Tuesday, August 2, 2011

Fed will print money soon, you better have been buying the phyzz

Federal Reserve policy makers may start weighing additional steps to prop up the recovery after growth fell below 1 percent in the first half of this year and economists began cutting second-half growth forecasts.

“At a minimum, the FOMC will have a serious debate about the policy options -- what they should do, and what they expect to get from it,” said Roberto Perli, a former associate director in the Fed’s Division of Monetary Affairs, referring to the Federal Open Market Committee. “Growth in the first half was dangerously close to zero,” said Perli, director of policy research at International Strategy & Investment Group.

The FOMC will meet Aug. 9 in Washington after the government marked down its measure of economic growth to annual rates of 0.4 percent in the first quarter and 1.3 percent in the second, casting doubt on the Fed’s June outlook of 2.7 percent to 2.9 percent growth for this year. A gauge of U.S. manufacturing, a main engine for the expansion, slumped last month to the lowest level in two years.

Chairman Ben S. Bernanke said in congressional testimony in July that the Fed may take new action if the economy stalls, including beginning a third round of bond purchases. The central bank could also cut the interest rate it pays banks on excess reserves and pledge to hold its assets at a record high and interest rates at record lows for a longer period, he said.

Any effort by Bernanke to expand the Fed’s $2.87 trillion balance sheet would probably meet resistance from district Fed presidents, including Philadelphia’s Charles Plosser, who have said bond purchases and low borrowing costs have already pushed up long-term inflation risks too high.

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45 comments:

  1. Are they meeting in D.C. or in Jackson Hole? I thought the Jackson Hole meeting was next week?

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  2. Is 40 dollars a battle royale or what for silver?? wow..

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  3. @unthought,

    I concur. $40 seems to be a line in the sand.

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  4. Guys,

    Just saw that on goldprice.org. If you overlay volume on top of gold spot price, you can see that volume just skyrocketted today! Volume for gold is now over 40M for the day, when normally it's around 500k ... Who is buying? :)

    Thanks jinx for the tip...

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  5. JPM= 39.97, Ag= 40.10

    But what is not known is that due to the way that its derivatives are written, JPM’s losses are exponentional once silver breaks $36 or so. Rumors has it that JPM could be losing as much as $40 billion once silver is above $50. It has something to do with how the derivatives are written with payment tied to the price of silver.

    In essence,JPM has bet (a huge amount)through derivatives that silver will never outperform inflation. And why not,since JPM assumed that it will always be able to manipulate the price of silver. We have now come to understand that JPM’s loss exposure to silver is much greater than we have ever dared to hope.

    JPM’s current short silver position is estimated to be approximately 150 million ounces down from the recent 180 million ounces in August. The losses from these positions are easy to figure out. For every $10 rise in the price of silver, JPM will lose $1.5 billion. But what I have recently discovered is that through its derivative positions, JPM will lose about 5 times that amount ounce the price of silver is above $36. And ounce silver is above $45 dollars, JPM’s losses will increase to 8 times the amount of losses in their short positions. The reason is that as the price of silver increases, certain provisions get activated which multiplies the losses.

    http://www.infiniteunknown.net/2011/03/11/silver-rise-protection-team-strikes-again-jp-morgan-in-worse-shape-then-we-ever-dared-to-hope/

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  6. .A new bull market was since reborn for both silver and gold stocks, but don't think you can outperform gold with silver or gold stocks in this OTC derivatives-based crisis....without taking some serious kicks in the financial head on the downside. Focus on enduring those kicks in the head, because you are not going to avoid them, despite what the timers are telling you. At some point, I think silver disconnects from gold and implodes, while gold sits there watching the action with a smile. I think it happens at prices far above $50 an ounce, but I think it happens.

    17.It's very important to carry at least 20% cash in your accounts, if you are active in the gold and gold-related markets. The other 80% will make you more than enough profits if the 20% cash position goes off the board.

    Stu Thompson

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  7. Chinese traders are buying, swizterland is buying to back 100% of their currency, chinese banks are taking delivery to sell through their retail branches.

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  8. Gold ^ Silver ^ uncertainty persists. I think US congress still ha to volt on purposed spending cuts (hahahahahahaha!!!!!!).

