Tuesday, February 1, 2011

QE3 On Deck! This Confirms The "Good" Economic Reports Are Bogus

Feb 1 (Reuters) - The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data prove weaker than policymakers expect, Kansas City Fed President Thomas Hoenig said. Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday.  Here's the LINK

This confirms that the string of economic reports from GDP to employment, and even today's auto sales, are manipulated and misleading.  If the "good news" was bona fide, the Fed would be discussing the tightening of monetary policy - raising interest rates and unwinding QE1/2. 

But the golden truth is that the only policy keeping the banking system from collapsing and the U.S. Government funded is the Fed's printing press.

Got gold?  Just like diamonds are a girl's best friend, quantitative easing/money printing/currency debasement is a gold investor's best friend!  I'm not going to post the charts, but the daily charts for gold and silver look as bullish as I've seen in a long time.  The price correction in January has likely set up a very big move in the metals.  Pray to whatever you pray to that Eric Sprott's technical analyst is wrong about how high gold/silver may go by this spring, because that would imply that this country is on the verge of some very painful economic/social turmoil...


  1. yep, always watch what they do, not what they say.

  2. One dollar dirt nap please.

    Incredible really.

  3. excellent post. but a point of slight contention, dave. since numerous people have been interviewed regarding Bernanke's and the Fed's QEII announcements, they didn't set June as any hard deadline for the cessation of QEII.

    For me, that means/meant, that they were likely to continue (which most of us reading this already know) with the $600B/mo after June. Thus, if/when those *announced* purchases(bc we all know they're "stimulatin' far more than $600B/mo) go beyond $600B/mo or WHEN they publicly cease and start up again, I'll consider that QE3.


  4. Imaginary games are the present day exercise for any and all prices regarding silver. Rumor has it that the true price of silver right this moment should be $ 250.00 per ounce. Imagine if you would many holders of physical silver,all at the same time advertising from around the USofA - FOR SALE- 1 oz. .999 fine silver ~ $ 250.00 true value. Would such a move trigger a positive reaction ?

  5. with gold closing above $1340 per forward Crimex contract perhaps we have seen the bottom in Au/Ag correction. with the CCI breaking record highs and the ISM prices paid topping 80 indicating a CPI breaking 6.5% in the next 12 months (more likely 6) according to zerohedge, along with surging oil prices, can't we already feel the flames of inflation licking at our consumer heels. the fires in the bankster blast furnaces are being stoked for the incinerating conflagration of hyper inflationary combustion of the greenback. the IRA, 401K, and pension plan sucker holes will evaporate if not through government appropriation than through the inevitable hyper inflationary fire storms set to sweep through world economies. the engineered Egyptian chaos, much like the destruction of the European sovereigns serves as an ominous prefigurement of our foreboding future.

  6. Hey yardfarmer - happy new year! I think a bottom is forming or has come and gone. Unless they have hidden hammer they are ready to swing at the market like they did in July 2008, I think we are going to see the metals start launch to new highs soon.

  7. Anonymous, the "true" price for gold and silver at any given in point in time between today and where it ends up when it is re-established as the global reserve standard is anyone's best guess.

    The true price for an ounce of refined silver in smaller quanitities is the price at which it is available today. I use Tulving as my benchmark for that and he is paying spot + 2.10 to silver eagles and selling them for sport + 2.59. That's the price.

    On the other hand, imagine if China (or whoever) were to ask the world for an offer of 100 tonnes of 400 oz. LBMA gold bars. What we be the best offering price for that? I don't know that answer other than to say that it is at least 2x today's spot price, in all likelihood. You see my point? From there you can use an assumed gold/silver ratio to back into where a big "chunk" of silver would trade.

    I don't know either where gold will be priced when it eventually is reinstated as the currency anchor for the world. Probably somewhere between Rickard's $7,000/oz and possibly $15k+ per ounce, which would be the number needed to monetize all the U.S. Treasury debt using gold. Or even higher if you assume we need to monetize more than just U.S. debt. Whoever controls the gold at that point in time will make those rules.

  8. The $15k number above is using an assumed 8100 tonnes of U.S. gold (which we know is no longer there) per the original Bretton Woods deal.

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