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What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil

Tyler Durden's picture


Earlier we explained why Bernanke's actions today mean that the Fed Balance Sheet will likely grow to over $4 trillion by the end of 2013. Critically this flood of liquidity will raise the nominal price of every asset (from whimsical pieces of stockholder paper to barbarous relics and black gold). Some of these assets, like stock prices and high-yield credit spreads do have point-in-time 'value limits' to their price - though at times it seems a dream that fundamentals would ever matter again; but some have less of a binding constraint - such as gold. Should the Fed proceed, as seems likely, and do its worst/best to blow its balance sheet wad then we estimate Gold will be priced at least $2250 per ounce by the end of 2013 (of course higher if the Fed sees no evidence of recovery). Meanwhile, deeper underground, the world's mainstay source of energy, WTI Crude oil, could jump to record highs over $150 per barrel (which just happens to coincide with the 'pegged' value of oil in gold). It will be interesting indeed to see how the world's socio-economic infrastructure hangs together should that occur - can't happen? Different this time? Indeed it is now that Ben hit the big red 'panic' button.


Gold vs Fed and ECB balance sheets... notably for QE2, gold priced in all the Fed balance sheet expansion within around half the period (around six months from Jackson Hole) and then overshot - this would infer we see Gold $2250 around the end of the first quarter next year - and expect some overshoot...


Oil vs Fed balance sheet... (which fits nicely into the 0.07 oz of Gold per barrel 'peg' that seems to have been 'agreed' with the world's oil producers).


Charts: Bloomberg


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Thu, 09/13/2012 - 21:50 | 2793116 Aziz
Aziz's picture

Now this is the kind of dip where I can say BTFD.

Thu, 09/13/2012 - 21:59 | 2793145 NewThor
NewThor's picture

Ben Bernanke is the anti-christ.

Thu, 09/13/2012 - 22:12 | 2793185 Dr. Engali
Dr. Engali's picture

No Obama is the anti Christ. Ben is the false profit. (spelled that way intentionally ... Think about it)

Thu, 09/13/2012 - 22:41 | 2793278 NewThor
NewThor's picture

reappointed by obaMABUSh appointed him.

Nostradamus said anti-christ 3 would be Mabus the duke of prints.

Thu, 09/13/2012 - 23:21 | 2793342 TwoShortPlanks
TwoShortPlanks's picture



This isn't QE3...this is QEi5

Everyone needs to understand as to the REAL REASON why QE3 was launched last night....APPLE!!!!

Bernanke's focus was on Market/Public sentiment...yeah?

Think about it. If this week's launch of the iPhone5 were to fail and not meet and/or exceed sales targets, THAT  ladies and gentlemen, would potentially be the rudest awakening to the Western World, that we really are in a Global Recession, bigger than anything else! Food & Oil can go up in price, but don't fuck with our toys.

Apple's revenue contributes to what percentage of the US GDP figures, and how much of Apple's revenues are attributable to iPhone sales??? (Rhetorical, I know the stats).

iPhone sales affect both GDP numbers and sentiment.

iPhone (Apple) has a greater effect on Market/Public sentiment than any other factor.

After FaceBook went FacePlant and then FaceEgg, there was no way in hell Apple was going to be allowed to go the way of the Lawn Dart.

It's Extend and Pretend via the iPhone5 vehicle…It's that fucking simple.

QEi5 lives!

Thu, 09/13/2012 - 23:28 | 2793413 Manthong
Manthong's picture



I pledge allegiance to the fruit
Of the United States of America.
And to the iPhones for which it stands.
One pie, under Obama , fundamentally transformed,
With slices, of wealth to spread around, for all.

Fri, 09/14/2012 - 01:54 | 2793620 Michael
Fri, 09/14/2012 - 03:15 | 2793682 Michael
Michael's picture

Tony Blair Appointed Senior Advisor to JPMorgan Chase

Tony Blair Confronted At Leveson Inquiry

Fri, 09/14/2012 - 05:48 | 2793775 smlbizman
smlbizman's picture

i think a more disturbing comment from big ben was that new home sales help the economy....and i will finish his congress you guys must reward people that buy new and punish those that want to buy existing....

Fri, 09/14/2012 - 07:51 | 2793910 GetZeeGold
GetZeeGold's picture



punish those that want to buy existing


Tisk tisk.....those people must be po.


You know you're poor when you can't afford the "or".


Thu, 09/13/2012 - 23:03 | 2793354 johnQpublic
johnQpublic's picture

how is the antichrist described in hebrew language?

in case you didnt know, phoenetically....








no shit...look it up

Fri, 09/14/2012 - 08:13 | 2793950 Obadiah
Obadiah's picture

It maybe spelled that way, but it would be just another ruse.


The antichrist will "Look, act and have the whole world believeing that he IS the Christ." lightning from his fingertips and amazing majikal tricks. O aint got that kind of powa.

Fri, 09/14/2012 - 08:15 | 2793955 TheDriver
TheDriver's picture

You know that the anti-christ is strictly a Christian construct, right? You also know that the translation to which I believe you're referring has no grounds in the reality of ancient Hebrew or Greek right?

I have no love for the man as a leader but let it go man. You're just making yourself look stupid when you say shit like this.

Thu, 09/13/2012 - 23:07 | 2793363 stocktivity
stocktivity's picture

I'm confused. Ben prints to infinity until unemployment goes down...inflation will no doubt rise...wages won't....people will have less money to spend with prices rising...companies will do worse....they won't hire and will probably let workers go...Ben prints to infinity until unemployment goes down. Sorry folks....It's (still) all Bullshit!

Thu, 09/13/2012 - 23:39 | 2793440 MiltonFriedmans...
MiltonFriedmansNightmare's picture

It's part of the plan...accelerate the destruction of the middle class....they know what they are doing.

Fri, 09/14/2012 - 03:56 | 2793721 AldousHuxley
AldousHuxley's picture

middle class can hedge themselves by buying betting the house  on call options....apartment living only for few years.

Fri, 09/14/2012 - 06:39 | 2793792 Chain Gun Smoke
Chain Gun Smoke's picture

Da Fuq?

