Ivar's Charts

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Turd Ferguson
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Ivars!

Nice to see you again. I hope you're doing well.

ivars
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Yes, thank You!

Yes, thank You!

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Bitcoin vs silver

Its an interesting idea that the moves are almost identical but on different timescales. I hadn't thought of using bitcoin to predict  silver though. Maybe the underlying asset form the speed at which it unfolds? ie bitcoin is smaller market cap so happens quicker ?

And the other thing I like about the classic bubble shape is the fractal way it keeps appearing on all different timescales. Maybe bitcoin is lining up for its biggest one yet.

ivars
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The. Size of the bitcoin

The. Size of the bitcoin market is definitely a factor why fundamental bubble shape for bitcoin plays out in smaller time scales. The last price increase was a small buble itself.

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Sentence from my old (2013)

Sentence from my old (2013) post in this thread

ivars wrote:

That also ensures that UK will be seeking to distance from Europe and mover into USA fiscal /financial arms as Japan has already clearly done.

I suggest that Britain's confrontational stance with Europe ( not military though) also helps USD as reserve currency, and we will see further escalation of that as well.

An now we have Brexit. It is politically prepared act, prepared by reaction to action in Syria that has led to surge in immigrants.  

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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Silver has made a small

Silver has made a small bubble now seems upside is exhausted dip towards 17,5 possible within 1-1,5 months.

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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@Ivars

Oh Ivars, please!  You are embarrassing yourself.  Were'nt you the one who said silver wouldnt see $20 for the next 5 years.  I also remembering Argentus throwing up a chart showing silver not doing much for many years.  Time for chart guys to eat some shit.  

argentus maximus
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brokerk22 wrote:....  I also

brokerk22 wrote:
....  I also remembering Argentus throwing up a chart showing silver not doing much for many years.  Time for chart guys to eat some shit.  

Not sure why you choose to insult me in other places from where I post, but whatever.

For some reason you failed to remember me buying like it was going out of business last year.

It's not who you score points off that counts in trading, but what prices you buy and sell at.

I have no psychological need for your approval but you seem to have a personal need for sending out insults to diminish the worth of others relative to your self worth. A fella might look into that. One who wants to be able to trade profitably, that is. 

Have a nice day in your world B22.

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Rhythm 'n Price
http://www.greenhobbymodel.com/rhythmnprice.html
This analysis - global markets

ivars
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Made this chart-overlay of

Made this chart-overlay of bank excess reserves with FED vs. gold price and interest paid by FED on bank excess reserves (Line with 2 values 0,25% and 0,5%). Clearly the chart is trying to tell something- why gold price in USD has since QE3 diverged from USG total debt but I can get hold of it-e.g why QE3 impacted gold price in reverse manner? 

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ivars
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Previous chart mistakenly

Previous chart mistakenly referred to MBS as securities bought by FED in QE3 ; in fact, it was mostly purchases of  USG debt.

Question remains what was so different with QE3 or its perception that gold price dropped during QE3 inversely proportionally to QE3 size =inversely proportionally to increase in Reserve balances with FED during QE3.

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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ivars
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Quote:Afundamental tenet of

Quote:
A fundamental tenet of monetary policymaking is that a surprise increase in the short-term interest rate will lower price inflation from what it otherwise would have been. Thus, it has been disconcerting to macroeconomists that many empirical estimates of the relationship between the federal funds rate and inflation have suggested that a surprise interest rate hike is followed immediately by a sustained increase in the inflation rate. This result has become known as the “price puzzle,” starting with Eichenbaum (1992). Hanson (2004) showed that it is not easy to explain away the price puzzle, especially in the pre-1980 period. The attached chart highlights circumstances in which the price puzzle flourished; specifically, it shows the tendency of the federal funds rate to precede change in inflation in the same direction during the 1970s. Interpretations of the price puzzle can differ in an important aspect: A conventional view is that nobody should believe that surprise interest rate hikes are ever inflationary in reality. Accord ing to this view, any empirical finding of the price puzzle is necessarily a false reading and a sign of a problem with the empirical model that generated such a result. A relatively new explanation for the price puzzle admits the possibility that surprise interest rate hikes really could be inflationary in some circumstances

There is a new theory around that says that in regime when interest rates are set by setting the interest rate on excess reserves kept in FED, to get inflation FED has to increase these interest rates, NOT decrease or make negative, as ECB and many other banks did.

FED increased interest rate on excess reserves from 0,25% to 0,5% at the bottom of gold prices. Since gold is an inflation hedge, its price went up from that moment.

Long article about positive inflation change on positive interest rate direction in current situation

http://faculty.chicagobooth.edu/john.cochrane/research/papers/fisher.pdf

Also from the chart one can conclude, that starting with QE3 market has decided that decreasing excess reserves are inflationary.

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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ivars
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During Great Depression

Interest rates were low ( followed by 3 month T-bill yield) , practically 0, bank reserves were high (200% over required) , But inflation remained negative. In 1937 reserves were sterilized and interest rae increased in fear from inflation. Inflation immediately followed, however, since there were no excess reserves nor interest rate on  them, FED dropped rate and had another period of 0 interest rates and low to negative inflation. The only thing they did not try was to increase interest rates while excess reserves were still high. 

War and fiscal  stimulus due to that (via debt) solved the problem. 

Quote:
casual evidence suggests that QE has been ine§ective in increasing ináation. For example, in spite of massive central bank asset purchases in the U.S., the Fed is currently falling short of its 2% infation target. Further, Switzerland and Japan, which have balance sheets that are much larger than that of the U.S., relative to GDP, have been experiencing very low inflation or deflation

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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Wy So Lo
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Clif High

Terrific Tuesday, what odds?

ivars
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It is true and incredible

It is true and incredible correlation ( I had to add 100 EUR to prices to get perfect overlay). It is telling us something, and it started since 1999 when Europeans signed agreement not to sell gold. 

