saveyourassetsfirst3 |
- Risk Parity: A Bullet-Proof Investment Strategy?
- Why I'm Dumping Gold Today
- Precious Metals Update - Why We Were Right On Gold, Silver And Platinum
- Winds of Change Blow for Precious Metals Mining Stocks
- The silver soap opera video
- “Inflation Risks Higher” After Fed Launches QE3, Analysts See Gold Hitting $1850-$1900
- Where Gold Is Headed Amidst QE3, Global Recession And Fiscal Cliff?
- Paramount Gold & Silver Corporation - The Ultimate Miner's Bliss:
- Reviewing the Silver Bull’s Seasonal Factors
- jpm silver vigilante is back, issues statement
- Perma-QE: Lessons from Bernankes Latest Splurge
- Dollar erases 2012 gains after Fed
- Precious Metals Update
- Disinformation Avoidance for Investment Health
- Louis James Interview with G. Edward Griffin
- Greg Weldon Update on Gold & Silver and Driving Forces
- Gold Facts: Statistics on the Precious Metal
- Peter Schiff on the Fed Announcement of QE3
- The Federal Reserve is Terrified of the Tea Party
- Fed Currency Debasement 3 (QE3) Sees Gold and Silver Surge 2% and 4.3%
- Loose money is here again (and gold stocks love it!)
- Is the Fed Adopting Questionable Easing?
- QE Event Horizon – Open-Ended Printing by Federal Reserve
- Bernanke a Hero to Gold/Silver Bulls
- Norcini – A Violent Wave Of Short Covering In Gold & Silver
- What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil
| Risk Parity: A Bullet-Proof Investment Strategy? Posted: 14 Sep 2012 01:17 PM PDT By Paul Allen: The basic idea behind risk parity is to diversify a portfolio in terms of risk, but not in terms of dollar values. In other words, risk is spread equally between asset classes so that each asset class contributes the same amount of volatility to the portfolio rather than an equal amount of capital. A traditional balanced portfolio, where 60 percent is allocated in equities and the remaining 40 percent is invested in bonds, may look balanced from a capital allocation point of view, instead of from a risk perspective. In our article, we would like to compare a traditional 60/40 portfolio with a risk parity approach, which uses the same underlying asset classes. In our comparison, we will use the SPDR S&P 500 ETF (SPY) to represent the allocation to equities and the iShares Barclays 20+ Year Treasury Bond (TLT) as well as the iShares iBoxx $ Invest Grade Corp Complete Story » |
| Posted: 14 Sep 2012 01:09 PM PDT By Jim McCraigh: I am selling some of my gold today for something better. I'm doing this is despite the fact that the long anticipated QE3 arrived with a vengeance this week. Ben Bernanke announced an apparently open-ended program to buy $40 billion of mortgage-backed securities per month in an attempt to jump start the real estate market. He also announced that the MBS purchases will continue until the current unemployment picture improves. Whether or not this will actually work is a topic for another time, but the message is clear: The dollar will ultimately be devalued as a result. As I have written before, this news is very good for the holders of gold. Gold as represented by the SPDR Gold Shares (GLD) was up 2.02% on Thursday. Not bad by any measure. But as I looked down the page I saw something that caught my eye. The iShares Silver Trust (SLV) Complete Story » |
| Precious Metals Update - Why We Were Right On Gold, Silver And Platinum Posted: 14 Sep 2012 12:15 PM PDT By Qineqt: For silver, we want to reiterate our bullish thesis on Silver Wheaton (SLW), whose balance sheet strength, dividend payout, and less leverage to mining risks make us prefer it over iShares Silver Trust (SLV). The third phase of quantitative easing (QE3) proved to be a catalyst for precious metals, especially gold and silver, as these commodities are looked upon as safe havens against a risk of inflation, which is expected to increase after this round of stimulus measures. We reiterate our previous recommendations on gold and silver equities and exchange traded funds. Our favorite gold equities remain Yamana Gold Inc. (AUY), Newmont Mining Corp (NEM), Barrick Gold Corporation (ABX), and Goldcorp Inc. (GG), in a declining order of preference. We consider silver as more volatile than gold, and hence advise investors to buy shares of Silver Wheaton , which is a silver streaming company i.e. it purchases a share of Complete Story » |
| Winds of Change Blow for Precious Metals Mining Stocks Posted: 14 Sep 2012 12:03 PM PDT
Based on the September 14th, 2012 Premium Update. Yesterday gold was little changed before the key Federal Reserve policy decision, a day after a German court ruling in favor of a euro zone rescue fund. The decision centered on challenges to Germany's participation in the 500 billion euro ($639.3 billion) European Stability Mechanism, or ESM. Critics charged that the treaty behind the ESM robs Germany's parliament of its constitutional authority over the country's budget and had asked for an injunction to prevent the country's president from signing it into law. In other words the Court ruled that it is constitutionally permissible for Germany to finance the debt of other nations. The decision means the eurozone finally has two robust financial defenses against the debt crisis. The bailout fund will take its place alongside plans by the European Central Bank to buy unlimited amounts of short-term government bonds issued by troubled countries. The ESM can support countries by loaning them money, while the ECB bond purchases could lower the painfully high borrowing costs that are threatening Italy and Spain. Additionally, the ESM is also expected to join in purchasing bonds to support the ECB effort. Yet both the ESM and the ECB bond purchases are only stopgap measures. They can give governments time to reduce their deficits and cut debt long-term by reforming their economies so they can grow faster. One wonders if the countries will bite the bullet or to delay once the pressure is off, as they have during previous lulls in the crisis. The news of the German court decision Wednesday sent bullion to its highest since the end of February. Also investors were hoping that the Fed will announce another round of quantitative easing, (QE3) at the conclusion yesterday of a two-day policy meeting. Such news would be considered positive for gold, as injections of liquidity into the market tend to benefit the yellow metal. What investors got from the Fed was something much bigger than QE3. What we got was an open-ended QE. $40 billion will be pumped into the U.S. economy each month until further notice. Just as if the endless QE wasn't enough, the Federal Reserve has maintained its funds rate at 0.0%-0.25% at least until mid-2015. The above is not important only per say, but also because it is something that exceeded market's expectations. Consequently, we didn't see the buy the rumor, sell the fact type of reaction – what happened was bigger than the rumor, so markets got another positive impact. This is a major bullish fact for the precious metals market. As Europe and the US continue their inflationary race, precious metals rally – and they should rally much higher – endless QE means that they virtually