Fri, 09/14/2012 - 07:27 | 2793868 A82EBA
A82EBA's picture

lol damn..   :))

Fri, 09/14/2012 - 09:12 | 2794235 Free Markets
Free Markets's picture

And I think the only way I can take advantage of QE is to refinance my house.  that sure as hell wont make up for higher gas and food prices.  thank goodness core inflation is steady otherwise I would feel the dollar devaluing.  Sarcasm ON!  Meanwhile my buddy who is a money manager will be taken to the Ryder Cup and schmoozed.

Thu, 09/13/2012 - 23:46 | 2793445 dbomb12
dbomb12's picture

This is not about the economy, it is about cheap money for bankers to rake in more profits until prices go so high the whole thing WILL collapse that is the plan the eventual devaluation of the dollar

Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002

"Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly."

Any Doubts???

Fri, 09/14/2012 - 00:27 | 2793530 RmcAZ
RmcAZ's picture

And don't forget, rates at zero which ruins savers.

Fri, 09/14/2012 - 07:37 | 2793873 A82EBA
A82EBA's picture

I personally dont believe the banks are here to be my daddy and give me a nice return on my deposits. I have the option of keeping it under my mattress along with the risk. There are better ways to invest. The lazy way is no longer profitable..lets get over it already.

Fri, 09/14/2012 - 01:29 | 2793549 vast-dom
vast-dom's picture



Faber contrarian on gold moves and bullish equities¿¿¿¿¿¿¿¿¿:



Thu, 09/13/2012 - 22:53 | 2793323 Zgangsta
Zgangsta's picture

I see what you did there.

Fri, 09/14/2012 - 00:21 | 2793519 Bernankenstein
Bernankenstein's picture

I think of myself more as the "Dollar Lama".

Thu, 09/13/2012 - 22:12 | 2793187 caimen garou
caimen garou's picture

he was trust from the bowels of the earth by the underworld

Thu, 09/13/2012 - 22:14 | 2793197 Cheesy Bastard
Cheesy Bastard's picture

Yup.  Chairsatan, couchsatan, ottomansatan, armoiressatan, and chifforobesatan combined.

Thu, 09/13/2012 - 22:27 | 2793240 Uber Vandal
Uber Vandal's picture


Thu, 09/13/2012 - 22:42 | 2793283 Cheesy Bastard
Cheesy Bastard's picture

The desk or the folding couch?  Actually that is a trick question, as both apply.

Fri, 09/14/2012 - 08:59 | 2794175 ZeroAvatar
ZeroAvatar's picture


Fri, 09/14/2012 - 00:11 | 2793499 Cathartes Aura
Cathartes Aura's picture


thanks for taking me back to one of my favourite childhood novels. . .  To Kill A Mockingbird.

where the hell is Atticus when you need him, or Boo Radley for that matter. . .


Thu, 09/13/2012 - 23:46 | 2793451 mt paul
mt paul's picture

anti economist ...

Thu, 09/13/2012 - 23:53 | 2793457 vast-dom
vast-dom's picture

yes. and i've been stating for while now that oil under $120 is rigged. $150+ is min in line with this idiocy easing going forward. i think gold could cross 2k very soon. 


and coupled with QEi, if Iran goes into play oil will go parabolic.

Fri, 09/14/2012 - 02:12 | 2793629 CrashisOptimistic
CrashisOptimistic's picture

Never ever forget that oil scarcity took the price to $150 in 2008, before Quantitative Ease was even in the lexicon.  There was zero printing that summer.  But there was scarcity as China ramped consumption for the Olympics and global supply could not match it.

There are almost 1/2 a billion more people now and the rate at which oil is coming out of the ground globally has not risen hardly at all.  

The point being, if we go to $150, a lousy $40 billion per month is going to explain a rather small part of that.  The big part is the relentless scarcity that drives drilling into deep ocean burning up effort and joules to get less and less out vs convenient on shore conventional drilling that requires nearly no effort.

This is forever.  There is no fix, certainly not more QE.

Fri, 09/14/2012 - 08:47 | 2794107 marathonman
marathonman's picture

Baloney, there were housing bubbles all over the freaking world.  Credit was expanding like crazy.  What is credit?  Money with counterparty risk.   With all that hot money, oil was bid up to $150 where it pricked the housing bubble because it sucked more money out of the people living hand to mouth on sub-prime loans and led to the collapse.

Thu, 09/13/2012 - 23:08 | 2793369 Yen Cross
Yen Cross's picture

I sold the top. ;-)

Fri, 09/14/2012 - 02:18 | 2793639 VonManstein
VonManstein's picture

your "contrarian indicator of the decade" wasnt so accurate was it though Aziz.. thought it was time to sell because open ended QE was priced in? Ye right!

Although Now we do have the "euphoria" you spoke of and we are going to new highs in everything.

Its quite scary actualy

Thu, 09/13/2012 - 21:50 | 2793119 Yellowhoard
Yellowhoard's picture

Gold bitchez!

Fri, 09/14/2012 - 07:40 | 2793880 samcontrol
samcontrol's picture

Never heard that one before on here...

RED ARROW ME all you want but i,m really bad at options and i need some HELP. I know talking trading here is off limits but prety PLEASE?

I have some PAPER gold products
GDX sold DEC 47.50 calls . HOW the fuck do i get my stock back without losing to much, what kind of rollover do you sugges? THANKS. .

Fri, 09/14/2012 - 09:03 | 2794196 LawsofPhysics
LawsofPhysics's picture

Sell paper, buy physical, buy call options for next year into the market rip...

then get popcorn and wait.

Thu, 09/13/2012 - 21:50 | 2793121 SGS
SGS's picture

So Canadian gas prices will be $8 a gallon.  Sweet. Maybe I'll just hijack a fuel truck.

Thu, 09/13/2012 - 23:46 | 2793450 adr
adr's picture

That did just happen the other day.

Thu, 09/13/2012 - 21:51 | 2793122 Hedgetard55
Hedgetard55's picture

May Bernanke rot in hell for eternity, but before that, may he contract colo-rectal cancer and die a slow and painful death. FUCKING THIEF.

Thu, 09/13/2012 - 22:39 | 2793273 masterinchancery
masterinchancery's picture

How about the treatment our Ambassador got in Libya--raped and tortured before being killed.

