Bernanke spoke, gold and silver fell--the reason?
RevDrBlimber
Posts: 391
What surprised me about gold and silver falling so suddenly on the last day of February was it was the first time in memory that this had happened, every other time the FED chairman had spoken, the metals rose. Here is what the Sovereign Society recently said:
"And on the last day of February, just a week and a half ago, it happened again...
"The action in the precious metals markets again reeked of Washington and perhaps Brussels.
"The day began with gold and silver moving higher.
"Gold traded up to $1,792.30 an ounce, while silver traded up to $37.58 an ounce, running right through its $36 resistance level. At the same time, gold was fast approaching its key psychological level of $1,800.
"It just so happened that on the morning of February 29, Fed chairman Ben Bernanke was speaking before Congress. Meanwhile, the ECB was printing, injecting or simply giving $803 billion to more than 800 banks as part of its long-term financing operation amid the Greek debacle.
"Over the past few years, every time Uncle Ben has flapped his lips publically, the prices of precious metals have exploded higher. This time, as Bernanke spoke and the ECB printed euros, something different happened. A Huge Sell Order in Gold
"Some close friends who trade gold in the futures pits on Wall Street told me that as Bernanke spoke a huge order came into the gold futures pit.
"That order, given by financial giant JP Morgan, was to sell 15,000 contracts of the yellow metal, that's 1.5 million ounces of gold. And at $1,790 an ounce, that is $2.7 billion worth of the precious metal. That is a huge order that took less than one minute to execute.
"Now I've been trading precious metals for more than 30 years. I have executed some of the biggest orders in the gold and silver futures pits that the market has ever seen during that time.
"And, I have seen other market players execute huge orders. Finesse is often an important factor in executing a large order - and I can tell you there was not a hint of finesse used to execute that massive order on February 29."
Andy Hecht, "The Sovereign Investor"
"And on the last day of February, just a week and a half ago, it happened again...
"The action in the precious metals markets again reeked of Washington and perhaps Brussels.
"The day began with gold and silver moving higher.
"Gold traded up to $1,792.30 an ounce, while silver traded up to $37.58 an ounce, running right through its $36 resistance level. At the same time, gold was fast approaching its key psychological level of $1,800.
"It just so happened that on the morning of February 29, Fed chairman Ben Bernanke was speaking before Congress. Meanwhile, the ECB was printing, injecting or simply giving $803 billion to more than 800 banks as part of its long-term financing operation amid the Greek debacle.
"Over the past few years, every time Uncle Ben has flapped his lips publically, the prices of precious metals have exploded higher. This time, as Bernanke spoke and the ECB printed euros, something different happened. A Huge Sell Order in Gold
"Some close friends who trade gold in the futures pits on Wall Street told me that as Bernanke spoke a huge order came into the gold futures pit.
"That order, given by financial giant JP Morgan, was to sell 15,000 contracts of the yellow metal, that's 1.5 million ounces of gold. And at $1,790 an ounce, that is $2.7 billion worth of the precious metal. That is a huge order that took less than one minute to execute.
"Now I've been trading precious metals for more than 30 years. I have executed some of the biggest orders in the gold and silver futures pits that the market has ever seen during that time.
"And, I have seen other market players execute huge orders. Finesse is often an important factor in executing a large order - and I can tell you there was not a hint of finesse used to execute that massive order on February 29."
Andy Hecht, "The Sovereign Investor"
0
Comments
I knew it would happen.
Hulbert recently debunked the Bernanke-speaks-gold-moves-higher strategy. His conclusion with lots of data points was that it was basically a coin flip as to up or down. That gold folks only see one side is perhaps another classic case of only seeing what a person wants to see. A search of Hulbert Fed Gold turns up the article and is probably the easiest way to find the article. The forum filters won't allow the direct link. The link is below with the extra space between the two offending words.
http://articles.market watch.com/2012-02-10/commentary/31067293_1_gold-market-gold-rise-time-gold
Manipulation works both ways. It is tiresome to hear the gold folks only play the manipulation card when the price moves lower. A hedge fund confessed to manipulating gold higher during the run to 1900. I believe there is a good chance that the silver run to $49 was likely also fueled by bull manipulators.
Think about it - WHY is the FED stress testing the banks?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Comment of the year!!!!!!
Knowledge is the enemy of fear
As China and Japan step back from buying US debt, who is supposedly buying it?
Don't think for a minute that significant manipulation isn't happening. Just because gold isn't targeted on one day? They didn't need to manipulate gold yesterday. Greece has been solved, donch'a know?
I knew it would happen.
<< <i>Someone tell me with a straight face that the bond market isn't being manipulated by the Fed in order to keep rates low and to keep the dollar from crashing.
