I’ve posted a number of articles I’ve come across this day and this week over at my Scoop.it feed: Gold and What moves it.
This week has seen a resurgence in gold which has put a number of bears back into their caves. But the question is why? Why did the precious metals move higher retracing a fair amount of lost ground?
The answer of course is the FOMC and Ben Bernanke who declared what the market is referring to as QE 2.5. The truth of the matter, at least as I can tell, is that QE never really ceased from the last round. What seems to have been taking place is a lot of stealth moves.
Now the Fed is putting inflation as a target. And frankly I in no way think he’ll hit his target of 2%. I think inflation will likely go well above that before attempts bring it under control. It reminds me a lot of the old Superman cartoon where the Man of Steel is trying to stop the runaway train from going over the broken bridge with stacks of gold.
Sure he did it. But what was the cost to those on the train? And frankly, Ben’s no Superman, and I’m sure, to be fair, he wouldn’t claim to be. (the bridge event is at the six minute mark)
Now the markets find themselves yet again trying to figure out what the news will mean and thus a number of people are rushing back into the real currency, Gold.
The one article that I think you need to go read is:
Living In A QE World
All Central Bank Balance Sheets Are Exploding Higher, Or Engaged In QE
The degree to which central banks around the world are printing money is unprecedented.
The first eight charts below show the balance sheets of the largest central banks in the world. They are the European Central Bank (ECB), the Federal Reserve (Fed), the Bank of Japan (BoJ), the Bank of England (BoE), the Bundesbank (Germany), the Banque de France, the People’s Bank of China (PBoC) and the Swiss National Bank (SNB). Noted on the charts are significant events or growth rates.
Shown is the size of each respective balance sheet in its local currency. Note that all are exploding higher as every chart goes from the lower left to the upper right. Most are still making new all-time highs. If the basic definition of quantitative easing (QE) is a significant increase in a central bank’s balance sheet via increasing banking reserves, then all eight of these central banks are engaged in QE.
Until next time.
You should go watch this video on FoxBusiness: Gasparino: Break-Up of CME on the Table
I frankly will be very, very surprised if that happens. In part because the corruption in the government in my personal opinion is far above what it used to be and they don’t feel the need to hide it. Thought I guess some will make an argument that breaking it up will help hide things. Maybe. But at this point I think the corruption has gotten to a point where they are quite happy to parade it in the open without any sort of adornment.
10 day chart of Gold and DXY
Right now gold is looking rather good and seems to have found strength. The Adobe Air widget Exact Price is showing it to be $1,642.30. The Dollar has been strong and is around 81 so there appears to be a desire of gold to break from its inverse relationship with the dollar. We shall see if this holds over the next week.
Another piece that I think is worth some consideration today is
It’s All Been Done Before on the Dollar Vigilante who begins:
One of the downsides of having government education camps (the school system) “educate” most of us slaves is that most of us have no clue what occured prior to our own lifetimes. And what we think we know is incorrect or never happened.
Everything that is currently going on in the US… government “stimulus”, massive deficits, pending bankruptcy and the use of the crisis to institute more government controls and blame the “free market” has already happened twice in the last century in the US. The following cartoon with the outline of the grand plan was printed in the Chicago Tribune in 1934, just after the first bankruptcy of the US Government in 1933.
As always, be sure to follow me on twitter and to check out my scoop.it topic, Gold and What Moves it, to see what I curated throughout the day.
Until next time.
I’ve been watching for MF Global news for a bit now, and it continues to become clear to me it is one of those turning points in the precious metals arena.
It’s a giant set up to me. And just shows the level of corruption that goes to the top of political and economic echelons. It shows to me how arrogantly the elite views the regular guy on the street.
I’ve posted a bunch of the news and items that relate to gold and silver over at my Scoop.it page: Gold and What Moves it.
But there’s two posts that I think are must reads in relation to MF Global and what the outlook for 2012 could very well be. Both come from Expected Returns:
Both are fairly short and both are worth your time, in my mind.
Right now gold and silver are at $1,622.50 and $29.30 as I look at the Exact Price widget sitting on my desktop.
Good question. If you’ve been watching gold like me with the Exact Price widget you’ve been going, “Wow”.