Thu, 09/13/2012 - 22:44 | 2793294 A Lunatic
A Lunatic's picture

Raped by Barbara Boxer, Dianne Feinstein, and Nancy Pelosi.........

Thu, 09/13/2012 - 22:47 | 2793302 chump666
chump666's picture

he was raped???


Thu, 09/13/2012 - 23:02 | 2793352 pods
pods's picture

Rape is a common thing tossed out because of the emotional value it has.

Remember Saddam's Rape Rooms?

Would bet that someone in an alphabet agency was the source for that one.


Thu, 09/13/2012 - 23:24 | 2793401 The Shootist
The Shootist's picture

Not suprised. Napoleon's troops who straggled behind the colomns were bum raped outside of Cairo circa 1799. They let the lads go who returned crying their eyes out and terribly shaken up.

Fri, 09/14/2012 - 00:08 | 2793492 hedgehog9999
hedgehog9999's picture

This is where the BUNGA  BUNGA joke came from, when I first heard it , it was from the jungles of Borneo..... but it is a middle east thing as evidenced by recent events....

Thu, 09/13/2012 - 23:29 | 2793417 chump666
chump666's picture

I think the Iranians were behind this, but rape?  Need proof, like a Reuters article or something. 

Thu, 09/13/2012 - 23:08 | 2793365 Divine Wind
Divine Wind's picture



Yup. Ass raped.

Sick Twisted Fucks.

But we should not be surprised.

Threat Journal recently carried the following piece:


Muslim Inbreeding:
Impacts on Intelligence, Sanity, Health and Society

No wonder the people are so effin crazy.

They still marry sisters and cousins. Worldwide the practice is still widespread.

Sorry Yall.

Truth is what the world needs a whole lot more of these days.


Thu, 09/13/2012 - 23:26 | 2793409 gonetogalt
gonetogalt's picture

yea, when Lawrence of Arabia was captured by the turks during WW I he was buggered and tortured for months...returned to England completely broken.  Buggery is actually pretty common in the Muslim world.

Thu, 09/13/2012 - 23:33 | 2793429 The Shootist
The Shootist's picture

I don't remember that part of the movie?!  (laughing emoticon)

Fri, 09/14/2012 - 00:32 | 2793536's picture

Jose Ferrer as the consumptive Turkish officer who tells Lawrence, "Your skin is very white."

Thu, 09/13/2012 - 23:57 | 2793471 Cathartes Aura
Cathartes Aura's picture

give me a fucking break.

rape is common in war zones and occupied territories - rape is even prevalent within the amrkn military, as in they rape fellow soldiers.

so let's leave the "Muslim" bullshit out - rape happens when a dickhead feels like sticking their cock where it doesn't belong, without permission.

A new feature film documentary is winning festival awards and garnering national attention for its in-depth focus on the thousands of women raped every year within the U.S. military.

Fri, 09/14/2012 - 00:12 | 2793500 Divine Wind
Divine Wind's picture


I was wondering when the first Dhimmi apologist showed up.


Fri, 09/14/2012 - 00:18 | 2793510 Cathartes Aura
Cathartes Aura's picture

your words make no sense relevant to my post.

grats, you must be so proud.

and it's "bwahahahah" - unless of course, you've got yer lacey panty set on, then oops, sorry.

edit: fate has tossed you a junk, I didn't

Fri, 09/14/2012 - 07:12 | 2793835 Nassim
Nassim's picture

30% of female soldiers in the US army claim to have been raped by comrades at least once.

So stick that up your fat arse!

Thu, 09/13/2012 - 21:51 | 2793123 Pants McPants
Pants McPants's picture

Great analysis, but what does it have to do with tonight's footballs game?


Thu, 09/13/2012 - 22:17 | 2793209 MrSteve
MrSteve's picture

say: Da Bears!!


and you'll be OK. We all approve such rants, da Bears, da Pack, da losses on all unreal assets. Gains on real assets, pure honey! Go Bears!

Thu, 09/13/2012 - 21:52 | 2793128 urbanelf
urbanelf's picture

Good thing he's buying $40bil in MBS every month.  WE DEFINITELY NEED MORE HOUSES!!!

Thu, 09/13/2012 - 22:11 | 2793180 SnobGobbler
SnobGobbler's picture

love to see them sort out the title on my house after this clusterfuck.......


i hope noble ben chokes on merkels cunt in the end.

Thu, 09/13/2012 - 22:19 | 2793216 MrSteve
MrSteve's picture

how would that work out, practically speaking?

Thu, 09/13/2012 - 22:44 | 2793291 Cheesy Bastard
Cheesy Bastard's picture

Haven't you heard about the recent problems we are having with labia?

Fri, 09/14/2012 - 00:24 | 2793525 Cathartes Aura
Cathartes Aura's picture

awww petal, bless.

is that the royal "we"?

Thu, 09/13/2012 - 23:09 | 2793371 Pure Evil
Pure Evil's picture

Well, if you saw the labia of the bitch Jimmy Swaggert got caught lusting after you would know how Ben could choke on Merkels cuntChoke On This

Fri, 09/14/2012 - 00:54 | 2793563 Colonel Klink
Colonel Klink's picture

Merkle looks like she could use a merkin.

Fri, 09/14/2012 - 07:05 | 2793827 Winston Churchill
Winston Churchill's picture

Think you meant Gherkin(pickled cucumber).

Thu, 09/13/2012 - 21:56 | 2793129 steve from virginia
steve from virginia's picture


There is an upper limit to how high crude prices will rise, that is what the benighted customers can afford to pay.


The customers are not the asset market plungers but the refiners then the end-users. These dudes are price-sensitive. When they step off the overall economy sags as it has over and over since Fall of '08.


QE could be counterproductive. It would be bad news if the Fed had to 'retrench' (and it just might). It would be worse news if the crude price dropped. It would mean the Fed is as useless as teats on a bull. It would mean more demand is being crushed, it would mean a lot of expensive new crude supplies shut in b/c the customers are being bankrupted by both crude prices AND indirect credit costs. It would ultimately mean shortages (which would be permanent, by the way).


When I say permanent, I mean permanent, like 100,000 years.


Very dangerous time, not a good move by Bernanke.

