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Interesting action in the precious metals had them continuing overnight a sharp fall begun after...

Interesting action in the precious metals had them continuing overnight a sharp fall begun after FOMC minutes suggested an earlier-than-expected end to Fed candy. This reversed with the 8:30 jobs report which showed still-sluggish employment growth. Gold has since bounced $21 to $1,651, though still off 1.4% on the session. Silver jumps $0.70, but remains -2.6%.
Comments (26)
  • The same FOMC that was discussing the "end" of QE2 in March of last year...of course that end was just the beginning of QE3 & QE4EVR.
    4 Jan 2013, 10:15 AM Reply Like
  • In the end, the Federal government cannot pay its bills and fund its out of control spending if interest rates rise. As a result, the Fed knows that if it ends the candy abruptly the addict will die and if it ends the candy slowly,the addict will die slower. At this point these are the only two options and the Fed's immense power has been boxed by a Congress and President that refuses to make tough calls.
    4 Jan 2013, 11:08 AM Reply Like
  • I think you are right. Bernanke was recently on record as saying there was only so much the Fed could do and that fiscal actions by government were required. As these got ikcked down the road by Obama it looks to me like Bernanke's response to try to kick start fiscal responsibilty.
    In short nothing has changed and money will have to be found from somewhere and ehat the betting it will be place firmly back on the Fed's shoulders, since without responsible action, inflation is ultimately the only way out of this mess, as it has been so many times in centuries past.
    5 Jan 2013, 06:34 AM Reply Like
  • SIVR is getting beat up today but it is right at a point-and-figure chart support level. This will be penetrated if it falls below 29, and then SIVR will head lower.
    4 Jan 2013, 11:50 AM Reply Like
  • A trillion $ coin will be minted,and adios to the debt! We are all playing with monopoly money, so why not? We can adjust SS by raising the age, but if you raise the Medicare age, then how to those people get medical care they can afford?


    And since abortion is no longer a viable option in most states, who will pay for the $30,000 daily cost of a crack baby sitting in a NICU unit in the hospital, and which loving anti- birth control family will adopt that child to keep it off the welfare rolls?


    We are doomed. The poor are reproducing exponentially, and the average middle class family can't afford more children. The poor are being given no sex education nor support for stopping pregnancy, so we will get what we ask for. Thousands of additional babies, disabled and unwanted that SOMEONE WILL PAY FOR.
    4 Jan 2013, 11:57 AM Reply Like
  • Thousands of additional babies, growing and having the opportunity to bless others and worship their Creator. When I read complaints of SOMEONE WILL PAY FOR, there is no doubt that SOMEONE has an attitude adjustment to make on what children are worth. Sex education is not so much needed as education (and ethical heart surgery) needs to be done on loving one's neighbor, and building up the already shrinking population in the USA. Ever wonder why historically, and yes today -- in China and India, and Brazil, those economies are called EMERGING? It is because they have lots of children. Western anti-population growth philosophies are for the wimps of the world societies. More people is one of the building blocks and the strength and foundation of a growing economy. Greed and hatred of human reproduction is the pitfall and deterioration of any such nation.
    4 Jan 2013, 06:09 PM Reply Like
  • If we are doomed, it is because people like you advocate for a society that is willing to murder babies, 58 million of them so far. Take a look at the pictures of aborted "fetuses" that look like babies and tell me that you would take part in such 'procedure'.


    Quit trying to justify your decision to support infanticide based on false economics and try looking at the moral side for a change.
    4 Jan 2013, 09:39 PM Reply Like
  • To tikigod18- Dear friends of mine adopted one of those crack babies, and he just graduated from high school, maybe not with "honors", but with much love, support, and admiration from family and friends. NICU stay has been long forgotten, and who knows how far he will go..... Just sayin
    6 Jan 2013, 07:01 AM Reply Like
  • You are wrong. The Hispanic birth rate, which has been the highest among U.S. ethnic groups, fell significantly in 2012 and will continue to fall for the forseeable future as the poor get more and more savvy to the financial-security stupidity of large families. And the population of the country as a whole will soon begin to fall because the national birth rate is rapidly approaching a rate that is below the "replacement rate."
    6 Jan 2013, 02:27 PM Reply Like
  • “And how we burned in the camps later, thinking: What would things
    have been like if every Security operative, when he went out at night
    to make an arrest, had been uncertain whether he would return alive and had to say good-bye to his family? Or if, during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, pokers, or whatever else was at hand? The Organs would very quickly have suffered a shortage of officers and transport and, notwithstanding all of Stalin's thirst, the cursed machine would have ground to a halt! If...if...(but) we didn't love freedom enough. And even more – we had no awareness of the real situation.... We purely and simply deserved everything that happened afterward.”
    - Alexander Solzenitzen
    7 Jan 2013, 05:00 AM Reply Like
  • Funny how the DOW is basically flat for 2 days yet gold and silver are dropping?