    What a circus!

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  9. Another smack down, trying to keep it below $40.

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  10. Disclaimer - I am short on paper silver.

    @malcolm - Good to keep a level head on our shoulders! PM will correct one the uncertainty subsides.

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  11. Hi, where do you guys buy physical silver from? online dealer? how do you tell if the dealer is selling real silver? I am in Ontario.. any recommendations?
    thanks a lot.

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  12. @highway - If I buy online, I usually go through scottsdale silver. I like their 10oz stackers, but that's me. I also tend to visit the local coin shop on a monthly basis and buy junk silver. They only change $0.30 above spot/ounce for junk whereas the Maples or Eagles can be many many multiples of that.

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  13. Malcolm wrote:
    "I think silver disconnects from gold and implodes"

    Can you explain your reasoning? Why wouldn't silver at least track gold? I realize silver is much more volatile short term but why a disconnect?

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  14. missiondweller,

    That's not my thinking, that was from Graceland Updates 2011, by Stewart Thompson. I havent emailed him to ask why. But to be honest he has an odd writing style, and hes thinking is hard to follow.

    I disagree with his comment, I just posted it to see if anyone else has any insight on this. I mean on fundamentals, silver should be about 125.00, I'm looking for 200.00.

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  15. @highway,

    I'm in Ontario too. If you buy .999 or higher silver or gold then you do not have to pay sales tax in Ontario. I get mine from APMEX.com. I have also ordered from Kitco.com but have not ordered from them for a long time because of Nadler's ridiculous stance on the PM's.

    When ordering from APMEX I have found it is easiest to order in USD, not CDN - convert it here in Canada first and send them USD.

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  16. Hmmmm, Silver @ $40.40US sheesh....

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  17. I sincerely hope by this point that everyone on this board has done their restricted course (if you're Canadian). Get yourself at least one gun, you'd be stupid not to.

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  18. Looks like we might win the day.. tough battle.

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  19. HOUSTON! WE HAVE A TAKE OFF, WE HAVE A TAKE OFF!


    Man, I love you SGS!

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  20. A FEW THOUGHTS ON GRACELAND UPDATES

    As for Technical guys...Stu Thompson is better than most. He thinks outside the box. My only gripe with Stu is his views on silver.

    None of the Large Govt Mints are minting or selling COPPER EAGLES, COPPER MAPLES, COPPER PHIL HARMONICS, and etc. They are minting and selling GOLD-SILVER of both of these denominations.

    Silver will not implode because of Derivatives or any other reason compared to gold. Traders like Stu are allowed an opinion as he states the following:

    "I THINK Silver disconnects from gold and implodes"...

    This is an OPINION especially as it has the verb "THINK" in it. I could say "I THINK" Obama is really an Alien in human skin. That doesn't mean it's true.

    Gold and Silver have been money for 1,000's of years. One cannot take a gold coin into a store and buy bread. Silver will be the currency of trade, and Gold will be he store of large value. Both are needed.

    I believe the opposite will occur when the Derivatives Monster dies. People will stampede into physical assets. Gold will head towards the stars and be unfoldable to the masses. Silver will head towards the moon and will be more affordable.

    We will see a 10/15-1 Gold-SIlver ratio. I might not be in Dollars in the future if the Dollar Dies...but it will be in market value.

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  21. The miners are really driving me crazy. Most of mine are down on the day and we have bullion breaking out to new all time highs. Such a joke.

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  22. JPMorgan Chase & Co 40.01 -0.42 (-1.05%)
    Silver Aug 02, 2011 15:52 40.81 +1.57 +4.00%

    Going parabolic as i type. We're winning again :)

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  23. Holy Silver > 4% today, crap I was about to buy a monster box this morning, but got tied up with work till now. Classic!

    I am sure there is another smack down coming? JPM will not allow this to continue!