have to. At this point, it seems that higher precious metals prices will be seen this fall and winter. We've seen some quite bullish developments in the precious metals this and last week. Let's now turn to mining stocks' technical picture to see whether they're in a similarly bullish situation as the metals themselves. We'll start with short-term HUI Index chart (charts courtesy by http://stockcharts.com.) In the chart, we have a bit (!) of a bearish situation. With the index reaching the psychologically important 500 level this week, a level which has often provided support in the past, we could very well see it serve as resistance this time. A moderately strong resistance line is also in place, one which is based on two local tops which were quite close together. The situation would be more bearish if the previous tops were father apart as this would make the resistance line a bit stronger. At the moment of writing this essay, the HUI Index is at 516, however the breakout is not confirmed and RSI is so extremely overbought that a correction or consolidation is now quite likely. Let's now move on to a very interesting chart that will show us the performance of mining stocks relative to gold. In the miners to gold ratio chart we also see a breakout this week and this is important and encouraging for mining stock investors. The ratio has been struggling for a month to break out and we finally see a convincing move above the resistance line. If a correction is seen and the ratio does not break below the support line, this will be a strong signal that miners will outperform gold in the month to follow. In exciting related topic, next week a brand new tool (in our new website; actually two tools: one for gold and one for silver) will be at your disposal for selecting mining stocks and rebalancing your mining stock holdings. To finish off, let's have a look at our own in-house developed indicator that serves as yet another confirmation of the recent bullish change in mining stocks. On September 7th, 2012, one of our indicators flashed a buy signal as it moved to the dashed line. The medium-term trend is clearly bullish right now. If the correction is seen in the precious metals in the following days, as described earlier, we expect the bottom (and a great buying opportunity) to be confirmed by at least one of our indicators – just as previous important bottoms were (see the above chart for details). Summing up, the miners are beginning to outperform the underlying metals and this bodes well for the future performance of the mining stock sector in the medium term. However, the following days may not reflect this bullish trend because the HUI Index is extremely overbought on a short-term basis. The completely new version of our website will be released next week, so if you sign up for our free mailing list with 7-day bonus access to our premium features, you will be among the first investors that are able to use it! We strongly encourage you to do so. Thank you for reading. Have a great weekend and profitable week! Przemyslaw Radomski, CFA * * * * * Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio? Sunshine Profits provides professional support for Gold & Silver Investors and Traders. Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits' Premium Service gain access to Gold Charts, Gold Investment Tools and Analysis of Gold & Silver Prices Naturally, you may browse the sample version and easily sign-up for a free weekly trial to see if the Premium Service meets your expectations. All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments. By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
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| Posted: 14 Sep 2012 11:58 AM PDT Interesting video |
| “Inflation Risks Higher” After Fed Launches QE3, Analysts See Gold Hitting $1850-$1900 Posted: 14 Sep 2012 11:57 AM PDT
"Inflation Risks Higher" After Fed Launches QE3, Analysts See Gold Hitting $1850-$1900 WHOLESALE MARKET gold bullion prices held above $1770 an ounce for most of Friday morning's London trading, near their six-month highs hit after the US Federal Reserve announced a third round of quantitative easing (QE3) yesterday, leading to warnings that the risk of inflation has risen. "After the move [gold bullion] had, not just yesterday, but over the last two or three weeks I think it would be natural to look for a period of consolidation," says Credit Suisse analyst Tom Kendall in London. "But certainly going into the back end of this year, I would be looking for gold to be getting towards at least the $1850 level." Silver bullion traded around $34.70 an ounce this morning, also close to new six-month highs, as stocks, commodities and the Euro all moved higher after Fed policymakers voted 11-1 in favor of new asset purchases. "Silver is poised to test the next resistance level at $35.4," one trader in Shanghai tells newswire Reuters. "The recent rally, which has lifted silver by about 25% over the past month, is suppressing short-term physical demand" The Fed announced Thursday that it will purchase $40 billion of mortgage-backed securities per month, and will continue such purchases until the outlook for the labor market improves "substantially". In addition, the Fed will continue its policy aimed at lowering longer-term US Treasury bond yields, known as Operation Twist, due to run until December. The Fed will also continue its policy of reinvesting principal payments on currently-held mortgage-backed securities back into this asset class. In its statement, the Federal Open Market Committee said that the combined effect of its actions would amount to around $85 billion of asset purchases per month until the end of 2012. "This is a Main Street policy, because what we're about here is trying to get jobs going," Fed chairman Ben Bernanke told a press conference following the announcement. "We're trying to create more employment. We're trying to meet our maximum employment mandate, so that's the objective." "[Bernanke will] fight and fight until he sees a real improvement in the economy," says Ethan Harris, New York-based co-head of global economics at Bank of America Merrill Lynch. "He's not going to let his critics stop him. He believes quantitative easing can help the economy and the Fed can avoid inflation, so he'll just keep at it until there's a real turn in the economy." The latest nonfarm payroll data suggest the US economy added 96,000 jobs in August, below the 150,000-200,000 Bernanke estimated in April is needed to meet Fed unemployment projections. The US unemployment rate meantime has remained above 8% since February 2009. "There is not a specific number we have in mind [for unemployment]," Bernanke told reporters. "But what we've seen in the last six months isn't it." In addition to announcing asset purchases, Fed policymakers extended their guidance for near-zero interest rates to at least mid-2015, beyond the previous guidance of late 2014. "[The Fed's decision to leave] purchases open-ended and extending their guidance means a steeper yield curve, as there is more inflation risk," says Societe Generale trader Sean Murphy in New