Thu, 09/13/2012 - 22:10 | 2793173 Flakmeister
Flakmeister's picture

You share a nagging fear of mine... what happens if the economy collapses faster than existing oil production leading to a price collapse in oil while rendering any new marginal barrel too expensive to develop. A lot of western supply is from fields with large decline rates, i.e. DW GOM..... 

He really must be scared of a deflationary spiral....I am constantly reminded of the statements about the Fed botching the GD and Freidmans(?) line about the printing press.... Ben must fear that we are there....

Thu, 09/13/2012 - 22:44 | 2793292 Citxmech
Citxmech's picture

Of course that has been the end-game for Western civilization in light of peak oil the whole time IMHO.  Regardless of what the nominal price per barrel ends up being.

Thu, 09/13/2012 - 23:39 | 2793435 DaveyJones
DaveyJones's picture

seems like it. Makes sense since the entire system is built on the false premise that the system continues and then the very solution implodes the system

Thu, 09/13/2012 - 23:39 | 2793436 GeorgeHayduke
GeorgeHayduke's picture

James Howard Kunstler has talked about this for a few years and he covers it quite well in his latest book Too Much Magic.

Always remember, the Prez, CONgress, and the Supreme Court, along with Big Ben B. all exist to keep wealth and power in the hands of those who already have wealth and power. They will drive this country off a cliff at full speed with single-minded determination towards that goal and no concern whatsoever for any casualties, except their wealthy and powerful buddies. End of story. The sooner people realize this reality the sooner they can start to deal with what is coming.

Harsh times ahead. Anyone have a rosy outlook for the next couple of years, regardless of who is elected?

Fri, 09/14/2012 - 00:24 | 2793523 hedgehog9999
hedgehog9999's picture

If you watch the Baltic Dry Index and the lower consumption of energy in China and the US as well as Europe given the recessions going there, an OIL collapse was inminent, by doing what he did, he has delayed the collapse a bit, OIL is just a shade under $100 now,


So, what is likely is a quick spike up followed by a crash or a spike up and then a levitation at a higher plateau while economies go into a hyper depression, either way it is not good.

He's trapped, I am just not  sure how quickly this will unfold, before or after the election.....

Fri, 09/14/2012 - 09:09 | 2794217 LawsofPhysics
LawsofPhysics's picture

The contrarian thought on demand is that so long as there are 7+ billion people, there will always be demand for oil as it allows you to do a lot of thing in agriculture and everyon still needs to eat.  Personally I see other problems ahead of oil, gas or coal.  Fresh water will be one of them.

Thu, 09/13/2012 - 22:25 | 2793229 Count de Money
Count de Money's picture

Oil prices are not really elastic (i.e. price goes up, consumption goes down). Most places in the US, driving is not an option, it's a necessity. And there's a limit to how much you can turn down your thermostat unless you don't mind dressing indoors the same way you dress outdoors.

What will probably happen is that people will make up for the rise in energy prices elsewhere by cutting other discretionary spending. That'll sure help the economy.

But Ben says I'll go out and spend because I'll feel wealthier because my house is worth more in inflated dollars. Idiot.


Thu, 09/13/2012 - 22:36 | 2793264 barroter
barroter's picture

Driving as a neccessity sure. Work, Dr appts and the like. But people will cut back that discretionary spending with a machette if they have too.

 As for heating? I've seen this. Poor families who can afford oil one month and not the next. What do they do? Exactly like you say, bundle up. If the electric isn't turned off, they aim for space heaters, electric blankets or whatever a yard sale can offer.



Fri, 09/14/2012 - 09:10 | 2794224 LawsofPhysics
LawsofPhysics's picture

Too bad oil is still a major part of the agricultural industry and everyone still needs to eat.

Fri, 09/14/2012 - 07:53 | 2793914 Just Ice
Just Ice's picture



'Zactly.  "Wanting" to spend more is just that...a want, a fantasy...when people don't have it because all their devalued dollars are now being taken for higher food, fuel and other non-discretionary costs.


Thu, 09/13/2012 - 22:08 | 2793136 Dr. Engali
Dr. Engali's picture

Tyler is there any good research about the Feds balance sheet expansion during the 70s ? It would be interesting to see how it compares to our current fed. What kind of assets were they buying and what was it's relative size to GDP compared to today?

Thu, 09/13/2012 - 22:09 | 2793177 PoorMan429
PoorMan429's picture

You make an interesting idea bringing up the 70's. After a massize easing in the 40's, 50's and 60's the first action Volcker took was to raise rates, and stem the flow. I postulate that this easing is preparation for the flow to stop, and reality to set back in. The Banks must be very well capitalized to survive that coming shock, and MBS purchases directly from banks fit the bill nicely.

Thu, 09/13/2012 - 22:39 | 2793271 fonzannoon
fonzannoon's picture

Poorman there is a reason that when the banks were stress tested they did not stress test them for rising rates.

Thu, 09/13/2012 - 22:10 | 2793178 Flakmeister
Flakmeister's picture

Go to the St. Louis FED web site and pull up the data.... Until '08 the FED has held basically T-notes, FRNs and Gold...

Thu, 09/13/2012 - 22:39 | 2793274 Bay of Pigs
Bay of Pigs's picture

The FED holds no gold. They hold certificates. Not the same thing.

Fri, 09/14/2012 - 09:11 | 2794231 LawsofPhysics
LawsofPhysics's picture

correct, the PDs and the treasury hold the gold (allegedly).

Thu, 09/13/2012 - 21:56 | 2793138 mattdubz86
mattdubz86's picture

I want to throw up

Thu, 09/13/2012 - 23:43 | 2793443 DaveyJones
DaveyJones's picture

funny, that's exactly what Ben is doing

Thu, 09/13/2012 - 21:57 | 2793139 Cult_of_Reason
Cult_of_Reason's picture

This analysis reminds of Laszlo Birinyi ruler prediction.

Thu, 09/13/2012 - 22:21 | 2793223 Dr. Engali
Dr. Engali's picture

I thought the same thing.

Thu, 09/13/2012 - 21:58 | 2793142 zerotohero
zerotohero's picture

It's hammer time - more gold purchasing ASAP.

Thu, 09/13/2012 - 22:21 | 2793225 ClassicCommodity
ClassicCommodity's picture

I'm a very traditional man.

