Gold: I smell a trap

[cypherdoc]

$TRIN over 5   

[1714484431]

1714484431

[1714484431]

1714484431

[1714484431]

1714484431

[1714484431]

1714484431

[cypherdoc]

USD up, everything else down.  where have we heard this before?

[cypherdoc]

expect a gold attack tonite.

[kjj]

I'm hoping silver hits $27.34 soon.  I've had my eye on a particular purchase for a while now, and now that it is on sale for 25% off (not really, I know, but still), I'm just waiting for a couple bucks lower to hit the next big round number.

[cypherdoc]

I'm hoping silver hits $27.34 soon.  I've had my eye on a particular purchase for a while now, and now that it is on sale for 25% off (not really, I know, but still), I'm just waiting for a couple bucks lower to hit the next big round number.

lets see; 29.84/49.82=.5989  OR  41% off? 

[cypherdoc]

http://gata.org/node/10500

the rumor mill is flowing.  too late.

[cypherdoc]

http://www.bloomberg.com/news/2011-09-28/euro-crisis-makes-fed-lender-of-only-resort-as-banks-chase-dollar-funding.html

ho hum.

[kjj]

I'm hoping silver hits $27.34 soon.  I've had my eye on a particular purchase for a while now, and now that it is on sale for 25% off (not really, I know, but still), I'm just waiting for a couple bucks lower to hit the next big round number.

lets see; 29.84/49.82=.5989  OR  41% off? 

It only makes sense to take the absolute peak as the baseline for calculating the discount if you either made the decision to buy at that moment, or if that was when the opportunity first presented.  Neither is correct, but silver has been hovering near $40/oz for several months now, and it is down roughly 25% from there to the vicinity of $30/oz.

[miscreanity]

http://www.bloomberg.com/news/2011-09-28/euro-crisis-makes-fed-lender-of-only-resort-as-banks-chase-dollar-funding.html

ho hum.

Everything is in place to flood dollars through the world. What's needed this time? Something like $2-3 trillion? More?

The solution is not possible with the proceeds from current Fed asset holdings. That flow can barely keep the US itself going for a little while longer, let alone Europe. So either release the bank reserves which is as inflationary as printing money (more so because the banks will eventually have to be recapitalized yet again), or just print more using a base built from bank lending (circulating bank reserves instead of depleting them in one shot) - essentially the Repo market method.

[cypherdoc]

http://www.bloomberg.com/news/2011-09-28/euro-crisis-makes-fed-lender-of-only-resort-as-banks-chase-dollar-funding.html

ho hum.

Everything is in place to flood dollars through the world. What's needed this time? Something like $2-3 trillion? More?

The solution is not possible with the proceeds from current Fed asset holdings. That flow can barely keep the US itself going for a little while longer, let alone Europe. So either release the bank reserves which is as inflationary as printing money (more so because the banks will eventually have to be recapitalized yet again), or just print more using a base built from bank lending (circulating bank reserves instead of depleting them in one shot) - essentially the Repo market method.

the banks can but won't release the reserves b/c of the interest being paid on it by the Fed, they NEED those reserves to shore up losses, and they don't see any good credit risks out there.

the Fed won't print up anymore USD's b/c of fear of hyperinflation, the gold price, further rioting from inflation (like in Middle East), destruction of USD, self preservation, and pushing on a string.  

same ol' arguments that are proving true.

[miscreanity]

... the Repo market method.

the banks can but won't release the reserves b/c of the interest being paid on it by the Fed, they NEED those reserves to shore up losses, and they don't see any good credit risks out there.

the Fed won't print up anymore USD's b/c of fear of HT, the gold price, further rioting from inflation (like in Middle East), destruction of USD, self preservation, and pushing on a string. 

same ol' arguments that are proving true.

The interest paid by the Fed can't be lowered or it would encourage release of reserves. Repo offers will offer marginally better return and are coming from the same guaranteed backer as the interest on reserves. That will allow for a rotating flow of credit from banks to Fed; the Fed gets access to massive amounts of funding that has heretofore been held in a bubble, while the banks continue to garner risk-free return.

At every level, leverage is increasing and will provide necessary liquidity from the existing pool of funds; the debt from debt we discussed. It isn't a direct QE in the manner we've become familiar with, but a magnification of the amount already out - it just hasn't hit the real economy yet. When the problem grows further and the existing reserves have been leveraged to the hilt, more conventional QE will have to be accepted as it will be the only alternative to the final crushing deflation we're still waiting for.