York. "The need to come out with the operation at all is alerting everyone that there is a long road in this recovery and there are still many things that need to be addressed." "Controlling the fire of inflation once it is roaring is a difficult task," warns Congressman Kevin Brady, a Republican from Texas and vice chair of the Joint Economic Committee. "The Fed is overly confident about its ability to pick the right time to withdraw all this stimulus." Writing in his New York Times column, Krugman adds that "the Fed seems to be trying to 'credibly promise to be irresponsible'" as a way of raising inflation expectations, something Krugman advocated the Bank of Japan do back in the 1990s. "As [Bernanke] himself said," adds Neal Soss, chief economist at Credit Suisse and a former New York Fed economist, the Fed has built up a lot of capital with respect to inflation credibility…the point of having capital is, from time to time, to spend it." "Should the Fed expand its balance sheet by a further $1.3 trillion," says Standard Bank strategist Walter de Wet, "it would lift our fair value estimate for gold to around $1900. As a result, even from current levels of gold at $1770, we still see substantial upside for the metal." Here in Europe meantime, Spain would be "daft" to ask for a bailout on top of the €100 billion it has already agreed to fund banking sector restructuring, according to German finance minister Wolfgang Schaeuble. "I'm not in the camp that says 'take the money,'" Schaeuble said in an interview Thursday. "I'm one of those who says we should do everything possible to convince the markets that…speculation against Spain is without any basis in reality." "Our desire and intention," said Spain's budget minister Cristobal Montoro yesterday, "is to return again to being a reliable partner in Europe that doesn't ask for anything." On the currency markets, the Euro rallied above $1.31 against the Dollar for the first time since early May this morning. Despite this strengthening, Euro gold bullion prices set a record high at Friday morning's London Fix above €1359 per ounce, before drifting lower towards lunchtime. Ben Traynor Gold value calculator | Buy gold online at live prices Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault's weekly gold market summary on YouTube and can be found on Google+ (c) BullionVault 2012 Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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| Where Gold Is Headed Amidst QE3, Global Recession And Fiscal Cliff? Posted: 14 Sep 2012 11:46 AM PDT By Faisal Humayun: Mr. Ben S. Bernanke lived up to the expectation of the gold bugs by launching a massive QE3 program. The dollar weakened and gold surged after the announcement. This article discusses the outlook for gold keeping in mind the most recent quantitative easing program, the fiscal cliff and the probability of a global recession. I am of the opinion that gold will witness new highs in the near term (3-6 months) and will continue to trend higher over the long term (3-5 years). As such, investors can consider having at least 10-15% of their portfolio allocation in gold in order to boost overall portfolio returns. Discussed below are the reasons for this rationale. The last one-year trend in gold prices has been interesting. Gold price corrected by 19% from September 2011 to January 2012. From January 2012 to early September 2012 (seven months), gold was in a phase of consolidation Complete Story » |
| Paramount Gold & Silver Corporation - The Ultimate Miner's Bliss: Posted: 14 Sep 2012 11:33 AM PDT By The retail investor needs to dig deep to find undervalued gold and silver stocks ahead of Wall Street. We look at the four catalysts for Paramount Gold & Silver (PZG) common stock in this economic environment:
We think the miners are an excellent value, but we like the miner's bliss better. Paramount is a miner's bliss because what we are about to tell you makes this explorer not only undervalued, but a buyout target. Wall Street is starting to discover PZG since the value advantage the explorer's stock has over a mining stocks is significant, especially given Complete Story » |
| Reviewing the Silver Bull’s Seasonal Factors Posted: 14 Sep 2012 11:16 AM PDT Silver is mined year-round at a fairly constant rate across the globe. Thus it is somewhat counterintuitive that this metal would exhibit marked seasonal tendencies tied to the calendar. But it sure does. Silver's seasonality is driven by fluctuations in demand rather than supply. |
| jpm silver vigilante is back, issues statement Posted: 14 Sep 2012 11:06 AM PDT http://www.silverdoctors.com/wynter-...y-dec-31-2012/ Wynter Benton, the anonymous blogger on Yahoo Finance' JPM page (who claims to be a group of former JP Morgan commodities traders under Blythe Masters and accurately forecast numerous silver moves in early 2011) re-emerged today after an 11 month hiatus. Benton claims that the Oct 31st 2011 take-down of MF Global was SPECIFICALLY designed to prevent the group of former JPM traders with a chip on their shoulders against their old boss Blythe Masters from taking delivery of a massive amount of physical silver and breaking JP Morgan's massive naked short silver position. Benton also claims that JP Morgan's $36 silver derivative time-bomb is still in effect, and states that the ex-JPM traders have re-grouped, and that silver WILL trade above $50 before Dec 31, 2012. ================================================== ============= Silver will trade above $50 before Dec 31, 2012 By wynter_benton We wish to inform our followers that silver will trade above $50 before Dec 31, 2012. The $36 silver derivative timebomb is still in effect for the Morgue so count the trading days once silver gets above $36. MFG was setup to prevent us from taking silver above $45 last year. Did anyone wondered why MFG failed precisely 30 days before our deadline or why no one can locate the vaporized money? It was designed SPECIFICALLY to stop us from taking silver up and out. Think about it. Too bad The Morgue cant do that again this time cause we are beyond their reach now. Once again, we are back. . . . . do da do da. . . . |
| Perma-QE: Lessons from Bernankes Latest Splurge Posted: 14 Sep 2012 10:31 AM PDT Bullion Vault |
| Dollar erases 2012 gains after Fed Posted: 14 Sep 2012 10:02 AM PDT The dollar dropped on Friday, erasing any gains made this year, as the Federal Reserve's decision to buy more bonds was taken as devaluing to the currency while boosting investors' appetite for riskier assets like stocks and commodities... Read |
