Gold: I smell a trap

[hugolp]

notice how this whole new EFSF proposal is based on leveraging up 8:1.  that means more debt piled on top of existing debt.  if they try this it will undoubtedly explode in their faces and we all know what happens when the debt goes boom.

The EFSF debt can be used at the ECB discount window. Money printing, not real debt.

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[cypherdoc]

notice how this whole new EFSF proposal is based on leveraging up 8:1.  that means more debt piled on top of existing debt.  if they try this it will undoubtedly explode in their faces and we all know what happens when the debt goes boom.

The EFSF debt can be used at the ECB discount window. Money printing, not real debt.

do you have the details of how this will be structured?

[cypherdoc]

notice how this whole new EFSF proposal is based on leveraging up 8:1.  that means more debt piled on top of existing debt.  if they try this it will undoubtedly explode in their faces and we all know what happens when the debt goes boom.

The EFSF debt can be used at the ECB discount window. Money printing, not real debt.

it won't work.  remember MLEC Super SIV?

http://www.zerohedge.com/article/mlec-sheeps-clothing-latest-greek-bailout-proposal-picks-where-super-siv-failed

edit:  this is just another shell bullshit game to dump the toxic sovereign debt onto the public.  when is the insanity ever going to stop?

[cypherdoc]

notice how this whole new EFSF proposal is based on leveraging up 8:1.  that means more debt piled on top of existing debt.  if they try this it will undoubtedly explode in their faces and we all know what happens when the debt goes boom.

The EFSF debt can be used at the ECB discount window. Money printing, not real debt.

i don't think it represents money printing b/c the initial money has to come from investors:

"The special purpose vehicle would issue bonds from investors and use the proceeds to purchase sovereign debt of distressed European states."

http://www.cnbc.com/id/44673564

[netrin]

http://www.youtube.com/watch?v=aC19fEqR5bA

[MatthewLM]

USD is contradictory to USTs because to keep the UST bubble going the USD has to be destroyed.

And these next bailouts will no doubt be funded through inflation.

[miscreanity]

@misreality:  you're buying right here, aren't you?  or is it puts you're buying?

You bet. Calls on GDX, GDXJ, NEM, RGLD, SLW. Some GLD for good measure. The puts (not very many yet) are on TLT.

Some quality junior and dividend-paying major shares, more TGLDX and of course - bullion. What can I say, I'm a metals man. My forays into ag, energy and tech are tiny by comparison.

This punch down is impressive. I wasn't sure there'd be enough clout to put all of the upward pressure off until next month, but they were able to squeeze another couple of weeks out of the same ol' tactics as those used in 2008 - European-style. That makes October (a major futures delivery month for silver) even more volatile than it would've been. Unlimited Monopoly money helps, but none of it matters if the separation of paper & physical finally hits.

My remaining options haven't dropped much from the low $1,700s where the last big round of accumulation was made, and there's plenty of time for the next set of volatility. There'll be a few big opportunities coming up before year-end.

i don't think it represents money printing b/c the initial money has to come from investors:

It's a sad fact. So the private investors get saddled with junk - duped. If funds they provide are used to recapitalize and provide liquidity to the institutions that bound themselves up in the first place, it's a guarantee that the same mess will happen all over again.

The banks have to create destructive financial instruments just to survive. I don't expect they'll act responsibly while drowning in panic. Investor funds will be levered to the nth-degree in order for financials to keep their heads above water, creating an even bigger problem than before and staving off that final deflation a little bit longer... again.

How about this: instead of arguing back and forth over whether gold will continue to rise over the next few years, you call the interim tops and I'll call the bottoms. Right now, I see gold as a buy anywhere under $1,650. From here on up, you call the major turning point to head back down.

http://www.youtube.com/watch?v=aC19fEqR5bA

Ah, the short-term view of wherever money can be made... good advice on protecting what you have, though.

[hugolp]

notice how this whole new EFSF proposal is based on leveraging up 8:1.  that means more debt piled on top of existing debt.  if they try this it will undoubtedly explode in their faces and we all know what happens when the debt goes boom.

The EFSF debt can be used at the ECB discount window. Money printing, not real debt.

do you have the details of how this will be structured?

it won't work.  remember MLEC Super SIV?

http://www.zerohedge.com/article/mlec-sheeps-clothing-latest-greek-bailout-proposal-picks-where-super-siv-failed

edit:  this is just another shell bullshit game to dump the toxic sovereign debt onto the public.  when is the insanity ever going to stop?

i don't think it represents money printing b/c the initial money has to come from investors:

"The special purpose vehicle would issue bonds from investors and use the proceeds to purchase sovereign debt of distressed European states."

http://www.cnbc.com/id/44673564

Ok, so here is how it works. The EFSF debt is offering interest well over 2% in the last auction. The discount window of the ECB costs 1.5% now. If you are a bank in the eurozone (even if you dont have the funds) you can buy the EFSF debt and then place it over the ECB to get the necesary ratio of funds, while getting the difference between the interest rates. And the EFSF is backed by all the EU members including Germany, so the risk is very low. Yes, the money can come from investors, but if it doesnt it can come from the printing machine of the ECB, thats why they have had no problems raising money for the EFSF: backed by Germany and with free money from ECB arbitrage. Whats not to like (if you are a bank)?