As China and Japan step back from buying US debt, who is supposedly buying it?
Don't think for a minute that significant manipulation isn't happening. Just because gold isn't targeted on one day? They didn't need to manipulate gold yesterday. Greece has been solved, donch'a know? >>
Of course they are manipulating the bond markets as it is the only way to keep things rolling along.
When will the dollar fall out of favor??? I'm sure when it does happen many will find out to late but it could take much longer than any of us could imagine as the fed has the resources at their disposal to keep it chugging along.
<< <i>It is tiresome to hear the gold folks only play the manipulation card when the price moves lower
Comment of the year!!!!!! >>
Especially when fundamentals keep screaming gold should be higher.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
<< <i>
<< <i>It is tiresome to hear the gold folks only play the manipulation card when the price moves lower
Comment of the year!!!!!! >>
Especially when fundamentals keep screaming gold should be higher.
I think that is a very much debatable topic, on many levels.
Someone tell me with a straight face that the bond market isn't being manipulated by the Fed in order to keep rates low and to keep the dollar from crashing
I will tell you. Your premise is wrong. The FED is trying to keep rates low to keep the dollar from going to the moon. Todays activity is an example. The FED and all central banks want to keep the dollar low to promote inflation. But as I've said many times, the market is bigger than all the central banks and will always prevail. The CB's may win a few battles, but the market always wins the war.
As China and Japan step back from buying US debt, who is supposedly buying it?
Why, why why, do people keep saying this? There is absolutely no evidence. Almost every country owns more US debt than they did a year ago.
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I will tell you. Your premise is wrong. The FED is trying to keep rates low to keep the dollar from going to the moon. Todays activity is an example. The FED and all central banks want to keep the dollar low to promote inflation. But as I've said many times, the market is bigger than all the central banks and will always prevail. The CB's may win a few battles, but the market always wins the war.
My mistake, the Fed is manipulating the market to keep rates low, so that the economy doesn't crash. Santelli was talking about the quick bump in 10yr T-Bill Rates just today, with the implication that the economy is strong enough to take a rate increase.
When I said, "to keep the dollar from crashing", I mis-spoke. The dollar *will* be crashing because of the liquidity pumping needed to keep rates low. We will have to see what happens as today's quick bump in rates work their way into the system. I don't know if they can get away with it. Inflation and unemployment numbers are still jimmied to suit the election process, and there is a big one coming up.
We haven't yet seen the effect of baby-boomer liquidations to fund their retirements, and the impacts of unfunded liabilities on government spending programs. The funding is going to come from somewhere, is it not? So, where's it coming from?
Kudlow is quite optimistic about the economy now, in spite of his acknowledgement that the uncertainty of the tax situation and hostility towards business by this administration represents a major drag on business investing.
These guys all think that there is a huge pool of pent-up investment money still sitting on the sidelines. They are playing "Ding-Dong the Witch is Dead" from the rafters because the European Debt Crisis is over. Nobody's talking about Iran today. China's economy may, or may not be on track for 7% growth. With China, who ever really knows?
One thing I have to thank you for Cohodk, is that I've been saving up cash and not spending it on those dreary precious metals. If you read a little deeper in Sinclair's comments about gold volatility, he does compare it to the time before the 2008 meltdown. I've decided not to play chicken with this election. Too much isn't right.
I knew it would happen.
Knowledge is the enemy of fear
The debt auction went relatively well today, only 29% bought by "other" instead of the 31% in the last auction. Things really ARE looking better.
Things just aren't what they seem, in my ever-so-humble view.
I knew it would happen.
<< <i>Nothing trumps liquidity. >>
liquidity, like PMs, is only successful when played correctly. A dollar held since 1913 is worth less than five cents today. No investments (except diamonds
FOMC manipulates markets to encourage personal spending/debt and devalue government spending/debt. Each soverign central bank is currently fighting to keep its currency at the weak end so as not to hamper its export efforts.
The lid can be kept on the eurozone crisis for only so long. Greece is but the first domino. As more fall they will fall harder.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>Nothing trumps liquidity. >>
liquidity, like PMs, is only successful when played correctly. A dollar held since 1913 is worth less than five cents today. No investments (except diamonds
FOMC manipulates markets to encourage personal spending/debt and devalue government spending/debt. Each soverign central bank is currently fighting to keep its currency at the weak end so as not to hamper its export efforts.
The lid can be kept on the eurozone crisis for only so long. Greece is but the first domino. As more fall they will fall harder. >>
Gonna be lots of dispair in a few months.
Knowledge is the enemy of fear
... and people keep saying This. Who the hell is trying to spend a dollar today that they earned in 1913 and held since?
