Thursday, September 13, 2012

QE TO INFINITY

Sources say today's announcement will be an announcement of QE to infinity. Dr. Bernanke will couch his words carefully to assure the market that the Fed will maintain sound monetary policy to support a weak recovery in spite of essentially no fiscal policy from the government side of the equation. His verbage will indicate that an open ended monetization of interest rates will NOT be inflationary since it will be limited by GDP numbers. Therefore inherently Dr. Bernanke will be preventing inflation from moving into a hyperinflationary zone. He will also mention that the cost of essentials could have a "negative impact" on the consumer AND GDP. He will NOT mention the word "stagflation" anywhere in his statement even though this will by definition be a stagflationary situation UNLESS Ben can reach escape velocity. ESCAPE VELOCITY is what he is trying to achieve and this is one reason why he will give for this monetary policy decision. THE VELOCITY OF MONEY can be achieved if complete confidence is finally lost in the value of fiat and the money begins to be spent on anything of value as fast as one gets fiat into their hands. This is not what the Fed wants but Ben believes that he can stop the final breakdown of confidence by allowing interest rates to rise JUST at that critical juncture......which is just as velocity of money rises and JUST before a hyperinflationary crisis arises. Of course this will by definition be a severe stagflationary event prior to this critical time period. For those of you not familiar with stagflation I can refer you to the 70's. This will be worse than the 70's since our economic position is much worse in terms of infrastructure and unemployment. The 70's was a cyclical downturn and this is far worse with NO structural repair occurring OR in sight. Don't over-read the remarks from the Fed today. We have been in QE since 2008 and we have NEVER stopped.....use any weakness to add to you miners. gl

54 comments:

  1. watch the intial move to run some stops. If you are looking to add or trade the first few minutes may provide you an entry if you are quick.....otherwise don't worry I'll be recreating. BTW sorry for the last couple of days but was out of "network" and Blogger makes it very hard on this blog to post without being on my home turf. I'm sure its all just coincidental.......hehehehehe

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  2. BTW ALL the traders expect a pullback in the general market......we know how that usually goes

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  3. John Najarian is shorting gold with 4 minutes to go before the announcement......he states he just saw some big puts on GLD go off.......heheheh.....soooooo crooked.......

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  4. gold tanking and no announcement yet...

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  5. Miners just dropped quick. These guys are good.

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  6. too much pro QE consensus....some vix front running.

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  7. tis a wee bit of a jaw-boner. Buying agency MBS, Freddie and Fanny. Is freddy and Fanny going to buy the spx or write loans?

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  8. Ben just announced unlimited QE 3!!! This is the end of America!!! It was a good 200 year run. Fun while it lasted.

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  9. KLI: Can you please explain this after QE3 was announced? Is it manipulation?

    Gold
    1,726.50
    -7.20
    -0.42%

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    1. yes Jay ...look at my comment above.....they ran the stops before they rip it.....now they have a ton of trapped shorts

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    2. btw I'm sure Joe is laughing his ass off at the move

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  10. Ben must be seeing something truly frightening that he has decided to stimulate despite the markets already near their highs. It will be interesting to see how high and how long this stimulus will last. We need to keep an eye on the exits.

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    1. Great point Doc. All the other QE's were done with a tanking market. This one was done with markets at record highs.

      Could it be the Israel/Iran war? China collapse and/or war? World collapse?

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  11. I spoke to soon about gold. Now it's spiking...

    Gold
    1,743.70
    10.00
    +0.58%


    Guess it took a while for the algos to run the new program.

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  12. BTW. I've gotta hand it to kliguy. He's been yelling and screaming about unlimited QE for months now. Now it's official.

    I should have bought some gold during the lull earlier this year. I didn't think Ben would actually do it.

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  13. Whelp goodnight everybody, time to hold onto that physical tightly :)

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  14. got slammed on vix trade....

    Ben is really crazy...how will making interest rates lower on housing over winter help...

    he is sending citizens straight to hell

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  15. Just got back in.....they ran the stops and then took it up didn't they?????? anyone able to reply?

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  16. yep...silver was resting on 360sma until lift off..they played it well...

    I'm done with the casino...this fucker is insane...

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    1. only a guess honest but this is the beginning of a monster run in PMs and PM equities...don't blame you though for wanting to stay out of it....

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  17. BTW honest you are too good of a trader to stay out....try and trade some of the miners this is going to be a VERY volatile trade but the trend should be a nice long one

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  18. Silver outperforming gold. Will gold play catchup over the next few sessions?