Finally, the down winds seem to have turned. Gold is at $1,599.60 as we go into the weekend. I would have felt a lot more better if it had cleared $1,600.00 but I’ll take it. It does look like a bottom is in. But next week will tell. It’s definitely been a great buying opportunity for a lot of people. I think what it’s come down to is a liquidity problem for banks and governments, but time will reveal the truth.
That said if you’re not following my curated feed on Scoop.it you’re missing most of the stuff I collect on the subject. Here’s the link:
Here are the top items I found today that are worth your time I believe:
Jim Rickards – The US Treasury Shorts the Dollar
Global economy fading fast … and no one’s coming to the rescue this time!
Gold and Money in Extremis… One Man’s Story
More Proof That The Gold Sell-Off Was Manipulated
House passes $1T budget bill, avoids shutdown
Have a great weekend folks.
That is the question isn’t it? What’s next? Will the Euro fold? Will the IMF bail them out? Will the ECB print? Will debt magically disappear and all live happily ever after or at least until the next, bigger, manufactured bubble smothers us?
Yeah. Gold is bouncing around in consolidation mode it seems. Bit frustrating to watch the golden widget on my desktop and get a head fake by the direction gold and silver are going but that can be the case from time to time. Though I must say when it got back below 1,710 I was thinking that this might be a great buying opportunity. The spot price now is at $1,729.40 so I guess some others must have had the same thought.
If you’re not following my scoop.it page you’re not getting all the goodness of articles I’ve stumbled upon along throughout the day.
That said there are three items that I think you need to check out if you do nothing else but download the widget.
Gold loses battle for $1750- needs to push through $1765
Obama Now Blames The Internet For Job Losses – augh.
Until next time.
Anyone else weary of how rumors and innuendo are driving markets and government? It’s like the investment and halls of politicians have changed position with TV Soap Operas. I hate Soaps. One bad plot after another. The stuff of brain cavities.
That’s pretty much how I feel about the current news cycle and investment reaction too it. But hey. What do I know. Not much. I’m just the kind of guy that prefers some form of solid trustworthy currency.
Gold made another attempt at resistance level $1720 today. Played around there but at the moment ExactPrice is showing it back down at $1,716.90. I’m going to be curious to see what Asia buyers do again tonight.
In the mean time here are some worthy reads.
Lear Capital: Solving Debt Crisis By Printing More Money, Buying More Gold <- Pretty much nothing has changed as the piece brings out. Government’s answer to fixing the problem of debt is more debt. Get used to it. At least until it drowns everyone.
King World News Interview with Eric Sprott is a must listen too interview. <- Hat tip to @ajmcafe.
Letter Sent to CME Chairmen and CFTC Commissioners <- Proof to me that the MF Global debacle ain’t going away.
Risk on – Everything got fixed overnight <- Looks like Trader Dan feels the same way I do about all this.
Jim Rickards Interview on King World News <- SDR’s IMF, dollar, and Roubini. Good interview worth listening too.
Gold vs the dollar as the Eurozone wilts <- I found this to be a sound piece.
Counter economic turmoil to come with gold – Williams <- good interview.
SocGen Sees $600 Billion QE3 Starting In March 2012 Sending Gold Up Between $1900 And $8500/Oz <- From ZeroHedge.
Have you been watching the spot price of gold the past several weeks? I’ve been doing so with the widget, ExactPrice, and it has been interesting.
There are I some major factors going on at this time when I just scratch my head and go, “why isn’t it exploding to the upside,” when instead it’s being forced down.
In my mind the two big factors are manipulation and lack of trust by investors.
Here’s the top items that are in my mind the must reads this week as we go into the Thanksgiving Holiday.
Lear Capital: Does the Gold Price Make Sense? <- Great points made here.
Late-day Levitation | TF Metals Report <- Be sure to scroll down and read the posted comment that Ferguson highlights.
Insight: Farm belt rage over MF Global could chill markets <- Proof that investors don’t trust the investment system anymore.
Ranting Andy: MF Global – The Beginning of the End of Paper Markets <- More on the scandal.
Did Anyone Really Think the Supercommittee Would Make a Difference? <- I didn’t. This is a great read. Pay attention to the breast implant conversation.
