Stocks, Gold, Silver, and the printing press.

[smokingman]

That kaboom last week...was a fire cracker.Someone just set off the figurative nuclear blast.

It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden | ZeroHedge
Dow Jones just hitting the tape referencing Spiegel

• German Govt: Italy Too Big For EFSF To Save - Spiegel
• German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
• German Govt: Italy Must Make Savings, Reforms To Exit Crisis - Spiegel
• Italy Debt Guarantee Could Raise Doubts Over Germany's Finances - Spiegel
• German Govt: EFSF Should Only Help Small, Mid-Size Countries - Spiegel

As a reminder, yesterday's stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between €1.5 and €3.5 trillion).
If Germany is now against this, which appears to be the case, it pretty much means, well, game over.
Add the uncerainty over the unwind of the Europe rescue "gamechanger" as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.

Monday the dollar rallies.Tuesday QE3 announced.Stocks and commodities rally like there is not going to be a tomorrow.The inflation you feel...not to worry the Federal Reserve says it does not exist.

 

[Stschil]

OBama policy advisers bailing in frustration?

Like rats from a sinking ship, administration economists and policy advisors are "Exit, Stage left" (as Snagglepuss would say)

Goolsbee throws in the towel, frustrated that Government Stimulus programs are being abandoned.

"There's no question that the administration has made the deficit a top priority for much of the year," Dean Baker, co-director for the liberal Center for Economic and Policy Research, told the Huffington Post. "That's led the administration to abandon any idea of any kind of stimulus or effort to stimulate the economy and I think that may be somewhat frustrating or at least troubling for a wide range of economists. Goolsbee may not be an exception."

Austan Goolsbee Exit: Obama Adviser Leaves Behind Frustration, Political Dysfunction

Peter Diamond, another "behavioral finance" guru, withdrawls himself from nomination to the Fed after being blocked by this pesky republicans.

In his article, Diamond bemoaned the rise of political pressures on central bank decision-making.
"We should all worry about how distorted the confirmation process has become, and how little understanding of monetary policy there is among some of those responsible for its Congressional oversight," he said.
"We need to preserve the independence of the Fed from efforts to politicize monetary policy and to limit the Fed's ability to regulate financial firms."

.

I'm glad he was blocked. Sounds like he is advocating no government input in the country's financial policies.

Peter Diamond Withdraws Fed Bid After Republican Opposition

 

[WWIIIDefender]

Apmex just put a notice on there site that says

Due to the uncertanty of the global precious metals markets apmex will not accept any further orders until the global markets reopen.

WOW I have never seen that before. you can't order any gold or silver from one of the biggest gold and silver dealers.

You have to actually try and purchase something before it pops up. Go try it out shocking.

 

[joslar15]

Apmex just put a notice on there site that says

Due to the uncertanty of the global precious metals markets apmex will not accept any further orders until the global markets reopen.

WOW I have never seen that before. you can't order any gold or silver from one of the biggest gold and silver dealers.

You have to actually try and purchase something before it pops up. Go try it out shocking.

Well, the Asian market is open now and gold hit $1696.05! $1685.75 is the current price now. Looks like the rocket is taking off!

 

[Hemingway]

To me, this is awesome news! I'm hoping a 1/4 oz of gold will get me that high-dollar Beretta trap gun I've been lusting after

And then pay my mortgage off with a few more ounces

Prepare yourselves, guys. And remember, they only made fun of Noah until the first raindrop.

 

[smokingman]

And why not? Rule 48 in effect.

Exactly What is 'Rule 48' - MarketBeat - WSJ

 

[Stschil]

And why not? Rule 48 in effect.

Exactly What is 'Rule 48' - MarketBeat - WSJ

So in order to protect the market riggers' after market trades, they can suspend trading or slow the opening to give them time to position themselves?

Or am I just being tooooooo cynical?

 

[jeremy]

So in order to protect the market riggers' after market trades, they can suspend trading or slow the opening to give them time to position themselves?

Or am I just being tooooooo cynical?

You are being way to cynical...

 

[smokingman]

8/8/11
DOW:10,809.85 -634.76 or 5.55%(6th largest single day drop in history)
Gold:$1721.80 All time new record

Sadly this is almost a non event other than the value of gold,and silver.
The FED will now easily step in with QE3.If not on Tuesday then very soon.
They are warming the printing presses up.Inflation is going to be rampant and fierce.
We can hope all those holders of our debt keep on holding it.If a run on treasuries happens,then we get to be the
first modern economy to experience hyper inflation.

 

[smokingman]

 

[joslar15]

Nikkei drops 4% following bloodbath on Wall Street. It's not yet financial SHTF, but it looks like world markets are doing a heluvalota sharting!

Nikkei falls 4 percent, below 9,000 as players flee stocks | Reuters

 

[smokingman]

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/10/Fed POMO.jpg
http://www.zerohedge.com/news/ron-paul-statement-feds-bailout-europe

http://www.marketwatch.com/story/fed-bails-out-europe-while-ecb-dithers-2011-11-30

It’s only coordinated in the sense that the Federal Reserve is printing the dollars and the European Central Bank and other central banks put the greenbacks in the virtual vaults of mangled commercial banks that are drowning in European debt. See story on Fed action.

Everything is up.
DOW:Unicorns and fairies (Up 4% as I write this)
Oil:Some where past the moon(as inventories hit 30 year highs on supply glut)
Gold:Just a barbaric relic (that central banks are buying in record amounts)

Federal Reserve minutes show QE3 will take the form of buying MBS securities from the banks.And why not buy the toxic garbage and give it to the taxpayer...bankers do not want that on there books.