    Things that make you go Humm !!


    Where is that fiat money going ? Bonds..nope,,,Stocks..... MIND


    Unemployment last month again was about 1,2 million fired but 200k jobs created..How long can this go on...
    4 Jan 2013, 12:38 PM Reply Like
  • To Interesting Times. I've looked at SLV versus Dow, Nasdaq, and S&P 500, there are some interesting events that happen when silver drops 10% for no apparent reason. Such as about 3 weeks later the indexes start a rapid drop. Maybe some of these highly talented analysis can take a look at this relationship. I figure it's so consistent, I might just buy some QQQ Feb 15 puts.
    4 Jan 2013, 01:25 PM Reply Like
  • GM


    Sounds like a good question...I am not a chart reader, so obviously i don't rely on them..But some here are probably good at it..Looking forward to some thoughts on it. Personally when you throw manipulation into a calculation?. If i can see it then it has to be very obvious. NAKED SHORTS by JPM...Massive shorts to be honest.


    Personally i look at a long term macro investment,,Like when the money printing started and gained traction all over the world it is just a matter of time that the PM'S go UP in price/value..


    At my age i have become patient!! Economics 101 works for me!


    Kicking the can down the road only last so long...Like look at this link what our cronies passed just a few days ago...They are nervous as hell, which is scary in itself..



    Or with a colleague posted..


    "No prognosticating skills needed there. We got the big pork laden package. I'm amazed it came in at only 154 pages long. Dingy Harry must have been in a hurry. The legislators got a good THREE MINUTES to thoroughly read the bill before they voted on it. The amount of DD they put into their work is just astounding.So once again they had to pass it to see what was in it. Who didn't see that coming?"


    Now if this doesn't scare you i don't know what will!!
    4 Jan 2013, 01:48 PM Reply Like
  • The FOMC is, I suspect, sending a misleading signal so assist their buddies' desires to load up on cheap gold and silver.
    4 Jan 2013, 02:59 PM Reply Like
  • 2:38 PM Gold investors are making a "major mistake" if they think the latest Fed minutes indicate the end of QE is likely by mid-year or even year’s end, Peter Schiff writes, seeing the recent decline in gold prices as a buying opportunity. The Fed's hands are tied, as any end to buying Treasurys or MBS would result in higher rates that might tip the economy back into recession. Gold finishes the day at $1,648.90
    4 Jan 2013, 03:00 PM Reply Like
  • I was looking for a safe way to short gold long term. I rejected the ETFs that are inverse to gold because they don't track the price of gold well. In my research I found that the asset class that is very well correlated with gold is the treasury bonds. The inverse correlation between GLD and TBT has been almost perfect: since Jan 2008 GLD has gone up 81% while TBT has fallen 77%. If the relationship holds, when the interest rates will start going up, gold prices will fall, and TBT would go up. There was a post several years ago by Krugman that built upon a paper from Salant and Henderson ("Market Anticipations of Government Policies and the Price of Gold"), Krugman believes that the gold story is basically about the real interest rates and concludes that "the price (of gold) has risen because the expected returns on other investments have fallen". Building on this logic, I think that when the interest rates start going up, the money going into the alternative investment (gold) will start flowing out of gold.
    5 Jan 2013, 11:51 AM Reply Like
  • Gold as an inflation hedge can serve that purpose well, but better long before the Fed is seen ready to start taking Acton to control inflation. Once the perception sets in that the Fed is finally preparing to fight inflation instead of a feared deflation, gold loses its luster as an inflation hedge, and we are beginning to see this effect. But the still high jobless rate makes the Fed hesitate to change its bias toward continued economic stimulus, so gold is now essentially flat.
    6 Jan 2013, 11:40 AM Reply Like
  • Fed is just bluffing! No way can they stop printing and buying unless Congress gets effective..That is not happening. BO has them by the throat..


    Gold is used for more reasons then just inflation as well...But i don't see it losing it's luster much..Personally imo silver is the better investment right now anyway..$30 bucks an ounce?


    Are you kidding me>>
    6 Jan 2013, 12:10 PM Reply Like
  • Boomer


    You might be right..However those who now hold the Bonds might sell thinking rates will go up and buy gold instead...Am i correct?


    Plus if you ever get hyperinflation the bonds are worthless..I have a fear all this Fed actions will one day cause that to happen..


