warpig Posted March 18, 2009 Report Share Posted March 18, 2009 This is wild. Link to comment Share on other sites More sharing options...
nicejim Posted March 18, 2009 Report Share Posted March 18, 2009 On a scale of 1 to 10....whats happening? I think the PPT installed a new rollercoaster. I don't know whether to buy, sell, cry, run to mummy... Fortunately I did some of that "buy the dips" stuff today. When the sales are on it's a shame not to. Link to comment Share on other sites More sharing options...
confounded Posted March 18, 2009 Report Share Posted March 18, 2009 Karl Denninger is not going to be a happy bunny! Bernanke bluffed and the bond market called it. He cannot monetize several trillion in new issue plus the entirety of the 10 and 30 year bonds out there to stop a bond market sell-off. Great post, and is how I have been reading it recently, but in a much less informed way. Link to comment Share on other sites More sharing options...
nicejim Posted March 18, 2009 Report Share Posted March 18, 2009 Is anyone here shorting it? Link to comment Share on other sites More sharing options...
qwertyuiop Posted March 18, 2009 Report Share Posted March 18, 2009 Is anyone here shorting it? GOLD or the DOW? I'm not sure id be doing either given today. Link to comment Share on other sites More sharing options...
FWIW Posted March 18, 2009 Report Share Posted March 18, 2009 WTF? OMG! I don't know whether to laugh or cry! Someone tell me the PPT ran out of ammo! Link to comment Share on other sites More sharing options...
tbatst Posted March 18, 2009 Report Share Posted March 18, 2009 On a scale of 1 to 10....whats happening? http://news.bbc.co.uk/1/hi/business/7951493.stm So the optimists think this will dig the economy out of a recession so up go share prices. The pessimists on the other hand think this is the start of a Zimbabwe style meltdown so up goes the gold price. Talk about decoupling! Link to comment Share on other sites More sharing options...
HPCsoYESTERDAY Posted March 18, 2009 Report Share Posted March 18, 2009 what a bizzare day makes you think about the selling beforehand doesn't it Link to comment Share on other sites More sharing options...
huntergatherer Posted March 18, 2009 Report Share Posted March 18, 2009 Did the train just leave the station leaving the bears on the platform? Link to comment Share on other sites More sharing options...
FWIW Posted March 18, 2009 Report Share Posted March 18, 2009 Got an explanation... ... ... Link to comment Share on other sites More sharing options...
Steve Netwriter Posted March 18, 2009 Report Share Posted March 18, 2009 Warning. Already out of date on the POG :lol: Link to comment Share on other sites More sharing options...
radge Posted March 18, 2009 Report Share Posted March 18, 2009 Across the Curve A daily bond market chronicle TIPS March 18th, 2009 3:43 pm The breakeven spreads on 10 year and 30 year TIPS are exploding. That means they are predicting more inflation down the road. The breakeven spreads generally move glacially. In both the 30 year sector and the 10 year sector they have moved about 11 basis points today. That movement would be in line with the absolute cratering of the greenback as well as the huge move(upward) in price of gold. Link to comment Share on other sites More sharing options...
malvern hills Posted March 18, 2009 Report Share Posted March 18, 2009 Karl Denninger is not going to be a happy bunny! Caution On Quantitative Easing (QE) Be warned Ben.... The BOE executed their first "QE" operation today. The "bid to cover" was an astonishing 7.35. This means that for every bond purchased 7.35 were tendered, or made available by willing sellers. Back in January I posted a Ticker in which I made clear what was likely to happen if Bernanke actually attempted to do (as opposed to threatening) QE: Bernanke bluffed and the bond market called it. He cannot monetize several trillion in new issue plus the entirety of the 10 and 30 year bonds out there to stop a bond market sell-off. In addition, the market no longer believes him, as evidenced by today's price action. A serious bond-market sell-off will ramp the cost of all credit, including mortgages and commercial loans. If he tries to monetize the result will be current bondholders tendering into his buying, forcing him to essentially "consume" the entire float. That stunt will cause the dollar to implode and we wind up exactly like Iceland. Overnight. Ben knows this; ergo, he is screaming like a petulant child while the market laughs at him just like the market forced Paulson to do what he said he wouldn't with Fannie and Freddie. Bernanke had better shut the hell up before he precipitates a bond market dislocation; traders can and will try to force him to make good on the threat. Ding. The BOE now has seen exactly what happens when you promise as a government to overpay for something - everyone hits your bid immediately! This is a form of crack that the government cannot afford to loose into the market - as soon as the buying pressure is removed rates will start to rise again, forcing yet another purchase. Ultimately The Fed winds up owning all of its own government's bonds, having destroyed the private capital market for sovereign debt (just as it has done for other securitized debt by threatening to overpay for those issues!) The difference is that if this happens for sovereign debt then deficit spending becomes impossible on an instant basis; this would in turn force a nearly 75% contraction of government spending. The outcome of this event would be the immediate destruction of Social Security, Medicare, half the military budget and half of all other government programs. PS: Bernanke knows this, which is why it hasn't happened yet. Let's hope he continues to remember it, because the destruction of our government is very, very un-funny, and this would likely precipiate exactly that in a "vast and fast" form. Please for the dumb among us ie. me ,could you explain this? Bernanke 'threatens' to monetize the bonds and announced to do so today-why is this threatening to anyone? Is it because doing so will signal the end game of bond price collapse? Link to comment Share on other sites More sharing options...