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    1. yes it will and "should" achieve new highs this year....on the other hand expect sharp and volatile pullbacks......buy any hard dips if you wish. I will try to find the new miner channels but that could take me several weeks to establish

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  19. KLI: Is it too late to invest in gold?

    I've got some good chunks of cash on the sidelines.

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    1. No Jay.....just invest in physical.....but most miners have a long way to run.....like PZG CGR SSRI
      AUQ PPP PAAS the trouble playing any paper trade is rehypothecation so I wish you the best...as I have said.....we are in the end game of a collapse...my hope is Ben holds it together... gl

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    2. sorry jay i meant to say its not too late to invest.....play pullbacks and invest in physical silver now

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  20. better listen to this guy....NOT a gold bug type
    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/9/13_Felix_Zulauf_-_Gold,_Systemic_Collapse_%26_The_End_Of_Fiat_Money.html

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  21. Come on honest! I'm scared s****s most of the time...If I can do it, so can you. :). Cannot quite process this qe--it is humongous! That coupled with the problems in ME are almost too much to take in. But it isn't surprising since Kli and Joe have been calling it exactly right for as long as I've been reading their insights. FWIW, heard a top-level military (retired) man speak today. He says ours are unable to defend themselves in Afghanistan per rules of engagement. Also said those defending the Embassy in Egypt have been told not to fire. I asked why don't we just bring 'em all home then? I think the answer's obvious to us. They (whoever "they" are) are just bound and determined to bring us into the NWO. No question. We're in for a rude, rude awakening. Also allowed as how he was told not to travel in the ME over the last few mos. THEY knew. I feel so bad that everyone is expendable....EVERYONE.

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  22. Chuck, I got spanked on the vxx too. But I am going to hang onto those shares. Ve vill get some V soon. PM's have a green light. However, still can't figure out if agency purchases include banks. I believe agency MBS are from gov-ment agencies.

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    1. yes sheeps you can bet they are stuffing money into the banks from their MBS....gov MBS is VERY limited......otherwise they have to purchase treasuries only

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  23. i have said to you all that they will make this trade as unpleasant as possible and they certainly have...the torture is probably NOT over so just be aware....those of you that have the fortitude to hold will probably do the best. I will still trade but expect this to be a multimonth rally....i expect many of these miners to move multiples off their lows. some of the juniors may lag but will ultimately outperform....

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  24. Well, First off I am glad I have been adding to the gold and silver stacks since January. All of my miners are green for the year except GBG. GBG has been a big bust! Oh well, my other miners have done especially well like H and PPP. Always know that not all miners are built the same! Like Joe says managaement is key! Good Luck to ALL!

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  25. The Bernanke said agency mbs. If banks are included then the market will continue to go up for sure.

    Fannie and McLean, Va.-based Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans, which are worth more than $5 trillion. Along with several federal agencies, they backed nearly 90 percent of new mortgages over the past year...

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  26. I wonder if the Middle East unraveling had any thing to do with Big Bens decision to go all in......... What a hell of a swing the past few weeks some of my trades are actually Farking in the green! I'm staying put for now.......

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    1. accumulation of miners AND the accumulation of bullion must eventually be met with price appreciation.....you can only give so much bullion away at a discount

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  27. speaking of i just completed what may be my last silver bullion purchase......i don't expect to see prices much below this level for a long time

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  28. I am wondering how much of the timing of this is for the election. Do they think they can get positive boost for 6 weeks before bad effects kick in? Or did they do QE for banking needs right now.

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    1. a multitude of sins to be covered Ken........we are in a deleveraging deflationary collapse WORLDWIDE that Ben is trying to prevent.....keeping it simple.....he has to print ...he has been printing......and he never stopped printing. ....all he did today was tell you

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  29. Kli,

    Your too nice...I trade but I'm just an average joe...what pisses me off about the casino is I engage in it..which helps the pigmen...

    I weep for my kid and all the kids out there, they are being led to a very bad place and they don't have a clue...I wouldn't either at that age...I just can't get over the fact that we are rescuing failed banks that gambled....It just kills me everytime he mentions more QE, I'll be alright in a day or 2 but god knows I would love to confront some fed bankers..I live where one of the fed cities and I wish they would just vanish from the face of this earth...2.5 trillion doesn't help UE, so lets churn out another 85 billion per month...they are insane...