It's all like an uncontrolled thermonuclear chain reaction.

[cypherdoc]

http://www.zerohedge.com/news/prominent-deflationist-schilling-sees-deflation-china-hard-landing-and-800-sp

i subscribe to his newsletter.

[cypherdoc]

4 yr daily charts.
what is Dr. Copper and FCX telling you?  inflation?   i think not:

[cypherdoc]

Repo offers will offer marginally better return and are coming from the same guaranteed backer as the interest on reserves. That will allow for a rotating flow of credit from banks to Fed; the Fed gets access to massive amounts of funding that has heretofore been held in a bubble, while the banks continue to garner risk-free return.

At every level, leverage is increasing and will provide necessary liquidity from the existing pool of funds; the debt from debt we discussed. It isn't a direct QE in the manner we've become familiar with, but a magnification of the amount already out - it just hasn't hit the real economy yet. When the problem grows further and the existing reserves have been leveraged to the hilt, more conventional QE will have to be accepted as it will be the only alternative to the final crushing deflation we're still waiting for.

It's all like an uncontrolled thermonuclear chain reaction.

you inflationists keep coming up with the most innovative ways of further destroying the USD.  problem is the Fed hasn't, they aren't, and they won't do the things you're suggesting for all the reasons i've stated above.

whats a gold bugs worst nightmare?  SOUND MONEY!

[cypherdoc]

do you have any idea what the psychology behind a wave 3 down is?  its this:

"OMFG!  we really do have a problem!  we are royally screwed.... sell, sell, sell!"

[miscreanity]

Price charts showing textbook representations of action play to emotions. Numbers behind the scenes remain consistently bullish for precious metals.

It's all an illusion:
Plunge In Price Of Gold All Electronic

Investors starting to wise up:
In "dash for cash", gold ETF investors hold on

Behind the scenes:
Gold Futures Advance As Biggest 3-Day Decline Since 1983 Spurs Purchases

The Fed's roadmap, with GDP numbers due tomorrow:
Bernanke: Fed Ready To Do More If Economy Worsens Too Much

do you have any idea what the psychology behind a wave 3 down is?  its this:

"OMFG!  we really do have a problem!  we are royally screwed so sell, sell, sell!"

An arbitrary perspective of price action doesn't dictate fundamentals. Painted charts only fool the little players. Selling has been done into the waiting arms of entities that weren't squeezed by intervention.

Deflation/Inflation is no different from Bear/Bull. Fundamentals determine which is dominant overall. Gyrations within the trend are normal - nothing goes in a straight line. There are always multiple currents affecting movement.

I'm still waiting for my fills.

You'd be correct under normal circumstances, trading in a legitimate market environment geared toward price discovery instead of perception management. This is a non-linear aspect.

Exactly.

The most difficult hurdle to get over is one's own conditioning, belief, in the system.

The cold hard fact is this: JPM-GS, the Comex and the Fed function as one entity and they have unlimited access to FRNs (which means they control the markets). The CFTC is a lap dog. Congress is a purchased hood ornament and Obama is a dupe.

The Fed has, effectively, been the central bank of the world. They want that sweet deal cemented. It is the lynchpin of control.

Silver is the achilles heel.

[cypherdoc]

I'm still waiting for my fills.

you got your call fills at $1800, your stock fills at $1600 now underwater, your USD/CHF short fill weeks ago, and now you must have got the rest of your gold fills now that its dipped down to $1588.  good luck.

[cypherdoc]

how ugly is this.  pm stocks getting destroyed again.  gold up slightly but not for long.  wave 3 down is here.

[cypherdoc]

significantly, retailers and momo stocks are getting obliterated today.  the last sectors to break.  look out below.  its over boys.

[hugolp]

how ugly is this.  pm stocks getting destroyed again.  gold up slightly but not for long.  wave 3 down is here.

Honestly, if gold does not correct more, with the one that is coming down right now, its a very bullish sign. Gold is still up a lot from a year ago. Its normal to have a correction.

Also, I have not seen mentioned tha the gold and silver margins were rised 21% (http://www.tradingnrg.com/gold-silver-prices-cme-margin-hike-by-21-september-24-2011/) forcing a lot of people to recapitalize or remove some positions. 21% is  a lot! Its very "curious" that they have choosen to do so just as the next deflationary mini-crash was starting. With the know history of the USA gov to try to keep the price of gold (and silver) down to help the survival of the dollar, it is "like" if they want to create a psicological effect to try to beat down gold and silver prices.

Mid and long term Im bullish on gold.