sideshow Posted March 18, 2009 Report Share Posted March 18, 2009 Personally, I've been buying in dollars, despite a big stash of sterling. It looks like the better move on today's announcement. Grabbed another 10 ounces from Kitco and the spot price is already above what I paid for delivery. Link to comment Share on other sites More sharing options...
Errol Posted March 18, 2009 Report Share Posted March 18, 2009 Hopefully lots of people attempting to trade gold today will have learned a valuable lesson. Some will have been wiped out. Link to comment Share on other sites More sharing options...
Steve Netwriter Posted March 18, 2009 Report Share Posted March 18, 2009 Lets see if I can make sense of this. OK, most obvious, Gold & Silver are rising rapidly. The Euro is rising against the US$. The Euro is rising against the JPY. The Euro is rising against the GBP. So the Euro is rising. The JPY is falling against: NZ$, EUR, but rising against: US$. Fairly stable against GBP. The US$ is falling against JPY, EUR, GBP (and even NZ$). So the US$ is falling. So today, so far, GoldUS$ just went up 945/890 = 6%. I guess that's what happens when you print lots of money. Fed pumps $1.2tn into US economy http://news.bbc.co.uk/2/hi/business/7951493.stm The US Federal Reserve says it will buy almost $1.2 trillion (£843bn) worth of debt to help boost lending and promote economic recovery. It said it would start buying long-term government debt and expand purchases of mortgage-related debt. The size of the move surprised investors, causing the Dow Jones stock index to jump almost 200 points. The Bank of England has already begun buying government debt to expand money supply - known as quantitative easing. Link to comment Share on other sites More sharing options...
ologhai Posted March 18, 2009 Report Share Posted March 18, 2009 Hopefully lots of people attempting to trade gold today will have learned a valuable lesson. Some will have been wiped out. And some won't. Link to comment Share on other sites More sharing options...
nicejim Posted March 18, 2009 Report Share Posted March 18, 2009 Thanks for the summary Steve, I usually get confused trying to work out what's going up on the currency charts. Also, gold is going up against silver. The ratio is a smidge over 73, from 71ish recently. Link to comment Share on other sites More sharing options...
tinecu Posted March 18, 2009 Report Share Posted March 18, 2009 Lets see if I can make sense of this. OK, most obvious, Gold & Silver are rising rapidly. The Euro is rising against the US$. The Euro is rising against the JPY. The Euro is rising against the GBP. So the Euro is rising. The JPY is falling against: NZ$, EUR, but rising against: US$. Fairly stable against GBP. The US$ is falling against JPY, EUR, GBP (and even NZ$). So the US$ is falling. So today, so far, GoldUS$ just went up 945/890 = 6%. I guess that's what happens when you print lots of money. Fed pumps $1.2tn into US economy http://news.bbc.co.uk/2/hi/business/7951493.stm What a crazy day. I still haven't got used to this volatility. Maybe never will. Link to comment Share on other sites More sharing options...