Fri, 09/14/2012 - 00:10 | 2793494 El
El's picture

You were supposed to BTFD...not wait until it was well up again. Haven't you been listening? ;)

Thu, 09/13/2012 - 21:59 | 2793144 Soda Popinski
Soda Popinski's picture

it means Graham Summer's forecasts suck. 

Thu, 09/13/2012 - 21:59 | 2793146 Unbezahlbar
Unbezahlbar's picture

$200 oz for silver

$2,500 for gold

$180 for Black Gold

That's my financial advisor's prediction. I hope he is right. These have been great hedges against the depreciating assets I already own ---house, cars, iPads, clothes, etc.

Thu, 09/13/2012 - 22:28 | 2793245 BeerBrewer09
BeerBrewer09's picture

$10 bread

$10 gasoline

$100 case of decent IPA

Thu, 09/13/2012 - 23:08 | 2793370 johnQpublic
johnQpublic's picture

i cant make gas

i make my own bread now yer telling me i have to learn to brew beer?

wonder what the learning curve on that one is gonna be

Thu, 09/13/2012 - 23:45 | 2793448 DaveyJones
DaveyJones's picture

brewing isn't that hard, it's as old as bread making and it's a great way to store nutrition. Kind of why they invented it

Fri, 09/14/2012 - 08:58 | 2794166 marathonman
marathonman's picture

Not too bad at all.  If you don't get your brew stuff sanitized first you'll end up making Heineken though. 

Fri, 09/14/2012 - 07:44 | 2793894 samcontrol
samcontrol's picture

you forgot the S at the end of HOUSE.

fucked society.

Thu, 09/13/2012 - 21:59 | 2793147 azengrcat
azengrcat's picture

Full retard print monkey in front of The Easing Button ®. Get. Real. Assets. Yesterday.

Thu, 09/13/2012 - 22:01 | 2793148 xtop23
xtop23's picture

Honestly, I'm amazed he played the open-ended QE card. I was anticipating a jawbone and we got the whole ass.

Well the market wanted a bazooka and it got it.

Time to buy a moped, some seeds, and some ammo. Bernanke just engaged ludicrous speed :(

We're fucked.

Thu, 09/13/2012 - 22:03 | 2793162 Hype Alert
Hype Alert's picture

Does it surprise anyone that China has copper stacked to the ceilings and overflowing the warehouses?  Better copper than US$.

Thu, 09/13/2012 - 22:04 | 2793164 roadsnbridges
roadsnbridges's picture

WTF, no live stream of the sand niggers in Egypt?

What if they pull another Lara Logan?

Thu, 09/13/2012 - 22:17 | 2793208 Cheesy Bastard
Cheesy Bastard's picture

Cindy Sheehan, wherefore art thou?

Thu, 09/13/2012 - 22:25 | 2793233 xtop23
xtop23's picture

Wrong website for that kinda inflammatory nonsense. ZH'ers know better than the hype that the little brown people hate us for our freedom.

As far as Logan goes, she chose to be there. You play you pay. Those are the risks you take.

I have a lot of sympathy for people that can't afford to eat because of exported inflation.

I also understand that if I had a drone flying over my head and dropping bombs on top of my kids I'd be pretty fucking pissed too.

Blowback. Look it up.

Thu, 09/13/2012 - 23:46 | 2793449 DaveyJones
DaveyJones's picture

very well said

Fri, 09/14/2012 - 00:45 | 2793553 Yes_Questions
Yes_Questions's picture



Wrong website for that kinda inflammatory nonsense.



Bears repeating.

Fri, 09/14/2012 - 08:50 | 2794125 YHC-FTSE
YHC-FTSE's picture

+1 Here, here. And I'm glad somebody mentioned food. I'm beginning to see people in the West being priced out of staple foods, so I can't imagine how bad it must be in the 3rd world. 

Gold, Oil, Silver prices suddenly lose meaning when your family starts getting hungry. 

Fri, 09/14/2012 - 08:59 | 2794179 marathonman
marathonman's picture

Many ZH'ers enjoy good inflammatory nonsense. 

Fri, 09/14/2012 - 03:28 | 2793695 Dr. Sandi
Dr. Sandi's picture

Hey roadtoad, when are you going to crawl back up your own asshole, from whence you came?

Thu, 09/13/2012 - 22:06 | 2793167 ziggy59
ziggy59's picture

Should take out the forward slash from between the B and the S on the graph since we know theres no balance in the BS of the FED.

Thu, 09/13/2012 - 22:10 | 2793179 A Lunatic
A Lunatic's picture

Until shit (gold/oil/potatoes/shoes) is priced in consumer demand rather than shit-stained FRN's I'll refrain from celebrating.

Thu, 09/13/2012 - 22:14 | 2793195 Esso
Esso's picture

Great, and just the day after I lost all my gold & silver in a stupid boating accident.

Thu, 09/13/2012 - 22:52 | 2793319 Zgangsta
Zgangsta's picture

You didn't lose it.  You just have it stored in a secure location.

Fri, 09/14/2012 - 00:07 | 2793489 El
El's picture

No. He lost it. Seriously.

Thu, 09/13/2012 - 22:39 | 2793198 DavidPierre
DavidPierre's picture

Baghdad Bob


It has been my conjecture that The Gold Cartel is SO obvious these days that the BIGGEST money in the world knows their drill and is ever more waiting in the wings when they go into suppression attack mode and waiting to pick up suddenly artificially cheap gold/silver.

YEAH BABY! … that is just what happened after the Fed made their announcement. The Gold Cartel got stuffed, as well as all those who refuse to pay attention to their price suppression antics.

It gives me great pleasure to bring one of them to your attention, as a result of his often hoof in mouth problem.  Just a couple of days ago, one of the most distasteful human beings I have ever come across, Jeff Christian of the CPM Group, said on BNN, the network that does not want GATA to be mentioned, that he gave the Fed a ZERO chance of doing any significant QE. It is one thing to think something like that, it is another to stick your bozo neck out in such a manner….

Jeffrey Christian was on BNN on Monday, Sep. 10th, claiming that there is zero chance the Fed will announce further ‘real’ easing until December at the earliest, that he expects gold to imminently crash to $1550. 

