More Evidence of post-QE Deflation Bias

126
Thu, Sep 25, 2014 - 8:01am

The POSX has surged through 85 today and looks to be on its way to 87+. Just more evidence that our current theme/idea of temporary deflation is, in fact, playing out.

Below is a 5-year chart of the POSX. Note that since this " post-QE deflation" trend took hold, The Pig has rallied nearly 8% and, by getting through resistance just below 85, it looks set to continue rallying toward the 2010 highs between 87 and 89.

So what is so interesting about that? Do you recall what was happening in mid-2o10??

Between December 2008 and June 2010, The Fed purchased a combined total of about .6T of MBS and treasuries. In late 2009 and before the program began to wind down in 2010, The POSX began to rally in anticipation that that was the last of it...that The Fed was done and that QE was over for good. Anticipating the deflation that might follow, The POSX shot UP from 80 to 89 in under six months. (Sound familiar?)

Of course, The Great Ponzi began to rattle and shake without Fed liquidity and you know the rest. QE2 was announced just five months later in November 2010 and by mid-2011, The Pig was back down to 78.

We are, right now, in the exact same position! The "market" thinks that QE has been tapered to ZERO, never to be re-started. Do you think that? Probably not but we have to let the "market" sort this out for itself. Perhaps a war or false flag will provide cover for the Fed to start QE4? Does it even matter? You know it's coming and it's just a matter of when.

Back in 2010, the paper gold "market" didn't quite know what to do. It rallied and backed off. Sold off and then rallied. In the end, from late 2009 through mid-2010, price was about flat. And what do we see now?? Since the "taper" announcement last fall, gold has rallied and back off. It has sold off and rallied. In the end, price is about flat.

I still think that price is likely to weaken a bit more in the days ahead as the prospect of running the stops below 80 has to have The Cartel Monkeys salivating. However, from just a purely "market"-based perspective, how much lower can/will it go IF you believe as I do that perpetual QE is now a necessity for the maintenance of the current system.

(And please don't tell me how gold slid 30% during QE3. Is it not clear to you by now that, after seeing gold rally about 70% during both QE1 and QE2, aggressive action was taken to prevent a similar rise during QE3? A rally which would have implied a price of about 00 by 2014!)

In the end, QE will resume. The POSX will fall and gold will rally. Those that claim that "the bull market in gold is over" and that "gold is heading to 0" are either ignorant of history or purposefully misleading you. Gold will soon make a very important low and reversal. Prepare accordingly.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

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daveyboy
Sep 27, 2014 - 4:21pm

Ironic that you take one part

Ironic that you take one part of my username to somehow denigrate me and yet by doing no whilst not addressing the points I have made is self evident of the fact that it is indeed you who has the child like mind. When did i ever refute that gold and silver have been around for a long long time, but it DOES NOT matter, you think the string pullers give a shit? no, Gold and Silver will not be money going forwards, that is obvious, digital currency will be, so the only questions that anyone should care about is should I hold metals as a hedge? yes, should I hold metals as an investment? yes.

Furthermore I call a shark a shark because while they plead with you, you know like good samaritans to buy their silver, it's been obvious that the price action in the metals is a piece of shit, it has been obvious that there are no shortages and no inability to get low premiums and yet the lower the price has been the louder the volume of their pleadings. Now, why am I pissed? well besides the fact that any number of the fear points can be easily disproven by simple logic, I am pissed, but more at myself for buying back in at $30.

It is not, nor has it ever been the case that I suggested that no one should hold metals, indeed at these prices, and if capital is available, then buying in is 101 stuff and yet this is the strawman which is predictably built each and every time because I insulted your heros. Ttterly pathetic and and child like reaction from some people on here.

Don't you know....you aren't meant to have idols,,,,,,,quit creating new gods.

Galearis
Sep 27, 2014 - 1:28pm

I agree with Turd

Except for the last statement. There will likely be no rally in the derivative gold because there is always 1) less and less gold behind it and more and more risk, 2) it is even more a pressing need for Western AND Eastern central banks - especially the FED - to safeguard dollar value of the phony spot price set by these derivatives and 3) China (and others, myself included) will not want a higher paper price as buying entities.

