WTF happened? PMs just exploded!

[Neuro]

Gold up $44 and Silver up 1.30, any clues?

[chad]

the bernank announced plans for qe infinity today.

[MNeagle]

http://gold-silver.us/forum/showthread.php?58458-1700-33

[Neuro]

the bernank announced plans for qe infinity today.

Hooray, everyone will get rich!

Pssst! Can you spare me a hundred dollars for a cup o'coffee brutha?

[Serpo]

http://www.goldprice.org/NewCharts/gold/images/gold_3d_b_o_USD.png


VERTICAL

[Neuro]

http://www.goldprice.org/NewCharts/gold/images/gold_3d_b_o_USD.png


VERTICALThat's like a $65 move from bottom to top. Didn't even know Bearnaise was speaking today...

[gunDriller]

Gold up $44 and Silver up 1.30, any clues?

silver was constipated. Bernanke sprinkled Fed-Ex-Lax on the currency markets. Silver exploded.

[chad]

i have to laugh though, the dog is up $1.32. maybe it really only does cost $5 to dig it out of the ground.

[mamboni]

Oh shit! I'm so excited, I have a turtle head peaking out! Finally! I moved almost all the rest of my cash, multiple six figures, into gold and silver and mining shares when gold hit $1570. Gold and silver are the only true money on planet earth. Everything else is hot air and bullshit.

[Buddha]

Dry powder is dry

[Book]

Iran is now probably demanding only gold as payment for oil.

[gunDriller]

CAREFUL !

the Department of Jewish Homeland Security will flag the use of the term "Exploded", "Gold", and "Silver" - and classify us as potential threats to ... criminal Jewish national security.

[EE_]

Oh shit! I'm so excited, I have a turtle head peaking out! Finally! I moved almost all the rest of my cash, multiple six figures, into gold and silver and mining shares when gold hit $1570. Gold and silver are the only true money on planet earth. Everything else is hot air and bullshit.

Very nice move mister!

[beefsteak]

Neuro,
To help frame the discussion, international CB consultant and venerated analyst, James Rickards gave a cogent interview Mon 1/23 (2 full days before US-FOMC meeting which lit a fire under PMs today Wed 1/25) which was conducted and now posted on YouTube.

If you were to study today's "bafflegarb" statement (post FOMC meeting--by "sauce of bearnaise") you'd prolly miss the excellent explanation and "what to listen for 2 days from now" thunder stealing exposed by Rickards on Monday.

In case you may think you've heard the name before on "King World News" infrequent interviews, J.R. is the author of the hot seller in financial circles, entitled: Currency Wars, just recently released.

Here's the link to Monday's prescient interview.
http://youtu.be/GPM-QLM-zQ4

The lingo part comes around the 20 minute mark of the 23 minute interview.

The explanation of lingo is in the discussion of "targeting nominal GDP" fed-speak expressions and what they really mean as they pertain to and "hide inflation" within obscure references and inferences.

Hope this assists. God knows you've been a big he'p to me and mine. ;D

Must say there's nothing quite like someone of his stature pre-announcing FOMC meeting results 2 days in advance of said meeting. 8)

The other juicy/affirming piece of investment guidance iterated in the above is J.R.'s recommended portfolio allocation. Funny thing is...while he may just now be articulating the percentages he set forth early in the interview, the Mrs. and I already arrived at this portfolio allocation he's now reco'ing .... about 13 years ago, and firmed it up about 7 years ago. Nice to finally "get one right" according to the experts. LOL Also nice to be "early for a change and get ALL the move in PMs" so far. Wish we had more, but can't get greedy. Some folks don't have any.

I liked especially how he referred to buying power of gold to "survival groceries for a year" while an ounce of silver set aside now would buy survival groceries for a week I think it was. Now that's a whole different illustration than the predictably trotted out, old canard about Gold and the "$20 suit" yadda yadda yadda. God, but I'm sick of that stale, shiney seat of the pants reference.


beefsteak

[beefsteak]

PS...if you like the way this guy thinks/advises heads of state, etc., then perhaps you'll like this additional interview 1/3/2012, where he categorically states the War With Iran has ALREADY started, and proceeds to document his positional declaration.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/13_Jim_Rickards_-_War_With_Iran_has_Begun,_Gold_to_Break_$2,000.htm l

[gunDriller]

The explanation of lingo is in the discussion of "targeting nominal GDP" fed-speak expressions and what they really mean as they pertain to and "hide inflation" within obscure references and inferences.

good point.

"targeting nominal GDP" means they will print as much money as they need to achieve that figure. of course the inflation that is part of the nominal GDP is based on their own WARPED definition of inflation.

