2nd.

Turd, I can't express enough my gratitude and respect for your integrity, maturity, wisdom, and graciousness.  Like I tell my kiddo, God will bless and reward you for doing good, even if at times others don't get it!

Hope you and your family have a wonderful weekend.

Thanks Mr. T.F. for a great post.  Items No. 1-4 will bring this metals site to the masses and become No. 1. 

Give me a little insight here please. When all fiat goes to zero just what will the mode of exchange ultimately be and will gold and silver maintain the value they have climbed to. I know this may sound like an absurd question, but I'm curious as to other opinions of the future...yours too Turd. I never had any plan to exchange my PM's for fiat, so just where will we be, what will this all lead us to?

I wouldn't be so sure of a major buying opportunity on Monday. I would BFTD. What Scott said above, I agree. Those expecting a early week fire sale may be disappointed I think. I don't see gold following the May silver route, the fundos are entirely different, as are the players. 

Next FOMC is Sept. 20 and 21   and they are a  Tuesday and a Weds.

PM's listen.

Notice how the prices are moving to his targets faster than projected?  Me thinks Turd has more clout than he realizes.

• He says that commodity price increases is temporary. This means that the current correction in commodities are not deep enough yet for him to start more QEs.  
• He hopes that education standard increases and reaches broader population base, and health care to be more affordable. This is a veiled threat to congress to act.  
• He says that international economic competitiveness has improved, and trade deficit has declined. That he is proud of that means that one of his objectives QE1 and QE2 was for USD debasement. He is patting himself on the back for a job "well done".  
• He expects inflation rate to go below 2% in the next few quarters. That is another signal that he wants price weakness first before resuming QEs.  
• He expands Sep 20 meeting to 2 days to discuss more accommodative monetary policies. Taken together with the points above, he hopes commodity prices and inflation rate to decline sufficiently for him to justify doing more QEs by September. He is eager to pull the trigger but not until at least September.  
• He wants fiscal policy to reward work and saving. That means he wants austerity for the people in the short term to reduce welfare handouts.  
• He blames congress for dragging their feet for the debt ceiling deal. In effect, he says that if you see the economy faltering, blame them, not him. He is doing his best to help economic growth. He even claims that unlike Feds in the past, he alone has the ability to boost long term economic growth. His main policy? Long term USD devaluation/debasement.
• Read the speech for yourself to see how arrogant Bernokio really is. "I know it all" and "I alone can do what past Feds could not do" attitude abound. 

We appreciate your leadership.

I am staying flat over this weekend. Looking forward to establishing new positions (SLV OCT/NOV calls) next week! Might start buying some GLD calls as well...   maybe.

that is the question...

Been giving this a bunch of thought over the past few weeks, and it's still not clear to me how Bernanke is going to keep the US Treasury's coffers filled with Benny-bucks.  Today's speech didn't offer anything compelling beyond ZIRP for the next two years.

Here are the rough facts about Federal spending and revenues:

* Spending ~ $3.8T

* Revenue ~$2.3T

* Deficit ~ $1.5T

* Outstanding Fed debt ~ $14T

As we know from the recent debt ceiling soap opera, there is no relief on the spending line.  The revenue line will remain unchanged absent some dramatic economic growth and/or draconian tax increases (not gonna happen),  - so no relief there.  That leaves the deficit at something north of $1.5T each year for the forseable future. 

My question is: "where is that money going to come from?"

Our foreign creditors are about done lending to us.  The public is too broke to lend to the government.  That leaves the Fed as the only option to print money to put into the Treasury.  There are basically two ways that can be done: 1) out in the open a-la QE2, or 2) off the radar, but how???

I'm leaning towards the second option.  I'm trying to figure out how to trade this fact.  Clearly over the long term the money will end up flowing through the Treasury into the market and driving inflation and PM's higher, so buy & hold remains unchanged.

What I can't figure out is if there will be ebbs and flows that we can use to trade.

Any thoughts?  

curious

Submitted by timpa on August 26, 2011 - 10:46am.

Clearly we are witnessing the unfolding of a gigantic world war between the PM's and the global fiat monetary system.  You must think on those terms to understand the magnitude of the power of the EE to suppress the PM price for god knows how many years.  Scottj presented evidence that this war goes way back when the U.S removed silver as part of the bi-metallic standard causing a depression, because then EE held most of the gold and did not want monetary power in the hands of the people.  This was done at the behest of the Rothschild proxies here in the U.S.