How will they do it? The usual: print and short as needed to keep the paper prices going down. In everything "tangible".

When: Delivery failures or a systemic collapse in the US. Note the FTDs can be in any commodity of strategic importance - like copper for example.

So far I have been 100% correct for three years. And I am still stacking.

FWIW,

G.

Safety Dan
Sep 27, 2014 - 9:38am

Anyone in the D.C. area and

Anyone in the D.C. area and need a job?

Check Out This Hilarious Craigslist Ad for Attorney General

A day after Eric Holder's unexpected resignation, someone came up with this Craigslist ad for attorney general.

THEFEDERALISTPAPERS.ORG

A day after Eric Holder’s unexpected resignation, someone came up with this Craigslist ad for attorney general.

I love the parody, especially some of the job responsibilities:
• Spying on reporters
• Covering up IRS misconduct
• Covering up White House misconduct

It speaks so clearly to the scandals and controversies surrounding Eric Holder. I only hope Obama is not using this as his criteria for Holder’s replacement.

Safety Dan
Sep 27, 2014 - 3:33am

Taliban Storm Afghanistan,

Taliban Storm Afghanistan, Beheadings Galore

Having spent well over $3 trillion dollars in Iraq and Afghanistan what do we have to show for it?

  1. Shias aligned with Iran rule Baghdad
  2. ISIS took over parts of over Iraq
  3. ISIS threatens to take over Syria
  4. The average Pakistani hates the US for drone policy
  5. Taliban threatens to take over Afghanistan

Taliban Storm Afghanistan

Please consider Taliban Storm Afghan District Southwest of Capital, 100 Killed

boomer sooner
Sep 27, 2014 - 1:54am

Better article on the Okla knife violator.

https://m.newsok.com/oklahoma-beheading-fired-employee-attempted-to-conv...

Going to get out the bow this weekend and practice for the four legged antler critters, but may need to practice some self defense strategies.

Wonder if a spork will be used to chop lettuce once they ban sharp objects.

boomer sooner
Sep 27, 2014 - 1:29am

ISIS Comes To America?

ISIS Comes To America? Oklahoma Man Beheads Woman After Being Fired

A man who had been fired from a food processing plant in an Oklahoma City suburb beheaded a woman with a knife and was attacking another worker when he was shot and wounded by a company official, police said Friday. As AP reports, while questioning the suspect's co-workers, investigators learned he had recently started trying to convert several employees to Islam.

https://www.zerohedge.com/news/2014-09-26/isis-comes-america-oklahoma-ma...

Drove past on Wed before the hubbub. Crazy to to bring a knife to a gun fight, just wish the women in HR would wtfu. Wrong place to do this and get out unscathed. Owned an automotive repair business within six blocks and every third vehicle had a gun in it, not counting the hunters in the Jacked Up 4x4's. Will for sure loading my pocket more actively (just acquired a little 380 s&w bodyguard, much lighter than my usual Kahr P40).

Safety Dan
Sep 26, 2014 - 10:06am

Final Q2 GDP 4.6%, says BEA |

Final Q2 GDP 4.6%, says BEA

POSTED AT 9:21 AM ON SEPTEMBER 26, 2014 BY ED MORRISSEY

The previous estimates of economic growth in the second quarter turned out to be a shade too modest. The final estimate of second-quarter growth from the Bureau of Economic Analysis puts the annualized GDP increase at 4.6%, the best quarter in more than two years, and a sharp rebound from Q1′s -2.1%:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.6 percent in the second quarter of 2014, according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 4.2 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same; increases in nonresidential fixed investment and in exports were larger than previously estimated (for more information, see “Revisions” on page 3).

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

Real GDP increased 4.6 percent in the second quarter, after decreasing 2.1 percent in the first. This upturn in the percent change in real GDP primarily reflected upturns in exports and in private inventory investment, accelerations in nonresidential fixed investment and in PCE, and upturns in state and local government spending and in residential fixed investment that were partly offset by an acceleration in imports.

