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2011-05-01 Economy
Central banks selling US dollars and buying gold
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Posted by phil_b 2011-05-01 00:00|| || Front Page|| [11127 views ]  Top

#1 Most recent spot chart has gold at $1565.70

Silver is moderating, though. Still under $50. The silver cartel plays by very different rules than the gold cartel. However, for decades silver has tracked gold. But suddenly, the two charts are no longer aligned.
Posted by Anonymoose 2011-05-01 08:56||   2011-05-01 08:56|| Front Page Top

#2 For now. A temporary distortion in the market.

Also: drill and quit printing money.

(probably NSFW - salty language)
Posted by RandomJD 2011-05-01 10:03||   2011-05-01 10:03|| Front Page Top

#3 Unless I am much mistaken, worse is on its way in the near term.

The US dollar has been sliding for a while. Silver is up 150% + in the last year.

This has the hallmarks of a monetary/sovereign debt crisis. Was it Ron Paul who wanted to audit the Fed? A Fed audit might be a good idea.

Has anybody read The Thing From Jeckyll Island? I have not but have heard a lot about it.

I think hard times might be ahead. If you are living in the US, don't worry but get out of US dollars and into anything else: australian corporate debt is firing right now, soft commodities like wheat/soy/rice.

Rising interest rates are an enemy of gold ONLY when they rise at a greater rate than inflation eats away at paper dollar savings.

If interest rates are 15% but paper dollars lose their purchasing power at a rate of 17% then gold should rise in real terms as people protect their assets.

Economically a weak US dollar can help the US in terms of making exports more competitive. That would give manufacturing a boost and help businesses create jobs.

It makes imports more expensive, cutting consumption and at the same time boosting jobs as people find it cheaper comparatively to buy US-made goods.

I remember when the Australian dollar was only worth US50c. We survived. I managed even to travel to the US. Now our dollar is well past parity at US$1.07 and many Aussies are struggling.

So don't worry too much with a devalued dollar just protect your savings!!

And start buying local... and defer overseas travel.

One last thought: When central banks sold all their gold it was $250-$450 per ounce. They picked the bottom to sell. What does that tell you about the economic brains behind central banks?

Now they are buying. Could this mark the top of the gold market? Not until Time magazine has gold on the cover.... and says it's a new era.

Posted by anon1 2011-05-01 10:30||   2011-05-01 10:30|| Front Page Top

#4 Thank you most kindloy for that insightful piece anon1. Ms. Besoeker and I have not traveled in a couple of years. I was surfing overseas vacation sites just yesterday for a potential European trip when I return to the States. The costs of overseas hotels and travel in USD is absolutley staggering. Maybe we'll spend a few weeks up in to Door County instead, ha.
Posted by Besoeker 2011-05-01 10:41||   2011-05-01 10:41|| Front Page Top

#5 I've heard that the Sister Bay Bowl has an excellent Prime Rib.....
Posted by Uncle Phester 2011-05-01 10:49||   2011-05-01 10:49|| Front Page Top

#6 Thanks for the tip!
Posted by Besoeker 2011-05-01 10:56||   2011-05-01 10:56|| Front Page Top

#7 B liked the tip, apparently :-)
Posted by Frank G 2011-05-01 11:08||   2011-05-01 11:08|| Front Page Top

#8 anon1, I haven't read The Creature from Jekyll Island, but I did listen to the one-hour synopsis presented by the author. He's an engaging speaker and the story - of the Fed's birth in 1910 - is horrifying. Unbelievable - yet, I believe it. No wonder they skip over this period of US history in skool. What we're seeing now is the whole charade coming apart.
Posted by RandomJD 2011-05-01 12:25||   2011-05-01 12:25|| Front Page Top

#9 Thanks for the good laugh RandomJD re: "drill and quit printing money." :)
Posted by JohnQC 2011-05-01 12:40||   2011-05-01 12:40|| Front Page Top

#10 Excellent links anon1 - thanks!
Posted by newc 2011-05-01 13:58|| concisemagazine.com  2011-05-01 13:58|| Front Page Top

#11 What does that tell you about the economic brains behind central banks?
Everything I needed to know about 'economic brains,' their over-inflated reputation, and their extreme arrogance, I learned when the housing bubble popped.
Posted by Anguper Hupomosing9418 2011-05-01 14:12||   2011-05-01 14:12|| Front Page Top

#12 On the contrary Anguper - they understand economics very well - you don't get to that level by being stupid.

