QE To Infinity

432
Thu, Sep 13, 2012 - 1:23pm

Long-rumored and oft-discussed, QE to infinity is finally a reality.

Here are the Bernank Fedlines from ZH:

*FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME'
*FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE
*FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
*FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST'
*FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015

Here's the key take-way: This is it. This is open-ended, QE to infinity.

Note the Fedline: FED WILL ADD TO PURCHASES IF WHEN LABOR MARKET DOESN'T IMPROVE

I also saw a headline on CNBS that stated that Operation Twist will end at the end of the year. Of course it will. As noted a few weeks ago, The Fed is nearly out of short-term paper to exchange for long-term paper. The end of Twist will surge new printing from this $40B number to the full $85B number.

Now note this Fedline: FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END

This is QE to infinity. It has begun and it will not end.

The important thing here is patience. Gold and silver will continue surging higher. There will, undoubtedly, be bouts of profit-taking that will last minutes and sometimes hours. Sometimes maybe even days. But these periods will be brief and ALL DIPS MUST BE BOUGHT.

Maintain and build core positions. Add to your stack at every opportunity. The perennial shorts of paper metal are going to be squeezed with ever-increasing intensity even while the "historic" aspects of this rally have still yet to be realized. Cartel banks will be left with no choice but to systematically cover their positions. They will attempt to do this in an orderly fashion but a rush toward physical ownership will likely disrupt their plans.

Gold and silver will both soon trade at new all-time highs. Again, this will not be a straight line up as there will most certainly be dips and pauses along the way. However, everyone reading this must realize that today is the first day of new paradigm.

We haven't even discussed yet the spiraling situation in the MENA or the strikes in South Africa. Maybe we will later today. For now, though, if I were you, I'd head out to my local coin shop or maybe click the HardAssetsAlliance link on the homepage. If you have to ask yourself "do I have enough physical?", you probably don't. Buy some today. Buy some tomorrow. Buy some more next week. The end of The Great Keynesian Experiment is upon us. Prepare accordingly.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  432 Comments

tmosley
Sep 13, 2012 - 9:31pm

For those saying QE3 was

For those saying QE3 was obvious, I would suggest you read this: https://lesswrong.com/lw/il/hindsight_bias/

Beware this form of bias, as when you "know" the answer, it will be harder for you to accept a different one when the answer that was "obvious" turns out to be totally wrong.

This is a bug in human cognition. You need to be aware of, but don't take offense at the suggestion that you suffer from it. That is, unless you are some sort of alien that doesn't suffer from it.

¤
Sep 13, 2012 - 9:34pm

Asian markets... / Made in Japan

...just woke up. This might get interesting quickly.

And then there's London. Loving the volatility or what?

Video unavailable
¤
Sep 13, 2012 - 9:38pm

The disparity in gold/silver

You can see two separate things taking place at the same time or to a much lesser degree right now on that small silver dive.

A thing of beauty at mid-day though and in concert with each other.

abguy4
Sep 13, 2012 - 9:39pm

With DPH's permission .............

With DPH's permission

I offer this as our new theme song;

Gold Diggers of 1933 - "We're in the Money"
kingboo
Sep 13, 2012 - 9:40pm

Hey Tmosley.......

there's another name for the "condition" you point out........some people call it conviction......... others even consider it a necessary quality for strong leadership....... to have little or no conviction on any topic can be considered weak minded.....

what does your website say about that? and to suggest "no offense" implies that people will be offended.... which ofcourse i am..... you know, it's one of those human conditions

¤
Sep 13, 2012 - 9:47pm

abguy4

Lol...I love it

Someone should send Ben that link to his e-mail.

tmosley kingboo
Sep 13, 2012 - 9:52pm

Ok, ignore your bias, see if

Ok, ignore your bias, see if I care. I'm sure it will never betray you.

145Bluesman
Sep 13, 2012 - 9:52pm

RE: The Face's Of FAILURE

Their new world order handler's would disagree.

They are doing exactly as they are told, to facilitate the end as we know it,

S Roche
Sep 13, 2012 - 10:05pm

Bernanke talks about gold...

It is worth setting aside time to read this 2002 speech and absorb all its implications as it all comes to pass:

https://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm

Some choice excerpts:

Inadvertently explaining the Fed's support of "paper gold":

"Today an ounce of gold sells for $300, (2002) more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal".

and why:

"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

No wonder Bernanke, (The Very Model Of A Modern Money Alchemist) mumbles bullshit about "tradition" when questioned about gold, because he has already said everything he could say, same as Greenspan before him:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. . . .

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth.". https://www.321gold.com/fed/greenspan/1966.html

They knew what they were doing yet they did it anyway. An historic day.

