundation, and Soros groups: http://www.infowars.com/wall-street-propagandists-scramble-to-cover-us-t...
US Feds are going door to door in Tennessee asking people about their stored food supplies, and demanded a Mormon food supply store give them their customer list: http://www.infowars.com/update-news-channel-5-confirms-door-to-door-ques...
War is coming, people, and it's going to include more than Syria and Iran!