| Posted: 14 Sep 2012 10:01 AM PDT It has been a while since a Precious Metals article appeared on the blog, so we are definitely overdue for an update on the current situation. There is plenty to write about from both the short and long term perspective, so it is appropriate to break the post into two parts. The second part will be posted sometime next week.  Precious Metal bulls believe that the recent break above the 200 day moving average for Gold could be a game changer, which technically might signal the resuming uptrend in price action. Silver, in particular has now moved above its 200 day MA for the first time in over a year, after being extremely oversold (almost a 50% decline from the peak 16 months ago). Personally, I am not 100% convinced die hard Gold Bugs have it right, as Gold is moving towards its 11th annual gain in a row. In other words, I would have preferred to see the PMs sector correct further, with Gold experiencing a proper bear market and an annual loss.  Regardless of what I think, it is much more important to follow the price action. In the chart above we can see that the overall Precious Metals sector, including Platinum and Palladium, has recently broken out on the upside. I have personally participated by purchasing a large amount of Silver at the July lows and a smaller trade position at the August technical break out.  From their perspective lows during the summer bottoming phases Gold has rallied 14%, Platinum has rallied 20%, Palladium has rallied 22% and Silver has rallied 30%. Precious Metals have now become overbought from the near term perspective and sentiment has risen towards extremes again. Elliot Wave shows that the Daily Sentiment Index, measuring the short term view of future traders, records 90% bulls on Gold and 92% bulls on the Silver Chart above. Therefore, I would pull back from purchasing any Precious Metals right now, until we see some kind of a consolidation or a correction.  Bullish sentiment is also evident in the GLD ETFs weekly rolling fund flows. The chart above shows that after suffering three panic selling events over the last 12 months, GLD ETF is now in process of posting its 6th consecutive weekly rolling inflow. Retail investors seem to be chasing the prices higher, so caution is advised as it is never wise to follow "dumb money". Having said, we could have also witnessed a major low in the PMs sector, like die hard Gold bugs believe (they believe every sell off is a major low). Assuming this is true and the cyclical bear market has finally finished, similarities could be drawn back to October and November 2008 prior to the Central Bank reflation policies, where we saw consistent inflows for 19 out of 21 weeks. I do have to admit that Precious Metals find themselves in a seasonality positive period of the year and therefore could surprise further to the upside, after a near term consolation or correction.  Calling a major low or for that matter a major high, is always a favourite game of retail investors, so I am not going to participate in the guessing game. Gold in particular has me worried, because its corrections have been rather muted at best, over the last decade. I know die hard Gold bugs will argue various technical and fundamental points to have me join their allegiance, but regardless of what anyone says, it is very rare for any asset to be up 11 calendar years in a row. But, to stick with the theme of this article, I admit there is definitely a lot of evidence that we have seen a low in PMs, so let us make that assumption.  In that case scenario, the best Precious Metals play tends to be Silver, as it behaves like Gold on steroids (very high beta). Over the last decade or so, during the Precious Metals secular bull market, Silver has experienced five major rallies out of technical bottoms. Assuming we have seen another major low, as Ben and Mario begin reflating, Silver might follow the historically strong seasonality period over the Summer months towards next years Spring months. The chart above shows Silver's analogue taking into context those five periods, while tracking the recent rally breakout, which started in late June at $26. Using a basic mathematical averaging method, if the rally follows historical patterns, it could last up to 160 to 190 trading days and gain more than 80 to 90 precent. That would put Silver back towards testing its major resistance level at $50. Precious Metals have come back into favour with investors recently, as market focus turns to the possibility of the Federal Reserve starting another round of Quantitative Easing or monetization of the US government debt. While no one can be one hundred percent certain Precious Metals have seen a major low, the technical evidence together with a potential fundamental trigger, do speak of positive price action ahead. In the second part, which will be posted sometime next week, I will focus towards a much longer term outlook on where the price of Gold and Silver could be heading. In the meantime, I leave you with a great interview with Ray Dalio, who advised that holding Gold is a must in a portfolio going forward. Enjoy!
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| Disinformation Avoidance for Investment Health Posted: 14 Sep 2012 09:41 AM PDT "The Big One Cometh" we wrote last week, and indeed IT, at least two Legs of IT, Did. First, The ECB announced a program of "Unlimited Bond Buying," "Q.E. to Infinity" as Jim Sinclair put it months ago and we concurred. And now, The Fed has announced it will buy $40 Billion of Mortgages per Month for an unlimited time period. But The Fed already has $2.8 Trillion on its Balance Sheet, and the ECB over $3 Trillion. The Powers-that-be claim this is not inflationary, but recent real Food and Energy Price Inflation show this to be untrue. And there is no mention of the problems of buying Impaired Collateral. Therefore, now let us be the first to coin a term for what is also likely to come, and, indeed has already begun. "Disinformation to Infinity," a multi-faceted Deception, which if not recognized as such, could be extremely injurious to investors' Profit Generation and Wealth wherever in the world they reside. The most recent example of Disinformation from the ECB (and there are several prior ones) is Draghi's claim that the Unlimited Bond Buying can somehow be "Sterilized" so that it will not be Inflationary. Bill Fleckenstein presents one excellent explanation of why "Sterilization" to immunize against Inflation is not realistically possible. "…we now know that Bernanke has heavily telegraphed QE3, and (thanks to today's ECB announcement) that Draghi has committed to unlimited bond purchases. Of course – wink, wink – he is claiming those purchases will be sterilized, but that is an impossibility. Just Call Him "Mr. Clean" For those who don't know, sterilization means that for every euro's worth of bonds the ECB buys, it will sell an offsetting amount. Usually that is done by buying a maturity of one length and selling one whose maturity is similar (or shorter). Thus, there is no net change in the amount of money created (in theory), but a maturity (or credit) that is unpopular gets a little help on the demand side while a more popular one gets more supply. (Bernanke used to talk, in essence, about a theoretical form of sterilization when he discussed the Fed's "exit strategy," although that approach to sterilization is one that is more "legged into," i.e., buy now, sell in the future.) "At this point, however, the Fed makes no pretense about an exit strategy. …What's more, the Fed would have you believe that it will have no problems executing its exit, which of course is silly. No single entity (nor any