A significant part of this growth comes from inventory adjustments, but not the majority of it. Real final sales of domestic product, which discounts inventory expansion, came in at 3.2%. That is the second-best reading in four years, with only 2013Q4′s 3.9% surpassing it. Of course, the quarter immediately following that produced a -1.0% real final sales number, but with this report, three of the last four quarters of RFSDP has been at 3.0% or higher.

That may not be spectacular growth, but it does look like a big improvement over the stagnation of the first five years of the so-called recovery.

CNBC celebrates the outcome, but notes a couple of potential clouds on the horizon:

There were upward revisions to all categories, with the exception of consumer spending, where stronger healthcare outlays were offset by weaknesses in recreation and durable goods spending.

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, was unrevised at a 2.5 percent rate.

Business spending on equipment was raised to an 11.2 percent pace from a 10.7 percent rate. Businesses also invested more in nonresidential structures, such as gas drilling, as well as in research and development.

Safety Dan
Sep 26, 2014 - 10:04am

Holder Fled DOJ Over Fast &

Government Watchdog Judicial Watch is claiming that Attorney General Eric Holder has announced his resignation due to his inability to further stonewall the American people over his role in one of ten alleged plots to smuggle American guns to Mexican narco-terrorist organizations and domestic gangs in an attempt to build support for more draconian gun control laws in the United States.

Likewise, Kelly Terry-Willis, the sister of Brian Terry, a Border Patrol agent murdered with guns smuggled in one of those operations, says that she doesn’t find the timing of his resignation to be a coincidence:

“I do not find it a coincidence that Eric Holder chose now to resign after Judge Bates denied the request from the DOJ to delay the release of the Fast and Furious documents. I personally think Eric Holder was really hoping that the documents would never be made public to my family and the American people,” Terry-Willis tells Townhall. “Will we ever get the accountability for my brother, Brian, Jaime Zapata and every other person who lost their lives to the guns from this horrific scandal? I don’t know, but I have a serious gut feeling when we finally see what is in those documents….the dynamics of this investigation are going to change and hopefully the people involved are brought to justice. Eric Holder can run, but there will be no hiding. The truth always reveals itself.”

Judicial Watch had sued the Department of Justice for a listing of the Fast and Furious documents the administration is hiding under Obama’s executive privilege, and and Federal judge ruled this week that the Administration must turn those documents over:

The court ruling to which [Judicial Watch President Tom] Fitton is referring is an order by a federal judge that by Oct. 22 the DOJ must provide Judicial Watch with a listing of the Fast and Furious documents the administration is hiding under Obama’s executive privilege—called a “Vaughn index.”

“A Vaughn index must: (1) identify each document withheld; (2) state the statutory exemption claimed; and (3) explain how disclosure would damage the interests protected by the claimed exemption,” Judicial Watch noted in its press release announcing the ruling on Thursday.

Fitton said that the resignation of the “disgraced Holder” is “past due accountability for Holder’s Fast and Furious lies, and I hope it brings some solace to the family of U.S. Border Patrol Brian Terry and the hundreds of innocent Mexicans likely killed thanks to the Holder Justice Department’s scheme that armed the murderous Mexican drug cartels.”

Fast and Furious is one of ten possible gunwalking operations in five states, according to investigative journalist Sharyl Attkisson.

At least one of those alleged DOJ operations, dubbed “Gangwalker,” was apparently designed to supply weapons to Chicago’s murderous drug gangs and drive up the number of gang-related homicides in that city, increasing calls for more restrictive gun control laws.

Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

Safety Dan
Sep 26, 2014 - 7:55am

Ted Bits The Economic &Financial No-Spin Zone

September 26, 2014

When LEVERAGE FAILS and HOPE turns to FEAR |PDF Version

In today’s TedBits we will be outlining a lot of smoke signals. They signal fires burning and about to break out. As everyone is aware, the Federal Reserve has been tightening monetary policy for almost a year now and has been joined by the Chinese central bank. The Federal Reserve has been reducing its balance sheet expansion from $85 billion a month (85,000 million) to zero in mid-November. While the fed does not characterize it as a tightening, it is one. Numerous studies have put the amount of interest rate reduction to -3 % when QE3 was at full bore. Now that the reduction is approaching zero negative interest rates are ending, they have raised rates by about 3% in real terms. We are Austrians at TedBits and believe in all of the core truths from Ludwig Von Mises:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

