The Golden Truth: Looks Like I Was Right

Wednesday, June 20, 2012

Looks Like I Was Right

CNBC's Steve Liesman's brains fell out of his head at the same time he lost his hair. - Dave in Denver

I hate to waive my own flag, but guys like Reggie Middleton and Tyler Durden pimp themselves so shamelessly and repetitively - and with brazen historical revisionism, especially Reggie - that I had to say something. The other day I suggested that the Fed might extend Operation Twist and shift the Treasuries it sells out to 3 years and the Treasuries it buys out to 30 years. The FOMC just announced the extension of Twist until the end of the year and it would sell Treasuries it holds out to 3 yrs and buy Treasuries from 6 to 30 years.

The Fed also said that it stands ready to use other methods to try and stimulate the economy if needed. It will be needed and it's just a matter of time.

By the way, Operation Twist, especially now that the duration of the Fed balance sheet will be significantly increased, is a de facto form of QE.

Just for the record, in follow-up to my commentary on housing yesterday, today's mortgage purchase application index from the Mortgage Banker's Assoc. was down 9%.

16 comments:

fredcoWednesday, 20 June, 2012
Well said.
In your opinion how and when will these sterilized twists, faux QE lite and the like start pushing up hard asset $ prices? And how do you see this in relation to the QE 1 and 2 asset value increases either on a percentage basis or in real terms? Does this new QE float all boats? Thank you sir.
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Dave in DenverWednesday, 20 June, 2012
fredco, i think this Twist thing was already priced into the stock market/SPX. Once the buying season kicks in big-time in India (late August), gold potential starts a move that takes it over $2,000 by Christmas time. James Turk thinks we'll have a "surprise" rally in the metals this summer. I think that's a good possibility. The gold cartel has been working overtime to keep gold below $1630 and silver below $29. Right now there efforts are preventing the next big move rather than successfully pushing them lower. That's very bullish
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AnonymousWednesday, 20 June, 2012
Great call Dave. To what extent do you think the Fed will get involved in Europe?
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Dave in DenverThursday, 21 June, 2012
I think they have alreay been heavily involved in Europe via the currency swap facililty. That's why the Fed won't disclose how it's being used despite being asked to do so by some Congressmen like Ron Paul
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AnonymousThursday, 21 June, 2012
So does Operation Twist mean the Federal Reserve sells short term treaures and purchases long term treasures in an effort to push down long term rates? Did they add any new money in this recent round of purchases? Thanks for your blog Dave it's great learning for me.
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fredcoThursday, 21 June, 2012
Thank you for your response .. a quick follow up if I may.
Do these twists and sterilized QE's act to only to pull back on the golden sling shot until some event or outright QE3 triggers the next wave up, or will these sterilized and stealth printings themselves be a catalyst for the next wave up? If so, how?
Thank you in advance..
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AnonymousThursday, 21 June, 2012
Blah blah. I am so sick of this manipulation talk crap from this cultish religion in this tinfoil hat group. The argument just never changes and everyone is just playing roulette that some time in the future Gold will be priceless because someone else is going to decide to do something.

This QE debate is rediculous. Only Hathaway and Adams have progressed to the next level of the real money debate. QE is immaterial by now - yes they are going to do it no they not... blah blah. Egos are getting in the way, especially Jim Sinclair and his answers now. The argument is QE is immaterial - when there is none the world will go to shit, there is a whole lot of it and the world will go to shit but you guys are still on about QE to infinity. How pathetic. When is the debate going to change and you say fuck QE - what's done is done. But you idiots keep on playing into the hand of the poker game and the bluff. Yes I would love to play some poker not with Bernanke but with you.

Progress the debate. The record is stuck with all you people - QE is nuts but yet you argue for QE. This will carry on and on until you wake the fuck up - not the other way around.

what I have noticed too - and that is concerning - this ponzi, ie getting more and more sheeple to but physical is getting harder and harder and a bigger sell. And the more it doesn't work the more aggressive the tinfoil hats become.

The change that has to happen isn't with the "manipulation" it's with your arguments. Wake the fuck up!!!!!
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AnonymousThursday, 21 June, 2012
And another thing - it seems that QE is only relavent to the commodities market. How about the industry it is supposed to really help - that's doing fine....And because of the tinfoil hats continued idiotic QE debate it hits those areas harder.

Pathetic bunch. Follow in Hathaways shoes
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JDThursday, 21 June, 2012
AUMN current market cap = $163 million

I FEEL LIKE I AM TAKING CRAZY PILLS!!!
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AnonymousThursday, 21 June, 2012
I'm not sure what tinfoil hat is trying to say but I'm pretty sure he took a lot of pills!! I couldn't give a rat's ass who does or does not buy gold and silver-- it is their future.
What industry is QE supposed to help? the banking industry? Cause they are most certainly not doing fine!!

Justin from Canada
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AriThursday, 21 June, 2012
Marty Armstrong is in the house. That's who mr. Blah, blah anonymous sounds like.
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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.