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  30. They are NOT insane.....its worse....the end game is "control"...world governance and if it means blowing up this system then they shall. The end game is what its is all about and for you to manage the end game. Withdrawing from the casino as Joe and Red advised is the smart move. If you stay then understand its to play. Moving into risk assets as Ben requires does NOT mean you must play in this casino. There are many other assets and I know personally what they are moving into...and its NOT equities

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  31. Kli,

    What do you think about these gold-back IRA'. I have been looking at one offered thru American Bullion and have talked to them a couple times. They seem legit.
    Basically, you transfer an old IRA into a gold IRA @ Self Directed IRA Services that acts as the custodian. The actual gold is then stored in a segregated deposit box in my name only at the Delaware Depository Service Company. American Bullion supplies the gold/silver. The guy I spoke with claims the PM's are held completely segregated and cannot be pledged as collateral (hypothecated) to anyone. He claims I am free to go see my PM's anytime and can take possession anytime, but of course would have to pay an IRA penalty if taken prior to age 59 1/2.
    I realized that actual possession would be best.
    I have some PM's in possesion now, but the above IRA transfers would seem to protect paper products from going "poof" someday.

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  32. Try to avoid any paper gold IRA, there is no such thing a segregated accounts it's a lie. If you must trade , play for chips you can take off the table and convert at a penalty on short notice for cash to convert into real assets.

    Putting in a wood burning stove into the old fireplace. Purchased and Stacked a chord of firewood over the weekend. Looking to put in some solar panels plus batteries and/or backup generators. More shelving to efficiently use the available space.

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    1. such a pessimist.......btw....build me a guest room

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    2. Guest carriage house in the back has power and a need to be refurbished irrigation well, and is 2 houses away from the hospital which is doubling its footprint and installing new buried power lines in an aggressive crash build program. Oh and the VA Hospital is just finished constructing a huge brand new outpatient clinic (22,000 square feet) a couple miles down the road with solar panels (440 kw of PV when complete) and multiple battery backup trailers. Weird thing is most of the locals who are able to do not use the existing facilities and leave the State for quality health care.

      Something pretty serious is going on in the back for the Fed to publicly give QE lip service at an all time high in the markets.

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    3. Some thing serious going on in the back, yeah could be..... Check out the BDI and where its at today and where it was in 2008, throw in the effect of the drought, Unemployment what ever the real number is probably around 25% , The Eurozone and that Kabuki show, Kli's assertion the TPTB are tired of giving away their gold for cheap, the Middle East starting to boil ect.. I'm sure I left a few things out but yeah there some stuff going on in the back room for sure! Now that I'm over my initial euphoria of seeing green for the first time in a while, thinking stuff over last night I'm farking depressed, were F-Ked......

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  33. Red,

    I fully agree about the "paper gold" IRA. But, what I described about is an IRA that holds actual Physical Metal. Certain coins/bullion are allowed in such as American Eagles. They claim that the actual metals are put in your own safety deposit box and it is segregated. I realize we live in a world of lies, but this seems legit.

    I will do more research. Otherwise, it is liquidating your IRA's and paying the penalty if less than 59 1/2. Then buying the metals and trying to safely store.

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    1. Red is correct....of course he and I have zero knowledge of this particular company but rest assured there is a very high likelihood that you will never get your gold......EVEN IF THEY ARE HOLDING IT IN A SEGREGATED ACCOUNT....I would prefer to either hold miners and their stock certificates if I HAVE TO TRADE AND HOLD PAPER......or maybe Sprotts PHYS or CEF anyway as red states there is another game and it is called moving out of your paper just before the SHTF and going to the matress or more importantly REAL Assets like food or land or gold or all three......the RULE of law is finiished after the MF GLobal court rulings.....

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    2. i know you have heard this before doc but a "rule of thumb" in the gold world is IF YOU DON'T HAVE THE GOLD IN YOUR OWN POSSESSION .....THEN YOU DON'T OWN IT. I firmly believe this to be true and will not go into detail.

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    3. here is another don't own so much that you can't escape with it......ask Khadafi

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  34. Kli & Red,

    Thanks for your opinions. I realized that possession has been "9/10th's" of the law and that will change to "10/10th's" of the law.

    What bothers me about waiting until SHTF is that we really don't know when that will be and thus difficult to time. If you go to the mattress with physical dollar bills, what will be the purchasing power of those dollar bills. If you buy the miners (I have some of course) thru your brokerage account and then your broker goes bust, then your miner shares could be lost thru hypothecation. Are you implying that you have demanded the actual miners stock certificates??

    At some point, I have to decide whether I will actually liquidate my retirement accounts which would result in penalties and a large tax bill. Or, these Gold IRA's, but risk them being a illegit. Or do nothing and risk the paper going "poof".

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  35. Not an easy choice Doc........ fwiw I unwound half of my drips and part of my Ira's. Bird in hand worth two on the bush but beond that who knows, you just have to do whats comfortable for you and your family with the thought in mind that at any point in time what ever is in an account can be MF'ed at any time.

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