Thank You Swiss National Bank For $2000+ Gold

Tyler Durden's picture

Confirming that this is a market for idiots, by idiots, was the 4 am response in the price of gold, which following the SNB's Swiss Franc peg announcement did not surge, as it should have considering that the SNB just singularly changed the role of the CHF from a "flight to safety" to a carry currency, making gold the only island of stability in a world of fiat insanity, but instead plunged by over $50. Subsequent attempts to regain the $1900+ level were met with constant program selling for no other reason, than just because someone 'else' was selling. Of course, the logic is completely and totally the opposite. But don't take our word for it: here is Reuters: "Switzerland's decision to peg the erstwhile safe-haven franc to the euro may finally give gold bugs the chance to see prices hit the once-unimaginable $2,000 an ounce mark, as the metal holds on track for its strongest annual rally in three decades. By buying euros in unlimited amounts to weaken the franc, the SNB is in effect putting more of its own currency into circulation, which threatens to trigger inflation. It has also impacted the Swiss currency's status as a haven in its own right. While gold prices initially dipped as the move sparked a rush to liquidity in the form of other currencies such as the dollar, the SNB move is likely to lend firm support to gold in the medium term, analysts said." Precisely. And it is not only Reuters: Bank of America's MacNeill Curry said that Gold will probably rise to $2,050 this year. The rationale - identical to the above: SNB decision to peg franc to euro should also support gold. "They have taken out one of the big safe-haven assets, which is the Swissie." As for the amount of time the idiots will need to realize that QE3 coupled with the SNB action means that gold is now valued somewhere well over $2000: at least a few days...Which everyone who looks for even the smallest golden pullback will be happy to take advantage of.

From Reuters:

"All in all, Switzerland is now on a quantitative easing policy in the foreign exchange markets," said Peter Fertig, a consultant for Quantitative Commodity Research. "If the Swiss franc is no longer a preferred safe haven due to intervention by the SNB, it will have (a positive) impact on the demand for gold."


Much of gold's rise this year - it is currently up 34 percent since January, on track for its largest yearly gain since 1979 - has been fueled by cheap cash, provided chiefly by Western central banks battling debt piles large enough to derail global growth.


Even without the SNB, the deterioration in the euro zone debt crisis and the U.S. economy's inability to create a single job last month had already prompted many analysts to upgrade their gold price targets this year.


The $2,000 mark is now coming clearly into view -- though its sustainability at that level is unclear.


"$2,000 is just another number. There is no reason why it can't go through that, can't go a long way through that," said Natixis strategist Nic Brown.


"This explosion in liquidity creates demand for gold and creates the perception for gold prices to go higher," he said. "But ultimately, this is a bubble fueled by liquidity."


Adjusted for inflation, gold already hit $2,000 an ounce in October 1980. In 1980s money, Tuesday's record high gold price of $1,920.30 an ounce is only worth $720.


But its rally is impressive nonetheless, with the metal set to end September with its twelfth quarterly gain in a row, its longest such winning streak in at least 30 years. Switzerland's move is just the latest piece of supportive news for the metal.


"I think gold is headed for $2,000. In theory, this could happen in a matter of days," said Frank McGhee, head of precious metals trading at Chicago's Integrated Brokerage Services.


"In reality, if this type of intervention action was taken and was ultimately seen to be ineffective, then the market will get new strength from that."

Who may do most of the buying? Why the same printing madmen themselves:

The most recent data from the International Monetary Fund shows the world's central banks have bought some 200 tonnes of gold this year, led by Mexico, Russia and South Korea. Investors in exchange-traded products backed by physical gold have increased their holdings by a net 75 tonnes in 2011.


The Swiss National Bank's "shock and awe" decision may prompt even more of this kind of investment.

So while the robots, the vacuum tubes and the algos are decidedly confused what to make of the noisy intraday momentum, the ultimate direction of the price of gold is beyond obvious. That's ok - anyone long gold since the  triple digits has more than enough patience to wait. After all, it won't be the first, or last, time, the Ph.D.-programmed robots need a little time to regain their bearings in a market that has just seen a 180 degree overnight change in virtually everything.

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kito's picture

i get really nervous hearing banking analysts tell us gold is heading higher....realllly nervous......

fuu's picture

In this one case I am not sure it concerns me. What are they going to do sell all the gold?

Unless they have developed industrial strength alchemy there isn't much to worry about.

The printing of fiat will continue until morale improves.

Oh regional Indian's picture

Turns out they have and I have the book, and no, not by paulo C.

That is the twist in the game.


Ahmeexnal's picture

riots in CH in 3...2...1...
seriously, first they close down the Letten, now this!

tmosley's picture

Gold in terms of francs.

LongBalls's picture

tmosley - Thank you! Something is not passing the smell test on this one. With all the manipulation why in the heck would they mow down all the life boats and force everyone into a decision between 1. The stock market, 2. US Treasuries, 3. Gold? Gold is the only asset moving higher and the most hated by the cartel. I think we should expect a severe bear attack on the PM's. It seems to me that they are about to throw the kitchen sink at the P.M.'s and coral everyones money for the slaughter on the DOW.