Also, you have to consider that the EFSF is only temporary. The real objective of the EU burocrats is the fiscal union, them having the fiscal power (taxation and emission of debt) and basically stripping the last important power that the governments of the EU members still have. The EFSF is only a way to introduce the eurobond in a stealth way (the EFSF lends money to EU countries backed by all the rest, so basically it is a eurobond with limited functionality). But as I said the EFSF is only temporary and the next step is the ESM (European Stability Mechanism) which implies traspassing the fiscal powers to the EU burocrats, because it allows them to emit debt backed by all the governments without the need of consent of those governments. After that they are only missing direct control over taxation. The ESM is scheduled to be aproved in 2013. I suppose the EFSF debt will be transformed into the new system.

The ESM has been accepted by the PIIGS without too much complain (for obvious reasons, who does not want to be rescued?) but its facing more rejection in the central european countries (obvious as well, they are the ones paying). In Germany the FDP (classic liberals/libertarians), that is ruling with Merkel, is supposed to vote against. Merkel has said his party, the UCD, will vote in favour, but several members of the party has already announced that they will vote against. They have proposed an alternative system where the debt emission has to be approved by the governments. The EU burocrats wont accept that obviously because they want to have the control, thats the objective of the move. So Merkel has gone to the left wing parties (the social democrats and the greens) that have said that will vote in favour. It seems it has votes to pass.

Unless people really oppose it, the EU is going to use the crisis to get the fiscal union (as Soros has been promoting f.e.) and they will inflate away the debt. Its very telling that Merkel wanted Weber from the Bundesbank to be Trichet successor, while France wanted the more inflationist Mario Draghi (italian, ex-Goldman Sachs). Germany has (had?) the control of the ECB so everybody assumed Weber was going to be then next ECB chairman. Until he resigned surprising everybody arguing that his hawky (anti-inflationary) monetary views did not have support in the EU. Finally Merkel has accepted Draghi.

[MatthewLM]

I would just like to note that the exchanges' spot price of gold has not fallen through the lower trend channel line. Good to look at the charts on the longer-term perspective. It went over the channel for a short while but is back within it.

[cypherdoc]

I would just like to note that the exchanges' spot price of gold has not fallen through the lower trend channel line. Good to look at the charts on the longer-term perspective. It went over the channel for a short while but is back within it.

what would you like to note for silver?

[Iseree22]

Gold is a bubble. It has little economic value, and no one is going to carry around gold to do economic exchange.

Personally, the sooner it pops the better.

[cypherdoc]

Gold is a bubble. It has little economic value, and no one is going to carry around gold to do economic exchange.

Personally, the sooner it pops the better.

Thank You.

FYI, at Fidelity there are NO AVAILABLE SHARES TO SHORT of GG, SLW, PAAS, SSRI, GDXJ, RGLD, SLV.  all sold to miscreanity.

[cypherdoc]

let me add ABX to that list.

[cypherdoc]

http://www.bloomberg.com/apps/quote?ticker=.LOIS3:IND

Libor-OIS up 8% today and straight up last month or so.  Liquidity has dried up.

[cypherdoc]

TED spread straight up since August.

http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

[BitcoinRedLight]

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.

[miscreanity]

Gold is a bubble. It has little economic value, and no one is going to carry around gold to do economic exchange.

Personally, the sooner it pops the better.

Your participation in the discussion is appreciated, but it would be better to contribute hard data instead of opinion.

FYI, at Fidelity there are NO AVAILABLE SHARES TO SHORT of GG, SLW, PAAS, SSRI, GDXJ, RGLD, SLV.  all sold to miscreanity.

SSRI wasn't me, but thanks for the rest. 

Now for one more dip below $1,600 to deploy the last of the orders that didn't get filled...

[cypherdoc]

this has to have you concerned.  that green reversal wick at the far right of the chart is perfectly timed for the next cycle UP in the $DXY.

[cypherdoc]

Now for one more dip below $1,600 to deploy the last of the orders that didn't get filled...

$1600 comin up fast.  get your buy button ready 

[cypherdoc]

TICK reading just hit -1415