Kuchek
Sep 13, 2012 - 10:12pm

Martin Armstrong on Financial Survival

Martin Armstrong--Hotel US-You Can Check Out Anytime You Like But You Can Never--Part One 12.Sept.12
¤
Sep 13, 2012 - 10:20pm

Up Up And Away

Up

Submitted by Tyler Durden on 09/13/2012 - 16:05

In case you missed it. Markets soared on the back of possibly the darkest day in central-planning banking largesse. Gold and Silver were the biggest winners, though stocks will get all the attention we are sure. Treasuries initially sold off on the news that this was an MBS program (and mortgage spreads collapsed from already record tights) but by the close, Treasury yields had almost round-tripped to pre-FOMC levels. For the first hour or so after the news, all assets moved in sync and correlations soared across risk-assets, but as the afternoon wore on, FX carry consolidated, Treasuries retreated (and 2s10s30s fell), dragging risk lower leaving stocks up near their highs in a world of unicorns and free-money. Notably, it appeared that stocks caught up to high-yield credits' recent exuberance and then found little ability to push ahead. HYG (the high-yield bond ETF) remains notably rich to real bond prices. VIX tumbled under 14% (down almost 2 vols) but notably the term structure of vol collapsed even more - as it seemed the QuEnfinity prompted longer-term hedges to be lifted. A remarkable day in many ways as the S&P crosses over 14x P/E and AAPL over 20% of the Nasdaq-100.

https://www.zerohedge.com/

https://www.youtube.com/watch?v=w2mBt8P477w

beardeus
Sep 13, 2012 - 10:21pm

Scary day indeed

I have been waiting ALL DAY to finish work and come home to my computer! I received a text... haha, actually from APMEX that said QE3 was a go! I started texting friends and family immediately! Half of me wants to celebrate and the other have does not!

I was thinking, the corrupt always watch out for themself. What I mean to say is... the FED would never sacrifice itself for The Morgue! To them, if The Morgue goes under from rising silver and gold prices then so be it!

As much as many have been anticipating this... how happy are we supposed to be?!


Sep 13, 2012 - 10:22pm

Anyone care to take a stab at

Anyone care to take a stab at why gold is extending but silver is not?

S Roche
Sep 13, 2012 - 10:23pm

@DPH

I think GLD has the gold and is used to warehouse the physical that "backs" unallocated gold, which is the true paper gold.

The LBMA states that unallocated is the most common form of gold ownership, the "GLD Puke" correlates statistically to price movements*, and I believe that extrapolations can be made from GLD inventory to the size of the unallocated market.

The LBMA OTC market is denominated in 400 Toz bars unallocated loco London and its daily traded volume exceeds all other markets by a huge factor, 90% is traded spot and options and forwards account for the balance. My guess is that OTC forwards about match Comex Futures volume.

A rising price and declining GLD inventory will be an interesting moment as I think it will be the only public window into the race to convert unallocated. That race will be between Bullion Banks, Authorized Participants and the whales like Soros.

Edit: *h/t https://victorthecleaner.wordpress.com/

SRSrocco
Sep 13, 2012 - 10:24pm

GREAT CALL TURD, POPPING OF SHALE GAS MIRACL & QE TO INFINITY...

WHAT A DAY... AND I MISSED IT..lol

Hell, what a day. I had a good idea that some sort of OVERT QE would be announced today... especially when folks like Jim Rickards was calling for it.

TURD.. GREAT CALL AT $26... nothing like being right about a 35% move in silver a few weeks...LOL

I am just about finished with a post on Shale Gas & Oil and how it will impact gold and silver. I wanted to wait until after the FOMC meeting as I knew it would be the center of attention.. regardless of what decision they made.

As Turd and others have stated.. this day marks the END OF THE DOLLAR as we know it. Its just a matter of time.

NED SCHMIDT & JEFF CHRISTIAN... TWO ROTTEN PEAS IN A POD

What a joke when Christian came out yesterday and announced that GOLD & SILVER would crash if there was no QE3. Someone had stated in a comment in Turds blog today that maybe he instructed his clients to short gold and silver. I doubt he actually did that because he can't be that STOOPID, rather I think he is getting a big sweaty palm of cash to say STOOPID THINGS.

Now, for my favorite buddy Ned Schmidt. I put ol Ned on the back-burner, but I thought I would drag him out and see what the hell he has been writing lately. I went to Financial Sense and found that his last article on the precious metals was on August 6th, 2012. Here is the headline:

No Feed for the Golden Bull!