Have a great holiday folks. Be sure to check out my Scoop.it feed for more info on what’s driving the gold market.
Nov 2010 Gold chart
Nov 2011 Gold chart
I’ve said it before, and I will happily say it again. Gold’s rise is in large function a result of debt and the ever multiplying nature of how debt is a driver in consumption and governmental programs.
This is to say that nothing has changed. Our governments continue to push more debt as a solution to the problems that brought us to this costume ball. Which, as I write, reminds me of the short story by Poe, The Mask of Red Death. Why? I don’t know, I guess I’ll need to go and re-read it, but the imagery and tone of that story is what the current economic climate reminds me of.
Here’s the opening paragraph:
THE “Red Death” had long devastated the country. No pestilence had ever been so fatal, or so hideous. Blood was its Avatar and its seal — the redness and the horror of blood. There were sharp pains, and sudden dizziness, and then profuse bleeding at the pores, with dissolution. The scarlet stains upon the body and especially upon the face of the victim, were the pest ban which shut him out from the aid and from the sympathy of his fellow-men. And the whole seizure, progress and termination of the disease, were the incidents of half an hour.
This morning the stock market is looking just as choppy as gold, which is at $1,778.60 looking at the free ExactPrice widget.
Keeping in line with the thought of debt today, I’m going to start out with two items twittered by .
Capital One U.S. credit-card delinquencies rise <- Well, that’s to be expected.
Government Mortgage Insurer Continues to Lose Cash Reserves <- The FHA. Go figure.
CFTC gets closer in MF Global fund mystery – official <- I continue to think that the MF Global debacle is going to be one of those things we look back and point to as one of the turning points.
Russian Central Bank Aims to Buy 100 Tonnes of Gold in 2011 <- Via Ed Steer. If they’ve made this announcement, I believe you can probably take it to the bank that they’ve already purchased the 100 Tonnes. No one in their right mind makes that kind of announcement ahead of buying that much.
IMF Warns of Risks to China’s Financial Sector <- Don’t be taken by surprise. Currency Wars are in progress. Read, James G. Rickards book: Currency Wars.
Gold soars to a new high in India as wedding season gets underway <- Set new high in Rupee.
Martin Armstrong – Gold Upside Take Off Only Months Away <- That’s a pretty specific forecast. Of course he notes like I have the factor of DEBT!
Death-ficits <- Good read from Greg Hunter. And it is again a theme of DEBT!
Keynote Speech At Sydney Gold Symposium 14-15 November 2011 By Alf Field <- This is an intriguing read on Jim Sinclair’s MineSet.
Clarification on Alternative Realities <- Read the intro into this Casey Research Daily. Deals with some of the risks in gold.
Gold marking time – rangebound trade continues <- Analysis from Trader Dan.
Gold Futures Trim Losses As Italy Debt Woes Linger <- HT to @lmgross and note again that we’re talking DEBT!!!
Note:
This post was meant for yesterday, 2011-11010. But as I was composing it something went nuts with my system. Not sure what exactly, combo of things perhaps. But now things seem to be working so I will just add to this post at the bottom the stuff I find in regard to all things precious metals. Right now gold is up and showing some strength with the Dow rising too. Gold is $1776.40 and silver $34.57.
Yesterday’s section of stuff:
What gives, you ask. All the economic data out there continues to point toward gold and silver prices that should be rising and not falling back from their recent highs, right? Well, one would think so. But this is a era of volatility and the uncertainty is a lot like the wild west, shot first, check their hat later.
On the subject of gold and volatility – well, yeah, that is kind of the point of this blog – I was pleased to find that delivered to my Kindle first thing this morning was my pre-ordered copy of James G. Rickards’s book Currency Wars, I started reading the preface right away and I can see it is going to be an engaging and enlightening read. Here’s a quote that stems from the analogy of the war being a tug of war:
“In the contest between inflation and deflation, the rope is the dollar. The dollar bears all the stress of the opposing forces and sends that stress around the world.”
And speaking of stress. Right now the precious metals are under stress. ExactPrice, the little widget sitting on my desktop, is reporting that gold is at $1,746.20 and silver at $33.48. Volatility is to be expected.