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  24. they've been mostly successful in keeping their share price above 40 while at the same time keeping silver at or below 40 for weeks now, and now they've crossed, and not just crossed, but very rapidly so

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  25. Flexin flexin
    Gold & silver flexin

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  26. have to laugh, no one thought these metals would clean up today or yest .... all the BRAINS were quaking .... NOBODY KNOWS ANYTHING cubed ... I know nothing but after they did not drop drastically last week, the coast was a lil clearer ... SGS, I know you are somewhat surprised and HAPPY :)

    i am sure a takedown is ensuing soon tho haha

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  27. holy crap market ended at ABSOLUTE LOW TO THE DECIMAL -265.87 that has to be the worst technical sign in trading when DJI falls apart and ends exactly on the low. this is the real deal, funds are selling the miners to RAISE CASH. Thats why the miners suck now. SHHTF

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  28. Ok, ok, lets keep our sanity - Silver went from $40.16 > $40.71. Hardly a "parabolic" move.

    And it has not yet breached the $41.43 high on July 27.

    I am "currently" bullish on Silver but am watching the charts closely.

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  29. @Commodity - "market ended at ABSOLUTE LOW TO THE DECIMAL -265.87"

    sorry, don't follow. Which exchange?

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  30. the move looks parabolic on the kitco chart

    http://www.kitco.com/charts/livesilver.html

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  31. The dow jones industrial index ended at the absolute low for the day my father and I were watching it blow through down 235 240 250 255 with ten minutes left and then it ended at the low of the day at 11866.62 The low was actually 0.9 lower I was wrong, but watching the charts it happened too fast, wasn't visible on the ticker.

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  32. just found out fitch put U.S. credit on negative review in the last hour of trading, maybe that helped the dow down

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  33. @Commodity - Thanx. Me also thinks this is significant. oh dear, oh dear, my shorts, my shorts...

    @Solid - Kitco chart sucks air. Have you seen the charts at silverprice.org?

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  34. I was looking at the charts and noticed that a large distribution dome begins in the dow march 9th 2003 my birthday and has an inverted peak of exactly 6 years later, with the recent highs mirroring the highs of 2007. There is a smaller distribution dome that begins on my birthday also, which you can see on the 5 year dow chart, andit looks like we are on the right side of the peak now.

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  35. march 9th 2009 being the lows of the most recent crisis. Is there some significance to a distribution dome with an inverted peak that is lower than its right and left boundaries. This should be a like once in a lifetime technical sign, someone out there recognizes.
    Also, just throwing this out to get your conspiracy theorist blood racing is there significance to the "13" year low of the s&p on march 9 2009 being "666"

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  36. @Commodity World News...you are pissing up a tree in a wind storm here, except for me. What do you mean by "distribution dome" with an "inverted peak" that is lower than "its right & left boundaries". Been doing technical analysis for 15 years & never heard of any of these terms, but would like to discuss them with you. Please explain.

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  37. distribution dome is a technical analysis of an inflated security or manipulated security. It is a fast start up with a decelerating rise to the dome top and then a slowly accelerated drop off. The dow jones chart is representing a 5 year and a 12 year distribution dome, The start of the dome coincides with a brief market bottom immediately followed by 1% interest rate policies, long term treasury purchases, and promises of unlimited loans to financial companies. I postulate that there is a manipulated inflation of security prices, and the smart money has been pawning stocks off to the pension funds and retail investors on the way to the top of the dome, and nowbuying is slowly drying up on the right side of the dome, but the inflating forces, government goldman suchs workers, etc knew what is coming all along and they are nearly all sold out of the market.

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  38. why have I read that before....is that from bulkowski's chart book?

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  39. the 5 year dome beginning march 9th 2009 has been postulated in various websites I've seen, but the 12 year dome hit me when I looked at the longer term dow chart, because It began on march 9th 2003 which i thought was a coincidental date for the both of them to begin on, the twelve year dome still has 3 and half years left to completion, The peak of the 12 year inflated dow distribution dome is a ghost peak that never happened, instead you have an inversion for the 2 years in the middle of the 12 year dome, with the inversion peak being the march 2009 low. In conclusion, there are 3.5 years left until the right side of the march 2003 dome completes

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  40. I read a post on clive maund about a double distribution dome in the gold miner index HUI and applied that to the dow http://www.gold-speculator.com/clive-maund/59024-gold-market-update-june-26-2011-a.html

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  41. This comment has been removed by the author.

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  42. He explained the domes applied to oil, gold miners and s&p in that link. It's a june 26th post I don't know if the HUI still fits under its shorter term dome though.

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