- Ludwig von Mises

This is the state of the world today. The financial system and governments would collapse if credit could not expand and steal from the future. It is their lifeblood. They have created a world where they always can borrow, but have made no provision for the repayment. It is a Ponzi scheme. The math can no longer work anywhere you look. Since the math can’t be made to work it is obvious that covert techniques of money printing are fully engaged and no one within the system dares yell, “Fire!” and call them out on their betrayals. Since Bretton Woods II in August 1971 when our leaders betrayed us by substituting IOUs for money, our world has become one big credit expansion, everywhere and always, REAL growth has INCREASINGLY ceased. If there wasn’t lending for consumption called growth, the world’s economies would rightly be called in a depression. It truly is INFLATE or DIE. Without it, our Ponzi economies and welfare states would collapse in the insolvency they inhabit. It is why our economies have become financialized to extract every penny in one way or another that they can from the public and transfer it to the government and the financial systems which control them (central banks and the their shareholders). We are debt slaves and serfs to global socialist elites, which are morally and fiscally bankrupt.........

First, let’s look at some parts of the global banking systems as a percentage of GDP in their respective economies:



Notice the average in the Eurozone is a GIGANTIC 349% of GDP in 2013 (600% in the Swiss banking giants). If those assets declined in value by a mere 10% (hardly a correction), the average checks those governments would have to write is 35% of a year’s GDP. Where would that money come from as these countries have surrendered the printing press to the ECB (a political exercise to gather power). Their financial systems would collapse instantly. Since those same banks also have gorged on Eurozone debt, their toxic assets would be quite a bit larger. Although, keep in mind the Eurozone has passed laws calling sovereign debt risk free so it wouldn’t cause them to have to raise reserves. But the falling prices of everything outside will. In reality, I believe some of that decline has already occurred and a regulatory approved cover up is underway.

Now for every dollar of new debt the US gets 8 cents of GDP!

The reported GDP of the USA is now approaching $16 Trillion ($16 million million).



If you subtract phantom GDP, which is about 17% of this number you are looking at $13.3 trillion. (Phantom GDP is economic activity in which no money is exchanged, for example if you own your house free and clear but could rent it out for $2500 they call that GDP, or a free checking account which they may estimate would cost $200 dollars a year, unfunded pensions called paid wages, etc.) To service the debt using the previous calculation of interest due, that $13.3 trillion must generate 17.3% just to service the debt before any wealth can be created. That 17.3% is being paid into the financial systems (banksters) and the lenders to the government.

Next let’s look at the stock market - in my opinion a levitation completely spawned by the feds balance sheet expansion, friendly HFT, leveraging corporate balance sheets with buybacks, and the plunge protection team at the Federal Reserve’s headquarters on Liberty Street in New York. All working hand in hand to foster confidence in the private sector, which has not benefited from the expansion for the most part as the spoils have gone to the big banks and pension funds for the most part. Here is look from Lance Roberts and streetalklive.com:

F

................. Read PDF For Full Article

DeaconBenjaminSafety Dan
Sep 26, 2014 - 7:46am

58% of Americans Want a Third Party

No viable third party will be possible until you get rid of the Federal Election Commission, which exists to enforce a two-party system.

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Key Economic Events Week of 6/29

6/30 9:00 ET Case-Shiller home prices
6/30 9:45 ET Chicago PMI
6/30 10:00 ET Consumer Confidence
6/30 12:30 ET CGP and SSHW to Capitol Hill
7/1 8:15 ET ADP Employment
7/1 9:45 ET Markit Manu PMI
7/1 10:00 ET ISM Manu PMI
7/1 2:00 ET June FOMC minutes
7/2 8:30 ET BLSBS
7/2 10:00 ET Factory Orders