Finacial Crisis 2.1> Fannie Mae taps $7.8 billion from Treasury, loss widens -> HT to @TheNvsibleHand. Contrary to the sound clip above from Gomer Pyle, this news is no surprise. The surprise is that our government continues to right taxpayer checks for their failures.
Alabama county files biggest municipal bankruptcy -> HT to @mikecane. I think we are going to continue to see more of this sort of thing in the future. Notice too, that each time we hear about another municipal failure it’s bigger than the last. That trend I imagine will only continue.
The Criminal Element, Part Deux <- TF Metals report worth reviewing dealing with the Comex and Gold.
Italian uncertainty pushing gold down – but the price fall shouldn’t last <- Amazing that uncertainty would mean that gold gets sold down but that does seem to be the case.
Updates on 2011-11-11: To all the Veterans, I thank you.
Ted Butler on the CME Group and Self-Regulation of Exchanges <- Worth a read.HT to @JessesCafe who twittered his post.
Ted Butler brings out a key aspect of the failure of MF Global that has received too little attention.
The self funding by the players of industry insurance is one of the main sticking points in this.
Why should the CME members pay back the MF Global customers, when they know full well what large institution illegally took the collateral, sold it, and is refusing to take the loss?
Rob Arnott – Defaults & Disorderly Contagion Around the World
With continued volatility in all the markets, King World News interviewed five time Graham & Dodd Award Winner, Rob Arnott, who oversees more than $80 billion as the Founder & Chairman of Research Affiliates. Rob sub advises the Pimco All Asset Fund and mutual funds and ETFs for Schwab, Powershares and Nomura. When asked about the latest crisis in Europe, Arnott stated, “It’s very simple, countries had an obligation to be fiscally solvent and to take responsibility for their own financial obligations. And all they’ve done is thrown all of the Maastricht (Treaty) agreements out the window, which tacitly means that they are probably throwing the euro out the window.”
New gold bugs are young and restless <- This is something to think about in how attitudes are changing.
Eveillard – If Italy Sells its Gold Here is What Will Happen <- Which reminds me so some of the stuff in Jim Rickards’s new book.
Hathaway – Sell Side to get Slaughtered on Bearish Gold Calls <- All about the floor in gold and where we are going.
Price Irregularities in the Silver Market <- Go read.
Intra-day averages clearly show market intervention
You’ve seen it before, right? Suddenly, the price of gold or silver drops like a rock. For no apparent reason a chunk of its value is lost within minutes. In other markets however, these kinds of rapid declines are extremely rare.
Why do these sharp price declines seem to appear out of nowhere? Usually professional investors do their best not to execute large sell orders all at once in order to avoid moving the market so as to conserve profits. Nevertheless, in the precious metals market it seems some market participants are often clumsy, triggering abrupt price drops. The reason however is not clumsiness, but other interest: these players want to influence prices with their selling actions. Since August 5th, 1993, when these sudden price moves began occurring with statistically measurable frequency – a number of financial institutions have intervened systematically against precious metal markets.
Moral Bankruptcy <- This is a great read. This MF Global failure is one of those things that I think we will look back in time at and point to as a key turning point. What has happened here is going to continue to reverberate for years to come.
Ferguson – “As you know, I was out all day today. It was nothing earth-shattering. Just a long list of mundane tasks that needed to get done. Accordingly, I had a lot of time to think. Think about trust. Honesty. Responsibility. The present. The future. All of this stuff swirling around in my mind for hours. I had an idea of what I wanted to write tonight but I didn’t know if I could pull it off.
“I guess what got me started was MFing Global. OK, so I lost 3G. I can handle it. But do you know that one of your fellow Turdites lost thousands of dollars and 5000 ounces of physical silver? That’s incredibly disturbing. MFing Global clients were assured that their funds were held “separately”. They were assured by the CME that all would be well.”
Swiss brokerage adopts GATA’s view of imaginary ‘paper gold’
Don’t forget to watch the Scoop.it topic: Gold and What Moves it. I’ll post more frequent items there as I come across them.
So yesterday gold and silver fell. Today they have regained much of their losses.