Right now we are seeing this battle take on monumental significance and proportions as more and more people wake up to the massive global fraud of fiat.  This is why the stakes are so high and becoming more and more intense each day as the forces of fiat darkness take on the multitudes of the earth's inhabitants who now attempt to protect themselves from the inevitable collapse of all fiat worldwide.  Even central banks in countries large and small  see the writing on the wall and are buying up both gold and silver to bolster their reserves in preparation for the coming storm.

There is an old saying which states, "Never bet against the FED".  I say you better bet against the FED with gold and silver, or you are dead!  These gigantic forces are tugging against each other causing increasing volatility and gyrations of the prices and volumes unlike anything I have seen before.  It's not just JP Morgan who is the  the prime enemy of the PM's, but every central bank in the world, every fiat currency, and every elite who benefits from this corrupt evil financial and monetary system.  So, when you buy physical PM's to protect your wealth, you are in effect betting against the entire global financial system and every aspect of the hierarchy that keeps this rotten system from imploding.

Kudos for raising it up a notch. Honored to be here.

May all find shelter from the storm here (metaphorical and physical).

Peace

Here is a view of what the bankers and the Bernak have this weekend. I have this view EVERY summer weekend. To those of you using terms of Jackson Anus and such, just remember there are real people that live here. I've lived here over 30 years, long before the Fed ever heard of this place.

I found this buried in a thread over at ZH.

Seems that it could be significant on both the gold front as well as dollar v. RMB front:

http://www.cheviot.co.uk/news/2011/08/the-pan-asia-gold-exchange-and-hugo-chavez-a-curious-meeting-of-minds/

The Pan Asia Gold Exchange and Hugo Chavez, a curious meeting of minds?

Ned Naylor-Leyland - 01.8.11

The recent story picked up in the media about Hugo Chavez and the ‘calling’ of Venezuelan Gold held in London generated a good deal of interest and drew attention to the little-discussed issue of Precious Metals custody and ultimately, delivery.

Unlike the Venezuela delivery angle, however, an even bigger and related story is emerging outside of the coverage of the mainstream western press. China has recently launched a new Precious Metals exchange in Kunming City, Yunnan province, called the Pan Asia Gold Exchange (PAGE). I had the great pleasure of being part of a small group of interested parties in London observing and participating in the opening ceremony for the new exchange. We saw the clear support of central and regional government in this venture, evidenced by the participants on the day and their comments. PAGE has been steered at central government level by key economic ministers and mavens and is a formal part of the PRC's present 5 year plan, one which places Yunnan province as a new gateway to international trade. The photo on the right shows the scale (and colour!) of the new exchange building in Kunming City.

A Healthy Market

Current Precious Metals Price Discovery

The Future of Precious Metals Price Discovery

This exchange is offering a new international-facing allocated ‘Spot’ Gold and Silver contract, with an 8am Beijing-time ‘fix’. The fix will only involve Chinese Banks; indeed the owners and members of the exchange are in no way related to the western banks that dominate the existing Spot and Futures Precious Metals markets. PAGE is launching in Q4 2011 a new Spot Precious Metals contract to challenge the emaciated LBMA ‘loco London’ system. International investors will now be able to buy allocated and, crucially, Rmb-denominated ‘Spot’ Gold and Silver contracts. The importance of this cannot be overstated. The Renminbi will be accessible to international investors through this exchange, but in a controlled fashion - using Gold as a synthetic choke on demand for the currency. By buying an Rmb Gold contract on PAGE and selling the equivalent $ denominated contract elsewhere, investors will be left with Rmb exposure. One would imagine that the incentive to own Rmb in the present climate is by inference likely to lead to a whole lot of demand for Gold contracts through this new exchange. Add to that the real demand for allocated Gold that will migrate across from the existing Spot market and you are looking at something that looks sure to have major implications for the Precious Metals market.