Liberty: Parent of Science & Industry
<< <i> A dollar held since 1913 is worth less than five cents today
... and people keep saying This. Who the hell is trying to spend a dollar today that they earned in 1913 and held since? >>
Those who in 1913 saw European problems and were worried about war and the end of the "good life". My how times have changed. LOL
Knowledge is the enemy of fear
This was probably true prior to 2001, but not any longer. Rates should have gone up in 2011, even Bill Gross thought so as he exited Treasuries. The Fed, Treasury and Big Banks
plopped another $75 TRILL in otc interest rate contracts on to their pile. Voila...rates stayed low and went lower. With our big banks holding $275 TRILL in otc interest rate
contracts, and the sum of the world's banks holding about $900 TRILL, those numbers are bigger than any financial market I'm aware of. This game will eventually end of course.
But as long as nothing stops the adding of $75 TRILLION to the pile each year, rates aren't going that far. The markets used to be bigger than the central banks...until they created
unregulated, off-balance sheet, otc derivatives without limits.
<< <i> A dollar held since 1913 is worth less than five cents today
... and people keep saying This. Who the hell is trying to spend a dollar today that they earned in 1913 and held since? >>
OK, spend one you have held since 2000.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Liberty: Parent of Science & Industry
<< <i>You mean, convert a growth asset back into FRNs and spend that dollar? What should I do with all the extra dollars?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>But as I've said many times, the market is bigger than all the central banks and will always prevail. The CB's may win a few battles, but the market always wins the war.
This was probably true prior to 2001, but not any longer. Rates should have gone up in 2011, even Bill Gross thought so as he exited Treasuries. The Fed, Treasury and Big Banks
plopped another $75 TRILL in otc interest rate contracts on to their pile. Voila...rates stayed low and went lower. With our big banks holding $275 TRILL in otc interest rate
contracts, and the sum of the world's banks holding about $900 TRILL, those numbers are bigger than any financial market I'm aware of. This game will eventually end of course.
But as long as nothing stops the adding of $75 TRILLION to the pile each year, rates aren't going that far. The markets used to be bigger than the central banks...until they created
unregulated, off-balance sheet, otc derivatives without limits. >>
Nothing is bigger than the masses. Nothing. History has proven this time and time again. Sometimes it takes a little while to prove, but it always does.
While I dont doubt those derivative numbers, they are so large as to be ridiculous. They could all be destroyed with a keystroke as they are paper right? And paper is worthless.
Knowledge is the enemy of fear
In God We Trust.... all others pay in Gold and Silver!
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
The US economy is to large to have 100% gold or silver backing the currency. 'They' had to do something.
I flip my dollars at least twice a year and sometimes a lot more. Just about Every flip makes me money. My '1913 dollar' is worth thousands by now. A dollar is not static. A smart dollar is on the move.
I suppose the only people who know how to manage this economy are the arm chair quarterbacks.
What really needed to happen about 25 years ago was for the US Govt to put into practice a way for the average citizen to protect their nest egg by being able to easily obtain gold and silver if they wished to.
OOPS, My bad, they did that.
WHAT this country needs is to stop punishing savers so that we fund our debt and commerce internally instead of defacto devaluing the dollar so offshore money starts operating in this country. We have been a capital starved country from the onset but it may be time to change that channel.
Looky what the same magazine had to say about him years later
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
While I dont doubt those derivative numbers, they are so large as to be ridiculous. They could all be destroyed with a keystroke as they are paper right? And paper is worthless.
For now, the big banks are bigger than the masses, and everyone else. But I agree that in time it will change.
I also agree that the derivatives got to be so large as to be ridiculous. And that's why in 2008 the BIS gave them a 40% haircut by changing the accounting on them. They couldn't
deal with the $1.1 Quad number and dropped it to $683 TRILL. But I disagree that they can simply all be netted out with a keystroke and hence, no harm no foul. If that were to
occur the big banks would crumble. And along with them all their customers and contacts around the world. It's all interconnected. The big banks are counting on the profits from their
derivatives as currently modeled...none of them are counting them as losses. Taking away paper profit positions is the same as a loss. When they let Lehman fail the opportunity
to net these out at a reasonable cost was lost. The genie is out of the bottle and cannot be put back inside.
Part of managing a PM holding is guessing which way the manipulation will go. I think it is time to move gold holdings into platinum, and perhaps I missed that by a bit in terms of timing.
What's interesting about it? Let's recall who the "Fed" is - a private banking cartel who has been granted special priviledges by the US government, to include money creation via the issuance of public debt and the running of debt auctions for a fee. Or should I say, frontrunning the auctions?
The banking cartel makes pure profit off the top; the public gets handed the bill.
And these are the guys who dictate policy. Bad deal.
I knew it would happen.
<< <i>
The cover before they photoshopped it:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey