Madness

84
Thu, Mar 10, 2016 - 10:21am

Following the lead of the BoJ, today the ECB announced increased QE along with a new program to buy European corporate debt. Next up will undoubtedly be ETFs and then equities. The madness of The Keynesians knows no bounds as they desperately attempt to maintain their debt-riddled monetary scheme.

Here's your full list:

As you might expect, the initial HFT reaction was to crush the euro which, in turn, rallied The Pig. This led to a spike in the S&P futures and a dump in gold. But then something curious happened on the way to HFT paradise....Draghi opened his mouth....and actual human logic began to set in.

If the BoJ is monetizing everything, installing negative rates and collapsing their bond market...

And if the ECB is now clearly going down this very same path...

Then how in the heck is Mother Fellen going to continue on her alleged path of higher rates? And so what happened next? The Pig sold off sharply, which rallied the euro. This led to a selloff is S&P futures and a spike in gold.

Got it? MADNESS!

So what does the rest of the day hold? Beats me! What are you asking me for? I have no idea!

Seriously...THIS IS MADNESS! It's like how we've discussed the Swiss National Bank. The Swiss...traditionally about the most fiscally conservative people on the planet...now have their central bank printing francs to buy stocks. STOCKS! They own over B of AAPL for pete's sake! FREAKING MADNESS! And now the ECB is going to be monetizing the debt of "non-bank corporations". Are you serious? (Pause for a moment to consider how unlikely and impossible that seemed just 10 years ago. Shit, five years ago!)

At the end of the day, the primary focus for all of us in Turdville however is GOLD (and silver, too) and today's follies are just another nail in the Bullion Bank coffin. WHY? Because if you and I can see the madness of all of this, then there is certainly a growing number of Big Money individuals and institutions that can/will see it, too. And as these folks continue to turn to gold...even in small allocations...the pressure increases on the Bullion Bank Confidence Scheme. This speeds up the timetable for delivery failure and the collapse of the entire fractional reserve pricing structure.

To that end, check today's chart. After falling to an immediate, HFT-driven low of 37.80, I now have a last in the Apr16 gold of 64.10. Not too shabby. I'll be VERY interested to what the action the rest of the day and then overnight, as the Japs and the Chicoms get a chance to react to Draghi and his "bazooka".

Silver fell in sympathy but it bounced right from where we'd anticipated, at the extension of last week's triangle. Very nice. If it makes a move through .80 now, look out!

(And now I have lasts of 69.20 and .64. Ole Whipsaw Clive probably just had a stroke.)

But the real interesting story today is The Pig and it's measuring stick, the POSX. Here's the chart I added to yesterday's podcast thread:

And here's an updated look. A break of the 200-day and then a close below 96.50 should be enough to shove the POSX even deeper and, subsequently, rally gold to new highs above 80. (This chart is stale as it's 15 minutes delayed. I've got a last in the POSX of 96.49)

AND THE HUI!! WOO-HOO!! A close up above 180 today (or anytime soon) and there will be a whole new round of buying that should materialize. Crazy, wild stuff...and very fun to watch!

As I close, here's an up-to-the-minute chart of the euro:

This puts the POSX at 96.55, gold at $1266, silver at $15.63 and the HUI at 178.

Go live your life with joy.

TF

About the Author

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turd [at] tfmetalsreport [dot] com ()

  84 Comments

jwmkratz
Mar 10, 2016 - 11:31am

Upside Down

I don't post that often. There are so many others on this site I'm thankful for.

Nice to have a day where the rest of the world wakes up to the "new normal". Your cash is no good and they (whoever they are) are going to charge the hell out you if you keep a balance in your checking account. I can't imagine how the velocity of money will accelerate and morph this "madness" into full blown and fully acknowledged inflation. If you got to spend it now because you'll have less tomorrow what are you going to spend it on. Bonds that are printing neg interest rates? Equities that are over valued and riding on credit? Cars that depreciate the moment you ink the contract? A different currency? You can't stick cash in the mattress anymore because if you choose to you are labeled a drug dealer or even worse. We live in contrary world of opposites. What was good yesterday is no good today. We've lost our moral compass, we've turned our back on the values of our parents and their parents, and our spiritual cup is nearly empty. Those of us who are bystanders to this "madness" do so because we inherently know something's not right. To those of you that have the passion and guts to remain unwavered in your beliefs...imho you will be rewarded. It may take some time for things to reset, but once on the other side, the slate will be clean, a fresh balance sheet without all the red figures. What is will be what was. As I may have written before, this country has been good to me. I have faith in our people, I have faith in God, and I respect the rule of law. Let's get this over with so our children have half the chance to prosper as we've had.

Rant off

CaptainDanite
Mar 10, 2016 - 11:49am

Stocks Down; USDJPY Down; VIX Up ... Metals Capped

So stocks are all but crashing; USDJPY struggling to stay above 113; VIX soaring back towards 20 ......... and yet the metals have been capped HARD. LOL!

Fine, you sleazy bastards. Keep it up as long as you can. You're just loading the spring with more tension, and I've got cash on hand for more phyzz.

I predict one thing: when silver finally does blow through the artificial manipulation, it's going to shock the living daylights out of everyone who has been watching it these past few years.

matt_
Mar 10, 2016 - 11:49am

Re: Why don't they....

Peter Schiff made an excellent point about this. With the Value Added Tax, the EU has essentially full and direct control over prices in the entire economy. If 2% price inflation was their real goal, all they need to do is adjust the Value Added Tax to set exactly 2% price inflation. Why don't they do that? I think the answer is because all of this interest rate manipulation and QE is about control of prices of things that the banks and governments value most. It isn't about "stimulating" (other than inflating stock market prices). It isn't about price inflation. It is about keeping government debt cheap, propping up the stock market, and supplying banks with an unlimited stream of cheap newly created money at the expense of everyone else.

Mickey
Mar 10, 2016 - 11:55am

Dandy Don Meredith

Turn out the lights, the party's over.

R.I.P. DON MEREDITH "Turn out the lights... the party's over"
tyberious
Mar 10, 2016 - 12:01pm

In case you missed it

West vs. BRICS: The New Cold War

Conclusion: We arrive once again at the conclusion that your first priority must be your own interests and that of your family. Don’t pay attention to the “noise.” Don’t be confused by appeals to your patriotism. Stay away from this upcoming globalist enterprise masquerading as a Cold War.

https://www.thedailybell.com/news-analysis/west-vs-brics-the-new-cold-war/

heathbr
Mar 10, 2016 - 12:02pm

COT report

will be interesting

tyberious
Mar 10, 2016 - 12:11pm

March 10, 2016 Santiago,

March 10, 2016

Santiago, Chile

The 12.5 hours spent crossing the Pacific on Qantas flight 27 feels like going through a wormhole.

The flight departs Sydney, Australia at 12:50pm and arrives to Santiago, Chile the same day at 11:20am. In other words, the plane lands 90 minutes before it departs.

When I landed yesterday, the captain came on the P.A. and said, “Ladies and Gentlemen, I have good news; if you enjoyed Wednesday March 9th, it’s still Wednesday March 9th!”

It really does feel like going back in time.

This feeling was only reinforced when I whipped out my phone and saw that German bank Berlin Hyp had just issued 500 million euros worth of debt… at negative interest.

I wondered if I really did go through a time warp, because this is exactly the same madness we saw ten years ago during the housing bubble and the subsequent financial crisis.

To explain the deal, Berlin Hyp issued bonds that yield negative 0.162% and pay no coupon.

This means that if you buy €1,000 worth of bonds, you will receive €998.38 when they mature in three years.

Granted this is a fairly small loss, but it is still a loss. And a guaranteed one.

This is supposed to be an investment… an investment, by-the-way, with a bank that almost went under in the last financial crisis.

It took a €500 billion bail-out by the German government to save its banking system.

Eight years later, people are buying this “investment” that guarantees that they will lose money.

The bank is now effectively being paid to borrow money.

We saw the consequences of this back in 2008.

During the housing bubble, banking lending standards got completely out of control to the point that they were paying people to borrow money.

At the height of the housing bubble, you could not only get a no-money down loan, but many banks would actually finance 105% of the home’s purchase price.

They were effectively making sure that not only did you not have to invest a penny of your own money, but that you had a little bit of extra cash in your pocket after you bought the house.

Paying people to borrow money is just crazy, whether it’s homebuyers, bankrupt governments, or banks.

Global insurance giant Swiss Re calculated that roughly 20% of all government bonds worldwide now have negative yields. And over 35% of Eurozone government bonds have negative yields.

(They would know—along with pension funds and banks, insurance companies are some of the largest buyers of bonds.)

With this deal, Berlin Hyp becomes the first non-state owned company to issue euro-denominated debt at a negative yield.

They won’t be the last.

We’re repeating the same crazy thing that nearly brought down the system back in 2008—paying people to borrow money.

The primary difference is that, this time around, the bubble is much bigger.

Back then, the subprime bubble was “only” $1.3 trillion.

Today, conservative estimates show that there’s over $7 trillion in negative rate bonds.

What could possibly go wrong?

Until tomorrow,

Simon Black

Founder, SovereignMan.com

SS121
Mar 10, 2016 - 12:33pm

The BRICS

their currencies are all USD denominated currencies

they have no physical Gold

Even if they did have some physical Gold it would do them no more good than a coin in the pocket of a monopoly player

The BRICS ain't got ****, and they ain't gonna do ****. Period.

joeblack
Mar 10, 2016 - 12:36pm

Capping

1270 is 1% up

Mar 10, 2016 - 12:37pm

EUR at high of day. USDJPY at low of day.

Come on baby, light my fire! Gold $1271 last!

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