UGrev's picture

Unfortunately for them, it doesn't look as though people are becoming scared enough to run from Gold as fast and hard as they would like. 

A.W.E.S.O.M.-O 4000's picture

"... the world's central banks have bought some 200 tonnes of gold this year ..."


I'm gonna say that they bought it with money they printed.


Gold at $infinity anyone?

_Alekhine_'s picture

They probably got rid of their dollar reserves.

Fiat2Zero's picture

Agreed.  The usual raids go for a very long sustained duration and are marginally successful.  Even when combined with such beneficial factors as holidays, margin calls, and known news events, both Gold and Silver seem to climb back up in the asian hours.  The patterns are so well known that there are major buyers getting great deals on waterfall declines.  Telegraphing your moves doesn't help achieve your goals.

I also think that the Internet is helping a large number of people get quickly educated on what is going on.  Education helps combat the "terror" when you watch that Kitco graph plummet through several dollars in a few minutes.  I now actually look forward to these raids as I can see their frequency and effect are becoming far less pronounced.  The end is near for the cartel.  There are too many holes in the dykes.

When I think of my own transformation, from sheeple, to "outside the matrix," I was able to educate myself very quickly (through great sites like ZH of course) about the myriad details of global finance, and the PM markets.  I have taken steps that, objectively, are very bold, considering my previous investment strategies, and of course, have paid off handsomely thus far.  Far better is being able to sleep at night knowing I have prepared as best I can.

The fact is that the Cartels _influence_ the markets.  They do not control them.  And they have committed egregious overreach due to arrogance, and underestimating the rebel fleet.  Here's to their imminent destruction.

LongBalls's picture

Locked and loaded Colonel-ingus!

FeralSerf's picture

They're caught between a planet sized rock and a shitload of hard places!

You the same LongBalls that used to play baseball in the DR and love Marlboros?

UP4Liberty's picture

Stay right and hold tight!

He_Who Carried The Sun's picture

You can buy other things than just bonds or stocks...

Get yourself a nice convolut of Picasso prints etc...

Nicer to look at even than stocks or bonds ;-)


Just don't fall for any falsified Miro or Chagall and the likes..... 

Fiat2Zero's picture

Thanks for sharing that chart.  Simply amazing.  Hinde Capital is a smart group (I always enjoy what Ben Davies has to say).

It's interesting to show how quickly the currency debasement can be done, when someone gets a mind to do it.  This must only be possible with digital currency (as the paper and ink variety would take far to long to generate - especially on those cheap new HP inkjet printers).

JW n FL's picture



Quote of the DECADE!

"The printing of fiat will continue until morale improves."

All Credit too fuu !!

Corn1945's picture

Tune them out. Make your own decisions and trust yourself.

legal eagle's picture

I remember telling one of my friends to buy gold at $1,175 and telling him that it would eventually hit $1,500.  Agast, he said "if gold hits $1,500, we have much more to worry about than making a profit."  Well, he was obviously wrong, and he was obviously very right.

I clearly need to change my avatar, how do I do that?

smiler03's picture

Go to the home page.

On right hand side near top, see your userid and My Account, click on it

Click on Edit tab

Use "Picture" halfway down the edit page and add a new one

DefiantSurf's picture

translated: "hide your gold and buy more lead"

fixed it for ya

DoChenRollingBearing's picture

Buy more gold and buy more lead.  (I already assume each one with gold knows how to hide it)

Fixed it for you!

I did the first today, maybe buy more Pb tomorrow.

Nice avatar!

DCFusor's picture

Don't forget to practice using that lead dispenser, it's useless if you can't make it do what you want, even in very stressful times or half asleep (or...stoned).  And remember to clean the dispenser afterwards.  These things don't work like in the movies, not even a little.  For some of us, it's better than the movies, for all too many, only the bystanders are endangered.  Like in those dumb criminal videos where two guys (a crook and a store owener) empty glocks at one another at two-three paces on no one is hit.  Don't be those guys.

DoChenRollingBearing's picture

True.  Practice and cleaning are essential skills in using your lead delivery device.

Construct's picture

I get nervous to. Then when I watch the 'CPM Gold Yearbook' figures I am a bit calmer again. Gold ownership is at 0.7% of all global investment.


Reptil's picture

Thanks for the chart. It reflects what I've seen here. Everyone's hoarding fiat currency, somehow think their euros are different from those in italian bank sheets. Amazing to behold. So.... Much talk not much commitment. Gold fills headlines, but not balance sheets.

Can you imagine what will happen when (not if; when) it reverts back to 5%? By then many will be out of business anyway.

Construct's picture

Indeed. Another statistic:

Real inflation adjusted price for gold/silver peak at 80s was 2400usd/130usd.

Jack Napier's picture

The silver price is $130 when using the cooked government inflation adjusted numbers. ShadowStats puts it at over $300.

rgd's picture

“On the surface, it would seem to be highly bullish for gold. The possible negatives could be:

1) investors throw in the towel and just put assets in USD, on the assumption that there is less of a risk of a 9% overnight move in the USD going against you.


