Thursday, February 11, 2010

More B.S. in the Press About Gold...

Marketwatch has an article out that attributes the big move in gold today to the fact that Greece will not be selling any gold in order to raise funds as part of its bailout. Here's the link:  Garbage reporting.  One analyst in the article referenced the Washington Agreement which limits the amount of gold the ECB can sell to 400 tonnes.  We're four months into the current WA year and the ECB has barely sold any gold, leaving plenty of room for Greece to sell its gold if it so chooses.

Here's what's really going on with gold.  To begin with, Greece reports holding 112 tonnes.  If Greece wanted to sell all of it, make no mistake about it, China or India or Russia would jump at the chance to pay the current spot price for all of it.  That would leave plenty of room for other ECB member banks to sell gold this year if they so choose.  That would raise roughly $4.2 billion for Greece.  Why wouldn't they sell?

Gold shot up today for several reasons, not the least of which is the fact that a committed bailout of Greece will involve using the euro printing press to monetize part of the situation.  The printing of fiat currency is the nemesis of gold and nothing makes gold move up more quickly than the smell of the fiat printing presses running overtime.  Second, Viet Nam devalued its currency yesterday, and based on the premium of $54 over the spot price of gold being paid in Viet Nam, it would appear that the population there is scrambling to buy physical gold.  Viet Nam is quietly one of the largest buyers of gold in the world.  And finally, the bailout of Greece is the first in a long chain of sovereign bailouts, including big State bailouts in the U.S., which will require massive fiat currency monetization.  Gold smells that stench and has screamed higher accordingly.

Always remember,  there's the Orwellian Ministry of Truth truth, and there's The Golden Truth.


  1. Another popular B.S. reason (utilized by the mainstream media) for gold going up or down is jewelry demand.

    Everytime I read a negative article on gold by the mainstream financial press, I want to unleash a golden shower on their heads.

  2. LOL...that's almost scatological...the McNabb watch is on here big time. Doubt McD will pull the trigger on him though.

  3. They claim no interest, which means they are totally interested in McNabb. I've heard Cleveland, Buffalo and one other team want McNabb too.

    Philly would be smart to deal him while he still has value. They're already set with a good, young QB in Kolb.

  4. You are all wrong. Gold went up today because Bill Clinton was hospitalized. Very reliable sources have divulged that due to President Clinton being hospitalized, many of the lavish Valentine's Day gifts that he was planning to give to his most intimate former bimbos, um, girlfriends and their/his offspring-a number rumored to be in the low twelve hundreds, that's intimate bimbo/girlfriends mind you, not offspring. The number for the offspring are said to be considerably higher.-gifts which came in the form of specially mass produced coins, medallions, and jewelry, fabricated from, you guessed it, precious metals, will now have to be curtailed.

  5. If this doesn't get the sleaze bags at JPM and GS out among the press talking about direct monetization I don't know what will.

    Accepted Bids 30 year notes.

    Primary Dealer $7,573,590,500
    Direct Bidder $3,847,481,400
    Indirect Bidder8 $4,559,023,800

    Tthe Feds is buying 50% of the primary dealers take directly and added together with the indirect they are buying more than the sleaze bags put together. Well what do you do when a major competition starts up in your market like this you try to put it out of action with a PR campaign. God G-d the Fed are coming to corner the Treasury Auctions.

    I love the way that they talk about the direct bid to tender ratio, which doesn't look so bad, as when the truth is they are actually buying 50%. You can imagine what the losing tender prices, which all seem to sleaze bag bids, look like.

    This is getting funnier and funnier.

  6. Edwardo that's hilarious.

    Anonymous: sure would love to see for sure who the direct bidder is. given that the Fed opts for zero transparency, I have to say that, in my mind, the Fed is guilty until it proves itself innocent

  7. A few thoughts,
    -If anyone in the MSM had any idea about gold we would all be rich.
    -Dave, if you have any pull with Jesse from the Cafe' could you please tell him I demand he remove the picture of Geithner as a member of the Sith Lords as we do not tolerate weakness nor stupidity. He must be some padawan jedi or something, get real already!
    -I really do not want to see any anti-Clinton stuff; I would disagree with everything he was ever for but health issues are above discussion IMO, but it's a free country of course.

  8. I'm going to copy the request you made to Jess and email him along with a link to your blog.

    MSM will catch onto gold as it approaches $2500.

  9. Just saw this now:
    I will have to digest this!

    First reaction; delivery issues so trying to drive out marginal buyers?

    I will lead off with my request to Jesse tonight for a laugh!

  10. Tim Geithner is NOT a Sith Lord.

    He is clearly designated as an Apprentice to the Sith Lords = Buttboy.

    I just added two new cards. Please continue to send all comments on my work to Dave. He is picking up my light work this century.


  11. Ya, I carry Jesse's bags kind of like Obama carries Bob Rubin's bags. But at least I'm not some kind of Uncle Tom...LOL

    gyc, the CME moves the margins on gold/silver around a few times a year. Usually when they are trying to create a big sell-off in the metals by forcing margin calls and triggering a waterfall of stops. Actually, a 25% hike isn't too extreme. I've seen as much as 40% in the past.

    In fact, they hiked margins not too long ago and the market sold off for a day or two then went a lot higher. Also, the margin levels for gold/silver are about 30% below their highs during this bull market.

    In terms of discouraging delivery, usually someone who is buying to take delivery isn't playing the margin float and typically has the funds to keep funding the account until first notice, as that's when you have to have your account fully funded for the amount of metal you are taking delivery of. We're actually short puts on April at 1105 that we sold for a next cost of 1083. We plan on taking delivery of that put position if gold is below 1105 in April.

    Bottom line is that they are trying to create a margin-call selling avalanche. I bet it fails.

  12. Dave,
    agree with the margin observations, they did this in December as well and I had forgotten,

    uh oh, now we may have opened a big can of worms!

    The sith have eras and the "brotherhood of darkness" had scores of crappy sith lords with a multitude of acolytes. It took Darth Bane (the Sith'ari) to destroy the masses and institute the "Rule of Two" (One master, one apprentice). Much later Darth Krayt betrayed this code and made "The One Sith" which again swelled the numbers and will cause the downfall of the Sith.

    Anyways, Obviously I am way too into this stuff! I guess Blankie makes a good Darth Sidious; "I am the Senate!!"; how fitting.

    The code of the sith:
    Peace is a lie; there is only passion.
    Through passion, I gain strength.
    Through strength, I gain power.
    Through power, I gain victory.
    Through victory, my chains are broken.

    Use my gmail on my site if you want to cut poor Dave out of the conversation!

  13. My apologies if I offended with my use of Clinton's hospitalization to facetiously explain gold's rise.

  14. Edwardo,
    no your comment was fine and in line I was just trying to head off any nuts that might stop by.

    No problem, great community here. Want to keep it that way.

  15. Dave-

    Do you have a good internet link/site to obtain a rough estimate of Gold premiums paid in other countries (i.e. the $54 premium you quoted for Vietnam)?

  16. Adam - I get my information from the "More gold goodies" section in Midas (LeMet). John Brimelow writes the report and he comments on the the major gold trading markets. I think he sources a lot of his information from regional reuters reports but he also gets information directly from big trading firms. I'm sure all of his data can verified if you do the legwork.