The Golden Truth: Rolling the Dollar and Smoking It - Gold Is the Legal Way to Ease the Pain

Friday, March 12, 2010

Rolling the Dollar and Smoking It - Gold Is the Legal Way to Ease the Pain

Weekly U.S. Dollar Index 2000 - Present

(click on chart to enlarge)

13 comments:

rdisraelFriday, 12 March, 2010
Dave,the dollar as I write this is now down around $.50 ,and gold has dropped to around $1100,as I posted before this makes no sense. In the past with the dollar down, gold/silver would be flying high. Now its just the opposite ,weak dollar, weak gold .Seems this week when the dollar is up ,gold is up--Maybe you can explain this ,I sure can't
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Dave in DenverFriday, 12 March, 2010
rd, you know what's going on LOL. the past 2 weeks, and really ever since the Fed raised the discount rate, gold has been more blatantly manipulated than I have ever seen (9 years of trading/observing gold/silver futures).

I'm wondering if the bullion banks, who are record short the USDX, long the euro, short gold/silver, are trying to force large specs to sell so the cartel can cover before the euro bolts higher and the dollar tanks.
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rdisraelFriday, 12 March, 2010
Dave.
I think you could be correct ,something is definitely going on here,this whole week has been one of the most strange trading weeks ever. It sure seems the cartel is trying desperately to lower the price ,to cover their short positions, before gold really starts to fly, and the cartel will be powerless to do anything about it.
But something for sure is brewing up !
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Dave in DenverFriday, 12 March, 2010
You have that one nailed. Even people who only casually watch the daily action in gold think the action means something bad is coming.

Hell, putting Janet Yellen as Vice Chair of the Fed is bad enough. Feb budget deficit set a record. Housing is starting to implode again.

State deficits may be the boogie man that spooks smart money into gold...
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EconomicDisconnectFriday, 12 March, 2010
DAve,
While I am not a huge chart guy, that pattern is clear indeed! I posted a while ago that I thought gold would uncouple from the dollar and si we may see some non intuitive moves between the two, but I think one of them is going much higher. The heavy one.
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JoeFriday, 12 March, 2010
The whole system is in total lock-down mode. The imagery I am getting is akin to a pressure-cooker about ready to explode.

The mass-public has no clue and will be the victim of a massive transfer of wealth that occurs when the USD goes Weimar.

We are totally screwed and there is no doubt that American Revolutation II is at hand.

Joe M.
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Dave in DenverFriday, 12 March, 2010
@gyc: yup. big banks increased their longs in the euro again vs. the large and small specs getting shorter PLUS Goldman was telling clients to short the Euro LOL
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MikeSaturday, 13 March, 2010
i haven't heard much talk lately on lemetropolecafe about Sprott's Physical Gold fund.
they are up to 349,000 oz and if i am not mistaken they are using the proceeds since the fund started and buying future contracts on the comex (april) so that would be 3490 contracts.

anyone know anything more about this fund? did they even have any gold when they started?

considering there are 1.66 million oz in the registered cateogry, that would take a nice hit just by sprott. sprott wont take a 25% premium like most of the wall street traders.

also any opinions on the EMF talking about using Gold as a reserve?
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AnonymousSaturday, 13 March, 2010
...so what would happen if about 20 major countries default?
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Dave in DenverSaturday, 13 March, 2010
Mike: good questions. PHYS only buys 400 oz. LBMA-certified bars. That is the international standard for gold bars. The Comex uses 100 oz. bars. So, regrettably from our standpoint, PHYS won't terrorize the Comex inventory.

The fund itself is not permitted to use futures. I have not been following its accumulation of bullion, but they raised $400mm less fees at issue, when they started accumulating bars.

If you google "PHYS prospectus" you can pull up an abreviated prospectus that describes how the fund operates. Actually, my friend Jesse wrote a blog piece on PHYS. Here's the link and it contains a link the prospectus:

http://jessescrossroadscafe.blogspot.com/2010/03/is-sprott-in-market-trying-to-buy-12.html
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Dave in DenverSaturday, 13 March, 2010
@Anonymous: total pandemonium. I think we're entering an intervention phase of history such that the major central banks will print enough fiat currency to prevent major countries from defaulting.
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AnonymousSunday, 14 March, 2010
So, Dave, you don't think there will be defaults, you recon there will be high inflation instead, and then what, another new world currency? What is the actual aftermath of that scenario? Tiny middle class? Lots of crime? What is your view? It looks like Europe will not disintergrate and all PIIGSS will stay there and will be helped somehow. Most of Europeans will perhaps have to (reluctantly) accept much lower standard of living... I look forward to your thoughts.
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Dave in DenverSunday, 14 March, 2010
@Anonymous. Man, your guess is as good as mine how this thing unfolds. All I know is we're going to see brutal inflation, food shortages, civil unrest and other shit hitting the fan. Don't worry about Europe because the overall situation is worse in the U.S. than in Europe.

Hell, no one even talks about the Mexican drug war thing that has started to proliferate in this country, but it's getting worse. I'm sure the media has been told instructed to stop reporting on it. It's Orwellian doctrine: if the media doesn't report it, it's not there.

I think what's coming is going to be very bad. The middle/upper middle/lower upper will be mostly wiped out. I think the biggest danger is that some kind of totalitarian Govt will seize power here, probably in Europe too.

If you want to see survive to see what the "other side" looks like, you'll want to accumulate as much gold/silver/food as possible and make sure you have some high quality weapons and plenty of ammo.

The guys I know who are preparing to hunker down have now stored over 1 year's worth of non-perishable food, buy gold/silver all the time, are well armed, have back-up generators and store propane. I have not gone that far other than the precious metals accumulation. I probably should LOL.

However this unfolds, I can guarantee you we are living in a period that will define history.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.