Rickards also has a lot of interviews on King World News. Rickards does about a good job as anybody of explaining the warped world of Fed-Speak & US government economics, the IMF, SDR's (the world currency distributed by the IMF) ... etc.

[Walter Mitty]

I wonder if it has to do with the stock market.
Stock Market up, Gold & Silver up.
Stock Market down ,Gold & Silver down.
Get the Paper price of Gold and Siver running parallel to the stock market.
At the next market crash it shakes out the weak hands.
The PTB buy right before the price explodes to the up side.
In the meantime trade the volatility with insider information.

[Sparky]

I wonder if it has to do with the stock market.
Stock Market up, Gold & Silver up.
Stock Market down ,Gold & Silver down.
Get the Paper price of Gold and Siver running parallel to the stock market.
At the next market crash it shakes out the weak hands.
The PTB buy right before the price explodes to the up side.
In the meantime trade the volatility with insider information.

Stocks and PMs get treated as tangible assets, unless paper fails. Stocks are an excellent hedge against inflation, unless paper fails. Stocks will continue to go up in a low interest rate environment, unless paper fails. (Am I making my point?)

[BrewTech]

Oh shit! I'm so excited, I have a turtle head peaking out! Finally! I moved almost all the rest of my cash, multiple six figures, into gold and silver and mining shares when gold hit $1570. Gold and silver are the only true money on planet earth. Everything else is hot air and bullshit.

I remember the good old days when I had the opportunity to make moves like that.

Good times...

Good luck with whatever you decide to do with all that fiat...

[Neuro]

I liked especially how he referred to buying power of gold to "survival groceries for a year" while an ounce of silver set aside now would buy survival groceries for a week I think it was. Now that's a whole different illustration than the predictably trotted out, old canard about Gold and the "$20 suit" yadda yadda yadda. God, but I'm sick of that stale, shiney seat of the pants reference.

I agree Beefsteak!

I think you are a bloody idiot if you spend $1700 to buy a suit today... Probably was one month of emergency groceries for an ounce of silver if it was one year supplies for gold. 1/12 ratio implied, if it was a week supplies for silver a ratio of 1/52 is implied, most analysts seems to think it will go down to 1/10-1/16...

[Shami-Amourae]

I think we will see some fireworks in March. March could be the month Greece finally defaults. If all these "fireworks" happen a lot of people will dump their Gold/Silver onto the market for cash, giving us a nice dip. Just my opinion, I'm no expert. What do you guys think?

[Neuro]

I think we will see some fireworks in March. March could be the month Greece finally defaults. If all these "fireworks" happen a lot of people will dump their Gold/Silver onto the market for cash, giving us a nice dip. Just my opinion, I'm no expert. What do you guys think?

I don't think a sovereign debt default would see any dip in PMs, not of the physical kind though... No counterparty risk starts to become really appreciated as advanced countries starts to default on what they owe...

[mamboni]

I remember the good old days when I had the opportunity to make moves like that.

Good times...

Good luck with whatever you decide to do with all that fiat...

Well, I don't have much fiat in my investment account, maybe 8% in cash. Over 90% invested in gold and silver bullion and mining shares. I in this for the long haul.

Personally, I just fell into a boatload of cash. Since I'm replete physical bullion wise, I've given my wife $30K to redo the downstairs media room, bathrrom and bar. A portion of the rest will be invested in musical instruments, survival supplies, weapons. I always keep mininum 6 months expenses in cash.

[undgrd]

Tactical Trumpet FTW!!!!

[beefsteak]

I agree Beefsteak!

I think you are a bloody idiot if you spend $1700 to buy a suit today... Probably was one month of emergency groceries for an ounce of silver if it was one year supplies for gold. 1/12 ratio implied, if it was a week supplies for silver a ratio of 1/52 is implied, most analysts seems to think it will go down to 1/10-1/16...

LOL...
I'd like to meet the housewife who can make 1/oz of silver ($32) buy a month's worth of emergency groceries, Neuro. I'd arrange for a luncheon between that paragon of thrift and Helen so fast you wouldn't even have time to blink first.

As far as what most analysts think about the "ratio returning to 16:1" that's so far fetched it makes us all look like tin-foil wearers. It's just another old canard. There IS no relationship between the two other than the one instantly calculated by algorithm birds. While I enjoy the divination of entrails and squiggles on T.A. charts, that particular millstone of PM analysis was abandoned by this old man many decades ago.


beefsteak

[Neuro]

LOL...
I'd like to meet the housewife who can make 1/oz of silver ($32) buy a month's worth of emergency groceries, Neuro. I'd arrange for a luncheon between that paragon of thrift and Helen so fast you wouldn't even have time to blink first.