One thing it tells for sure - gold in EUR has to go up if ECB will continue to increase its assets with QE programs, which it most likely will. One reason could be serious devaluation of EUR vs. USD. Another reason- Europeans CBs buying/selling gold to keep gold share at the same level relative to the expanding assets of ECB in EUR. 

So now we shall see gold up in EUR- whether via EUR devaluation or gold price increase due to buying. One can see that in the period ECB was selling gold its prices went down

Quote:

Under the agreement, the European Central Bank (ECB), the 11 national central banks of nations then participating in the new European currency, plus those of Sweden, Switzerland and the United Kingdom, agreed that gold should remain an important element of global monetary reserves and to limit their sales to no more than 400 tonnes (12.9 million oz) annually over the five years September 1999 to September 2004, being 2,000 tonnes (64.5 million oz) in all."[2]

Britain did not sign in 2004 and later as it had by that time sold most of its gold and DID NOT ACCEPT EUR. It was prolonged with slightly different texts in 2004, 2009 ..in 2009 IMF did not sign anymore. It was prolonged again for 5 years valid from September 27 2014..

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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ECB keeps 6800t of gold to cover all expansions of balance sheet

ivars wrote:

Another reason- Europeans CBs keep gold share at the same level relative to the expanding assets of ECB in EUR. 

And this correlation means that European CBs keep the amount of gold reserves that takes care of ECB balance expansion at approximately 2 000 000 000 000 EUR/900 EUR/Oz= 2222 million Oz=2,2 billion Oz = 6800 tons.

To keep this correlation working, the member CBs and ECB has to be able to impact gold prices a lot. Seems lately they have not been so successful in bidding prices UP.

Somehow they like to have it tied to gold. 

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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Regarding Freegold

Hi Ivars, fun to see you back. 

I was persuaded by FOFOA that the various governments would be loath to give up their ability to define paper as  "legal tender" in their law and print as much of their paper as they felt like.  Maybe some day  peasants with pitchforks  or Mr. market can have some say in how much they print.  As I see it,  freegold is NOT a gold standard, but a world where people can legally save in gold and the market gets to determine the ratio between a given fiat and gold.  Would be nice, I'll believe it when gold profits aren't taxed as capital gains.  Perhaps in the FOFOA fantasy world charts of central bank "assets" would be correlated to gold price.  In MY fantasy world I'd have the central banks eliminated. No central bank assets..... No chart correlation.

The anti-silver rantings for FOFOA seems bizarre and illogical  compared to the rest of their case which has some consistency and good points.  The hatred for silver of FOFOA and his predecessors makes me suspect: "They must be bankers"

Here's a classic anti-silver FOFOA:                                             http://fofoa.blogspot.co.uk/2015/06/silver-dollar.html

And a great pro-silver response from our buddy srsrocco: https://srsroccoreport.com/freegold-rebuttal-a-case-for-much-higher-silver-prices/

Nick

P.S. I don't think you need to post the same chart in more than two threads (one of them being this Ivar's charts)  I read "All comments" so I see you a lot.  That said,  your multi-multi-post approach is better than not hearing from you.

ivars
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Silver usually (when move is

Silver usually (when move is up) predates gold moves. Currently silver seems to signaling that soon gold will get up. According to Central banks of  EUR zone (NOT ECB) Balance sheet is fully backed by gold at current prices. The amount of gold EU countries has delegated for this purpose is:

-it started with 2691 million oz or 8371  Tons in March 1999! Surprisingly, the total amount of GOLD owned by USG Treasury (FED only has gold certificate) has been  8133 tons, so EUR has been trying to back by its currency by the little bigger amount then USG has. 

-Today its value is backed by 2636 million Oz or 8199 tons, so Gold value in EUR is almost matching initial target, and the whole exercise shows that ECB and banks of EU totally is targeting their reserve PEG to gold tons, namely around average of 7633 tons.

-average has been from march 1999 2454 million Oz = 7633 tons

-minimum (which means high gold price in EUR) has been 5129 tons in August 2011.

-Maximum(which means low gold prices in EUR) has been 10353 tons in December 2008.

So it is quite difficult for them to be on target, but right now they are close

Now EU CBs  is adding to balance sheet 80 billion EUR/month (20 billion more then previously) with open end- till the end of March 2017 or more. This gives 800 billion or EUR bigger Central Banks of EUR area balance sheet which increases it by 25% ..so on average gold price in EUR has to increase on average by 25% or reach 1625 EUR/Oz. What will be the EUR USD rate at that time? But seems long gold in EUR is tradable, as is silver. 

Here is a chart showing Central banks of EU cumulative balance in gold (billion Oz), with red line being the average. There , in the end could be a trend moving this value priced in gold down , but as we can see, short term Europe allows the peg to move above average.

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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Why I wonder about potential

Why I wonder about potential EU gold price targeting together with EUR/USD rate is that the USG public debt, which equals all world net savings in USD, and had been in good correlation with gold price in USD since 2000, is not anymore after 2012 October. Of course it could be a bearish overshoot after gold price bubble during and after QE1 and QE2, but there could be other correlation (with EUR area Central bank total balance sheet) that is driving gold prices in EUR and as a secondary result, also in USD. 

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Any future development must involve changing something which people have never challenged up to the present,and which will not be shown up by an axiomatic formulation.

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