How can a guy like that, as well as Kitco’s, Jon(Nitwit) Nadler, stay in business? Who pays these clowns to be wrong all the time?

On Sept. 11, Pastor Lindsey Williams, former minister to the global oil companies during the building of the Alaskan pipeline, announced the most significant event to affect the U.S. dollar since its inception as a currency. For the first time since the 1970's, when Henry Kissenger forged a trade agreement with the Royal house of Saud to sell oil using only U.S. dollars, China announced its intention to bypass the dollar for global oil customers and began selling the commodity using their own currency.

Thu, 09/13/2012 - 22:17 | 2793206 BORT
BORT's picture

Did you see that fire today?  It was a big one.  I threw a few shorts on the fire.  I got out of them all.  I had been holding on, thinking that sanity would prevail somewhere.  I saw a glint in old Ron Paul's eye.  He saw that he will be able to say, in his old age (like tomorrow), that he had warned us.  Beware the Fed.  I thought it would be different this time.  I thought I could beat the Fed, catch them with their pants down.  For a number of years I have had a fixed income core that grew at 5% since 1999.  I had purchased i-bonds as my inflation hedge, and have used short ETF's as my deflation hedge.  Today I realized that Bernanke had lit the fuse.  I now believe we have hyper inflation rocket on the pad.  My prediction:  Obama wins, EBT's can be used for gas as well as food and (slightly discounted) for booze.  God help the person who tries to put this back in the box.  How does it end?  With real wages in the US reaching Asian levels, and with asset wars around the world.  The Plutocracy will rule us all, from African miners to Roman cab Drivers, to American farmers.  Go along to get along, or choose to "live in a van, down by the river."

Thu, 09/13/2012 - 23:25 | 2793398 chump666
chump666's picture

The more I think about this MBS/QEinfinity, the more likely the Fed has shot it's own leg off.  Romney/Ron Paul the Republicans will eat this is up, no one gives a damn about equity returning to their homes, the banks will not stop allowing big draw-downs on equity, so the house used a an ATM is finsihed.  Inflation will be the big concern as incomes, real interest rates (credit) erode purchasing power significantly, the private sector just got bashed over the head by the Fed.  The backlash will be intense, it was a stupid, crazy move by the the Fed before elections.  Obama will be sweating hard.



Thu, 09/13/2012 - 22:18 | 2793211 caimen garou
caimen garou's picture

just got to watch for margin hiker, err, um, teleprompter,or whatever in chief

Thu, 09/13/2012 - 22:18 | 2793212 chump666
chump666's picture

Also the markets may just flip Bernanke QE3 mania, next month's earnings will be dismal, that and inflation causes companies to hold off hiring and expansion (they horde cash).

This f*cking a-hole has had now three attempts at this, he has f*cked it every time. Maybe this time, it's payback. Maybe...'for real'

Thu, 09/13/2012 - 23:23 | 2793399 Yen Cross
Yen Cross's picture

b God Damn it "666" is my lucky #!  Rock on Chump! FUCKEN ( A)! I want to kill those "rug pilots" that abused an ambasador!

 We have a way of doing things /;

Thu, 09/13/2012 - 22:19 | 2793218 sumo
sumo's picture

Jeff "There is no shortage" Christian delivers the goods ... for his Wall Street masters:

...On Monday this week [CPM Group's Jeff] Christian appeared on Business News Network in Canada and pronounced that the U.S. Federal Reserve would announce no substantial bond monetization this week, that the Fed's inaction would smash commodity prices, and that CPM Group had advised its clients to go short gold and silver:

Thu, 09/13/2012 - 22:20 | 2793221 ClassicCommodity
ClassicCommodity's picture

Any Aussies on here?

Thu, 09/13/2012 - 22:21 | 2793226 firstdivision
firstdivision's picture

We still didn't hit a 1 sigma move from the trend line from June's low's to right before this.  Got a long way to ride still.

Thu, 09/13/2012 - 22:34 | 2793259 lsbumblebee
lsbumblebee's picture

I think that once they can no longer force equities to keep pace with gold, the money will then pile in to the PM's, force a default at the Comex and we can all go home and watch Cramer play with himself.

Thu, 09/13/2012 - 22:42 | 2793277 SafelyGraze
SafelyGraze's picture

and what does a $4T balance sheet mean for food and wages?

for food: if you're TPTB and you have EBT cards that capture both buyers and vendors, you can exploit your omnipotence by requiring vendors to sell at a price you determine. which will drive vendors out of business and will nourish a black market which you'll have to impose a police state to thwart.

total cost: police payroll plus privatized prison system.

for wages: after high price-inflation, the current minimum wage becomes less than an ounce of silver per day. if it's a lot less, we "win" the currency war and our exports become competitive again. jobs for everyone! mission accomplished!

Fri, 09/14/2012 - 03:30 | 2793698 Dr. Sandi
Dr. Sandi's picture

Competitive exports? Our robots can eliminate more jobs than the Chinese robots so we win?

Thu, 09/13/2012 - 22:41 | 2793280 surf0766
surf0766's picture

So they are buying $40 billion a month until house are affordable to buy. At 0% interest rate I am still not buying.

Thu, 09/13/2012 - 22:47 | 2793303 mademesmile
mademesmile's picture

Maybe not a house, but 10 acres and a well are pretty nice!

Thu, 09/13/2012 - 22:42 | 2793284 XtraBullish
XtraBullish's picture

Tyler: $2,250 gold would be the inflation adjusted number from the $857 peak intra day in January 1980 back when the U.S. of A. was the world's largest creditor nation. You might want to rethink your forecast.

Thu, 09/13/2012 - 22:52 | 2793318 surf0766
surf0766's picture

What is the dow or S & P inflation adjusted using 1980 as base year?

Thu, 09/13/2012 - 22:56 | 2793332 JustObserving
JustObserving's picture

WTF, $2250 gold by end of 2013?  I think we may have that by the end of 2012 and silver to $50.

Who cares about the Fed balance sheet of $4 trillion when US debts and unfunded liabilities increase by $8.3715 trillion every year?

The only way we can handle our staggering debts and liabilties is by massive inflation.  So gold will hit $2250 much before the end of 2013.