2) this pushes investors into risk assets


3) the extreme losses experienced by CHF long speculators raises a warning flag for gold – i.e. bulls make money but pigs get slaughtered so to speak.


4) this could be a prelude to some intervention in the gold market.


One thing is clear to me is that no asset is safe in this environment.”


UGrev's picture

How long will this jackassery of money sloshing go on? holy, mother fucking, fucketty fuck fuck .. They all know it's going to end and it will end badly for EVERYONE.. the longer they wait the worse it's going to be. I'm getting really tired of this shit.. they are just grindig metal on metal now. 

SheepDog-One's picture

Just grinding metal at this point, good analogy.

UGrev's picture

+1 for picking up on the "metal" ref ;)

FeralSerf's picture

Nothing that a carload of Vaseline can't ameliorate.

Jack Napier's picture

After the bending over we've all been given I'd be surprised if there is any Vaseline left. Maybe that will be the next hot commodity? We'll all come to remember the great Vaseline shortage of 2012.

Smiddywesson's picture

They all know it's going to end and it will end badly for EVERYONE.. the longer they wait the worse it's going to be.

The longer they wait, the worse it will be UNDER THE CURRENT SYSTEM.  So why would so many bankers and politicians, worldwide, agree to kick the can at such a cost in today's fiat?  Have they all gone crazy, all at the same time?

Maybe they know it doesn't matter how much fiat they spend to kick the can under a lost system.  Maybe the longer they delay, the better their chances of smoothly switching to a new system.  So they continue to kick the can and buy gold. 

UGrev's picture

the crash, and thus the "worst part" (as referenced in the longer they wait the worse it will get) comes at the crashing point of the current system, not DURING the current system. My point stands, but for clarity I will amend my statement to read "The longer they wait, the worse it will be at the END of the current system".

 I think their attempt is to make us beg for a new system which, I'm sure they have all so generously created for us; a system that benefits them the most and is, of course, tweaked and refined so that it's harder to uncover the fraud(s) in the new system that they install. I honesty think they will boil the fucking water for as long as they can..slowly.. until we either give up or start a war.

The easy way out for both sides is for us to beg.. the more costly for us is war. War is just a nuisance for them. They'll make money on it, but it just makes things take that much longer while the war plays out. 

JW n FL's picture



The reality of these or any other protests are the same that we here in America will face when it is our turn in the near future..


The reason why is simple, numbers.

The Bottom and Lower Rung Middle Income Crowds are on board with Fighting Back.

The Middle and Higher Rung Middle are Comfortable thusly there will be NO! Protest from them and in fact see the Lower Rung and Bottom as acceptable losses.

In the End.. after the Bottom and Lower Rung have been silenced..

The Attack on the Middle and Higher Rung will begin.. But the bottom and lower will want no part of those peoples problems and mostly the Middle and Higher Rungs will just grin and bare it!

divide and conquer.

this battle was won thru the programming of over stimulated decades ago.

The Bottom and Lower Rung Deserve what is happening.. they are less than. they are stupid or ignorant either or it doesn't matter.. not worthy of benefit and a drag on the larger society.

The Middle and Higher Rung will not want to lumped into that crowd and will suffer with a smile rather than be seen as one of those kinds of people.

Greece Fell!

Spain will Fall!

Germany is a LAP DOG! and will get in line becuase they win either way but this way with Global support.

Italy? will fall.

and then..


after all the others have gone before.. America will fall, divided.. and by the time everyone figures out that it always was a war against all of us.. will be.. to.. fucking.. late...



Fiat2Zero's picture

It's going to continue for far long than we think.

I'm thinking that gold, the inverse of the monetary system, is going far, far higher than $12,000 per ounce.  This does not comfort me, despite my position, but makes me a little scared.

What will happen when everyone will be clamoring for 1 ounce of gold, or 5 ounces of silver?  Anyone who holds the physical might have to hire a private army to guard it.

But the only way it's going to play out is collapse.  That much should be certain by watching the events unfold, despite the words coming out every leader's mouth.  And for collapse to happen we have to hit a far more manic stage of crises and money printing.

trembo slice's picture

i feel ya, but no ruling caste in history has ever willingly given up power.  they will keep it going straight into WW3, unfortunately.

bid the soldiers shoot's picture

"they will keep it going straight into WW3, unfortunately."

What you mean is "we have always been at war with Eastasia."

Smiddywesson's picture

this could be a prelude to some intervention in the gold market.

The last two interventions in the  gold market didn't work out so well for the manipulators, esp the last margin hike.  I don't really care what the analysts do, and I'm losing any concern about the manipulators too.

DoChenRollingBearing's picture

Hike the margins to 100%.  It matters not to me.  Gold will shine whatever the manipulators do, given time.

No worries, except I can't get the green arrow to work here for you here...

So, take a written +1

Mountainview's picture

There are still Norwegian Crowns, Japanese Yen and the ultimate undervalued currency-the RENMINBI--only available on the blackmarket..!!!

au_bayitch's picture

I believe renminbi can now be received from HSBC atms in HK, along with HKdollars. Probably a zerohedger in HK now. Oh, the dusk til dawn bar.