    Some of us who hold gold and silver expect the dollar to devalue so low that it is essentially worthless, a carton of milk one day might cost 100 bucks...IT DID HAPPEN in Germany in the 30's !!!
    5 Jan 2013, 12:19 PM Reply Like
  • IT, this is exactly my logic. As interest rates go up, prices of bonds will go down. This will improve the return on bonds if you buy them at lower prices. This improvement in the returns on treasuries and other investments is what will potentially drive the price of gold down if Krugman is right. I expect the price of gold to go down at approximately the same rate as the returns on bonds improve. Therefore, TBT which is an ultrashort treasuries, should go up. TBT is one way of playing the outflows from bonds and from gold. The problem is the timing. I am not sure that the increase in treasury rates is sustainable. As Washington creates another debacle, investors can flock again to the safety of US treasuries. Any other global event may have the same effect: Iran, another round of Euro crisis, etc. Shorting treasury bonds has been a losing trade for 4 years now. Eventually it will turn profitable ( and highly profitable) but timing is unpredictable.
    5 Jan 2013, 12:44 PM Reply Like
  • Heres a post from a good friend of mine....lets here your take...


    We just went through massive political theater where Congress did what it wanted to do; it raised taxes while presumably saving Americans from massive tax increases. I suppose Congress thinks that Americans are so stupid that they will forget that it was the same Congress that set up the law that created the fiscal cliff and those massive tax increases in the first place.


    What Congress did not do was reduce spending. The FED has been saying for some time that the problems with the US budget can't be solved by the FED's monetary policy. So to answer your question, I think the FED is signaling Congress that it needs to reduce spending to bring revenues more into alignment with spending. In order to encourage Congress to reduce spending, the FED is saying they may reduce buying government debt. If the FED does not buy the US debt, all hell is going to break loose. China won't buy it anymore. I also think the FED's threat here is hollow... I agree with you, they can't stop buying our debt. When that is realized, Gold and Silver should pop again.


    Printing money is different from QE. Buying government debt is called 'printing money'. It's also called monetizing debt. When the FED buys US debt, that is inflationary and Gold and Silver should go up. If the FED signals that it's going to reduce buying US debt than Gold and Silver should go down. I think this is why Gold and Silver have recently taken a hit.


    Meanwhile, the FED also has QE. QE is not involved with buying government bonds; it's involved with buying other kinds of assets. Technically, QE is not printing money because it’s purchasing real assets as opposed to debt. QE3 is about buying mortgage-backed securities.


    The idea was that by buying mortgages, banks would make more loans and reduce their mortgage rates. But the banks are not using the money to make loans; the banks are using the money to make other kinds of security related investments. Basically, QE3 is a bailout program for the banks that made risky loans and lost. The FED is transferring the risk to the taxpayers.


    I think the reason the stock market is not going up because of QE3 is because the economy is slowly sinking into a recession. So the QE money is basically enough to offset the average decrease in corporate profits.


    One big problem that should occur is that average corporate profits have to decrease because the government just decreased the average Americans paychecks by 2.2%. This means US GDP is going to take a hit.


    If the FED also reduces QE3, the market should trend down even faster which will cause business cutbacks and more unemployment.
    5 Jan 2013, 12:52 PM Reply Like
  • hi all
    please give signals on gold
    should we buy or sell gold,sp 500 and nasdaq
    thx a lot
    if on my mail im so thank ful all dears
    thx again
    6 Jan 2013, 01:27 AM Reply Like
  • I very doubt QE will end any time soon.
    7 Jan 2013, 04:34 AM Reply Like
  • I am an 66 year old retiree, hoping to enhance my retirement
    with part time investing.
    7 Jan 2013, 04:35 AM Reply Like
  • HC


    Be very careful with todays manipulated markets..Imo stocks might run out of steam soon..A NICE SIZE correction is due!!


    The metals, although manipulated by naked shorts, still have a lot of upside potential..Silver only $30 bucks an ounce??


    Once more people buy the physical will we see an upward movement. Otherwise all those naked shorts will definitely suppress the price..


    The Fed is dropping hints ONLY to get Congress to get it's act together. No way can they stop buying right now..Then you hear Pelosi saying just use the 14th admendment to raise the debt ceiling?


    What country do we live in ?? I thought WE had a democracy once ?


    How foolish am i...
    7 Jan 2013, 11:40 AM Reply Like
  • We live in a country that resembles exactly what the Constitution sought to protect us against; a tyrannical centralized govt run by an oligarchy.
    8 Jan 2013, 09:24 AM Reply Like
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