By Ned W Schmidt CFA 08/06/201

Financial market bulls can survive for short periods of time on rumors of feed on the way. These rumors are usually conjured out of thin air by cable media gurus, Keynesian economists, Street strategists, and other cartoon characters. False rumors of food for the financial market bulls in recent years have been abundant. Included have been:

  • Hyperinflation is imminent, a perennial favorite.
  • U.S. dollar is to become worthless.
  • Euro zone is to collapse, and Euro to become worthless. Alternates with previous rumor.
  • QE-3 will happen next week.

We note that none of these fantasy reasons for expecting a dramatic move in the prices of Gold and Silver came to pass. Unfortunately for the purveyors of investment fantasies, one of the real sources of food for precious metals has also not cooperated, as shown in the following chart.

Red line in above chart, using right axis, is the year-to-year rate of change in the U.S. money supply. As is readily apparent, at this time the growth rate of the supply of dollars is not sufficient to cause either hyperinflation or a collapsing dollar. The food supply for the Gold and Silver bull markets is simply not growing sufficiently to keep them healthy.

-----------------------

Here we can see that once again... NED SHOT HIMSELF IN THE FOOT...by opening his mouth a month too soon. I plan on emailing Ned and letting him know that when silver hits $50 and gold $2,000, I plan on crucifying his precious metals forecasts for everyone to see.

GOD HATH A SENSE OF HUMOR....

Kcap TF
Sep 13, 2012 - 10:26pm

@Turd

Trading machinations.

Will be reconciled within hours.

Not noteworthy.

Great day today eh?

Kcap

¤
Sep 13, 2012 - 10:41pm

No clue

Silver desperation over here running some Asian operations over there loading on a bunch of shorts from there?

Or a new trading platform we've been hearing about on here from Ned Naylor just went online over there?

tmosley
Sep 13, 2012 - 10:51pm

I would venture a (wild)

I would venture a (wild) guess that silver is being used as a lever to try to keep gold down, and it isn't working.

¤
Sep 13, 2012 - 10:55pm

Magic Carpet Ride

Steppenwolf Magic Carpet Ride Magic eye

Nigel Black
Sep 13, 2012 - 10:57pm
Deeper
Sep 13, 2012 - 11:00pm

@ Turd

Pretty consistent with the moves over the past few days, you mentioned yourself this morning that silver shouldn't have been down that much [of course relative to gold] pre-fomc.

¤
Sep 13, 2012 - 11:02pm

Gold / Silver Charts

GOLD









~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SILVER





TomMack
Sep 13, 2012 - 11:09pm
kingboo
Sep 13, 2012 - 11:10pm

Is there any doubt...

that this is a full blown currency war? How do you think Asia likes Bernank today......pulling out his big gun, waving it around. There was a time i wasnt convinced, but it seems that a controlled currency race to "zero" is in full swing......

Now we all know that q-e has been happening right along, but today i must say.....even i was shocked by the sheer size....

do they really think they can stabilize the housing market? what a joke. They have essentially nationalized the whole frickin housing industry......and once again, on our dime. Targeting the housing industry? gimme a break......the banks are gonna dump that toxic shit, take the cash and lever up like a mofo........ thats like targeting a bumble bee with buck shot......... and the banks rob us again...... it's looking like 4 more years of "Smoker-in-Chief"..... bet ya Isreal will love that

TomMack
Sep 13, 2012 - 11:12pm
reefman TF
Sep 13, 2012 - 11:27pm

@Turd,Silver is being contained in the up trend channel.

@Turd,

Silver is being contained in the up trend channel. That wsa the cue for me to get out at 1:30pm today when it hit the upper bound.

Here is a 1hr chart showing the trend channel. While we may "pop" out of this channel, it is unlikely that we will form a steeper channel. This is the same angle as back during the run-up to $50.

Obama Bin Lyin
Sep 13, 2012 - 11:29pm

New wynter_benton post!

Silver will trade above $50 before Dec 31, 2012

By wynter_benton . 9 hours ago . Permalink

We wish to inform our followers that silver will trade above $50 before Dec 31, 2012.
The $36 silver derivative timebomb is still in effect for the Morgue so count the trading days once silver gets above $36.

MFG was setup to prevent us from taking silver above $45 last year. Did anyone wondered why MFG failed preciselsy 30 days before our deadline or why no one can locate the vaporized money? It was designed SPECIFICALLY to stop us from taking silver up and out. Think about it.

Too bad The Morgue cant do that again this time cause we are beyond their reach now.

Once again, we are back. . . . . do da do da. . . .

Sentiment: Strong Sell

Patrancus
Sep 13, 2012 - 11:33pm
leeson_was_framed Nigel Black
Sep 13, 2012 - 11:33pm

@ Nigel Black

Loved the video, as funny as it was uninformative! Enjoy the well deserved hat tip

145Bluesman
Sep 13, 2012 - 11:41pm

face palm

Face palm with head shake regarding the re-emergence of the whole wynter_benton saga.

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