group) has enough capital to buy all the bonds they won't be buying when QE ends, on top of all the bonds they would need to sell. "…Draghi claims he going to sterilize his purchases. Well, if you're buying debt of Spain, Italy, and potentially France (not to mention Portugal or Greece), there is a lot more problem debt to buy than there is debt you would be able to sell, such as Germany or Sweden or some other more fiscally prudent country. (Because you obviously can't be selling the same government debt you are buying and expect to provide any relief.) That means it simply can't happen. Obviously, when you contemplate the thought of unlimited purchase, it is literally impossible for you to sell an unlimited quantity. It doesn't even work in theory, and in practice it really won't work. "But the fact remains, the only way to protect oneself is to own something that can't be debased like gold, silver, or other rare assets." "ECB Sterilization = Fed 'Exit Strategy'," Bill Fleckenstein, "Daily Rap", 9/6/2012 So, the consequence is that we are looking at both QE to Infinity and also a likely 'Disinformation to Infinity' or at least until Economic Realities overwhelm the Deceptions. (And, yes, Deepcaster has several Recommendations for Gold and Silver in our Portfolio.) And as those who suffered through the Weimar Republic know (or, more recently, the Argentine and Zimbabwean versions) Monetary Inflation which exceeds increases in the production of Goods and Services leads inevitably to Price Inflation. Period. Indeed, it already has, around the world. The Eurozone's Main Crude Oil Supply is Brent, whose price has bounced up well over $100 for months. And the "Arab Spring" was touched off by riots over Food Price Increases and there is credible evidence of Food Price Riots in China as well. And these Food Price Increases came before the Drought in the U.S. and Elsewhere. And the Continuing Commodities Index (CCI) has increased by over 15% per year for the past 10 years – a Reflection of Inflation in The Real Economy. But the best hard evidence of accelerating Price Inflation comes from the USA which is already Threshold Hyperinflationary at 9% per year. This is the Real Number (as opposed to the Official Ones) provided by shadowstats.com (see Note 1). Note that the Official Numbers are Bogus (i.e., more Disinformation) and serve to disguise the Inflationary impact of repeated QE. Just in case one Thinks Truth Suppression is limited to the U.S. or Eurozone, consider the following example from China where a Canadian Citizen Financial Researcher was jailed for writing an Unfavorable Report about Silvercorp, a Silver Miner working in China. "But one of the most-daming thigs I've come across on China hit my desk over the weekend. I seldom link other articles in full, but his one is worth a read when you get a chance: "In China, Silvercorp Critic Caught in Campaign by Police" "It is the story of a researcher in China who police arrested – and detained – because he works for a fund manager who writes negative reports on Chinese companies. (The researcher is a Canadian citizen, by the way, yet sits in a Chinese jail on flimsy evidence and no due process whatsoever. I can't believe the Canadian government lets it stand. "Chinese companies have had lots of fraud issues, as you may know. Investors have uncovered discrepancies and outright frauds in U.S.-listed Chinese companies. This sent the stock of many such companies tumbling. "This, is turn, hurt these companies' ability to tap Western markets for more money, which hurts their ability to pay local taxes. And that hurts the local governments who labor under a pile of debt. It's all any ugly, corrupt circle. "Take-away: If you are in China, you have to write positive reports or you get arrested. That's the message here. "Gloom spreads in China despite the best efforts of officials" Chris Mayer, Mayer's Special Situation, 9/10/2012 In sum, short-term, Central Banker and Government Actions will not only be a Major Determinant of Market Performance but also of the "Stories" (i.e., the Disinformation) that are told to describe Performance and Prospects. But in the mid and long term, Fundamentals will prevail. Speaking of the "Stories", The Fed and other Central Bankers would still like us to believe that their QE and related Action are net-beneficial to the Economy. This is false, of course, because they are net-beneficial Mainly to the Mega-Banks, and not to Taxpayers. Dr. Robert McHugh provides a good analysis of the effect of Fed QE, which by the way could be applied as well to the ECB Action. "The impact of QE3 should be higher prices for both precious metals markets and stock markets, for at least the short-run (for the Stock Markets – Ed.). But, not for the long run because the program will not work to stimulate the economy or generate jobs. That is because the money does not go to the general public, does not go to Main Street, but goes to Wall Street. Unfortunately, Wall Street is not an efficient money distributor or job creator. The money goes into markets from Wall Street, not to households or small businesses, merely elevating stock and commodity prices. Unless households or small businesses own stocks and metals, they do not benefit. The process is simple. The Fed prints money, then buys fixed income notes and bonds from Wall Street. Wall Street ends up with lots of freshly printed cash. Billions of cash, maybe trillions if the QE program is large. Wall Street has to do something with the cash, so they buy stocks and commodities, driving up prices with demand, while speculating prices will rise in the future when they can make a profit by selling positions, that selling initiating a collapse in markets and the disintegration of the QE3 money printed by the Fed in the first place. QE becomes an exercise in temporary stimulation of markets, not sustained stimulation of the economy. For an effective QE3 program, printed money would need to be given to small businesses and households in the form of an income tax rebate from the U.S. Treasury where economic demand can increase and jobs can be created. Consumer spending (households on Main Street) is the key driving force for economic growth, and that spending can fuel improved revenues for small businesses, which are the key engine for jobs creation. For QE3 to work, the Fed should fund a tax rebate by buying new Treasury issues." "The Fed and QE3: What This Means for Markets" Robert McHugh, safehaven.com, 9/8/2012 And there are other Financial Realities which are hidden by Disinformation or Outright News Blackouts. One such Reality is tht certain Asset classes deemed to be safe, are not really. Jim Willie provides an Excellent overview of Asset classes which a variety of sources claim are safe. But this claim appears to be Disinformation in light of Willie's analysis. [Specific strategies and Investments aimed at Profitability and Protecting from Disinformation are contained in our recent Letter and Alerts and referred to in Notes 2 and 3 below.] ◄$$$ AN ATTACK ON THE $2.7 TRILLION IN MONEY MARKET FUNDS HAS COME, THE TRADITIONAL STATIC STABLE SHELF. OBSERVE THE