Key Economic Events Week of 6/22

6/22 8:30 ET Chicago Fed
6/22 10:00 ET Existing home sales
6/23 9:45 ET Markit flash PMIs for June
6/23 10:00 ET New home sales
6/25 8:30 ET Q1 GDP final guess
6/25 8:30 ET Durable Goods
6/26 8:30 ET Pers Inc and Spending
6/26 8:30 ET Core inflation

Key Economic Events Week of 6/15

6/16 8:30 ET Retail Sales
6/16 8:30 ET Cap Ute and Ind Prod
6/16 10:00 ET Chief Goon Powell US Senate
6/16 4:00 pm ET Goon Chlamydia speech
6/17 8:30 ET Housing Starts
6/17 12:00 ET Chief Goon Powell US House
6/18 8:30 ET Initial Jobless Claims
6/18 8:30 ET Philly Fed
6/19 8:30 ET Current Account Deficit
6/19 1:00 pm ET CGP and Mester conference

Key Economic Events Week of 6/8

6/9 10:00 ET Job openings
6/9 10:00 ET Wholesale inventories
6/10 8:30 ET CPI for May
6/10 2:00 ET FOMC Fedlines
6/10 2:30 ET CGP presser
6/11 8:30 ET Initial jobless claims
6/11 8:30 ET PPI for May
6/12 8:30 ET Import price index
6/12 10:00 ET Consumer sentiment

Key Economic Events Week of 5/25

5/26 8:30 ET Chicago Fed
5/26 10:00 ET Consumer Confidence
5/27 2:00 ET Fed Beige Book
5/28 8:30 ET Q2 GDP 2nd guess
5/28 8:30 ET Durable Goods
5/29 8:30 ET Pers Inc and Cons Spend
5/29 8:30 ET Core Inflation
5/29 9:45 ET Chicago PMI

Key Economic Events Week of 5/18

5/18 2:00 ET Goon Bostic speech
5/19 8:30 ET Housing starts
5/19 10:00 ET CGP and Mnuchin US Senate
5/20 10:00 ET Goon Bullard speech
5/20 2:00 ET April FOMC minutes
5/21 8:30 ET Philly Fed
5/21 9:45 ET Markit flash PMIs for May
5/21 10:00 ET Goon Williams speech
5/21 1:00 ET Goon Chlamydia speech
5/21 2:30 ET Chief Goon Powell speech

Key Economic Events Week of 5/11

5/11 12:00 ET Goon Bostic speech
5/11 12:30 ET Goon Evans speech
5/12 8:30 ET CPI
5/12 9:00 ET Goon Kashnkari speech
5/12 10:00 ET Goon Quarles speech
5/12 10:00 ET Goon Harker speech
5/12 5:00 ET Goon Mester speech
5/13 8:30 ET PPI
5/13 9:00 ET Chief Goon Powell speech
5/14 8:30 ET Initial jobless claims and import prices
5/14 1:00 ET Another Goon Kashnkari speech
5/14 6:00 ET Goon Kaplan speech
5/15 8:30 ET Retail Sales and Empire State index
5/15 9:15 ET Cap Ute and Ind Prod
5/15 10:00 ET Business Inventories

Key Economic Events Week of 5/4

5/4 10:00 ET Factory Orders
5/5 8:30 ET US Trade Deficit
5/5 9:45 ET Markit Service PMI
5/5 10:00 ET ISM Sevrice PMI
5/6 8:15 ET ADP jobs report
5/7 8:30 ET Productivity
5/8 8:30 ET BLSBS
5/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 4/27

4/28 8:30 ET Advance trade in goods
4/28 9:00 ET Case-Shiller home prices
4/29 8:30 ET Q1 GDP first guess
4/29 2:00 ET FOMC Fedlines
4/29 2:30 ET CGP presser
4/30 8:30 ET Pers Inc and Cons Spend
4/30 9:45 ET Chicago PMI
5/1 9:45 ET Markit Manu PMI
5/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 4/20

4/20 8:30 ET Chicago Fed
4/21 10:00 ET Existing home sales
4/23 8:30 ET Weekly jobless claims
4/23 9:45 ET Markit flash PMIs
4/24 8:30 ET Durable Goods

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