It's just that their *goals* are different from ours. We are assuming that they want to reign in oil prices and the price of everything else. It isn't - it's just the opposite.

Obama said so himself.
Posted by CrazyFool 2011-05-01 14:25||   2011-05-01 14:25|| Front Page Top

#13 Glad you likey. Here's another geeky econ video:

Keynes vs. Hayek Rap Battle
Posted by RandomJD 2011-05-01 15:23||   2011-05-01 15:23|| Front Page Top

#14 http://www.youtube.com/watch?v=Gk5aRIz17fk
Posted by Uncle Phester 2011-05-01 16:30||   2011-05-01 16:30|| Front Page Top

#15 Interesting story from a couple of years ago.

During the Clinton Administration [Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks were gold plated and shipped to Ft. Knox.

The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was then allegedly sold into the international market, when the central bank "gold dumps" happened. Much of it ended up in Hong Kong.

Then in 2004, the Manhattan, New York, district attorney's office began an investigation of the office of the NYMEX Senior Vice President of Operations, who is responsible for retaining smelter and serial number records of all gold that passes through the exchange. That senior VP then disappeared and has not been seen again.

About the same time NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], withdrew from gold trading.

And at the same time, the London Gold ETF, GLD, was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a likely destination for many of these “salted tungsten bars” where they would never see the light of day.

Then the FED got involved, creating a similar means to have fake gold bars permanently quarantined, while retaining the imaginary value of them as if they were pure gold.

But all of this has resulted in an international game of "gold, gold, who's got the gold?"
Posted by Anonymoose 2011-05-01 19:00||   2011-05-01 19:00|| Front Page Top

#16 Note: Asian market silver is dropping in early trading.

Now down to about $43/oz.
Posted by Anonymoose 2011-05-01 19:19||   2011-05-01 19:19|| Front Page Top

#17 'moose, I've seen the rumors about all these gold-plated tungsten bars. Do you know if there is any hard info, or anyone tracking down the story?
Posted by RandomJD 2011-05-01 20:53||   2011-05-01 20:53|| Front Page Top

#18 In the end gold looks just prettier than paper and has some adornment use. But is it "worth" 1500 dollars an ounce?

I'm buying good real estate. Can't go wrong with that.
Posted by European Conservative 2011-05-01 22:08||   2011-05-01 22:08|| Front Page Top

#19 EC... looking for a small, 2 bdrm on a small parcel near the village of Porrbach. Ring me up.
Posted by Besoeker 2011-05-01 22:27||   2011-05-01 22:27|| Front Page Top

#20 Besoeker, wouldn't it be easier just to drive around that village and ask?
Posted by European Conservative 2011-05-01 22:32||   2011-05-01 22:32|| Front Page Top

#21 Not motoring much these days EC. A lot of day dreaming, but not much motoring around.
Posted by Besoeker 2011-05-01 22:35||   2011-05-01 22:35|| Front Page Top

#22 By the way, I hope EC junior made it home safely and in good order from Afghanistan.
Posted by Besoeker 2011-05-01 22:37||   2011-05-01 22:37|| Front Page Top

#23 He is still there.
Posted by European Conservative 2011-05-01 22:55||   2011-05-01 22:55|| Front Page Top

#24 And just sent me an SMS with the good news.
Posted by European Conservative 2011-05-01 22:59||   2011-05-01 22:59|| Front Page Top

00:00 Spimble tse Tung2768
23:59 Silentbrick - Lost Drill Bit Division - Halliburton
23:56 Water Modem
23:54 PBMcL
23:52 JonC
23:50 European Conservative
23:48 JosephMendiola
23:45 Old Patriot
23:45 Secret Master
23:43 Steven
23:37 RandomJD
23:37 European Conservative
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23:33 Gloria
23:32 Zebulon Thranter9685
23:29 European Conservative
23:27 European Conservative
23:26 JosephMendiola
23:24 Gloria
23:23 European Conservative
23:22 JosephMendiola
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