STEALTH ACTION TOWARD CAPITAL CONTROLS. NEW RULES COULD FORCE A MAINTENANCE OF A MINIMUM AMOUNT IN EACH ACCOUNT. THE MONEY MARKET FUNDS SERVE AS SCARCE CAPITAL, A LIQUIDITY SOURCE THAT HOLDS TOGETHER THE INSOLVENT BANKING SYSTEM. $$$ Back in January 2010, it became apparent that money market funds were in danger. They are typically very safe, the safest, like cash funds. No longer. They have been abused to sustain the corrupted system. Depositors (investors) gradually have been losing their right to redeem money market accounts, in fallout from the extreme distress extended from mortgage bond holes followed by sovereign bond growing holes followed by more hidden derivative gaping holes. The USGovt is implicitly placing capital controls on the primary forms of cash aggregation available, such as $2.7 trillion in US money market funds. The regulators are leaning on proposed Money Market Rule 2a-7, which grants money market fund managers the option to "suspend redemptions to allow for the orderly liquidation of fund assets." The rule is obviously designed to prevent money market runs, thus bank runs, in veiled domestic capital controls. (Emphasis added.) ◄$$$ A STUNNING PROGRESSION IS UNDERWAY, THE EROSION IF NOT RUIN OF ASSETS IN A SEQUENCE. NOTICE THAT SUPPOSEDLY SAFE PAPER ASSETS ARE AT GREAT RISK. THE EXTER PYRAMID IS AT WORK. THE END GAME IS TO HOLD GOLD, THE LAST ASSET STANDING, THE ONLY SURVIVOR. $$$ In recent years like in 2006 through 2009, investment in mortgage bonds proved unsafe. They used to be the stable staple among paper merchants, located with their real estate brethren of assets in the red group (highest risk). More recently, sovereign bonds have been shown to be unsafe, the supposedly sacrosanct bonds backed by governments. Finally, cash set aside in money market accounts is not safe. The progression of risk is palpably clear in the systemic breakdown. The present focus of interest is the orange group that includes government bonds. Money market funds lie in the yellow group since the ultimate in short-term paper, in my opinion. Next will be attack focused upon the short-term government bills. The winner and final survivor will be gold, the last asset standing to look over the charred ruin landscape. It is inevitable. It is written by the annals of history. Yes, indeed, Physical Gold has a Tangible Reality which can not be Distorted by Disinformation. Best regards, Deepcaster September 13, 2012 Note 1: *Shadowstats.com calculates Key Statistics the way they were calculated in the 1980s and 1990s before Official Data Manipulation began in earnest. Consider Bogus Official Numbers vs. Real Numbers (per Shadowstats.com) Annual U.S. Consumer Price Inflation reported August 15, 2012 1.41% / 9.02% U.S. Unemployment reported September 7, 2012 8.3% / 22.8% U.S. GDP Annual Growth/Decline reported August 29, 2012 2.21% / -2.15% U.S. M3 reported September 7, 2012 (Month of August, Y.O.Y.) No Official Report / 3.10% e Note 2: There are Magnificent Opportunities in the Ongoing Crises of Debt Saturation, Rising Unemployment, negative Real GDP growth, over 9.0% Real U.S. Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults. One Sector full of Opportunities is the High-Yield Sector. Deepcaster's High Yield Portfolio is aimed at generating Total Return (Gain + Yield) well in excess of Real Consumer Price Inflation (9% per year in the U.S. per Shadowstats.com). To consider our High-Yield Stocks Portfolio with Recent Yields of 10.6%, 18.5%, 26%, 15.6%, 8%, 6.7%, 8.6%, 10%, 14.9%, 10.4%, 15.4%, and 10.7% when added to the portfolio; go to www.deepcaster.com and click on 'High Yield Portfolio'. Note 3: Deepcaster addresses the questions of Profit and Protection in light of Fiat Currency Purchasing Power Destruction and provides Guidelines in his article – "Essentials for Wealth Acquisition Acceleration" found in 'Articles by Deepcaster' Cache. Using such Guidelines facilitated Deepcaster's making buy and sell recommendations resulting in remarkable profits recently if acquired and liquidated when we recommended, approximately*: 50% Profit on Gold Stock Call on September 7, 2012 after just 101 days (i.e., about 180% annualized) 80% Profit on Gold Stock Call on August 29, 2012 after just 98 days (i.e., about 300% annualized) 30% Profit on Energy ETF on July 30, 2012 after just 54 days (i.e., about 200% annualized) 56% Profit on Premium Gold Miner on June 1, 2012 after just 2 days (i.e., about 10,100% annualized!) 87% Profit on Agricultural Blue Chip (Tr. 2) on April 23, 2012 after just 208 days (i.e., about 152% annualized) 57% Profit on Agricultural Blue Chip on February 24, 2012 after just 149 days (i.e., about 140% annualized) 45% Profit on Platinum ETF on February 8, 2012 after just 42 days (i.e., about 390% annualized!) 40% Profit on March 2012 $55 GDX Calls on January 27, 2012 after just 23 days (i.e., about 635% annualized!) 34% Profit on Gold Royalty Streaming Company on December 5, 2011 after just 166 days (i.e., about 74% annualized!) 42% Profit on Volatility Index Futures ETN on October 3, 2011 after just 292 days (i.e. about 52% annualized!) 36% Profit on Double Short Euro ETF on September 7, 2011 after just 43 days (i.e. about 300% annualized!) 35% Profit on Double Long Gold ETN on August 23, 2011 after just 41 days (i.e. about 280% annualized!) 26% Profit on Double Long Gold ETN on August 17, 2011 after just 35 days (i.e. about 260% annualized!) 25% Profit on Gold Stock on August 8, 2011 after just 201 days (i.e. about 45% annualized!) 150% Profit on Gold Stock Calls on July 13, 2011 after just 56 days (i.e. about 975% annualized!) *Past Profitable Performance is no assurance of future Profitable Performance. |
| Louis James Interview with G. Edward Griffin Posted: 14 Sep 2012 09:39 AM PDT Louis James of Casey Research sat down with G. Edward Griffin, author of the popular Creature From Jekyll Island, which takes readers through the creation and motives for the creation of the Federal Reserve. Without commenting on the book itself, we indeed do recommend that people obtain a copy and read it cover to cover. The video speaks for itself and is, in our opinion, worthy of sharing. The set up for the video reads: "G. Edward Griffin works tirelessly to dispel the notion that the Fed has been a failure. His latest effort was at the just-concluded Casey Research/Sprott Inc. investor summit on Navigating the Politicized Economy, where he told a packed hall that the Fed has been wildly successful at its true mission – to protect the banking system at all costs. According to Griffin, the problem is the American people are footing the bill for these costs through stealth taxation, thanks to the coordinated actions of the Fed and US government."
Source: Casey Research via YouTube http://www.youtube.com/watch?v=-X5ISQJEpV0&feature=player_embedded |
| Greg Weldon Update on Gold & Silver and Driving Forces Posted: 14 Sep 2012 09:27 AM PDT Greg Weldon joins us to discuss the Fed's announcement and what we can expect from them going forward as well as the ECB. He also notes his targets for Gold & Silver and what has to happen for their rebound to be sustained.