Historically the emergence of new Gold and Silver exchanges is met with a collective yawn. The reason for this is that there has never before been any expectation that new exchanges could/would affect the price discovery mechanism. Each new exchange was effectively an extension of the status quo. The mainstream has become dissociated with regard to this issue of price discovery. Many assume that Precious Metals prices are discovered in the healthy way one would normally expect - the body of the market being the 'real' Spot market, where the forces of supply and demand meet, with a small tail wagging merrily away in the form of a futures market (see the Jack Russell illustration). In Gold and Silver the size of the Spot market is ten or more times that of the futures market, so the use of a dog as an analogy holds up in scale terms. The current price discovery mechanism, however, as expressed by my Basset Hound illustration, works instead as follows:

The body of the dog (the Spot market) has become the plaything of its ‘tail’. Rather than the dog wagging its tail, the dog is being wagged BY the tail. This is achievable because the actors wagging the dog by its tail are some of the same LBMA (London Bullion Market Association) members that effectively make up the body of the dog. The LBMA system (aka ‘loco London’) has held sway beyond living memory and countless nations rely on the system for both price discovery and storage/custody. This system has not only allowed itself to be corrupted by fractionalisation, it is clear that the body of the dog actually welcomes being wagged, for fear of the repercussions of being caught short were it not! The ‘spot’ dog has been reduced to shell of its former self, so much so that even apologists for the status quo admit that the ‘spot’ market has around 100 paper claims outstanding to each physical bar. At any cost the existing mechanism will resist delivery, which is what makes the recent demand by Hugo Chavez to repatriate Venezuelan Gold reserves so interesting. This move towards delivery by the Venezuela leader plays into the same important dynamic as the Pan Asia Gold Exchange.

My contention is that this new exchange represents a far bigger challenge to the hegemony of the existing bullion banking system and it price discovery mechanism than most realise. Given the choice between being the unallocated and unsecured creditor of a fractionalized LBMA market or holding title to deliverable and allocated bars within the PAGE system I anticipate much of the ‘loco London’ business will migrate east, lured by the twin benefits of certainty of outright ownership and long-awaited international market access to Renminbi.

Download August's Monthly Note in PDF file format

Hence for the raid started on 26 Aug 07:40, cartels should call it a day roughly after 13:40.

How many more quarters is the market going to ignore that the price of silver is not going back to the lows posted at the start of the year ?   I can understand the hesitancy of Wall street in the first quarter believing the growth would be short term and that the value of profits would drop once the prices came back down, but by now I would hope that their new projection models would factor in a higher price per ounce vs. cost of mining.  Is this just a coiled spring building pressure, or am I missing something ?  Advise please...

I haven't been able to sit at my desk for more than 10 minutes since the open between internet issues, goat breeding follies, burned milk and trying to play catch up.  I literally have no idea what's going on right now... information overload (FOR ME!) doesn't happen that often. 

I seriously just want to load up LotR online and whack pixelated orcs for the rest of the day.

Ta,

"Scottj presented evidence that this war goes way back when the U.S removed silver as part of the bi-metallic standard causing a depression,"

I must have missed that link or article and it sounds interesting.

Any links to any of that discussion or ScottJ's take on this? Thanks

BenRoberts...Well said .  Something very large is going on between the TPTB or because of TPTB in monetary policy on a global level. We're in for some type of historic change at some point from all of this. There's too much pressure built up within the system, most of it bad, and it needs to correct at some point by some large measure anda  drastic maneuver due to desperation and chaos seems likely.

Or is is all planned and it'd being implemented? That's a debate to consider.

They seem to have set up the table nicely for dramatic change to occur. Is this just dysfunctional Sovereign fiscal mismanagement world wide or  planned, low grade economic chaos to clear the pathway to whatever reforms are needed  towards a unified global currency?

As of 11:29, Silver is the ONLY comod in the RED, just incase if anyone is keeping track

Fiat = currency.  It will never cease to exist in some form.

Gold = money.  It will soon be universally recognized as such and will become the ultimate store of wealth and value.

All fiat will be measured against gold.  Each fiat's unit of value will be determined by the size of its monetary base and the net productivity of the economy it represents. 

Fiat will continue to exist as currency for the purpose of exchange.  Gold will function as true money as the ultimate store of wealth.

The price discovery for gold cannot and will not be found until all paper gold products implode.

I'm sure others can articulate these ideas better than I can but that's my best guess at the most probable way this all shakes out.