The Golden Truth: Does My "Bunny" Have A Good Nose On QE3?

Thursday, June 23, 2011

Does My "Bunny" Have A Good Nose On QE3?

(Note: the quote is in reference to the famous quote from Martin Siegel to Robert Freeman - of Goldman Sachs, of course - when exchanging some inside trading information, in an insider trading circle that ultimately led to the conviciton of Ivan Boesky)

Check out the comments from Robert Broaddus, former Richmond Fed head: LINK Here's the salient quotes sourced from Zerohedge:

•BROADDUS SAYS ANY DISINFLATION MAY PROMPT FED TO CONSIDER QE3
•BROADDUS SAYS FED UNDERSTANDING OF INFLATION HAS IMPROVED
•FORMER RICHMOND FED CHIEF BROADDUS SPEAKS ON BLOOMBERG

LOL. Where there's smoke, there's fire...My argument per my previous quote is that the Government is going to try and "paint the tape" with the illusion of "disinflation" by trying to smack the commodities for awhile like in July 2008.

6 comments:

EconomicDisconnectThursday, 23 June, 2011
The problem right now is every trader out there is so itchy to buy LNKD or what not they keep having these mega rally days on any hint of the next handout. Going to be hard to lay the groundwork (semi fear) if every other day is a cray rally day.
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mabmanThursday, 23 June, 2011
Former Federal Reserve chairman Alan Greenspan discusses his distaste for the very central bank he reigned for 2 decades.

http://www.youtube.com/watch?v=yRJs5yL62BA
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AnonymousFriday, 24 June, 2011
Sinclair, Hathaway - Hell Could Break Loose, Confidence Cracks

“We’re talking about the credit default swaps. There is a crisis in the derivatives again that nobody sees, but many people know. This crisis is the fact that the person who creates the derivatives, the manufacturer, what he’s creating is insurance policies. What’s being paid for it? Higher and higher prices as all of this default talk takes place, it’s nothing more than a promise to pay.

Modern derivatives have some degree of margin behind them, but not enough that could possibly survive a default on Greece tomorrow followed by all of the weaker nations of the EU. Nobody is really putting enough attention on the fact that these manufacturers sell these things and they take in huge amounts of cash flow. But their ability, taken as a whole, to guarantee the debt of sovereign nations is simply not there.

If you think that the banking system of the western world is strong enough to guarantee the debt of the western world, you’re totally out of your mind. That’s the reason they’ll do everything possible to paper over the Euro crisis to prevent the defaults in order to prevent another crisis in banking that definitively would occur, that absolutely would occur from a default. This fact is ravingly positive for gold. You would have a complete collapse of the western banking system if Greece goes down.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/24_Sinclair,_Hathaway_-_Hell_Could_Break_Loose,_Confidence_Cracks.html
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AnonymousFriday, 24 June, 2011
Yes well, all these idiots we have to deal with.

Here is a site - Jim Sinclair - posts his stuff. I like what he consistently writes. His chart work is also good.

http://edegrootinsights.blogspot.com/
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AnonymousFriday, 24 June, 2011
Please could someone tell me why Copper is not effected by anything - it just sits there?

Secondly - it seems the powers can really just play with us in the precious metal space. We only really lucky that the powers in actual fact may like them too.

Thirdly the Euro jumped too much yesterday so we have to start on the Italians!

How about just getting out of this market altogether and start trading in Gold and Silver physical?

Miners - seem the religious experience Embry etc was talking about was meant for the bulls.
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AnonymousFriday, 24 June, 2011
presto-magico economic policy?

Inevitable Catastrophe: The Fruits of Moral Hazard on a Global Scale

Transparent, independent markets do not move in lockstep. The campaign to prop up all asset classes with implicit guarantees of intervention has completely insulated institutions and punters who believe that the Bernanke Put and the Chinese government's equivalent prop under real estate is not just policy but a guarantee of god-like power.

Thus the gains from gargantuan speculative bets are yours to keep, and any losses will be made good by the central bank or government. This is the ideal recipe for misallocation of capital and speculative derangement on an unprecedented scale.

Moral hazard is the ultimate perverse incentive: it rewards all that is unproductive and risky and punishes long-term investment and prudent risk assessment.

A second feature of the global central bank's moral hazard is the necessity to punish any punters who dare to bet against the banks' manipulations. Thus Fed Chairman Bernanke could opine that oil would decline and presto-magico, a "surprise" release of oil by central authorities occurs the next day.
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Add comment

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.