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| Gold Facts: Statistics on the Precious Metal Posted: 14 Sep 2012 09:16 AM PDT Just in time for the current rise in the gold price we release an infographic on facts about gold in the ground, mined gold, current market value of all gold, gold leaf, gold wire, annual supply, central bank holdings, gold consumption and more. |
| Peter Schiff on the Fed Announcement of QE3 Posted: 14 Sep 2012 09:11 AM PDT An incredulous Peter Schiff delivers a vehement harangue of the Federal Reserve and its Chairman, Ben S. Bernanke in this 17-minute monologue. Schiff calls the Fed's new policy "Operation Screw." Video below... "The Fed has checked into the Roach Motel of monetary policy. It can check in but it can't check out. It can expand its balance sheet but never shrink it – so the Fed IS spending money; it is spending it on financial assets and in fact the goal of the Fed is to make those assets rise in price," Schiff says among a slew of other zingers.
Source: Europacmetals.com via YouTube http://www.youtube.com/watch?feature=player_embedded&v=LS879r7xeLc |
| The Federal Reserve is Terrified of the Tea Party Posted: 14 Sep 2012 08:56 AM PDT
From an odds perspective, we thought the Federal Reserve had very good reason to show restraint at the September meeting. By restraint meaning 'delivery of the minimum' while still satisfying expectations for stimulus, i.e. reasonably accommodating action coupled with pointedly neutral language (or something to that effect). Call it the 'neutral accomodative' stance. Going into the meeting, we pegged the odds of neutral accomodative at something like 70 percent, with 20 percent chance of "nothing done" and a pause until the December meeting. The chances of a full-blown "super dove" outcome were seen as statistically non-trivial, but very low. Why take that probabilistic mix? Let's recap the analysis elements, as they appeared before the announcement occurred. In considering how dovish to be, these are (roughly) the risk factors the Fed faced:
In comparison to the above, consider the advantages the Fed would have had, had they deliberately crafted a more 'accommodative but neutral' message: ~ A mildly disappointed, but still mostly appeased market, would have presented less danger of overheating. ~ There would have been more tactical and psychological ammunition 'left in reserve,' with the possibility of pointed reference that it could be used at the December meeting. ~ An 'accommodative yet neutral' stance would have nicely threaded the political partisanship needle, giving short term assistance to the economy but waiting for bigger juice until after the November election. ~ Given the overbought state of equities and oversold state of the dollar even before the meeting occurred, a modest mean reversion in both (equities down, dollar up) would have provided a more stable market profile, with the Fed able to jawbone or policy-walk equities back up / push the dollar back down if mean reverting corrective action grew out of hand. ~ Given the state of sharp internal division within the Fed (doves vs hawks), an accommodative but neutral stance also would have walked the line between these groups. ~ A more measured stance would have reflected a vote of confidence from the Fed in respect to the US economy's slow healing, versus over-aggressive actions containing a whiff of panic. The accumulated evidence, in other words, clearly favored restraint – at least some restraint – of a nature that would give the Fed more 'Reserve' (no pun intended) at a time when markets were probably about as favorably disposed as possible to a little medium disappointment without imploding. That's the logic. And yet, 'neutral accomodative' ain't what we got. Instead we got "ludicrous speed," as confirmed by the following language:
 click to enlarge Instead we got the lower probability 10 percent scenario: Bernanke firing the big cannon, and making markets go insane. We can see just how insane by observing the parabolic action in the euro (EURUSD), which clearly denotes a big surprise in terms of the Fed not just "coming through" on QE3, but being a hell of a lot more accomodative than expected. Which begs a curious question: Why would the Fed do that? When such a rational course of action was available, why would they use up their psychological ammo before December… risk bitter charges of partisanship… alienate the internal hawks… Leave themselves flat-footed in the event of new crisis… and, last but not least, run the risk of pushing an already extended equities-up / dollar-down "risk on" trend to frenzied collapse-prone levels? From a game theory perspective, such a decision making process suggests the Fed is dumb. But we do not believe that. Corrupt? Yes. Beholden to special interests and financial insiders whose well being is elevated above all? Certainly. But dumb? No. This leaves one last possibility: The Fed has decided it wants to see President Obama re-elected… and wants to help engineer that outcome at all costs. The Fed may have further decided that President Obama's reelection is so important, it is worth risking all manner of bad optics to make it happen (by juicing the economy prior to November as much as it possibly can). Of course, Bernanke went out of his way to specifically deny this possibility, stating that "We have tried very hard to be non-partisan and apolitical… We make our decisions entirely on the state of the economy." But of course he would say that, wouldn't he? It is a classic vein of politician and CEO speak. When a leader says 'X is not a concern," you know damn well it's a large concern… Too tinfoil hat, you say? Consider this recent Reuters report, "At Jackson Hole, a growing fear for Fed independence:"
The Federal Reserve rightly fears the Tea Party – to whom VP candidate Ryan is somewhat beholden to – and the 'hard money conservative' wing of the Republican party in general. Let us now conduct a political analysis. This is about as pleasant as gutting a trout, but it is necessary to put the pieces together. So here goes. We do not remember the origin of the saying (thinking it might be Barry Ritholtz), but we generally agree with the notion that "Democrats are the party of no ideas, while Republicans are the party of bad ideas." As John Mauldin has keenly observed, the Democrats, having no idea how to help the economy, have passively signed on to a monetary policy form of "trickle down economics" – by way of endorsing the "socialism for the rich, boost paper assets, push them out on the risk curve" tactics of the Federal Reserve – that is more grossly unfair to the poor than Reagonomics ever dreamed of being. As a side note on this, the sight of Michelle Obama waxing eloquent about her and the President's working poor class roots warranted such deep cynicism one hardly knew whether to laugh or cry. Health insurance tweaks aside, the Wall Street driven corporatist Obama presidency , with all its leniency towards savings-destroying, cost-of-living increasing actions, has been one of the worst for poor people ever. Some food for thought:
With all the above said, the Federal Reserve would prefer to cast its lot with the Democrats because, being the party of no ideas, their "go with the flow" solution involves handing over economic responsibility, and power, to the Fed.