Thu, 09/13/2012 - 22:44 | 2793296 mademesmile
mademesmile's picture

I'm trying to find a silver lining in this mess. Think I just did.

Thu, 09/13/2012 - 23:15 | 2793366 devo
devo's picture

Rising oil brings (unfunded) war back into the equation.

Gold and silver were releasing pent up energy before the Bernake struck. I'm thinking 2000/50 by year end. It's gold season.

I think corrections will be much shorter going forward, too.

Thu, 09/13/2012 - 23:25 | 2793407 Conrad Murray
Conrad Murray's picture


I see what's going on here, Mr. Bond.

Thu, 09/13/2012 - 23:49 | 2793454 SafelyGraze
SafelyGraze's picture

<long post>

the Nank 'splains stuff to the peeps 
[ 6:40 ] 

q: aren't the fed's purchases a lot like, you know, spending?

a: no way!
firstly, we just buy financial stuff. not goods and services. it's really different from, like, the government buying stuff. we give dollars to people who lend dollars to the government or who lend them to other people. get it? *we* don't spend the dollars! we're clean as a whistle! we use a middle man to lend to the spenders. 
secondly, we plan to sell the stuff we buy. so we're hoping to do some flipping. speculating. will we make a profit if we sell what we bought? who knows! but if we do, then (after we keep our obligatory 6 percent cut) we'll send the leftovers to the treasury and thereby contract the money supply (yeah, I'm talking 'bout deflation -- so what!) while reducing a trillion-dollar deficit by, oh, a billion or two! isn't that crazy! or maybe we'll sell the stuff we buy AT A HUGE LOSS to the fed, which is no big deal, and will leave a lot of dollars out there in the money supply!

q: doesn't zero-interest hurt savers/retirees who live off interest from their savings?

a: no way!
firstly, maybe zero-interest is keeping the value of your house from dropping EVEN FURTHER! you don't have a house? GO BUY A DAMN HOUSE, YOU DUMB RETIREE. your house doesn't buy you food and medicine? think WEALTH EFFECT, DUH. also, you can get a home equity loan when the value of your house goes up (which it will never do if interest rates climb above zero). so stop whining. you saved for a rainy day, and here it is! now start spending your nest egg, dammit.
secondly,  you can't "save" and "retire" if you have no job! the zero-interest policy will stimulate hiring! so if you're retired and living off interest, GET A FREEKIN JOB, DUH!

q: will your purchases entail creating more bank medium (dollars) which will show up as increased prices (inflation) when people exchange an increased amount of bank medium for a constant amount of real stuff?

a: get over it!
firstly, I blame inflation mostly on drought and US-sponsored regime change.
secondly, the way *we* measure inflation, it always ends up at 2 percent, NO MATTER WHAT! and check it out: we measured inflation at 2 percent *before* launching our new printing program, therefore our proposed future purchases DIDN'T CAUSE PRICES IN THE PAST TO INCREASE, DUH.
thirdly, you can always find some other product that's cheaper. THAT'S THE TRICK! milk used to cost you a buck and now it's costing you five and you're getting no money from your CD's? Listen closely: CRUSH A TUMS TABLET AND STIR IT INTO A BUCKET OF WATER! there's your daily allowance of calcium, granny! do I gotta 'splain every freekin little thing to you people?


Fri, 09/14/2012 - 00:43 | 2793524 SafelyGraze
SafelyGraze's picture

he actually said this [ 17:20 ]:

1. we're able to influence (increase) the price of stuff (by printing money and dropping interest rates). 

2. if you own stuff and its price rises, you're suckered into feeling wealthier and so you spend. even though your wealth stayed the same and it's just denominated in devalued dollars! THIS WORKS EVERY TIME! but guess what? your wealth just DECLINED! sucka!  fool you once, shame on me. fool you over and over again, shame on .. well .. 

3. if house prices are rising, you'll be suckered into buying a home in a rising market (hoping to flip it for a profit). what a laff! prices rise because there are more dollars! and you fell for it! you sell it for more, but EVERYTHING costs more, so you NEVER COME OUT AHEAD! oh, and you'll be taxed on the "profit". so you NEVER BREAK EVEN!

4. same goes for stocks and your 401k. the price goes up, you see a bigger number, you mistakenly think it's outperforming inflation, and you spend. YOU FELL FOR IT! your wealth stayed the same, but you SPENT MONEY! bye bye wealth!

4. what happens to all this wealth that we shake down from you people? once we separate you from your money (by you own decision, I might add), then that money flows to corporations who skim off a chunk of it for profits and ceo pay! (p.s. -- they hire or at least retain some employees, so there's my connection to the 'employment mandate' ... damn, this is so simple!)

sum sum: we print. the price of your stuff increases. you mistakenly think your stuff is generating cash flow. you spend the cash. somewhere, someone gets hired. meanwhile your wealth diminishes. 

[ maybe one day we will again export stuff and then money will flow in to our economy. but that's nowhere on the horizon. meanwhile, let's all just liquidate our wealth so that it become somebody's income, which, by the way, happens to be taxable! don't make us come get it by force, ok? let's make this easy for everybody. be a good sport. ]

Thu, 09/13/2012 - 23:50 | 2793460 passwordis
passwordis's picture

 If anyone believes the rise in silver and gold prices is the free market reacting to decisions by the fed, they are delusional. The government/banking cabal is in complete control of the price. People like James Turk and Eric Sprott believe something other than the cabal is responsible for the rise in Gold and Silver.  They believe the cabal is trying with all their might to keep a lid on rising gold/silver prices. This is a naive perspective. The Cabal can bring both Gold and Silver down to whatever number they like at any time or bring it as high as they like.

 What we are experiencing now is the controlled rise in price in anticipation of a new gold standard.  They've spent the last 60 years using their fiat creation to buy up all the real physical assets. They've traded garbage for tangible wealth. Now that they've stolen all of the gold, they are allowing the price to rise. They are not failing at keeping prices down. They are promoting a gold standard which well benefit themselves, the gold owners.  It's a vicious circle. It's genius. The stupid goyim never seem to catch on, they actually believe "hard money" is the answer to the world's problems.