As far as what most analysts think about the "ratio returning to 16:1" that's so far fetched it makes us all look like tin-foil wearers. It's just another old canard. There IS no relationship between the two other than the one instantly calculated by algorithm birds. While I enjoy the divination of entrails and squiggles on T.A. charts, that particular millstone of PM analysis was abandoned by this old man many decades ago.

beefsteak
I disagree beefsteak, but I thanked you because you have a way with words that is quite enticing... ;D

Just because something have discoupled decades or centuries ago, doesn't mean that it will never come back. I think the tradition of having to save for what you bought started disappearing when the Gold-Silver ratio got out of it's 16/1 ratio, but I do think those times will return. Not too long ago gold was generally derided as a barbarous relic, that would never be a serious investment again. This was 10-12 years ago, and gold was valued at $250-300... Silver was up to 32/1 G/S ratio just 10 months ago, certainly a temporary peak, but as gold is advancing and getting out of range for smaller savers, there is absolutely nothing that would stop silver going up to 20/1, 16/1, 12/1 or even 10/1. I do believe $8000 gold and $500 silver is possible without severe price inflation, within the next few years...

Btw how is the new suit? ;D

[beefsteak]

The old shiney seated trousers still have more life in'em. All one has to do is sit on rough sandpaper and twist a spell. Good as new.

In the meantime, I look for other shiney items that are far more to my liking. THOSE shiny trinkets I do sincerely enjoy "sitting upon."

Thanks for the dialogue. I understand where you are coming from. Whenever I see a disconnect, my commodity broker training has instilled in me a long time ago... "look for what is different this time."

This time...in regards to the ratio under discussion...the "differences are as innumerable as the sands on the beach" thus my discard of traditional ratio based valuations as any type of relevant metric 'this time.' "

I agree that returning to the incorporation of traditions for basing life decisions in my/our here and now is a valid point, and one I ascribe to.
Don't agree that this holds true in matters of finance, especially natural resource management finance and investment genre'.

However, that does not include most assuredly old manipulative metrics (how much gold to how much silver is "traditionally espoused.")

Nowhere does this "traditional 16:1 metric" fall apart more visibly than in the world of actual mining, a field in which I have some expertise.

Many copper deposits, such as mined in the SW of the USA by conglomerate Phelps-Dodge turn out huge amounts of gold in ratio to their primarily recovered metal, Cu.

Are we to somehow believe there is a traditional "copper to gold ratio" that should regulate all valuations of copper in today's marketplace globally?

I think not.

Is copper less manipulated than Ag? I think So. Is silver more manipulated than Au? Absolutely.
Are historical, manipulatively visible, ratios relevant in any metal market other than Ag? It is my posit that would be a no.

Your current thoughts?

[Sparky]

I think the problem with the 16:1 argument is that it was based on a long-abandoned government-imposed standard, rather than some natural relationship, like supply or demand. It could go to 16:1, or 12:1, or 20:1.

Probably the main reason for it to get to 16:1 is that so many silver-bugs are aware of that target that silver might get bought-up to that ratio, and then sold off. It's the self-fulfilling prophecy thing.

My guess all along has been $3200 gold (for this approaching generational high), with silver at $75-$100, but I could certainly see $200 (16:1 for $3200 gold) in play. I'd put that as my upper limit over the next 20 years. I'm sticking with my original gold target, but I now think my silver target might be too light. I now think it's at least even money that we break $100, and that's without the hyperinflation scenario. I think we'll see CPI-measured inflation in the 6-12% range for a number of years. I consider hyperinflation more like 30-50% (or 20%+ as measured by CPI). If we do get to that, estimating the future price of silver starts to lose its meaning.

[undgrd]

I always thought 16:1 was the G/S ratio in the ground?

[Sparky]

I always thought 16:1 was the G/S ratio in the ground?

I did find this, but can't vouch for it:

In short, if you are going to use gold/silver ratios, you may want to think about the possible relevance of other ratios:


9:1 is the ratio of silver to gold annual mine production
6:1 is the estimated ratio of economic gold to silver in the ground (USGS)
5:1 is the estimated physical ratio of all silverware, silver/gold jewelry and other stocks above ground (according to CPM Group)
1:1 is the year-to-date ratio of investment dollar demand.
1:3 (more silver than gold) is the physical ratio of gold and silver coins/bullion

From http://www.financialsense.com/node/4809.

I don't really understand the last ratio. He reverses the ratio at 1:3, citing more silver than gold. Don't all the ratios imply more silver than gold? So why isn't this simply 3:1?