Such is further underscored by leading super Keynesians like Paul Krugman, to whom virtually all stimulus is good stimulus. As if the point were not underscored enough, Krugman apparently thinks even the latest water cannon blast was "not enough." Dear Paul Krugman, you are certifiably nuts. The Republicans, on the other hand, being the party of "bad" ideas – and also the party of hard money – see an alternative way to save the economy, via the blanket lowering of taxes. From the Federal Reserve's point of view, the soundness of Republican tax-obsessed ideology is irrelevant. The key threat is that, via Tea Party views specifically and Republican views in general, lower taxation is seen by Repubs as a preferable saving grace option versus leaving the reins of monetary power in the hands of a corrupt Fed. We are not attempting to pick a side here. We are certainly not favoring the lowering of taxes as an economic cure-all, any more than we favor dumb stimulus. Neither Democrats nor Republicans have our endorsement (so if you are a partisan hack for either side, PLEASE spare us). "A pox on both houses" is our political motto, and bumper sticker affiliations (e.g. "proud to be a [fill in the blank]") are for simpletons in our view. As macro-oriented traders of all liquid asset classes, we are interested in trying to figure out why the Fed did what it did, especially in light of the fact that the Fed surprised us. Referencing basic game theory once again: If you have determined someone to be your enemy beyond a shadow of a doubt, and if that enemy is posing an active threat, it may make sense to strike as hard as you can, while you can, before losing the chance. The Tea Party, and the hard money ideology of Republicans in general, is a genuine threat to the Federal Reserve's independence – or at least is perceived as such – via the possibility of legislative change under Republican control. Some may say this threat is far fetched, but it is the most serious threat to the Fed that exists… and for Bernanke, his legacy as chairman within the Fed's hallowed halls is surely just as important, if not far more important, as his broader reputation in the outside world. For Bernanke to be the chairman who lost the Fed's independence on his watch, would be an absolute legacy disaster. And so, just as risk of death supersedes risk of non-serious injury, this legacy risk trumps all else. For the Fed in relation to FOMC day prior to a key presidential election, the proper strategic course of action thus becomes dominated by this single huge variable, outweighing all the other (very strong) reasons why a pre-election "accommodative neutral" stance would have made sense. With potentially everything to lose from an institutional legacy perspective at the hands of a hard money, anti-Fed, lower-taxes-not-stimulus Republican administration, the Fed judged all the attendant risks worth it in order to ensure the best chance of an Obama reelection possible. This realization is deeply troubling, of course, because in order to protect its own backside, the Fed has made a grossly unwise decision in respect to the health and stability of the actual economy. Again, it seems crazy for the Fed to do what it did on Thursday, and we know these men and women not stupid. (Many other things, but not that.) But when you consider the internal calculus, it all makes sense… Even from a delayed costs perspective, if it all comes crashing down worse later on as a result of the Fed's move, odds are good the do-nothing Fed supportive Dems will have been re-elected by then (via economic juice headed into November) – the core of Bernanke's legacy (protecting the institution) thus preserved. We did not like Ben Bernanke before. We now like him even less. We fear that, when the Fed-fueled bottle rocket has gone down in stagflationary flames, many more investors who now cheer the Fed will come around to our view. Because, like it or not, the Fed could actually be setting us up for a deflation outcome of major size and scope… more on that in a future episode. JS (jack@mercenarytrader.com) p.s. Institutional allocator seeks talented traders and money managers. Potential allocation amount: $2 to $10 million. See if your track record qualifies...  Similar articles you might like: |
| Fed Currency Debasement 3 (QE3) Sees Gold and Silver Surge 2% and 4.3% Posted: 14 Sep 2012 07:42 AM PDT gold.ie |
| Loose money is here again (and gold stocks love it!) Posted: 14 Sep 2012 07:32 AM PDT |
| Is the Fed Adopting Questionable Easing? Posted: 14 Sep 2012 07:12 AM PDT Gold and silver opened marginally lower this morning while platinum and palladium continued to add to Thursday's gains. Spot gold traded near $1,766 and spot silver near $34.50 as the New York session opened for the final day of the trading week. |
| QE Event Horizon – Open-Ended Printing by Federal Reserve Posted: 14 Sep 2012 07:09 AM PDT
from wealthcycles.com: An event horizon, is in laymans terms, "the point of no return" according to Wikipedia–more specifically, "the point at which the gravitational pull becomes so great as to make escape impossible. The most common case of an event horizon is that surrounding a black hole." Today the private bank charged with the privilege of issuing dollar notes as a liability (otherwise known as the Federal Reserve) crossed that boundary: it announced today it would begin creating new currency–what we at Wealth Cycles refer to as "printing money–with no end date announced. That means there is no end date. The impacts on the purchasing power of the dollar and both silver and gold will become more and more profound as the reality of what the Fed is doing sinks in. Keep on reading @ wealthcycles.com |
| Bernanke a Hero to Gold/Silver Bulls Posted: 14 Sep 2012 07:07 AM PDT
from rickackerman.com: Interesting times, for sure – and by no means accursed for those with the wisdom to have bought silver or gold investables before yesterday. Both took flight on word that Helicopter Ben has promised to do whatever it takes to bring U.S. unemployment down to more reasonable levels. If Americans knew what it will ultimately cost them to have the Fed target unemployment rather than the money supply, they'd be having second thoughts about Bernanke's bold new experiment. Because trillions of dollars worth of stimulus attempted thus far has failed to keep unemployment merely from rising, we shudder to imagine how many trillions more it might take to actually push joblessness lower. Keep on reading @ rickackerman.com |
| Norcini – A Violent Wave Of Short Covering In Gold & Silver Posted: 14 Sep 2012 07:04 AM PDT
from kingworldnews.com: Today acclaimed trader Dan Norcini told King World News that in both the gold and silver markets, "… we were seeing a violent wave of short covering." This started taking place immediately after the Fed signaled the additional QE. Just six days ago Norcini correctly predicted that gold and silver would continue this surge. The acclaimed commodity trader had this to say about what is now taking place: "Once the QE announcement came from the Fed, gold and silver immediately soared, but so did the rest of the commodity complex. Anything that was a hard asset was moving higher, along with the stocks that produce those hard assets." Keep on reading @ kingworldnews.com |
| What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil Posted: 14 Sep 2012 07:03 AM PDT
from zerohedge.com: 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. Keep on reading @ zerohedge.com |
The FOMC also said it would probably hold the federal funds rate near zero "at least through mid-2015." Since January, the Fed had said the rate was likely to stay low at least through late 2014. The Fed said "a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens."
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