sideshow Posted March 18, 2009 Report Share Posted March 18, 2009 I'm slightly concerned I've been a bit hasty on the trigger. I also bought ABX and PAAS on the news. Up nicely on them. And SLV a little later - that was slower to take off. It wouldn't surprise me to see some organized selling by central banks to try and suppress things. I think there must have been some of this going in this announcement. Link to comment Share on other sites More sharing options...
qwertyuiop Posted March 18, 2009 Report Share Posted March 18, 2009 Time to take out a mortgage - and have the money / gold on the sidelines? Link to comment Share on other sites More sharing options...
confounded Posted March 18, 2009 Report Share Posted March 18, 2009 I guess that's what happens when you print lots of money. Fed pumps $1.2tn into US economy http://news.bbc.co.uk/2/hi/business/7951493.stm Will any of this limitless printing be used to suppress gold? That is what is always nagging at the back of my mind, I have never disputed the role gold should play and bought into that a while ago (although not earlier enough to accumulate at the lows). Link to comment Share on other sites More sharing options...
tinecu Posted March 18, 2009 Report Share Posted March 18, 2009 Time to take out a mortgage - and have the money / gold on the sidelines? Cheap freshly printed notes al la GB below the rate of Gold appreciation....ah but would involve owning a house! Link to comment Share on other sites More sharing options...
Mr Pipples Posted March 18, 2009 Report Share Posted March 18, 2009 From http://www.jsmineset.com/ Hourly Action In Gold As Of 3PM CDT From Trader Dan Posted: Mar 18 2009 By: Dan Norcini Post Edited: March 18, 2009 at 5:16 pm Filed under: Trader Dan Norcini Dear Friends, The events that have transpired since the writing of my midday commentary are so stupendous that I felt a few comments were in order. The news that the Fed would be buying $300 billion of long-dated Treasuries sent the bond market into what can only be called a frenzy. In all the years I have been trading, I have never seen anything quite like it. We are talking about a move that carried from 123^25 to 132^18. The drop in yield was nothing short of breathtaking. The effect on the yield curve was to flatten it considerably. If the idea was to give the banks some ability to borrow short and lend long and profit from the recently steepening curve, that just went up in smoke but apparently the thinking is that the Fed can artificially force down long term interest rates and this will have a beneficial effect on the comatose housing market. Hey you morons – why not just hand out money directly to every taxpaying citizen in the country? After all, you can just print more of it whenever we need it… God help us all… The effect on both the Dollar and the gold price was instantaneous. The Dollar collapsed as well it should have while gold shot up nearly $60 of its worst levels of the session. Folks – it is my sincere conviction that this current administration is absolutely CLUELESS in how to solve this problem and are flailing in the wind. They are throwing anything that they can think of at a wall and hoping that something will stick. These theoreticians and academics, none of whom can probably even balance their own damn checkbooks, are now attempting to run the monetary system. In the process they have just destroyed our Dollar and make no mistake about this – they are now monetizing debt – which is another way of saying they are printing money out of thin air. Is it any wonder that the Dollar cratered and gold shot up so sharply? As a long term friend of gold I am of course pleased to see gold moving higher but as an American citizen who loves this nation, I am both sickened and angered at the amateur hour that has taken over in Washington D.C. While the Fed burns down the Dollar, the same dipsticks who helped create this mess are worried about $165 million in bonuses when they are spending over $3 trillion in debt that my children will be saddled with. And to see the chief ringleaders, Barney Frank and Chris Dodd, feigning outrage and attempting to hop on the populist bandwagon to distract attention away from the gargantuan sum of indebtedness that they have just chained to the next generation makes my blood boil. Wake up America – these damn fools are destroying what is left of our Constitutional republic. Obviously the technical action in gold completely erases that which transpired before the Fed announcement. Now we have to see if gold can sustain a footing above the $930 level. If it can, and it must if it is going to have a chance at trending higher, then it has a very good shot at $960. That level is what will need to be taken out in order to challenge $1000. The mining shares as evidenced by the HUI and the XAU both launched technical breakouts smashing above the 40, 50 and 10 day moving averages and taking out horizontal resistance levels in the process. The HUI needs to take out 320-323 to set up a trending move. Please see the gold chart below for the levels… Link to comment Share on other sites More sharing options...
Mr Pipples Posted March 18, 2009 Report Share Posted March 18, 2009 A thought... China ain't gonna be happy. Link to comment Share on other sites More sharing options...
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