May as well add to something I said almost a year ago.The FED is lending banks money at near 0% interest.The banks then give the money back to the FED to hold earning interest on it.They are making BILLIONS doing this.
http://weblogs.baltimoresun.com/business/hancock/blog/2011/11/bloomberg_banks_made_13_billio.html
http://content.usatoday.com/communi...arned-13b-from-secret-fed-loans-amid-crisis/1

Now that 13 billion was earned in 2008-2009...how much do you think they have earned year to date?

 

[smokingman]

DOW:12,045.70 up 4.24%
Oil:$110.3
Gold:1751.50

I can not wait until the FED release Friday to see what they have done to the balance sheet.

 

[RockofStrength]

DOW:12,045.70 up 4.24%
Oil:$110.3
Gold:1751.50

I can not wait until the FED release Friday to see what they have done to the balance sheet.

Wasn't just the FED. The whole world is gonna lend a little, borrow a little to shore up this debacle. Of course this ignores the fact that ease of borrowing and a lack of intelligent budgeting and spending caused this problem in the first place and continues to dig the EU (among others) into another economic crisis.

 

[rambone]

Keep up the good work with this thread.

 

[Stschil]

The Fed couldnt wait till friday either.

I can hear Wrong Again Ben now:
"Fire up them presses, boys!, We need to get a couple trillion more $$'s in the system to inflate things more. What? Naw, don't worry we're going to blame this round on Italy. The People will swallow it, they always do. Besides, what can they do to us?"

 

[smokingman]

I have created my own new inflation index.
Lets call it the Campbell's soup index.
I did some research and went back quite a bit.I will post a monthly update if I remember from now on.
All prices are for campbells condensed tomato soup.

1950:10 cents
1960:15 cents
1970:17 cents
1980:21 cents
1990:33 cents
2007:39 cents
2008:40 cents
2009:45 cents
2010:51 cents
201111-28-2011)60 cents

 

[smokingman]

Lets talk about silver.It is probably a rare opportunity to purchase some physical silver at this point.
First I would like to point out some market action.
Lets start with Spot.Sprott Physical Silver Trust
They just put out a prospectus a few days ago.To buy 1.5 BILLION in physical silver.Roughly 8% of yearly production. Sprott To Buy $1.5 Billion In Silver

Next lets talk about the CFTC.New limits are going into effect in January.
Speculative Limits - CFTC

http://www.cftclaw.com/2011/10/cftc-finalizes-position-limits/

Then this from the head of the CFTC.
The CFTC did not include any details explaining why it chose to release an update at this moment. However, in an interview with a gold advocacy website, CFTC Commissioner Bart Chilton recently expressed a strong belief that the silver market is being manipulated: “I believe that there’s been violations of the law, [t]he Commodity Exchange Act… in the silver market and I think any such violation, of course, should be prosecuted to the full extent of the law. I believe there has been repeated attempts to influence prices in the silver market. And there’s been fraudulent efforts to persuade and deviously control the price.”
http://www.cftclaw.com/2011/11/cftc-update-longstanding-silver-probe/
Now lets go over to the COMEX and see where things currently stand.
The CME notified us that we had 484 notices filed for first day notice or 2,420,000 oz of silver. To obtain what is left to be served, I take the Oi standing for December (2131) and subtract out today's deliveries (484) which leaves us with 1,647 notices or 8,235,000 oz left to be served upon.


Thus the total number of silver oz standing in this delivery month of December is as follows:


2,420,000 (oz served) + 8,235,000 (to be served upon by the end of December) = 10,655,000.



Harvey Organ's - The Daily Gold and Silver Report

Lets also look at historical inventory at COMEX.
World Of Wallstreet: COMEX Registered (Dealer) Silver Inventory Over Time: Can You Spot A Trend?
Or down 38% in the last year.

I am not offering financial advice.I am not paid anything.I am not a lawyer.
That said.It looks like a great time for the silver investor.

 

[smokingman]

the Fed's balance of power is about to shift substantially. With under 30 days left in 2011, the current roster of 4 rotating voting Fed governors is about to be swept out, only to be replaced with 4 new ones. Yet as the chart below from SocGen shows, the rotation will probably be the most dramatic in Fed history as 3 die hard Hawks (and 1 dove) are eliminated only to be replaced with a panel which is almost exclusively Dovish. In fact, at the end of the day the only modest Hawk on the Fed's voting committee will be Richmond Fed's Jeffrey Lacker (the only member to vote against the drop in FX swap line rates), and even he in the past has shown his dovish wings. Which means that for all intents and purposes, the major delay in global events, and market uncertainty, merely has to last until the end of the year when the doves take over. Furthermore to anyone who will point out that in 2012 virtually every single Hawk will be mysteriously out of the voting rotation, all we can say is: "you are correct." And if Europe or Iran or China or any other event serves as a welcome distraction for a few more weeks until the Fed once again does what it does best (and only), so be it.

When Doves Laugh: 4 Weeks Until The Quiet Coup In The Fed Gives QE3 A Green Light | ZeroHedge

January 25th we will get QE3.I see and most watching see no other reason for the huge changes taking place at the FED.QE3 from the sounds of the last FED meeting will be the purchase of 600 billion in mortgage backed securities from the banks.
I guess they need another bailout.

 

[ultraspec]

Def keep up the good work smokingman.

Whats the current price of physical silver now?