[Neuro]

The old shiney seated trousers still have more life in'em. All one has to do is sit on rough sandpaper and twist a spell. Good as new.

In the meantime, I look for other shiney items that are far more to my liking. THOSE shiny trinkets I do sincerely enjoy "sitting upon."

Thanks for the dialogue. I understand where you are coming from. Whenever I see a disconnect, my commodity broker training has instilled in me a long time ago... "look for what is different this time."

This time...in regards to the ratio under discussion...the "differences are as innumerable as the sands on the beach" thus my discard of traditional ratio based valuations as any type of relevant metric "this time."

I agree that returning to the incorporation of traditions for basing life decisions in my/our here and now is a valid point, and one I ascribe to.

Don't agree that this holds true in matters of finance, especially natural resource management finance and investment genre'.

However, that does not include most assuredly old manipulative metrics (how much gold to how much silver is "traditionally espoused.")

Nowhere does this "traditional 16:1 metric" fall apart more visibly than in the world of actual mining, a field in which I have some expertise.

Many copper deposits, such as mined in the SW of the USA by conglomerate Phelps-Dodge turn out huge amounts of gold
in ratio to their primarily recovered metal, Cu.

Are we to somehow believe there is a traditional "copper to gold ratio" that should regulate all valuations of copper in today's marketplace globally?

I think not.

Is copper less manipulated than Ag? I think So. Is silver more manipulated than Au? Absolutely.

Are historical, manipulatively visible, ratios relevant in any metal market other than Ag? It is my posit that would be a no.

Your current thoughts?
I don't really base my prediction on the natural ratio of the metals, this was only important as long as gold and silver were monetary metals, and the main reason why silver most likely will not become a monetary metal again is that it is too rare today. While the population of the world has grown to 7-8 billion people from 3-4 billion when the silver standard was abolished above ground easily available silver has decreased by a magnitude, so we would get very few coins of silver per person... It could only become a monetary metal in smaller limited societies, not globally... But silver will keep it's luster as poor mans gold, and I predict it's luster will increase with price, most investors/savers won't consider it worth it's weight until above $100.

So far we have a great industrial demand for the metal, seems like even if western world collapse, China, Russia and Asia will keep chugging along, the industrial demand doesn't seem very price sensitive and it depletes more and more of tge reserves each passing year, once Apple can't release sufficient numbers of iPhones because of physical shortages, price will completely explode.

As was mentioned also 16/1 is a mental target for many metal investors, that in itself will push it towards that and probably beyond once breached. Manias are an interesting phenomenon. Good idea to sell when it approaches 10 (if ever ;D)...

Gold doesn't have it's high value because of it's rarity alone. It does have it's value more because of it's yellow shiny color, it's density and non corrosive nature. I bet fossilized dinosaur crap is more rare than gold, but it is not easily recognized and not very pretty, so it is pretty worthless to most...

[gunDriller]

The old shiney seated trousers still have more life in'em. All one has to do is sit on rough sandpaper and twist a spell. Good as new.

Is copper less manipulated than Ag? I think So. Is silver more manipulated than Au? Absolutely.
Are historical, manipulatively visible, ratios relevant in any metal market other than Ag? It is my posit that would be a no.

Your current thoughts?

it's surprising how much alike we think.

Sprott had a good essay on recent silver history at KWN recently -
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/25_Eric_Sprott_-_Aggressive_Chinese_Buying_Will_Spike_Gold_Price.h tml

he makes good arguments for the 16:1 ratio
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2012/1/26_Eric_Sprott_files/Eric%20Sprott%201%3A26%3A2012.mp3

BUT every ship-wreck is different, though the endings tend to be similar.


i think the Deion Sanders answer is a good one, "Both". as in, collect ALL metals. i have a 2 pound pure zinc scoop thing at my desk, just because i like metals. it would come in handy if i wanted to - make toy soldiers ... which i don't.

but one of our members was just talking about buying zinc & paying $10 a pound ... i got this zinc for maybe 50 cents.

the secret - estate sales, garage sales, moving sales, "free piles" - it's amazing what people throw away.


i ask myself "which metal would be best in a desert island situation ?" i think steel sheet might win there, because a fire will often get up into the 1700 to 1900 degree F range, which will melt copper, silver, and gold - and that's no good if you're using the metal to cook your food.

of course, in a financial transaction, not many people will be interested in an 800 pound cast iron antique stove, even if it is "really cool".

so it's just good to have a variety. and for that, it helps to have space to store it in. the "which metal/ material to warehouse" question varies with the size of your warehouse.

[Glass]

I'm wondering what the margin calls are going to look like after this. How long does it normally take to get your calls?