 Sure Gold and silver will rise.. It's part of the plan. It's all completely scripted. It's not a "flight to quality". It's not a move against fiat that is responsible for the rise. It's an orchestrated plan designed to further consolidate power through ownership.  It actually makes it easier for the little guy to make money if you can see the script.  Governments, institutions and banks around the world are not increasing their gold reserves because they believe the dollar might possibly become worthless, They are buying up all the gold because they are going to make damn sure the dollar becomes worthless... - at least without gold backing!!   The coming gold standard will start the whole game all over again.  Vicious circle! 

The only question I have is when to get out... If we approach anything close to a 20% S/G ratio. I'm out... and I'm probably out of the country at that point as well.

Fri, 09/14/2012 - 08:18 | 2793960 Dr. Engali
Dr. Engali's picture

I totally agree. That's been my belief all along. They are allowing gold to rise just enough to suck in more gold at the "we by gold" shops popping up in every corner. Why go through the trouble of confiscation when people will turn it in freely to feed themselves?

Thu, 09/13/2012 - 23:52 | 2793462 Dr. Gonzo
Dr. Gonzo's picture

Could you imagine living in a Bizzaro world where people chose their leaders because they were of good quality and honest character and a Bizzaro world where the leaders insisted on a gold/silver currency to emphasize saving, thrift, efficient markets and accountability, solvency, and prosperity, and individual rights? Basically the opposite of what America has now?

Fri, 09/14/2012 - 01:22 | 2793582 Cathartes Aura
Cathartes Aura's picture

it's a lovely daydream, but I don't think this is why nationstates were "invented" in the first place.

history doesn't really record any examples of what you'd like to see. . . but I reckon the smaller a nationstate, the fewer "leaders" needed, might lessen the corruption. 

ahh, yes, but then bigger nationstates would see the smaller as un-developed, child-like, in need of a strong hand, etc.  the bribes would flow, undermining any idealism.

no, best to maintain one's own integrity in the face of corruption, a small circle of trusted cohorts, vigilance.

Thu, 09/13/2012 - 23:59 | 2793475 SumSUN
SumSUN's picture

Gold/Silver ratio about to fall.

Fri, 09/14/2012 - 03:35 | 2793699 Dr. Sandi
Dr. Sandi's picture

Check it out, it's already started.$gold:$silver


Damn, the server doesn't like the equals sign. But add the $gold:$silver by hand to get the ratio.


Thu, 09/13/2012 - 23:59 | 2793479 MikeMcGspot
MikeMcGspot's picture

Get physical.

If you don't have it in your hands, wipe that smile off your face. Just a wet dream that you have nothing to show for except for wet sheets.

But, I got a piece of paper says I own 1000 OZ of gold or silver or share of XYZ.

Show me what you got or STFU.




Fri, 09/14/2012 - 00:10 | 2793480 MikeMcGspot
MikeMcGspot's picture

Happy Thors day folks!




Fri, 09/14/2012 - 00:13 | 2793502 dwdollar
dwdollar's picture

I'm thinking about getting back into paper trading. No Gold or Silver though. Why do that when you can have physical? Is there a 4x ETF that tracks food stamp participation?

Fri, 09/14/2012 - 03:46 | 2793711 onebir
onebir's picture


Fri, 09/14/2012 - 00:13 | 2793503 legorf
legorf's picture

Well I don't understand all the anger here. Not saying Bernanke is doing a good job, just saying he is doing the only thing the FOMC was designed for, print money, play with rates and monetary aggregates.

So what can Bernanke do?

·     He can expand the Fed balance sheet through outright bond/mbs purchases.

On the one hand, there is a slack in the labor market, so workers are not in position to demand higher wages. Inflation is contained via lower labor cost growth. There is no need for companies to hike prices on this front. On the other hand, currency debasement can cause other prices to surge, such as commodities denominated in US$. Companies, usually, have no choice but to pass part of this price increase to their customers. Finally, the monetary policy transmission mechanism is broken, with banks flooded with liquidity but not lending it. Every time you create debt, you create money. Thus chartered banks somehow create money when they lend money. But they're not. Bernanke hopes growing M0 will eventually filter through the real economy. He thinks he just needs to pump more. All in all, from his perspective, import price inflation, yes BUT no wage inflation, or at least, not yet and no inflation through excess liquidity landing in the real economy, again, a least, not yet.

Commodity prices go up and down, they are volatile, thus excluded from the core cpi index. As I said earlier, no wage inflation, no inflation from excess bank lending but commodity price inflation which is not counted as inflation. That certainly fits the bill for Ben.

Most importantly, he, Bernanke, remains the center of the show, seen as a positive message by market participants, happy to get free money. There is nothing like a free lunch. Basically, it's "don't fight the Fed" all over again. While investors are focused on the Fed, they usually forget about the rest, unimportant things like earnings and economic data.

·     He could simply sit there and wait. Let the market decide.

There is a big problem with the last proposition. It would lead to the Fed not being the market focus anymore. If markets focus on the real economy/financial markets, we could get hell of a market ride, to the abyss, and coincidentally, an economic collapse. You know when it starts, you certainly don't know when and how it ends. We all know that the US economy is still in pretty bad shape, maybe even already back in recession.

Bernanke has no choice but to print. Is it good, is it bad? Will higher oil prices choke the economy he supposedly want to save? Unfortunately, we will only figure this out in a couple of years, when all the dust has settled. Meanwhile, Ben Bernanke's Focus is not on inflation but possible deflation and financial/economic risks. In his view, the cost of doing nothing could, by far, outweigh the cost of action.

As investors, we should just trade accordingly. The good, the bad, the wrong and the ugly, these are political/moral questions. Legitimate, but emotions should not influence investment strategies.



Fri, 09/14/2012 - 09:52 | 2794490 maximin thrax
maximin thrax's picture

He could monetize the Treasury debt held by SS towards creating a bank owned by US citizens that holds no bad paper, withdraw an equal amount of liquidity from shaky member banks of all sizes where excess cash serves no purpose other than plugging ballance sheet holes, and let those banks who made the worst bets implode without concern for another liquidity crisis.

Fri, 09/14/2012 - 00:15 | 2793507 chump666
chump666's picture

It begins:

BEIJING--Chinese state researchers reacted negatively to the Federal Reserve's new mortgage bond buying program, saying it would lead to inflationary pressures in China and do little to help the real U.S. economy.


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