A day or so far the call with maybe another day or so to settle up. Are we looking at next Tues, Wed for a dip in PM's on the back of that?

[letter_factory]

[COLOR=blue]
Here's the link to Monday's prescient interview.
http://youtu.be/GPM-QLM-zQ4
beefsteak


Says it costs 364 $/oz gold....lol

[gunDriller]

I'm wondering what the margin calls are going to look like after this. How long does it normally take to get your calls?

A day or so far the call with maybe another day or so to settle up. Are we looking at next Tues, Wed for a dip in PM's on the back of that?


the Baltic Dry Index shipping revenue curve is astoundingly bad. World Trade revenues in a state of collapse. It looks like it's going off a cliff - even on a Log chart plot.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/01/20120125_BDIY2.png

that is some serious doom !


the ECB has already announced their own money-printing, but that hasn't been enough to goose gold in $ terms. gold has stayed close to its all-time high in Euro terms ... because the Euro is sucking.

i think the gravity of the situation will make it impossible to prop up world stock markets in the next few months and they will take a plunge in the next few months. right in the middle of an election year. another buying opportunity for PM's.

then the Fed will try to say something re-assuring. they have nothing left to re-assure people with - they can't lower interest rates any more, and everybody knows they can't raise rates because the debt is HUMONGOUS. what's left - to officially announce more money printing.


and then - we will have the spectacle of the next debt ceiling debate.

so there are titanic forces pushing the markets in both directions. going down when the markets generally collapse (including those margin calls), then taking gold & silver up when the Fed admits that they're printing money again and they have that Nincompoop debt ceiling debate. i think that combination will be enough to push gold over $2000.

[letter_factory]

so there are titanic forces pushing the markets in both directions. going down when the markets generally collapse (including those margin calls), then taking gold & silver up when the Fed admits that they're printing money again and they have that Nincompoop debt ceiling debate. i think that combination will be enough to push gold over $2000.


Time for Iran to do a pre-emptive false flag, blame it on israel/us/europe, and close the strait of hormuz.

[gunDriller]

http://www.washingtonpost.com/business/senate-vote-will-allow-12-trillion-debt-limit-increase/2012/01/26/gIQA5omUVQ_story.html

"Jan. 26 (Bloomberg) -- The U.S. Senate voted to permit an increase in the nation’s debt limit designed to be large enough to accommodate borrowing through the November election.

The chamber today voted 52-44 to kill a measure that would have blocked a $1.2 trillion increase -- to $16.394 trillion -- in the legal cap on borrowing. Under a convoluted agreement among lawmakers, that allows the debt ceiling to rise automatically without additional government action."


http://www.foxnews.com/politics/2012/01/26/senate-vote-gives-obama-option-to-raise-debt-ceiling-another-12-trillion/

http://www.kitco.com/images/live/silver.gif

looks to me like the vote occurred about 12:30 Eastern time - because that's when the markets abruptly moved.


... but i'm having trouble finding an article that says what time the vote occurred.

[Glass]

According to C-SPAN the debate was on Thursday 12:10pm as per your article date. Doesn't say when the vote was time wise.




LIVE NOW ON C-SPAN 2: Senate Debate Debt Limit Increase (http://mentionedoncspan.tumblr.com/post/16526361979)
Thursday at 12:10pm (ET)

In any event I think you are on to it.

[mamboni]

Fed To Markets: Buy Gold And Silver

by John Rubino on January 25, 2012



The Fed just spoke. Here’s a slightly edited transcript:

Blah blah blah … the economy has been expanding moderately … blah blah blah boilerplate inanity blatant lie … the Committee seeks to foster maximum employment and price stability ….
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

This of course comes as no surprise to anyone. But seeing it in print had exactly the impact you’d expect. Stocks erased their early losses, the dollar tanked, and precious metals soared. With good reason. It is now the stated policy of the US government to have negative real interest rates for years to come (eons in trader-time).
http://dollarcollapse.com/wp-content/uploads/2012/01/Gold-dollar-silver-Jan-12.jpg (http://dollarcollapse.com/precious-metals/fed-to-markets-buy-gold-and-silver/attachment/gold-dollar-silver-jan-12/)
The carrying cost of gold and silver bullion will remain more or less zero, while all manner of “risk-on” strategies and carry trades will generate virtually guaranteed returns. Think back a decade or so and ask your younger, more naive self what the result of open-ended zero interest rates would be. You’d have probably said “that will never happen, but if it did, gold and silver would go parabolic”. You’d be half right. Grab those junior miners with both hands.


http://dollarcollapse.com/precious-metals/fed-to-markets-buy-gold-and-silver/